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.