The United States Agency for International Development (USAID) and the Indonesian government recently announced the Indonesia Integrity Initiative (Integritas). Integritas is a program that seeks to prevent corruption in Indonesia. Despite the great political transformation Indonesia has undergone over the past 20 years, corruption remains a stubborn holdover from the previous authoritarian regime. Moreover, corruption in Indonesia permeates both the public and private sectors. It promotes negative outcomes in both governance and business. With an eye toward increased civic engagement, Integritas represents a new way of addressing the issue.

Corruption in Indonesia

In 2011, more than eight in 10 Indonesians claimed that corruption was a serious issue. Ten years later, Transparency International’s 2021 Corruption Perception Index scored Indonesia 38 out of 180 countries in perceived public corruption, with lower scores indicating higher perceived corruption. This long-held distrust is not without reason. Former President Suharto allegedly profited $15-$35 billion through corrupt practices in his 31-year tenure.

Suharto’s behavior set the standard for graft and abuse of public resources by officials for decades. In 2019, a member of parliament running for reelection had more than 400,000 envelopes in his basement meant for voter bribes. In 2021, a former maritime affairs and fisheries minister was found guilty of accepting bribes in a livestock smuggling scandal.

Finally, lower-level corruption is just as prevalent. Nepotism and bribery plague the civil service sector, especially in its enrollment program. Importantly, these practices harm Indonesia’s governance, economy and people.

How Corruption Impedes Growth

Prevalent corruption impedes economic growth by fueling inefficiencies in resource management. It also distorts economic incentives meant to encourage growth. This is partially why the Indonesian economy has made slow progress over the last few years. In turn, this slow progress leaves many without formal employment. Those who take up informal positions in rural areas often receive pay below the regional minimum wage. That, in turn, keeps many in poverty, and seeing this poverty, candidates seeking office bribe voters with money and food, including sugar and rice. Of course, this further exacerbates the problem once the candidates take office. Clearly, a necessary step in addressing corruption in Indonesia is changing the culture around it.

The Indonesia Integrity Initiative

The Integritas program looks to address corruption by promoting civic engagement and integrity in business and government sectors. The goal is to aid local civil society in identifying systemic corruption vulnerabilities and conflicts of interests that promote them. This strategy marks a shift from corruption prosecution to prevention. If successful, citizens will become more aware of anti-corruption programs, adopt attitudes that promote shunning of corrupt practices and will provide much-needed oversight in public and private sectors.

USAID cooperated with the Indonesian government to align Integritas with national development goals on growth and stability. This makes anti-corruption efforts a high priority alongside economic and development initiatives. The Partnership for Governance Reform (Kemitraan), a local NGO, will be implementing this $9.9 million program over the next five years.

With corruption present in most levels of society, many Indonesian citizens have grown accustomed to these dishonest practices and even encourage certain forms of it, such as voter payoffs. These practices have negatively impacted economic growth and hurt those who struggle to find fair employment. The Integritas program will help address this issue and, if successful, should promote a culture that makes it hard for corruption in Indonesia to thrive.

– Gonzalo Rodriguez
Photo: Flickr

Corruption in Indonesia
Corruption in Indonesia is present in all three branches of parliament and private business. According to a study conducted by the Centre for Strategic and International Studies (CSIS), less than half of the respondents trust the local government, police and private sector. Transparency International identified decentralized decision-making, ambiguous legislation and a weak judicial system as main sources of corruption in Indonesia. Here are 10 facts about corruption in Indonesia.

10 Facts About Corruption in Indonesia

  1. Forbes named the former President of Indonesia one of “the world’s all-time most corrupt leaders.” Mohamed Suharto was President for 31 years in the 20th century. Throughout his reign, others suspect that he embezzled between $15 and 35 billion.
  2. One out of seven citizens pays a bribe for utilities. Bureaucratic corruption increases the average cost of living, which disproportionally impacts the country’s poor. Bribery costs add an additional fee to fundamental health care, education and sanitation services, thus increasing the overall costs and access to these systems. Further, corruption in Indonesia distorts the distribution of government spending and therefore hinders the development of important public projects such as increasing access to clean water.
  3. Approximately thirty percent of firms have suffered extortion while conducting business in Indonesia. Further, several of these firms (13.6 percent) identify corruption in Indonesia as a major obstacle. For firms often have to pay bribes or give gifts to acquire licenses, permits or contracts in order to conduct business. Corruption in Indonesia is a business norm where companies include gifts in total costs.
  4. In the 2019 elections, Parliament member, Bowo Sidik Pangaroso, attempted to buy votes for reelection. Authorities found more than 400,000 envelopes filled with cash in his basement just weeks before the election. Both vote-buying and candidacy-buying are common forms of corruption in Indonesia. The Charta Politika agency surveyed three constituencies about money politics and found that on average, 49.3 percent of voters supported cash and gratuitous handouts.
  5. Eighty-nine percent of corruption in Indonesia occurs at the local level. After the election of President Suharto, the country started to shift from authoritarian rule towards democracy. Suharto’s first step to democratization was the decentralization of the Indonesian government. However, the lack of accountability for local governments created an environment that fostered corruption. For example, inadequate oversight in the forestry sector cost the government $4 billion per year from illegal logging.
  6. Corruption is expensive. Last year, corruption in Indonesia cost the government $401.45 million. This cost is $55.4 million less than in 2017.
  7. The Corruption Perception Index (CPI) ranks Indonesia 89. Using Transparency International’s Corruption Perceptions Index (CPI), Indonesia ranked number 89 out of 180 countries with a score of 38/100 in 2018. This is significantly better than its rank and score of 118/180 and 32/100, respectively, in 2012.
  8. Many attribute more recent success in reducing corruption to President Joko Widodo, more commonly known as Jokowi. Indonesia elected Jokowi in 2014 on an anti-corruption platform. He simplified regulations for businesses to attract foreign investment. For instance, Jokowi signed Presidential Decree No. 20/2018 to simplify and accelerate the process of acquiring a work permit for expatriate workers by 34 working days.
  9. Indonesia has an organization dedicated to eliminating government corruption called the Komisi Pemberantasan Korupsi (KPK). This corruption eradication commission formed in 2002 as an independent organization in charge of investigating and prosecuting high-profile corruption cases. In 2016, it reported a 100 percent conviction rate and recovered approximately $35 million in state assets.
  10. The new generation has zero-tolerance for corruption in Indonesia. A group of students in Indonesia held their school accountable for corruption. The school was profiting from money that it received to go towards nonexistent construction projects. When student organizer Darmawan Bakrie and his friends realized the injustice, they established the Save our School campaign. Despite threats and warnings from the school, students and parents worked together and succeeded in holding the school accountable. The local mayor saw the campaign in the news over the course of three months and removed and transferred (but did not fire) the guilty officials from their positions and held them liable for the money they stole.

Corruption in Indonesia holds deep roots in its democracy, but the future looks bright with the Save Our School campaign as just one example. Many participants (58.5 percent) of the CSIS study believe that the Indonesian government is honest in its desire to eliminate corruption.

The central government and anti-corruption organizations work on a day-to-day basis to hold individuals accountable for their actions, but they still have a long way to go. If successful, anti-corruption practices can decrease inequalities, create foreign business opportunities and decrease national poverty levels.

– Haley Myers
Photo: Flickr