By Peter King, Sydney University
Abstract
This article argues that Indonesia since reformasi remains subject to powerful tendencies for disintegrasi both province-based "separatism" and general socio-political decay. These tendencies are greatly aggravated by the failure of democratically elected presidents and parliaments to effectively tackle endemic corruption or reform the armed forces, which continue to enjoy near-total immunity as a major practitioner, guarantor and enforcer of corrupt business practice and extortion.
The article notes the activism of civil society and liberal media on the corruption issue and the commendable new array of anti-corruption institutions. But it argues that reform efforts have been virtually nullified by broad collusion of Indonesia's political, bureaucratic, military and business elites in sustaining but also "democratising" and decentralising the system of corruption inherited from Suharto. Change must await new social and political struggles initiated outside the parliamentary arena which itself has become a major source of KKN (Korupsi, Kolusi dan Nepotisme).
Recent surveys suggest that there is much less concern now about Indonesian disintegration in the usual sense provincial defection than in the early days of reformasi under Presidents Jusuf Habibie (1998-9) and Abdurrahman Wahid (1999-2001). At that time both Acehnese and Papuan civil society mobilised strongly for independence and East Timor managed to achieve it. Aceh since early 2005 has enjoyed a ceasefire and disarmament agreement between the Free Aceh Movement (GAM) and Jakarta in which referendum and independence demands have been put aside and any immediate danger of secession averted. But Papua has remained restive and the special autonomy deal of 2001 has clearly failed to bring reconciliation or peace, undermined as it has been at every turn by nationalists and the military at the Centre. These same nationalists the ones prepared to back coercion and military action against proponents of peaceful demands for justice and self-determination among alienated minorities could also pose a long-term threat to the Aceh peace (Aspinall 2005, 6).
If the threat of outright disintegrasi by provincial defection has been lowered a little, the threat of disintegrasi in a social and more general political sense has not. KKN remains at the heart of Indonesia's problems. The economy which was so devastated by the Asian crisis in 1997-98 continues to languish, and benefits mainly those who contrived to avoid their just desserts following the financial meltdown of that time. External debt estimated for 2005 at US$128 billion was still half of GDP; per capita income remains barely $1000 per annum for Indonesia's 225 million people, and half of them live on less than $2 per day. The bill for debt repayment and interest, both domestic and foreign (the 2004 budget estimate was $14b.) is almost double the development budget (Wijaksana 2003). Indonesia has now paid off the IMF debt incurred in 1997-8, and the economy grew at better than 5 per cent in 2004-5. But the situation has since become dire once more. Inflation leapt ahead with the oil crisis which began in 2005 and there are grave continuing problems with infrastructure development and accommodating foreign investment.
This article explores the role of KKN, and the violence, especially TNI (Tentara Nasional Indonesia armed forces) violence, so often intimately associated with it, in future prospects for disintegrasi in Indonesia. At the same time it canvasses the potential role of civil society and political struggles in bringing KKN and its dependent Indonesian elite under control. It also highlights the neglected role of foreign actors, especially big resource investors and resource consumers, in the KKN dynamic and conundrum. It seeks to develop a framework for the understanding and control of KKN post reformasi going beyond the hegemonic World Bank or liberal understanding of the anti-corruption struggle (see World Bank 2003). In this view corruption reform depends on strengthening an existing legal-moral reform movement which is being led by one the reforming segment of the existing Indonesian elite. This segment is presumed to be allied with wider civil society forces in a struggle against the practitioners of KKN in legal, judicial, police, bureaucratic (ministerial and state corporate), military, political and business circles. Rather, I will argue, KKN should be conceived first of all as a partly competitive, partly cooperative leading industry of the ruling elite as a whole. It is certainly more competitive and decentralised than it was under the Suharto dictatorship, and there are quite a few new players. But there has been no significant elimination of old big players many of whom are living a luxurious exile in extradition-free Singapore (Aditjondro 2002). Moreover intra-elite competition over the spoils of KKN may be often a charade. When police and prosecutors, prosecutors and judges, judges and judges, or politicians and cronies appear to be in conflict there may be explicit or tacit deals in operation for mutually beneficial outcomes. After all the whole business of appealing corruption cases up the court hierarchy (or KKN food chain) is essential for the more intensive extraction as well as the more democratic distribution of bribes. Meanwhile police, prosecutors and judges alike are at least scoring points with some publics for assiduous hard work more likely foreign publics than domestic.
Underlying the bustle in the legal system there seem to be two fundamental deals or perhaps conspiracies which have shaped court outcomes decisively and rendered fundamental reform just about impossible. One is the military guarantee of the "safety" of the Suharto family, including apparently its ill-gotten tens of billions of dollars. This was originally extended by then armed forces commander and Minister of Defence Wiranto at the point where Suharto yielded up the Presidency in 1998, and is evidently being honoured by his successors, as discussed below. The second deal/conspiracy is even more speculative but seems to be another fundamental pillar of the post reformasi corruption order. It is the failure to seriously pursue the bank officials and conglomerate cronies who conspired to steal or embezzle tens of billions of dollars of Bank Indonesia liquidity credit rescue funds issued in 1998.
In addition, the unreformed armed forces (TNI – Tentara Nasional Indonesia), continue to enjoy the fruits of their own largely untouched and untouchable KKN and extortion empire. The army in particular continues to play a central role by both violent and other means in upholding the KKN order as a whole right down to village level where the parallel government of its "territorial function" continues to operate.
Finally, the external drivers of local corruption rather conspicuously neglected in the tables and methodology of Transparency International deserve to be placed centrally in the KKN picture. Indonesia's "weak" state capacity and corruption control mechanisms and enervated political will are to a large but indeterminate and inadequately researched extent a product of inadequately controlled forces in the international environment. Prominent among these are multinational resource companies with large investments in Indonesia, foreign consumers and traders of Indonesia's mineral, energy and (mostly illegal) forest products and associated foreign governments. Construction, armament and no doubt many other kinds of foreign companies and "their" governments are no doubt also important in a process involving continuous corruption of local corporate cronies, politicians, state officials and the military to grease the wheels of investment, licit and illicit trade and other business dealings. The role of countries such as Singapore and Malaysia in providing safe haven for Indonesia's corporate criminals and their billions also needs to be mentioned in this context.
The BLBI scam and after
In the immediate aftermath of the Asian crisis of 1997-8 the chief New Order corporate, parliamentary and bureaucratic actors resorted to KKN on a massive scale by embezzling the huge IMF and other rescue funds which were intended to reflate, restore and help reform the banking system. As this predatory class, still led by the Suharto family and its chief corporate/banking cronies, resumed the plunder-by-corruption of the Indonesian interior (to borrow Marx's phrase), they were aided, abetted and joined by a widening circle of senior bureaucrats, and state industry sector executives, together with the "court mafia" judges, prosecutors and court officials, and police and military generals (many retired) as well as politicians and party officials.
Then, as decentralisation reforms took hold from 2001 and large new revenues flowed towards provincial and regency coffers, local businesses and local-level officials, both bureaucratic and elected, began to join the KKN club. They soon began to operate in ways barely possible under Suharto's centralising dictatorship – but including, for instance, bribery of politicians in Jakarta to actually release allocated relief funds. The potential of special and regional (ordinary) autonomy to deliver long-delayed economic justice and a sense of effective local participation in Aceh, Papua and elsewhere was seriously compromised as a result.
Money politics between parliaments at all levels national, provincial and regional and the electorate were complemented by money justice and kleptocratic state administration as well as corruption, illegal business dealing and extortion on the part of the military. Much of this was an old New Order story, but in conditions of demokratisasi it was at once less centrally regulated, much more transparent and still massive. Rarely can theft on such a scale have been so openly conducted. Based on the first $16 billion IMF-supplied credit to Bank Indonesia, BLBI (Bantuan Likuiditas [Liquidity Credit] Bank Indonesia) enabled a bank bailout whose funding was misappropriated almost totally by the crony banks of the leading cronies of the old regime. A derisory fraction of these funds has been recovered much went to pay off foreign debt and to prop up (or, later, recover ownership of) bankrupt conglomerates.
In addition, Bulog (Badan Urusan Logistik the national logistics agency), including its poverty alleviation fund; Pertamina, (Pertambangan Minjak dan Gas Bumi Nasional the state oil and gas company), and other government statutory bodies continued to be fair game for various scams and large-scale theft and kick-back schemes, as before under Suharto. The poverty which needed to be alleviated turned out to be the comparative poverty of the well-heeled in the wake of the Asian crisis. Poverty intensification for the general population was a feature of the post-meltdown scene, and it was generously helped along by the masters of KKN.
In certain cases the transparency of reformasi was painful for KKN practioners, especially for the sole Suharto crony, Bob Hasan, and the one Suharto child, Tommy, who went to jail. But some foreign corporate players also found transparency tough. The US-owned Freeport mining company in Papua, for instance, having cemented its status in the 1960s by massive in effect, free share issues to Suharto foundations and cronies, paid off TNI (the armed forces) in various ways for many years, but then found itself required to conform with the US Foreign Corrupt Practices Act. Hence it sought to reduce contributions to senior generals' bank accounts and other off-budget expenditure. The result was the unresolved murder of two of its own employees in 2002. This was almost certainly engineered by its good friend and accomplice in Papuan dispossession, the army. But the US Attorney General, mindful of the pressing requirements of the war on terror, eventually blamed the murder was on the Papuan freedom fighters, the OPM (Organisasi Papua Merdeka).
Violence, corruption and the TNI
Such violence is no accidental or ancillary part of the KKN story. Systematic and large-scale violence enters the picture with Suharto's assault on the Left and the mass killings of 1965-66. These were accompanied by imprisonment and forced labour for hundreds of thousands more, and the dispossession and "decitisenising" of the extended families of tapols (tahanan politik political prisoners) and others which followed. This ordeal for millions was justified by a mendacious regime-propagated myth of the Left as a daemonic threat to social order. The way was open to the politics (and economy) of the so-called "floating mass" (massa mengambang) in which the people were truly weightless when it came to political or industrial influence and organisation (Farid 2000). Thus the unrestrained exploitation of labour and the extra-legal enrichment of the First Family and its leading Chinese and pribumi (native) cronies could proceed without serious legal, political, industrial or agrarian disturbance.
General Suharto was the architect of the system and its executor. The corpses of 1965-66 and the archipelago of gulags were a graphic reminder that dissidence, resistance, or simply a Left orientation, carried a heavy price. In Papua and Aceh, where disintegrasi ("secessionism") of the first kind identified above has been an issue for much more than a generation, policies leading to disintegrasi of the second kind (sosial) were actively practiced at the point of a gun. There was exploitation without compensation on Suharto's orders of local resources (copper and gold, as well as timber) by complicit multinationals in the interests of associated cronies and generals as well as foreign shareholders and consumers (see King 2004, chapter 5). Local resistance to dispossession, impoverishment and environmental despoliation based on corrupt dealing was met with military and police "sweeping" and shooting, with jailing and assassination. Resistance has persisted up to the present in Papua where an effective peace deal with Jakarta is still lacking.
Despite the efforts of President Abdurrahamn Wahid and a few other leaders under reformasi, the violent and derogatory myths of the Suharto era continued to flourish, together with the Cendana Family billions. The reconstruction of a viable Left opposition languishes correspondingly. The synergy between KKN and La Violencia has been overlooked or slighted by those over-anxious to celebrate the achievements of demokratisasi, or to insist in the face of much evidence to the contrary that a benign transition is underway. Indonesian civil society remains lively but embattled and still struggling for real empowerment despite renewed media freedom. The reasons are not far to seek.
Intimidation of civil society
From the procured murder of the judge who sentenced Tommy Suharto to prison on corruption charges in 2001 to the BIN (Badan Intelijen Negara State Intelligence Agency) associated poisoning murder of Kontras (Komisi Untuk Orang Hilang dan Korban Tindak Kekerasan Commission for Disappearances and Victims of Violence) founder and scourge of the TNI, Munir, in 2004, the wages of honesty in civil society or the judiciary can be death. Straightforward military violence, as in the 2001 assassination of Papua Council Presidium chairman and leader of Papua's non-violent independence movement, Theys Eluay, by army special forces (Kopassus), is one issue. Another is military-protected or military-induced violence in support of KKN, as in the recruitment of so-called "false OPM" in Papua who seem to have carried out the intimidating murders at the Freeport mine in 2002, and much of the enforcement and intimidation activity attributed to preman (gangsters).
The NGOs and press alike must contend with the hoodlum factor wielded most notoriously, often with police or military complicity by leading Sino-Indonesian tycoon, Tomy Winata. In his long-running war with Tempo magazine over a March 2003 story concerning a suspected arson in a huge textile market in Jakarta, the Tempo offices were attacked by Tomy's goons (the invaders included members of then President Megawati's PDI P party's paramilitary youth, Young Bulls). Tempo's editor (Bambang Harimurti) was attacked by other thugs at a Central Jakarta police station, and the house of its co-founder (Goenawan Mohamad) was confiscated by pliable judges in the East Jakarta district court to cover a Winata libel suit.
But TNI is not alone in protecting its own corruption and other illegality violently, as the case of Tommy Suharto makes clear. There is in effect one law for the big corruptor and another law for the small one and the orang kecil (little person) in the slum or kampung. The difference is made by the winning combination of money and violence. Tommy Suharto's judges in his subsequent murder trial did convict him, but gave him a considerably lighter sentence (15 years, eventually reduced to four with remissions) than his hired hitman. Imagine the feelings, let alone the calculations, of those sitting on the bench at his various trials, knowing also that Tommy had spent a year on the run in Jakarta under military protection in the lead-up to his murder trial and not forgetting that the former First Family's wealth, including his own, remains largely untouched (Tupai 2005a).
President Yudhoyono had made the campaign against corruption a centre piece of his 2004 election campaign, and in May 2005 told the chairman of his own Coordination Team for the Elimination of Corruption (Tim Task Tipikor), Special Prosecutor Hendarman Supandji, "that regardless of whomever was found to be involved in corruption, he should carry on with his duties". However in May 2006 Yudhoyono moved to drop all corruption charges against Suharto but was forced to hold off temporarily in the face of a public backlash. Nevertheless his supposedly "reforming" Attorney General, Abdul Rachman, former director of the Jakarta Legal Aid Instiute (Lembaga Bantuan Hukum LBH), soon afterwards succeeded in persuading an appeals court to allow charges to be dropped in a $600 million corruption case against Suharto family foundations on the grounds of the ex-President's (highly controversial) ill health (Gelling 2006). Seriously pursuing the Suharto billions is just too difficult, dangerous and potentially self-incriminating for the post-Suharto elite.
Here is the key to KKN money protects existing money; money restores lost money; money makes more money; money disarms, demoralises or can be used to destroy the protagonists of combating bad money. Violence is the longest of the long shadows thrown by black money, which is probably, one way or another, most money in Indonesia. But money alone, including the lack of it, is also at the root of the decay of civil society since the early days of reformasi.
For instance the leading environmental NGO, WALHI ( Wahana Lingkungan Hidup Indonesia the Indonesian Environmental Forum) suffers from serious skill and capability shortages (Rukmantara 2005), quite apart from military intimidation of its field workers attempting to monitor illegal logging. The billions of rupiah thrown around by big corruptors in logging and timber cases speak louder to many than fearless, well-informed monitoring and reporting. Reformasi aktivis aktivis from NGO and academic circles were appointed to the KPU (Komisi Pemilihan Umum National Elections Commission) to replace the party nominees who organised the 1999 election. But they proved unable to resist the lure of the KKN that several of them had established their names and careers by denouncing. They apparently all eleven of the KPU Commissioners have pocketed kickbacks to the tune of several million dollars in total, maintained "tactical funds" with which to bribe BPK (Badan Pemeriksa Keuangan Supreme Audit Board) officials and signalled their new elite status in an elite manner. Only one of them has so far seen the inside of a gaol.
Both in the Centre and the regions, stalwarts of civil society in the legal profession have discovered the indispensability of divided loyalties. Lawyer Adnan Buyung Nasution, a leading figure in the crusading human rights NGO, YLBHI (Yayasan Lembaga Bantuan Hukum Indonesia the Indonesian Legal Aid Foundation), induced a serious split in the organisation when he began taking briefs for TNI generals accused of gross human rights abuses in East Timor. In Papua several human rights activists in cash-strapped local NGOs have apparently been advising the accused in the Papuan logging scandal which forced President Yudhoyono to take action early in 2005. Their efforts were not in vain. Out of 137 police cases not a single one resulted in a conviction, according to the Jakarta Post. TNI and KKN Today
The President has not yet been heard to comment about the collapse of the biggest single legal action of his anti-corruption presidency. Meanwhile the biggest single Indonesian beneficiary of illegal logging in Papua directly through the companies they control and indirectly by extortion and facilitation of log production and export by others is undoubtedly the President's old institutional home, the military. TNI is also the chief purveyor, provider, procurer, protector and provocateur of violence in Indonesia, and especially now in Papua. The army obviously occupies a crucial position in KKN, although the naval role in illegal export and trans-oceanic theft (of oil, for instance) needs to be borne in mind. TNI (including retired generals') business, even the ostensibly legitimate business organised under so-called foundations (yayasan yayasan), operates in a shadow world barely subject to transparent accounting or effective government regulation at all. There has been some window dressing under reformasi, including audits by big-name accounting firms, but the situation is unlikely to change much despite the supposed return of these businesses to civilian control (Misol 2005; Siboro 2005). The military are heavily involved as sub-contractors, extorters, "protectors" (for a price) in all major multinational resource projects (Freeport, Papua; Caltex, Aceh, and shortly, if not already, BP in Papua as well).
More than any other Indonesian institution (and many if not most Indonesian government ministries and statutory authorities operate to a large extent outside effective political or legal control) the military still contrive to operate as a state within a state, even though they have lost their appointive seat quota in parliament under reformasi. This military quasi-state is often almost literally at war with that other lesser quasi-state, the police, over demarcation disputes in the black economy. Some excellent police work against home grown and international jihad terror networks followed the Bali bombings of 2002. But in October 2005 President (and former Letjen ) Yudhoyono invited TNI to renew its so-called territorial function, which was supposed to be ended under reformasi, in the interests of the US-backed local war on terror. And indeed full military relations with the United States resumed in early 2006, including IMET training and restored ability to purchase sorely needed spare parts and new military equipment all in the interests of the war on terror and of course TNI's own terrorising habits.
The anti-corruption charade
Because of Indonesia's multiple governmental sovereignties there is a large element of charade in the current President's "war on corruption" and all previous efforts so far to come to grips with the Suharto legacy of missing billions. Yudhoyono denounces corruptors and calls for reform and prosecutions, but pardons Suharto the fons et origo of contemporary corruption and fails to act against other "big fish" and patently rotten institutions. Police arrest, or mysteriously fail to; prosecutors prosecute, or mysteriously reduce or drop charges; judges convict and sentence, or mysteriously find innocence in the flagrantly besmirched; offenders abscond or appeal and stay out of jail; appeal judges mysteriously reverse convictions or slash sentences the KKN merry-go-round whirls on. As has been archly observed, the wages of sin in the whirl can be seen in the car park at the Attorney General's office, whose own prosecutors as well as representatives of big-fish corruptors routinely follow judges around with offers that are not often refused. There is lavish compensation available for the shabby judicial treatment of the same prosecutors' occasionally convincing attempts to get plunderers convicted. In the end few are jailed, sentences are light and subject to reduction and prison conditions quite often commodious and always subject to negotiation, while little of the stolen millions or billions is ever recovered.
Meanwhile a criminal industry of bureaucratic, military, police, judicial, political, banking and business (including international business) KKN players prospers together with its attendant luxurious and high-handed way of life at the expense of the tax system, the orang kecil, the honest middle class and overseas aid donors and lenders. But the state and associated institutional donor-lenders (World Bank/Asian Development Bank/IMF) occupy an ambiguous position. Through the Indonesian operations of immensely wealthy resource multinationals they are in effect major beneficiaries as well as funders of the KKN system. And so are First World consumers of the fruits of unsustainable and illegal forestry and environmentally and socially debilitating mining and oil and gas production. This makes First World governments dubious allies of Indonesian civil society in the anti-KKN struggle.
The civil society role in resistance to KKN, especially its more violent manifestations, is altogether admirable and of course dangerous. There is also danger for government officials and not only judges. Reformasi Indonesia has lost at least two fearless prosecutors in suspicious circumstances. In the light of the Munir poisoning case, there might have been foul play at work to explain the sudden deaths in office of zealous former Attorney General for Gus Dur, Baharuddin Lopa (died in Riyadh, July 2001), who secured the Bob Hasan conviction, and Public Prosecutor Muhammad Yamin (died in Bali, April 2004). Unfortunately, their bodies were never autopsied.
KKN, violence and the presidency Abdul Rahman Saleh was President Yudhoyono's replacement for the notoriously corrupt and pro-military former Attorney General under Megawati Sukarnoputri, MA Rachman. But under this supposed reformer the official investigation of Munir's killers has stopped short of any serious attempt to investigate let alone charge the obvious high-up suspects in the case. These include former BIN boss, LetJen (retired) Hendropriyono, and his former deputy, Muchdi Purwopranjono. The BIN operative and Garuda pilot accused of the murder, Pollycarpus, made 35 mobile phone calls to Muchdi in the weeks surrounding Munir's murder. This is the status quo ante: never investigate masterminds. It was established when only low ranking Kopassus soldiers were charged over the Theys Eluay assassination in Papua during 2001. President SBY mildly deplored the failure of Hendropriyono to testify before his own Presidential Fact-finding Team (TPF), but not the "Hendro" slighting of both Tim Pencari Fakta and Munir. SBY has never responded to the outrage generated by the failure of the police investigators or the AGO prosecutors to act on the well-grounded recommendations of this team to pursue the BIN connection. He has still not released the full TPF report. Increasingly a kind of real or phony war of attrition is emerging between designated anti-corruption and transparency-promoting bodies and other, usually more powerful, government and judicial /legal agencies. In 2004 a row erupted between the BPK audit board and the Presidential Secretariat, and in 2005 another began between the Corruption Eradication Commission (Komisi Pemberantasan Korupsi KPK) and the senior justices of the Supreme Court, with the President himself (no less) attempting to mediate in both cases.
The examples above suggest a syndrome of governmental paralysis in the face of KKN and its consequences and paralysis of a comprehensive kind, since KKN severely impacts upon every important policy and institution in the republic. The President takes initiatives but hesitates fatally to follow through, and compromises his own reputation and effectiveness in the process. Government ministries, for whom tactical funds and off-budget budgets are the stuff of life, do not even have a reform plan in front of them which would permit them to parlay their own essential income-boosting black funds (civil service pay being universally inadequate) against budgetary reform and a big boost to salaries.
Perhaps the greatest irony of the KKN saga surrounding the Presidency is that the post-Suharto President with the most imposing credentials for reform (including even KKN reform), reconciliation and democratic dealing Gus Dur was impeached and sacked by the MPR (Majelis Permusyawaratan Rakyat People's Consultative Assembly) in 2001 for a comparative bagatelle of corruption. This was Rs35b. spirited from Bulog by his masseur, and US$2 million in aid money received from the Sultan of Brunei unaccounted for. His dabbling in KKN was a transparent pretext for his political rivals and military spoilers to be rid of someone who was seeking to construct an action government in the wake of frustrated efforts at military reform and peacemaking with Papua.
The failure of institutional reform
While the prospect of serious reform action induces Presidential paralysis, parliament is not immune from the syndrome either. Quite apart from politicians' own addiction to money politics there has been failure since 1999 to follow through and make effective the promising institutional innovations of the period a Corruption Eradication Commission (Komisi Pemberantasan Korupsi KPK) and Anti-Corruption Court ; a Judicial Commission to monitor the mafia in the court system; a proactive Supreme Audit Agency (Badan Pemeriksa Keuangan BPK), and, less impressive, a Komisi Ombudsman Nasional. The failure can be seen in documented kickbacks to potentially inquisitive politicians in KKN cases (Wijanarko et al. 2005), and brokerage (for substantial fees) by MPs and their agents of the release of disaster relief funds controlled by the parliament to regional governments. The lone party in the DPR (Dewan Perwakilan Rakyat House of Representatives) enjoying serious reform credentials, the Muslim-based Prosperous Justice Party (Partai Keadilan Sejahtera PKS), which received 7 per cent of the vote in the 2004 national election, may be losing those credentials (Cahyono 2005; Soekanto 2005).
Paralysis is evident in the sham or half-hearted reforms, sham political battles, sham legal actions and other merry-go-rounds of the current Presidential war against KKN. Despite a very great deal of huffing and puffing almost no big players in the major corruption cases the BLBI liquidity fund and other bank scandals, illegal logging and log export, fuel smuggling (and theft) have been prosecuted successfully. The performances of the Attorney General's Office (AGO) and the President's anti-corruption team (Tim Task Tipikor) have been woeful. Corrupt courts and prosecution; bureaucracy still rife with off-budget budgets fed by private sector "clients" that outstrip official ones (and actually setting the real income of many public sector employees well above what they could expect in the private sector); official at state enterprises indulging in kickbacks, theft and smuggling; banks revitalised at public expense as cash spigots for corrupt cronies; military and police presiding over extensive protection rackets and illegal resource extraction the story is not an elevating one. Indonesia in 2005 continued to bump along near the bottom (137th) of Transparency International's Corruption Perception Index. A detailed calculation of the multi-billion dollar "costs" of corruption, which are of course the purest kind of effortless profit for many, would suggest that KKN is among the largest and most successful industries in the land. Fuel on the KKN Fire
A nice illustration of elite rapacity and political paralysis at work can be gleaned from the vexed case of fuel subsidies as administered by Pertamina, the state fuel monopoly. From the Suharto period to the present Pertamina has been a favourite target for plunder by KKN adepts in the company itself and in the government, the police and the military. Although the 2005 cuts in fuel subsidies under SBY were hailed as a breakthrough, fuel prices remain less than half the going world market price. With its run-down infrastructure and chronic FDI shortfall, Indonesia is unlikely to escape the status of net oil importer which it attained in 2004 despite vast untapped local reserves.
Fuel imports have persistently risen in recent times out of line with economic performance. This has been partly driven by the lucrative business of illegal re-export (smuggling) of oil and oil products for sale in Singapore and elsewhere at a cost of at least a billion dollars per annum. A large proportion of all imported fuel finds its way back to where it came from. In addition there has been outright theft on a massive scale from Pertamina storage facilities in East Kalimantan (US$500m worth in one 10-month operation over 2004-5) and elsewhere. Although the fuel subsidy is a budgetary black hole and an economic disaster for the country, the kerosene subsidy in particular is widely seen by the poor as a direct benefit and a rare example of apparent government concern for them.
Thus the fuel subsidy, which still threatens to blow the budget away altogether, remains an area of acute political sensitivity. Suharto was after all brought down by the "Jakarta street" after a fuel price rise, for all the good that has done the poor. SBY more than doubled key fuel prices in October 2005, but the kerosene price was still around one third of production cost at Rp 2,000 (19 US cents) while a litre of petrol was still only Rp 4,500. With an estimated full-year saving of over US$2b. the subsidies were still costed at Rp138 trillion (US$13.8 billion) for 2005 as the government committed to a cap on its deficit of Rp 25 trillion There was a compensating but rather derisory subsidy to the very poor (15.5 million families 30 per cent of the total) of Rp 4.8 trillion enough for monthly payments of Rp100,000 to each family for the rest of 2005 (Guerin 2005; Donnan 2005).
The target, government advisers said, was to bring petrol prices in line with market levels by January 2007. Diesel was to follow by July 2007 and kerosene, the most subsidised fuel, would to be brought to market prices by January 2008 (Donnan 2005). But clearly a fundamental price reform of this kind in the absence of any other serious reform agenda could see the "street" erupt again and even topple the whole KKN house of cards next time around. The paralysis and now unpopularity afflicting the Yudhoyono presidency does not give grounds for much optimism that re-election for him or a soft landing for Indonesian society is likely.
Prospects for radical reform
Since the Indonesian elite is almost defined by opportunities for beneficial corruption, it will be difficult to seriously tackle the problem without major political upheaval. Meanwhile Indonesian civil society is capable only of inducing minor upheavals. Pro-transparency NGOs have had considerable success in bringing corruption cases to light for instance the KPU (election commission) case. And "specialist" anti-KKN NGOs such as Indonesia Police Watch have proliferated alongside the more celebrated "generalist" ones the Indonesian Transparency Society (Masyarakat Transparansi Indonesia), ICW ( Indonesia Corruption Watch) and Transparency International's Indonesia Office. WALHI, the Indonesian Environmental Forum, an umbrella NGO, plays a strong role in exposing the corruption underlying environmental vandalism. Kontras (Komisi Untuk Orang Hilang dan Korban Tindak Kekerasan Commission for Disappearances and Victims of Violence) under Munir and subsequently has played a key part in exposing the military role in the violence which underlies so much large-scale corruption.
Tremendous efforts have been made in the NGO sector, while street protest against government dilatoriness and dereliction has persisted, together with indispensable exposure journalism in the liberal media (Tempo weekly in particular). But civil society seems weaker overall now than at any time since the onset of reformasi. There is a rather bland if not blind optimism in some quarters about the inevitable triumph of Indonesian reform in the long run under democratic conditions. But a more persuasive South East Asian pattern is democratic failure followed by authoritarian resurrection. Although the Aceh peace agreement counts as a considerable success for reformasi there is no reliable sign of an advance to fair dealing in Papua. The military's political comeback is continuing and with it popular resentment of TNI. Disintegrasi in its twin connected manifestations institutional and policy failure and social despair on one hand and further provincial defection on the other seems definitely in the works. This at any rate is my theme.
Although Indonesia has been deemed a failed or at least failing state in some quarters since the Asian meltdown, theory has not quite come to terms with the peculiarities of reformasi's most momentous failure. No doubt the superior perspective for grasping the KKN problem is the one favoured by seasoned political economists with a Marxising bent. The outstanding practitioners of the rent-seeking approach to corruption in Indonesia, Richard Robison and Vedi Hadiz, tend, however, in my view, to blame the military rather too little for the failure of reform since Suharto. They are also rather dismissive of civil society:
Civil society unchained proved neither to be uniformly middle class, nor progressive, nor civil....[which is] understandable in the context of the pervasive apparatus of repressive, corporatist, and ideological controls applied so successfully by the [previous?] regime to every facet of social and political life...
That no [sic] progressive civil society emerged in post Soeharto Indonesia may be seen, ironically, as the consequence of authoritarian rule being replaced with an increasingly fragmented, ineffective and diffuse form of government unable to guarantee civil rights. (Robison and Hadiz 2004, 31).
The repressive controls of the old New Order are far from being fully relaxed, as Papuans, Acehnese and many others will attest. State violence and intimidation have the same potency as ever to tame a civil society which extends well beyond that neo-liberal reforming middle class which these two authors perhaps rightly regard as a feeble force. Finally, the government and parliament in Jakarta are far from having any straightforward commitment to upholding civil rights or even elementary honesty in state operations. Fragmented, diffuse and ineffective government in certain areas is exactly what upholds the current KKN regime as it continues to divert and consolidate the diversion of billions of dollars to undeserving pockets. Those who have pocketed the billions are all too aware that reformasi with focus and teeth is a step into a dangerous unknown. Reformasi is not beyond their ability, just in conflict with their interests in the short to medium term at least.
What, then, is to be done? A bankrupt and politically ailing Indonesia remains subject to powerful tendencies for disintegrasi both separatis and koruptor driven, and boosted if anything by the nationalist and militarist turn of the political class since the year 2000. Indonesia remains peculiarly vulnerable to international economic and political forces and pressure, for good or ill. But it's not clear that reform will be served on balance by these pressures, especially since the United States resumed full relations with TNI on transparently false assumptions in 2005-6. Nevertheless, international campaigns and policies designed to bring Indonesia's grand foreign corporate corruptors in the resource sector to heel, extradite indicted cronies who have fled abroad, restrain governmental and consumer collusion in the illegal log trade and bring untouchable criminal generals before a UN tribunal all have a place in the struggle with KKN.
However, the main burden of the struggle must lie with Indonesia's insulted and injured. The handful of genuine and the much larger number of fair weather reformers inside the elite who can be propelled into action by effective struggles emanating from civil society and the street will also have a role. It looks like a very long haul, with money-driven national politics, parties and elections seemingly impotent to initiate real reform. But there have in fact been little victories along the path of net failure so far. The array of new anti-KKN legislation and institutions is impressive and available for a genuine reform movement, albeit largely nullified so far by the judicial-legal-police mafia. Moreover the setback for the military in East Timor (1999) and Aceh (2005) and potentially in Papua should also be noted.
Disintegrasi by provincial defection is viewed as a calamity by definition for the most part in Jakarta, but the impulse for defection arises from unconscionable and (in Papua's case) continuing misrule, mainly by the military. The solution for it is not more repression but self-determination. Indonesia as a polity not to mention its international reputation is better off with East Timor independent and the GAM in Aceh able to vie for power peacefully. (In the case of East Timor and Papua at least, disintegrasi propinsi can paradoxically help to avert disintegrasi sosial.) Any turn of the political wheel or reform which pushes back the TNI empire of impunity in business, extortion and repression must be accounted a plus for the anti-corruption struggle. This struggle in turn is the key to the full civilianising and, ultimately, civilising of Indonesian politics.
Notes
1. Preliminary versions of this article were presented at IIAS (the International Institute of Asian Studies, Leiden) and in the Graduate Seminar, School of Political, Social and International Studies, University of East Anglia, during 2005. The author wishes to thank IIAS for its generous offer of an affiliated fellowship in support of the research, and Lily Rahim in particular for invaluable critique of my drafts.
2. Based on analysis of an Indonesian electronic clippings archive Gerry Van Klinken informs me "that disintegrasi leaps into the popular vocabulary in 1998, stays there to the end of 2001, then drops away again as quickly as it had appeared". Email, 19 July 2005.
3. CIA estimate. The CIA's estimate of GDP at purchasing power parity was US$901.7 billion for 2005. See CIA 2006.
4. 'Economy of Indonesia', Wikepedia, 7 October 2006.
5. Is KKN a positive sum game for the players? In the (notorious) view of Supreme Court chief justice, Bagir Manan, the most important part of a corruption investigation is the return of stolen money rather than punishment of the corruptor. 'Court chief's words draw fire', Jakarta Post, 10 August 2006. Evidently the risks and rewards of KKN are seriously out of balance.