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The London School of Economics and Political Science Berantas The London School of Economics and Political Science Berantas Korupsi: A Political History of Governance Reform and Anti-Corruption Initiatives in Indonesia 1945-2014 Vishnu Juwono A Thesis Submitted to the Department of International History of the London School of Economics for the degree of Doctor of Philosophy, London, May 2016 1 Declaration I certify that the thesis I have presented for examination for the MPhil/PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is the work of others (in which case the extent of any work carried out jointly by me and any other person is clearly identified in it). The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without my prior written consent. I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. I declare that my thesis consists of words <98,911> words. Statement of use of third party for editorial help I can confirm that my thesis was copy edited for conventions of language, spelling and grammar by Mrs. Demetra Frini 2 Abstract This thesis examines the efforts to introduce governance reform and anti-corruption measures from Indonesia‘s independence in 1945 until the end of the Susilo Bambang Yudhoyono‘s (SBY‘s) presidency in 2014. It is divided into three main parts covering Sukarno‘s ‗Old Order‘, Suharto's ‗New Order‘, and the reform period. The first part discusses how the new- born state of Indonesia balanced asserting its independence with efforts at institution building. It analyzes the power struggle between the diametrically opposed nationalist camp led by Sukarno and the administrator camp led by Vice President Hatta. It also examines Army Chief General Nasution‘s push for anti-corruption initiatives under Sukarno‘s guided democracy. The second part analyzes the roots, causes and development of corruption under President Suharto. It looks at how, in the early period of the New Order, Suharto enacted a number of anti- corruption policies in response to demands especially from students, how this political alliance ended as Suharto was able to consolidate his political authority, and how this undermined the checks-and-balances system. It also analyses the impact of the increasing corruption on Suharto‘s political capital as the Indonesian middle class demanded greater transparency and accountability, ultimately – along with 1997 Asia Financial crisis – leading to Suharto‘s downfall in May 1998. The third part of this thesis examines the efforts by the post-Suharto presidencies to tackle the legacy of corruption from the New Order period. It discusses the dynamics between the reformists within the executives and legislatures who worked together with civil society and the conservative/pro-status quo groups and oligarchs, as well as the impact of a more democratic political governance structure, the emergence of a free media, the greater freedom of expression, and the functioning of the most effective anti-corruption agency in Indonesia‘s modern history – the Corruption Eradication Commission (KPK). This thesis advances three arguments: First, that despite all the rhetoric in championing the cause, governance reform was never seen as a long-term endeavor and therefore was never applied consistently from independence to the SBY era. Second, the anti-corruption drives predating the KPK in 2004 were mostly arbitrary, with limited impact, selective in nature, and politicized. Third, the establishment of the KPK changed the sense of impunity among the political elites, albeit only in a limited sense. On the one hand, that allowed the KPK to sustain and even accelerate the anti-corruption drive during the two terms of SBY‘s presidency but, on the other, it left the overall political, economic and social structure and with it the persistent institutional failure that induced and incubated the wave of corruption largely intact. 3 Dedicated to my father, Prof. Dr. Juwono Sudarsono, and my mother, Raden Roro Priharumastinah. 4 Acknowledgement This PhD thesis, that marks the end of my academic journey at the London School of Economics (LSE), could not have been completed without contributions from many people and institutions during my life in the form of encouragement, support, input and criticism. First and foremost, my highest gratitude goes to my father, Juwono Sudarsono, and my mother, Priharumastinah, for their full support, especially during every stage of my education up until completing my PhD at LSE. My father has always been a source of my intellectual admiration as well as a figure to who I look up in terms of his dedication to public service and academic excellence. My mother, meanwhile, has always provided all-out support and equipped me with practical advice that is crucial in chartering a number of challenges in my life, especially for me to be able to finish my studies. They are the reason why I am who I am today and they have been showering unmatched gifts of wisdom and love on me since I was born, so this dissertation is dedicated to them to show how extremely blessed I am. My deep gratitude goes to my PhD supervisor at LSE, Associate Professor in International History Dr. Kirsten Schulze, for providing me with a once-in-life-time opportunity, intellectual journey and her extensive as well as responsive guidance for more than 4.5 years of study that shaped my thinking, as manifested in this dissertation. This first rate education that I experience at LSE was only possible because of a full-scholarship from the Jardine Foundation. In addition to the scholarship, the Jardine Foundation also generously provided me with a travel research fund both in Indonesia (Jakarta, Yogyakarta) and Australia (Canberra, Sydney, Melbourne) and a grant for finalizing my thesis. At the Jardine, not just all the members of the management committee, but particularly I would like to thank Mr. Neil McNamara, Mr. Philip Hawkins and all the administrative staff who were very responsive to all my enquiries about my studies. I 5 would like to thank the contribution of former Indonesia Ambassador to the United Kingdom Yuri Thamrin, who played an instrumental role in recommending me for the Jardine scholarship. I wish to express my appreciation for the input from my PhD upgrade panel members at LSE: Professor in International History Dr. Arne Westad, Associate Professor in International History Dr. Antony Best and Associate Professor in International History Dr. Roham Alvandi. My high appreciation for giving me robust, critical and comprehensive feedback on my PhD thesis goes to both my internal examiner, Professor in economics from the School of Oriental and African Studies (SOAS), University of London, Dr. Anne Booth and external examiner, Associate Professor in Indonesia Politics from the Australia National University (ANU), Dr. Greg Fealy. Their input certainly improved the analytical quality of this thesis. Within the Department of International History of LSE, special appreciation should be given to the Department Manager, Ms. Demetra Frini, who helped me to copyedit the whole thesis with high quality and in a timely fashion and also to Postgraduate and Research Manager Mrs. Nayna Bhatti who was very responsive to my administrative inquiries, especially those related to my travel grant. Also, I would like to thank all of the staff at LSE‘s PhD academy office, particularly Deputy Research Degree Manager Matthew Brack who was very patient and responsive regarding my inquiries especially in the process of thesis submission and other PhD-related administrative matters. During my more than 3.5 year stay in 24 Westbourne Terrace, apartment number 20 in London, I would like to thank the apartment owner Mrs. Nathalie Fortin and her husband Baly for being responsive to my apartment-related inquires as well as glad that our relations have developed into a friendship. Renting their apartment near Paddington station where I could take a train quickly usually to Oxford and close to Hyde Park where I regularly went jogging was definitely one of the highlights of living in London. 6 With extensive field research for this dissertation in the second and third year of my study, I also would like to express my appreciation to LSE in giving me various travel grants through the Department of International History and PhD mobility bursary scheme for my field research that was based at the National University of Singapore (NUS). The Financial Support Office of LSE also generously provided funding for finalizing my dissertation for submission in September 2015 and a travel grant for my participation in number of academic conferences that helped me to solicit valuable input and comments that improved the draft of my PhD thesis. During my stay in London for more than 3.5 years, I would also like to thank my brother Yudhistira Juwono and his wife Brenda Yudhistira as well as my niece Lavanya Eliana Yudhistira for stepping-up in taking care of my parents in Jakarta, while I was away. More importantly, I wish to thank Ratna Susanna for being very patient and supportive of my studies in London that forced us to be apart for quite some time, making me feel grateful and blessed for having her as my girlfriend. At the University of Indonesia (UI), I would like to express my appreciation to former Rector of UI and Professor in Sociology Dr. Gumilar Rusliwa Somantri as well as his successor Professor in Metallurgy Dr. Muhammad Anis for giving me permission to take leave from UI for my study at LSE. Besides Prof. Gumilar, I would also like to thank UI‘s former Vice Rector for Finance, Human Resource and Administration Dr.
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