Bill Guerin, Jakarta – Indonesia, ranked among the world's most corrupt countries, is ready to start rebuilding its tsunami-devastated northernmost province of Aceh.
The National Planning Agency (Bappenas) released its reconstruction master plan over the weekend. Set out in 12 published volumes, the plan covers four main areas – restoring livelihoods, restoring the economy, restoring infrastructure and last, but hardly least, restoring local government.
With more than US$4.4 billion already pledged from abroad, not including private and corporate donations, to pay for the mammoth reconstruction task, concerns are mounting that some of the donations will end up in the wrong pockets, particularly after the imminent departure of several foreign groups.
Implementation of the plan – to be tasked to a new Aceh Rehabilitation and Reconstruction Management Board appointed by a presidential decree and ensuring full accountability for each dollar spent under intense domestic and international scrutiny – will test to the full President Susilo Bambang Yudhoyono's commitment and ability to fight corruption.
Only days after the disaster struck last December, Speaker of the People's Consultative Assembly Hidayat Nurwahid warned the government that it must ensure that aid did not end up in the hands of corrupt officials with a propensity to "fish for great catches in murky waters".
Former US presidents Bill Clinton and George H W Bush also raised the corruption issue in a February meeting with Yudhoyono, who assured them that Indonesia would channel aid funds in a transparent, effective way.
Not just Indonesia
The Massachusetts-based Kurtzman Group has studied corruption in several countries and pointed out that Indonesia is not alone. India, where hundreds of villages were destroyed and thousands of people killed by the tsunami, ranks 42nd in its study of 48 countries. India has extremely high levels of corruption, serious problems with regard to transparency, and inadequate financial regulation, the group said. It does not overstate the case to add that some Indian officials have been siphoning off aid money for decades.
Malaysia, ranked No 22, and Thailand, at No 23, scored much better in the study than Indonesia and India, but both are far from corruption-free. Getting things done in these two countries often requires "facilitation payments", or bribes, said Kurtzman. And once those bribes are requested, there is very little that can be done to stop them.
United Nations deputy special envoy Erskine Bowles warned that problems should be expected as the recovery period begins. "Any time you have a disaster affecting this many people you would have some isolated incidents of money not ending up where it was intended to," he said in Aceh on Friday.
Obstacle course
Though graft is somewhat of an industry in Indonesia, where many officials view public office as a vehicle for private gain, would-be corruptors appear to face a much more serious obstacle course than normal in trying to misappropriate funds intended for reconstruction.
The Supreme Audit Agency (BPK) is working with international groups to supervise and monitor aid flows, US accountants Ernst & Young have been retained by the Indonesian government to audit foreign aid, and the Anti-Corruption Commission (KPK) is to monitor reconstruction to ensure that funds are not misused.
KPK chairman Taufiqqurochman Ruki said all projects in the government's blueprint must undergo formal tender procedures and warned that KPK will expose any irregularities that inflict losses on the state. "We demand accountability and transparency, including from the foreign donors that are helping the Indonesian government, so the public will know how much [aid money] has been gathered and how the funds are being used," he said.
More than 115 legislative council members have been implicated in corruption cases in 16 provinces – Aceh, North and South Sumatra, West Sumatra, Jambi, Bengkulu, Riau, Jakarta, Central Java, South Sulawesi, Bali, East Nusa Tenggara, South, Central and East Kalimantan, and Papua. Aceh has long been seen as one of Indonesia's most corrupt provinces. The ongoing operation to quell the separatist Free Aceh Movement, or GAM, had in essence left local authority in the hands of the military (TNI), an institution that has been blamed for much of the endemic corruption in Aceh. In 2003, Rp4.06 trillion ($429.5 million) was allocated to military operations in that province – about three times the annual provincial budget. However, a state-appointed auditor later found that some $291 million had gone missing.
KPK was established in the same year, and, unlike previous anti-graft bodies, was given the power to prosecute. Its first big hit came with the arrest of Aceh Governor Abdullah Puteh, who is currently under detention and awaiting trial at the Anti-Corruption Court. Puteh is accused of "self-enrichment" over the purchase of a Russian helicopter in 2002.
Ruki has warned that mismanagement and further corruption could boost support for GAM. "I hope that projects will proceed well and correctly, so as to be able to turn off or completely curb the Acehnese people's separatism."
All displaced civilians and civil servants in Aceh must be registered to prevent any parties from exaggerating their losses in an effort to gain more funds, he added.
Global graft watchdog lends a helping hand
Berlin-based Transparency International (TI), a global corruption watchdog, in a statement titled "Corruption Issues in the Tsunami Relief Effort and Post-Tsunami Reconstruction", asked rhetorically: Should the fact that Indonesia is perceived to be the fifth-most corrupt country (according to its rank in TI's own Corruption Perceptions Index), be just cause to prohibit aid, or certain types of aid, to the country after the tsunami tragedy?
According to TI, the answer is no. The new government should not be condemned because of high corruption levels in the past, it said, and argued that what is most important are the policies of the current government, in particular, the level of political will to practice good governance and introduce anti-corruption reforms.
TI worked with Bappenas on the master plan. The group's deputy executive director in Indonesia, Leonard Simanjuntak, said TI has already found "some irregularities, such as in the construction of barracks, some mark-ups on the prices and numbers... coming from some of the government institutions".
He warned of the tendency for certain officials to claim that, as this is an emergency and the situation is not normal, some precautionary procedures can be put aside. As a result, government agencies might have become careless about normal accounting procedures, making it easier for irregularities to occur, Simanjuntak said.
Knowing this, he argued that TI cooperation with Bappenas should continue. "We also try to influence them, so we're involved in the working groups on transparency and accountability and try to produce mechanisms and procedures for accountability and transparency, including auditing procedures, supervision procedures," Simanjuntak explained.
Post tsunami shock and awe
President Yudhoyono, who was elected on an anti-corruption mandate, launched a major anti-graft drive in December, urging government officials to avoid family businesses and ensure transparency in all state affairs. On the same day, the KPK signed an agreement with the country's 33 provincial governors under which they pledged to report their wealth and support the commission's efforts to curb corrupt practices.
"The level of corruption in our country is very alarming, and I urge every state official to lead by example in fighting corruption," Yudhoyono said.
Even if the pre-aid-fund-flow optimism and downplaying of the likelihood of serious graft occurring were to be misplaced, and foreign aid money is abused, there is still a potential upside available for Yudhoyono should he decide on a full shock-and-awe attack on the culprits, regardless of favor and political standing.
There could be very positive spinoffs for a country that has seen five leaders since 1998. Yudhoyono is the first leader to come to power with a pro-business agenda, though the president has said it will be impossible to eradicate corruption, collusion and nepotism if people in the government and the business community continue with "the old ways of doing business".
Conversely, if corruptors are quickly arrested and put on trial, that could signal meaningful progress on stamping out bureaucratic corruption and other hindrances to badly needed foreign investment. Indonesia could then truly claim to be open for business.
But perhaps it's best to refer to what UN envoy Bowles said when summing up the positive aspects of the first three months of the relief effort: "Yes, there have been glitches; yes, there have been mistakes; yes, we have taken two steps back, four steps forward – that is going to happen in a disaster of this magnitude. But we have accomplished a great deal."
[Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has worked in Indonesia for 19 years in journalism and editorial positions. He has been published by the BBC on East Timor and specializes in business/economic and political analysis in Indonesia.]