0 Regional Graft Undermining Indonesian Economy, Democracy: Expert

The spread of corruption following the decentralization of power from Jakarta in the late 1990s is threatening to hold back Indonesia’s economic and democratic development, an expert has warned. Ikrar Nusa Bhakti, a political analyst from the Indonesian Institute of Sciences (LIPI), said on Thursday that the scale and breadth of corruption being practiced at the regional level had reached a point where foreign investment prospects were undermined and Indonesia’s regional and global competitiveness were at threat. 

The problem, he said, was that when the central government devolved power to regional authorities following the fall of Suharto’s New Order regime in 1998, it failed to anticipate the potential for those officials to abuse their newly vested powers. Ikrar said much of the corruption at the regional level was of the “bribe and kickback” variety and was most apparent in the run-up to regional elections. “The candidates, whether the incumbent or the challengers, engage in corrupt practices during campaigning. 

They take money from donors, who in turn expect the favor to be returned in the form of project and procurement contracts,” he said, adding that the awarding of contracts to the winning candidate’s cronies was also a problem. “Having a close relationship with a regional head is considered a very important factor in winning government contracts.” Another form of corruption often seen at this level, he went on, was the practice of embezzling funds from the regional budget through markups, and of leaders demanding kickbacks from the various bureaus in their administration. 

Ikrar warned that these practices were allowing some regional heads to establish their own fiefdoms, where they wielded more authority than the police. He said that if the phenomenon was allowed to spread unchecked, it would reflect badly on Indonesia as an investment destination, as well as undermine the nation’s ongoing democratic reforms. “Without guaranteeing investment security, it will be difficult for Indonesia to increase its competitiveness over the long term,” Ikrar said. “As a result, we will not fulfill our economic growth potential. The central government must act fast to contain this problem before it gets out of hand.” He proposed several solutions, including continuous training of regional officials to boost their professionalism, and a system of incentives and punishment to cut out underperforming or corrupt leaders.

source : the jakarta globe