Making progress in corruption fight

Making progress in corruption fight

W. Scott Thompson, Sukawati, Bali

The problem about corruption is that it is a moving target.
What is "corrupt" today was permissible yesterday. Standards
change. My own country is sanctimonious today but some of
history's greatest corruption took place on the road to
industrialization there -- in the U.S.

A great senator once stood up in the Capitol and demanded that
his coffers be "replenished."

Some people argue that once countries are rich, corruption
will go away. True -- but the rate at which national wealth is
obtained depends mightily on the amount of corruption. It's like
population growth: Family size comes down when countries become
rich, but absence of family planning ensures that wealth comes
late. You can explain why Thailand is twice as rich as the
Philippines by population programs alone.

There are, arguably, four levels of corruption, and it bears
consideration whether a country can concentrate on all four at
once. At the bottom and top the answers are easy. "Tea money" or
small scale corruption is present everywhere in poor societies
and no one has ever found a way to prevent it, beyond getting
rich.

At the other end of the scale is the macro-corruption where
leaderships change the whole national economic rules to enrich
themselves and their families. Inevitably, the country becomes
impoverished. Indonesians know all too well about this one. The
minute you distort the macro-economic rules for your personal
benefit you have introduced the highest form of inefficiency and
the greatest market distortion possible.

But there are two kinds, or levels, of corruption that bear
some thought, where perhaps middle-income or lower middle income
countries can put emphasis. The second level is political
corruption, and it is present everywhere and probably always will
be: Rich people subsidize election campaigns in hopes of
favorable treatment, companies give generously to politicians who
can pass beneficial tax laws benefiting them. But it makes a
great deal of difference how much they can give, and whether it
is transparent.

At the very least, parliaments can pass laws imposing stiff
penalties for non-transparent political contributions. They can
limit the amount anyone can give. Of course there are ways to get
around this: Get all your children to support your candidate. But
it becomes more difficult.

The third level is the one where perhaps the greatest good can
come from real reform, in a rapidly growing society like
Indonesia's. Here we have the kind of dirty deeds everyone hears
about: Generals taking a percentage from military purchases,
politicians getting a cut from NGOs or AID-giving organizations.
Big sums change hands.

In Thailand the phrase "unusually rich" was devised to
describe what was an inappropriate amount of new wealth to have
garnered from service in government -- and the amount was about
Rp300 billion. Anything below that in the 1990s was tolerated.
Now the lines have been drawn at lower levels. The moving target
again.

This kind of corruption doesn't wholly distort the economy and
subvert it in itself. But it hardly aids civic spirit for hard-
working citizens to see political leaders getting rich. So
cynicism about politics spreads. And who any longer wants to
invest in a country where the deals are done under the table
rather than on top? You don't know where you stand with the
former and you are always under threat -- that greedy hands will
reach out as soon as you have demonstrated the ability to
generate economic growth.

And this form of corruption destroys personal virtue. It seems
okay because "everyone is doing it". A "friend" pocketed about
eighty million rupiah from me, out of a simple financial
transaction in which he was supposedly helping me. Nothing so
awful had ever happened in my experience, but people hearing of
it hardly grew in their respect for the country. Every time a
palm goes out at customs, the country's reputation takes a hit.
Someone should take down names and send them in. Heads should
roll.

Why should the future hold anything different for Indonesia?
If elected will Susilo Bambang Yudhoyono fall prey to the same
temptations? Maybe -- but maybe not. In the Philippines a man of
similar background, Fidel V. Ramos, became president in 1992 and
ushered in the cleanest period of his country's politics ever.
And mirabile dictu, investment poured in and economic growth
soared. Ramos is held in an awe that corrupt money can't even
begin to buy. Susilo can do the same and the results would no
doubt be the same.

There is the additional point that the public clamor for a
clean-up is powerful today. The moving target is moving upwards.
Pressure to end corruption comes from all sources. A new -- or
reelected -- president could find sources of power in clean
politics that would astonish and galvanize.

The enormously successful, and largely clean, elections give a
huge impulse to continue the reform -- and catapult Indonesia
from near the bottom of the list of the world's countries at
least to middle levels within a very short time indeed. The
makings are there, the incentives are there, and the country
deserves nothing less.

Dr. W. Scott Thompson, D. Phil. is Adjunct Professor of
International Politics, Fletcher School of Law and Diplomacy,
Tufts University, Medford, MA. The views expressed are personal.