Indonesia's money still going down the drain

Indonesia's money still going down the drain

By Santo Koesoebjono

WASSENAAR, The Netherlands (JP): Former president Soeharto is
widely said to be smarter than Ferdinand Marcos. If so, then is
it worthwhile to continue chasing his alleged "loot", which he
should have hid even better than the deceased Philippine
dictator?

A banker and observer of the Indonesian economy in Amsterdam
explained that money laundering was simple to commit.

"Just transfer the money from a foundation in Jakarta to
person A in Singapore. Mr. A does a bogus transaction with Mr. B
in Hong Kong. So the money flows from Jakarta to Singapore and
then to Hong Kong. Mr. A closes his account in Singapore, so Mr.
A cannot be traced.

"Mr. B transfers the money to a company registered in one of
the tax-free havens, say, the Cayman Islands. This company has
nominee shareholders whose names are not known. This Cayman
Islands' company establishes other companies in other off-shore
banking centers. So you cannot trace back where the money is and
to whom it belongs. There are numerous variations on this ploy."

We all know that dictators from whatever system are corrupt,
one more than the other, and they have stashed their money in all
corners of the world. We also know that their countries are
usually poor or the income distribution skewed; a small
percentage of the population has a huge share of the national
income, which is true in Indonesia and manifested in Jakarta.

There was Marcos and Mobutu Sese Seko of Zaire, and the high-
ranking Iraq officials shouting "Down with Bush" for television
cameras during the 1990 Gulf War, while their children were
studying in England and the United States.

Who was making a fool of whom? The really deceived are always
the common people, farmers, manual workers, laborers and the
street vendors.

If we continue chasing the money of Soeharto, which is indeed
necessary, we are wasting the precious time and energy needed for
the present development of the wrecked Indonesian economy and
society. Hiring detectives, accountants and lawyers can only
recover part of the loss and it is a costly affair.

In a show of legality, the government sent the attorney
general to Europe on the ostensible mission to look for
Soeharto's money. Of course, it was in vain.

If we want Soeharto to take account of all his political and
other misdeeds during the three decades of his dictatorship, do
it now but it will require a formidable amount of judicial proof
and witnesses willing to testify. But, as the Pinochet affair
shows, he does not need to be kept in the country.

In fact, having Soeharto on Indonesian soil may turn out to be
a historical error. He is on the television news, everybody can
bow to him at the mosque and he is free to summon others whenever
he wants. His power has been transferred to a close friend within
the same political and economic system.

Psychologically, it is wrong to keep Soeharto in the country.
Although modern communication technology allows instant and
continuous contact, distance can make contact less obvious and it
is psychologically better and sounder to improve the delicate
balance of the political climate.

The new government needs to pay more attention to controlling
the outflow of money and attracting all citizens, both indigenous
and nonindigenous, to reinvest in the country.

If it does not happen, one cannot complain if foreign
companies are investing and even buying, for the moment,
"cheaply" rated local companies. It may help to get business
moving again.

Most abhorrent are the Indonesians spending thousands of
dollars on luxury consumer goods abroad and at the same time
telling their expatriate compatriots about the sad condition of
our people and country. Official as well as private persons are
guilty of doing this in private talks or at the embassy.

It is beneficial to conduct research in the field of herbs and
traditional medicinal plants in Indonesia as part of a joint
Dutch-Indonesia project, but does Indonesia need to fund a
professorship at a Dutch university? (University weekly Mare, May
12, 1999).

Would it not be better to nominate an Indonesian professor
acquainted with the local tradition, culture and language use on
the subject? Are we still that underdeveloped after over 50 years
of independence that we cannot find one suitable candidate?
Again, money is draining out of the country.

On the one hand, we ask for aid through international
agencies, foreign banks and countries because we need money for
development and economic restructuring. On the other, we are
frittering away money in the manner of the rich from a rich
country.

The attitude shows the reform era has allowed the elite to
restructure their own positions and wealth. The common people are
blinded by abstract words full of dreams about a bright future in
a democratic society, but in the meantime they suffer and scrape
together meals from leftovers.

It will take some time to eradicate the endemic societal
disease called corruption. People tend to associate themselves
with the new rulers because they have power and money, and
therefore can punish the disloyal and reward the obedient.

Considering the prevailing mental suppleness strategy for
survival, the new government should take measures to eradicate
the core of the disease and to contain cronies. A clean
government is pressing and a clean local government that is
responsible for policy implementation down to the village level
is even more urgent. Do we have enough people of that stature?

A compromise is required next to the strong control that needs
rehabilitation of the functioning of the trias politica --
judicial, executive and legislative power.

The writer is an economist-demographer based in the
Netherlands.