Corruptions hurts the growth of small businesses

JAKARTA (JP): Corruption and collusion between government officials and businessmen have hampered the growth of small businesses because they channel most of the credit from state banks to large entities, legislator A.A. Baramuli said here Saturday.

Speaking at a one-day seminar on the Success of Malaysian Indigenous Enterprises, conducted by the Association of Indonesian Moslem Intellectuals (ICMI), Baramuli said many Indonesian officials have special relations with conglomerate owners.

He said the recent Rp 1.3 trillion (US$620 million) loan scandal at Bank Pembangunan Indonesia (Bapindo), which involved businessman Eddy Tansil and a number of officials, serves as a good example of collusion between Indonesian officials with businessmen.

Baramuli, the man who uncovered the Bapindo scandal a few months ago, listed a number of cases of collusion that he discovered during his time as an executive of the Indonesian Chamber of Commerce and Industry (Kadin) from 1973 through 1983.

"Once an indigenous businessman wanted to acquire a permit to appropriate a two-hectare plot for his project but he couldn't get it. At the same time, another businessman got an appropriation permit for a plot of almost one thousand hectares that overlapped the same location.

"It turned out that the second businessman had special relations with an official who had the authority to issue the permit and that the businessman involved some family members of the official in the business," Baramuli said.

Fighting crime

In corruption cases, Baramuli noted that Indonesia has long had a legal weapon to combat it -- the 1971 Anti Corruption Law. "However, it is seldom enforced only because of the low character of our bureaucrats," he said.

Baramuli -- who is also a vice chairman of Kadin's advisory board -- noted that because of lack of morality of many Indonesian officials, the country's economy has been dominated by a few conglomerate owners which control over 70 percent of the country's business assets.

Baramuli said Malaysia is one step ahead in combating corruption among its officials and in treating indigenous enterprises.

"The business environment in Malaysia truly benefits indigenous enterprises, as they are protected by law. The positive role of Malaysian bureaucracy is supported by its Anti Corruption Agency Act, which they have the will and the ability to enforce," Baramuli told seminar participants, including Malaysian indigenous businessmen.

In fighting corruption, Baramuli said that Malaysian authorities are equipped with three legal tools -- the 1961 Prevention of Corruption Act, revised in 1971, the 1970 Emergency (Essential Powers) Ordinance and the 1982 Anti Corruption Agency Act. (rid)