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.