Recently Prof. Robert Klitgaard, a former Kennedy School of Government professor and a leading anti-corruption expert, visited Indonesia. In addition to giving a public lecture at our university, we took him to a series of meeting with policy makers, NGOs and business communities.
The meetings were very inspiring. He always asked similar questions concerning what people thought of the progress of corruption mitigation in Indonesia.
Surprisingly, despite news about political corruption that has dominated Indonesia’s media recently, most people agreed that significant improvement has been achieved; even though corruption is still prevalent.
Similarly, Prof. Klitgaard, who has advised more than 30 governments all over the world and has observed Indonesia since the 1970s, agreed that the effort to curb corruption has shown encouraging progress.
These opinions are consistent with surveys by various institutions, including the World Bank and Transparency International (TI). For instance, from 2001 to 2010, Indonesia’s Corruption Perception Index (CPI) score improved from 1.7 to 2.8.
This incremental gain is considered one of the most progressive in Asia, thanks to Indonesia’s vibrant civil society, the active press and the hardworking Corruption Eradication Commission.
The TI data shows that in 2001 only 3% of the 91 countries surveyed were worse than Indonesia, while in 2010 the percentile increased to 40% out of 178 countries.
Indonesia is not yet clean; however what has been done to clean up the country needs to be appreciated. Curbing corruption has never been easy and Indonesia’s success over the past decade is in part due to the availability of “low hanging fruit,” the high-profile corruption cases that have been relatively easy to curb.
What remains nowadays are “the high hanging fruit,” cases which involve those who have strong financial resources and political muscle. The going is getting tough. The plateau in 2010 as shown by the chart indicates the situation.
Without any breakthrough, the target to reach a CPI score of 5 by 2015 will become a distant reality.
Corruption, poverty and inequality
Corruption has been one of the most significant factors which hinders countries from realizing their potential. In his book The Bottom Billion, Paul Collier explains that corruption is a major reason for the rampant poverty in South Asia and Africa, where one billion of the world’s poorest people live.
Other things being equal, corruption reduces the amount of investment and the benefit of each dollar being invested. In addition to the economic cost, corruption also has social costs in the form of economic inequality.
Corruption lowers public service quality and availability that is mainly dedicated to the poor, such as public schools, hospitals, transport, clean water and sewage systems. Corruption also breeds injustice in society. In a country where corruption is prevalent, the poor and the rich have different positions before the law. Law tends to be friendlier to those who are able to hire the best lawyers and who have access to political power.
Klitgaard believes that if no one is corrupt, there will be no poverty. In the Indonesian context, Axel Drexel states that corruption cost 63% of GDP in 1997. Corruption is probably the reason why – despite the dynamic demography, the rich natural resources, the vibrant domestic market and the friendly neighborhood – Indonesia’s GDP per capita stands at $3,000 in 2011, not $33,000, $23,000 or $13,000.
Learning from best practices
In 2010, Transparency International Indonesia conducted a survey on the domestic CPI. The survey measured corruption levels in 50 Indonesian cities. Interestingly, large disparities exist among the cities.
The score ranges from 3.6 (the worst) to 6.7 (the best), where Denpasar, Tegal, Yogyakarta and Solo were among the cleanest cities. With CPI scores of 5.8 – 6.7 their scores are at par with Spain, Taiwan, Portugal and the UEA, assuming country and city CPIs are comparable.
The wide disparities actually represent great opportunities. It shows the possibility for cities to be clean in relatively corrupt Indonesia. They also shows that cities in Indonesia don’t need to reinvent the wheel. Instead, they can learn from the best practices.
Interestingly, the best practices are not far away; in fact they don’t even need a visa or a passport to visit.
Various innovations have been implemented in Yogya and Solo. Among these innovations is improving the ease of doing business, including getting a building permit, paying local taxes and securing a business license. The processes are conducted under a single roof, in a transparent manner.
The government establishes standard operating procedures including the cost and the time frame for public information; this reduces information asymmetry, a source of corruption.
In addition, the two cities implement a merit system for their officers. Firing or retrenching officers who do not support the government vision to improve public service quality is not a rarity. In short, government officers are held accountable for their task.
What’s more, the mayors of the two cities drive simple, humble cars, setting a good example for other government officers.
What has been done by the two cities seems simple. As always, simple plans implemented in totality will bring a much better outcome than sophisticated plans done half-heartedly.
If Yogya and Solo can do this, so too can other cities and Indonesia.
Wijayanto is a vice rector at Paramadina University. He is also the co-founder and managing director of Paramadina Public Policy Institute. He can be reached at firstname.lastname@example.org