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Indonesia the
enigma
By Tony Sitathan
"Indonesia is still an enigma and will continue
to be so for a long time," said Dian Sastro, a futures
trader working for a brokerage firm in Jakarta. He
captured the frustration and the general inability of
the government to deal with KKN (the Indonesian acronym
for corruption, collusion and nepotism) as well as a
feudalistic justice system that glorifies crime instead
of stopping it.
In a Javanese world, ulterior
motives are best kept in the dark, like the ancient art
of wayang kulit (shadow puppetry). No one knows
for sure who plays the role of the puppet master pulling
the right string, at the right time and at the right
place. By pulling the right cord, the puppets bring to
life actions that are directly initiated by the puppet
master.
"It was easy to see who the puppet
master was at the time of former president Suharto. But
since his ouster, there are numerous other contenders
for the post of puppet master that [are] creating
confusion among the elite powerbrokers in Indonesia,"
remarked Samad Husin, a Singapore-based businessman who
has done business with Indonesia for the past decade.
It's a fact that Indonesia cannot eradicate
overt KKN overnight, but it's also a pity that nothing
has been done so far to put at least a clinker in the
well-oiled government bureaucracy that is adept at
diverting state-owned funds to individual pockets. Time
magazine, after several months of in-depth investigative
reporting, unearthed incriminating evidence that Suharto
and his six children amassed US$15 billion in wealth.
And during the 32 years of Suharto's rule, more than $73
billion in revenues and assets passed through his and
his family's hands. The Suharto brand name was
everywhere at that time, from timber concessions and
allocations to even the natural reserves - the lucrative
gold and petroleum industries in Indonesia.
Ibnu
Sutowo, the founder of Pertamina, the state-owned oil
and gas producing company, was involved in a loan
scandal as early as the mid-1970s. Pertamina borrowed
$10.5 billion from the government to finance a fleet of
tankers. Unable to repay the loan, Pertamina lingered
precariously on the brink of bankruptcy. A law came into
effect that banned Pertamina from seeking commercial
loans for the next 30 years. Needless to say, a
significant quantity of the lent money ended up with top
government officials and maverick businessmen.
Indonesia has never been able to cleanse itself
since that incident. A multitude of other
mega-corruption projects became synonymous with the
Suharto regime. But President Megawati Sukarnoputri has
curtailed some of the excesses of the past. Government
officials reached a consensus to exhibit greater
accountability of public expenditure and good corporate
governance. "However, a new culture cannot be practiced
overnight. It takes time to weed the bad from the good
crops," remarked Adis Bullah, the managing secretary of
a leading public bank in Indonesia.
But how can
good governance alone wipe out years of firmly
entrenched KKN in the Indonesian psyche? "Indonesia is
seeing a dramatic change, hopefully a change for the
better," said Makmur Tjandra, a private businessman who
has been in the chemical-trading business for six years.
Whether change can really be effected remains to
be seen, since transformations at the superficial level
are as insignificant as plastic surgery. And at this
point in time, plastic surgery is highly recommended by
factions of the government that call for a total
reformasi or revolution to counter the excesses
of the past.
That may be one reason Megawati has
been slow to identify problem areas and unable so far to
come up with a clear strategy to put an end to KKN. But
nonetheless, Indonesia for the first time is seeing
progress and a backlash of anti-Golkar sentiments,
although some critics of the government fear that it
could also turn into a witchhunt.
For allegedly
ordering the assassination of a virtuous judge, Tommy
Suharto should escape the gallows but not a prison
sentence, according to prosecutors. Tommy, once the
darling of the bullish investment community, is now the
pariah. He headed business empires that are second to
none in Indonesia. Unlike Bambang Trihajadmojo, the
elder son of Suharto, the ex-dictator's youngest son,
"Tommy" Mandala Putra, was the apple of his father's eye
and had the mandate to run his business empire as a
crown prince would run an empire. Bambang's Bimantara
Group-headed business, on the other hand, is still a
contending business entity, since it's professionally
managed and run in contrast to the otherwise crumbling
business legacy of the past.
The media under
Megawati have taken a proactive role in exposing
corruption and recently revealed the fact that the
Suharto family pocketed hundreds of millions of dollars
in the 1990s through huge markups on arms imports for
the Indonesian military. Suharto's daughter Siti
Hardiyanti "Tutut" Rukmana acted as the agent in the
procurement of 30 British-built Hawk light attack jets
and 50 Scorpion tanks between 1993 and 1995. It was
reported that Tutut netted a profit of $350 million.
What can be done to put white-collar criminals
behind bars? Should the law, the anti-graft law in this
particular case, be revoked and something harsher
implemented? It's ironic that the punishment for petty
theft such as stealing a chicken or picking pockets is
more severe than stealing from the states' coffers.
"It's instant death for those caught stealing chicken,
while it's a slap on the hand (paying a maximum of Rp25
million, and later [receiving] red carpet treatment) for
those caught embezzling millions of dollars. Where is
the logic in this case?" fumes Agung Indrayanto, a
criminal lawyer based in Jakarta.
It leads one
to wonder, what then is enough? The public is at the
crossroads of stances - one stance of thoroughly
eliminating graft and corruption and one of tolerating
such crimes. Bob Hasan, the former minister of trade and
industry under the Suharto regime, was a fall-guy for
the entire Suharto clan. He has taken the blame for the
missteps of the past government. Recently Akbar
Tandjung, the DPR's (parliament) Speaker and chairman of
the Golkar party, was indicted by the attorney general
on corruption charges. Bulog, the state central planning
agency, allegedly misappropriated funds in excess of
Rp54 billion ($6 million). Akbar went to jail for less
than a week before the charges were dropped.
Nonetheless, the public received a positive
signal that no one was above the law, even though Akbar
is now out of prison. It represented a solid step toward
good corporate governance. And now an ad hoc group
called the Pansus Bulog II has been established by
parliament to investigate Akbar's involvement.
But Indonesia needs fewer theatrics and more
prudent legal solutions. Take the case of case of PT
Asuransi Jiwa Manulife Indonesia, an insurance-business
unit of Canadian Manufacturing Life or Manulife Inc. A
verdict was delivered in favor of a curator of
Manulife's defunct former partner, Dharmala Sakti
Sejahtera, who filed a bankruptcy petition over failure
to pay a dividend not authorized by its shareholders in
the first place. The bankruptcy verdict against a
company having Rp3.1 trillion worth of assets has given
rises to intense speculations regarding a conspiracy
between the curator and the court to favor Dharmala,
believed to be behind the conspiracy.
The case
angered the Canadian government, and the Canadian
foreign minister said his country would look at all
options to rectify the situation, including imposing
sanctions on Indonesia. The case has derailed investors'
confidence in Indonesia. Can due process of the law in
Indonesia be bought? Apparently so if the price is
right, confirms Pengkubu Siaswonto, a former member of
parliament who is now a lecturer in Gagah Mada
University. As one Indonesian lawyer, Luhut Pangaribuan,
put it nicely, "We need to reform the judges first
before revising the law. Now matter how good the law is,
the judges always find loopholes."
The past
plagues Indonesia. Can Megawati break free from this
stranglehold of corruption that seems to be the dominant
culture in Indonesia? Kusanto Anggoro, A political
analyst from the Center for Strategic and International
Studies (CSIS), said Indonesia does not have a clear
game plan. "There is no agreement between the executive
and the legislative regarding what priority they should
emphasize first in the reform era," he said. This
indecisiveness will continue to weigh heavily against
any reform effected by the government.
The
government in April passed a Law on Money Laundering.
The law focuses on the transactions involving funds of
Rp500 million or more that are directly or indirectly
derived from the illicit earnings of corruption and
other interrelated activities. In order to enforce this
law, a Center for Reporting and Analyzing Financial
Transactions (Pusat Pelaporan dan Analisis Transaksi
Keuangan or PPATK) was created. This was supposed to be
the Internal Affairs Division that tracked white-collar
crime and money-laundering activities.
But the
sad truth is that nobody knows who is going to enforce
this law and who will be subject to the interrogations
of PPATK. Is this yet another Indonesian wayang
kulit sideshow, since the person pulling the strings
in PPATK will also be accountable to the wishes of the
enigmatic puppet master, well hidden from the public
eye? The country will soon find out.
(©2002 Asia
Times Online Co, Ltd. All rights reserved. Please
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