Despite tougher measures to combat graft, Indonesia remains at the top of the corruption index in the East Asia region, the latest UN Development Program report says.
The report, Tackling Corruption, Transforming Lives, gave Indonesia a score of 4.2 out of 5 on the corruption index for its police, judiciary and tax office -- the highest score in the East Asia region.
The report cited the 2007 Transparency International Global Corruption Barometer, which measured public perceptions of corruption in public service institutions.
The Indonesian police often demand bribes from the public, the report said.
"One study, in Indonesia, involved accompanying truckers in long inter-provincial journeys that encountered multiple police checkpoints," it said.
"The bribery expenses at these checkpoints constituted around 13 percent of the transportation cost which, though less than the fuel cost, is a little more than the wage cost."
Indonesia is using the tax revenue sector as a pilot project for institutional reforms designed to curb corruption.
The UNDP released its Asia-Pacific human development report in Jakarta on Thursday.
The report said nearly one in five people in the Asia-Pacific region claimed to have paid a bribe to police during the previous year and only a quarter of crimes in Asia were reported because of a lack of trust in the police and courts.
"Justice has a price, and two-thirds of the Asian population consider the courts to be corrupt," it said.
The report said "petty" corruption was a massive drain on Asian economic growth and hit the poor the hardest.
"Petty corruption is a misnomer," Anurahha Rajivan, head of the UNDP Regional Human Development Report unit, said.
She said anti-corruption efforts too often concentrated on exposing the "big fish".
"Hauling the rich and powerful before the courts may grab the headlines, but the poor will benefit more from efforts to eliminate the corruption that plagues their everyday lives," she said.
The health sector also is subject to corruption, the report found, with many people in South Asia having to pay bribes to gain admission into the hospital and mothers even having to pay to see their newborn babies.
Corruption has led to the deaths of millions of the children in the region from diarrhea and diseases caused by unclean water and poor sanitation.
In the education sector, corruption is related to fewer children attending school and higher drop-out and illiteracy rates.
An extreme type of education corruption is found in "ghost teachers" who may be on the payroll but never set foot in the classroom, the report said.
Corruption has also been evident in natural resources, with many politicians awarding concessions to family members or political allies.
It said in some Asia-Pacific countries, the proportion of illegal logging, which often involved corruption, might be as high as 90 percent.
"In Indonesia, less than one-fourth of the total logging operations, estimated at US$6.6 billion, is legal," the report said.
"Informal payments and bribes in this sector are estimated to be more than $1 billion a year."
UN resident coordinator and UNDP resident representative in Indonesia, El-Mostafa Benlamlih, said for Indonesia, the timing of this report could not be better because the debate about how to deal with corruption was as lively as ever.
"Stemming the tide of corruption today will save Asia-Pacific nations billion of dollars toward a better tomorrow," he said.
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