Can Chinea help RI eradicate corruption?

Can Chinea help RI eradicate corruption?

Charles Himawan, Professor of Law, University of Indonesia,
Jakarta

During his meeting with President Megawati Soekarnoputri on
Wednesday, China's Premier, Zhu Rongji, emphasized China's
support for Indonesia's attempt to accelerate its economic
recovery. But before Indonesia can do that, the country must be
free of corruption. What better person than Zhu himself to advise
the Indonesian leadership on how to eradicate corruption
effectively?

Many wise men have advised us that corruption negates economic
development. Taking this cue, the Chinese leadership, believed to
be spearheaded by Zhu, has come down very hard on corruptors,
particularly the "big fish".

The death sentence is imposed on them. The strategy is in line
with a popular Chinese saying: To catch a snake, one must always
go for its head. If you catch the body, the snake will surely
bite you.

The big question is what is the result of Zhu Rongji"s tactic
in catching the heads of the corruptors? If we take simple export
performance as an indicator of a nation's economic strength, we
can see a remarkable difference between Indonesia and China.

When China first launched its semi-market economy in 1980,
Indonesia's exports were far ahead of China's (US$21.1 billion
versus 18 billion). This was a time when Indonesia's public
officials were not as corrupt as today, and it was also the
beginning of a campaign in China to eradicate corruption.

Within five years, i.e. by 1985, Indonesia was left behind
($18.5 billion compared to $27,3 billion). After 1990, it became
extremely difficult for Indonesia to catch up with China as the
following table shows us.

Though a direct correlation between a corrupt-free nation and
the surge in exports still needs to be scientifically proven,
many development practitioners believe that a corruption-free
nation performs better in its export activities.

One simplified reason is that in the export business, a long
chain of business activities are involved. So that the goods may
be competitive on the world market, every link in the chain must
be free of bribery. Only then will Indonesia's exports reach
hundreds of billions in US dollars.

Though China in terms of having a clean government cannot yet
be ranked with the Scandinavian countries or with Singapore, the
determination to crack down on corruptors has attracted another
important source of capital, i.e. foreign direct investment
(FDI).

The latest statistics indicate that China and Hong Kong have
absorbed about $150 billion between 1998-2000 (7.6 percent of
global FDI) as compared to Indonesia, which had negative FDI
(minus 0.2%, Asiaweek recently reported). Sadly, $7.7 billion was
taken out of Indonesia during the same period of time.

China's strategy is in line with the wisdom of Singapore's
Senior Minister Lee Kuan Yew, who says that "If you want to
grow ... structure your society and your policies such that
you can make maximum use of international capital".

One way to be able to make maximum use of international
capital is for Indonesia to structure its society and policies so
as to lead to a corruption-free nation.

The international fund managers do not expect Indonesia
to get a clean government like Singapore in the foreseeable
future, but they do expect concrete action from the Indonesian
government against corruptors in the same way as China is doing
now.

Indonesia has beautiful policies designed to rid itself of
corruption, but they remain beautiful in encapsulated
legislation. No concrete action has yet been taken against the
heads of the corruptors. Should Indonesia follow Zhu Rongji in
shooting the "big fish"? To date, China is said to have executed
seven major corruptors.

In Indonesia's wayang (shadow puppet) play, some suspected
corruptors are today being investigated, sentenced and even
having their cases discussed by the Supreme Court, but except for
one or two cases, there has been no clear evidence yet that the
corruptors are to be punished.

Perhaps China's method of executing corruptors by shooting
goes against Indonesia's spirit of humanism, and therefore is
unlikely to be adopted even by the most hardened Indonesian
government.

One alternative would be to confiscate and return ill-gotten
wealth to the treasury. Yet before this could take place, solid
and corruption-free teamwork between the three most important
law-enforcement agencies, the police, the prosecutors and the
judges must first be established under the Coordinating Minister
for Politics and Security.

Otherwise, Indonesia's economic recovery will be extremely
difficult, if not impossible. The initial steps, however, must
first be taken Indonesia itself before any meaningful support
from Zhu Rongji can be effectively availed off.

Export value of Indonesian and Chinese goods in billion US$

(1990, 1995, 2000):
Indonesia, 25,5, 45,5, 59,8;
China, 60,9, 135, 240.