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Indonesia battles with widespread corruption

By Karishma Vaswani
BBC News Jakarta

James Sundah
James Sundah eventually got his new driver's licence

Ask James Sundah about corruption in Indonesia and he will tell you a story that will make you laugh out loud.

The 50-year-old musician had a simple problem - he lost his driving licence last year, so he went to his local police office thinking his details must be on file and getting a replacement would be easy

Instead, he was told he would have to get a new licence.

"The police told me it would be a quick and painless procedure," he said. "Most Indonesians would have got the hint: pay some money, and get your licence. But I wasn't having any of it."

Corruption is unfortunately a way of life here - and for many Indonesians, passing a small bribe to an official to get a job done is commonplace.

But Mr Sundah decided that he was going to try getting things done differently. What would happen if he applied for a driver's licence using the proper, official procedures?

"I took the written test three times, and each time they failed me," he said.

There may be some questions or concerns about Indonesia - but that applies to just about every country in the world
Gita Wirjawan
Investment Coordinating Board

"I was a couple of points short each time - but when I asked to see the test papers, the officials refused. The others in my exam room told me that if I just paid an extra $20, I would get my licence."

Mr Sundah finally managed to get his licence because of his persistence - the police realised he was not going to pay them a dime.

"Finally I asked to see the exam paper - and I spotted the question: 'What would you do if you hit someone in an accident?'," he chuckled.

"I got the question wrong - because the correct answer, according to the official exam paper was to run away!"

An amusing story, but also a sad reflection of the state of corruption in Indonesia today.

Lost forests

Mr Sundah was lucky - he could afford both the money and the time to repeatedly take the driving test - but there are thousands of Indonesians who do not have that luxury.

Corruption costs the country's economy billions of dollars in losses every year.

Partially cleared forest in Kampar Peninsula in Riau province - 14 October 2009
Illegal logging costs Indonesia $2bn annually says Human Rights Watch

A recent report by the US-based Human Rights Watch estimates that corruption in Indonesia's forestry industry alone costs the economy $2bn a year.

Indonesia is home to the world's third largest area of tropical rain forests but every year millions of trees are lost due to illegal logging.

According to Human Rights Watch the lost billions would be enough to provide basic healthcare to about 100 million Indonesians for almost for two years.

'Right direction'

In another damning blow to Indonesia's economy, the European Union has come out with a report saying that one of the main reasons its investors are reluctant to come to Indonesia is the perception of high levels of graft in the country.

The government acknowledges there is a problem - but says that like all developing countries, Indonesia is not perfect.

"One has to take a long term view of Indonesia," says Gita Wirjawan, the man tasked with attracting more foreign funds to Indonesia's economy.

"There may be some questions or concerns about Indonesia - but that applies to just about every country in the world. Let's face it, nobody's perfect but we're on the right trajectory and we're heading in the right direction."

Trusted institution

But that may not be how Indonesians who deal with corruption on a daily basis feel.

They have taken to the streets demanding that President Susilo Bambang Yudhoyono, whose popularity is largely built on his reputation as Mr Clean, keeps true to his word and clamps down on corruption in the country.

Protesters demanding inquiry into the Bank Century scandal - 6 December 2009
There have been regular protests denouncing corruption

While the president's clean image has not been tainted - it has certainly been tarnished.

Editorials in Indonesian newspapers have called him weak and indecisive in his handling of the case of the Corruption Eradication Commission, or the KPK as its known in Indonesia, one of the few institutions people in this country actually have faith in.

The Indonesian public was outraged last month when two anti-corruption officials were detained by the police.

Many believe the KPK had become a target of the police and the attorney general's office because of its reputation of putting corrupt officials behind bars - even those in high places.

In an attempt to placate the people, President Yudhoyono addressed the nation in a televised speech, saying the case of the two officials should be settled out of court.

The two men were finally reinstated to their original roles but the public was not satisfied.

Plot?

There is now a new corruption drama that has transfixed people in this country: the case of Bank Century, a small Indonesian lender that was bailed out by the Indonesian central bank at the height of the financial crisis last year.

Allegations of misconduct have been levelled at the two people in charge of handling the bailout - Indonesia's Finance Minister Sri Mulyani Indrawati and Vice President Boediono, two key members of President Yudhoyono's new cabinet.

A parliamentary investigation is underway to determine whether the two officials misused their powers to save Bank Century. After the bailout many of the bank's wealthy clients allegedly donated money to the president's election campaign.

President Susilo Bambang Yudhoyono
President Yudhoyono was elected on promises to combat corruption

The president, vice president and finance minister have all denied any wrongdoing.

President Yudhoyono has said the allegations are all part of a big political ploy by his enemies to topple him.

While political analysts say these conspiracy theories are unlikely to infuse further faith in the president's effectiveness as a leader, they have pointed out that President Yudhoyono could improve Indonesia's image as a graft-buster if he just put in place some simple measures.

"Many of the regulations passed by governments in the developing world are there for one purpose alone: rent-seeking," says James Van Zorge of Van Zorge, Heffernan and Associates, a political risk consultancy based in Jakarta.

"If you cut away 50% of these regulations, then you would significantly cut down corruption. It's as easy as a stroke of a pen."

While it may sound simple, completely eradicating corruption in Indonesia is anything but easy.

This country has grappled with the issue for decades, and many fear it is so deeply embedded into civic institutions and the culture of doing business that it will take generations to fix.

President Yudhoyono had promised his people, as part of his election campaign, that he will help to clean up the image of Indonesia both at home and overseas.

He now has his work cut out for him.



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