Part 2 of 2: Flushing away rent seekers and bureaucrats

Part 2 of 2: Flushing away rent seekers and bureaucrats

Evan Jones, Batam

The task of the civil service is to implement the laws of the
land. Too many of Indonesia's laws are not rooted in reality.
They are unreasonable, unenforceable, irrelevant or otherwise
obselete; they expect too much of Indonesia, too much of it's
citizens and too much of those civil servants who are expected to
bring what is written on paper to physical reality. Every
impractical law, regulation or procedure is a rent seeking
opportunity.

The management guru, Peter Drucker once proposed (somewhat
tongue in cheek) that governments should posses a limited quota
of laws. If it is desired to pass a new law, it should be
mandatory to firstly remove an old one.

Although Indonesia has hundreds of laws which should be
abolished, this is easier said than done, as the current system
which designs and drafts new laws has it's roots in centuries old
practices of patronage and money politics. Vested interests (such
as rent seeking civil servants and business cronies) quitely
promote private agendas, hidden behind a proposed new law's
publicly pronounced goals.

For example, earlier this year, a meeting of the National
Legislation Program (Prolegnas) listed 83 draft laws to be
enacted in 2006. Interestingly, plenty of these draft laws refers
to non-substantive issues.

Why, in this day and age, does the public not possess more
detailed information about the doings of law making and law
enforcement? Why so few reports in the metropolitan Indonesian
language media? Two reasons: Firstly because laws and policy
decisions are still made the old way -- in secrecy. Indonesia's
journalists too often don't even think to ask pertinent
questions. Secondly, because when top policy makers or civil
servants are involved in obviously illegal money making
activities, they take care to muzzle media exposure simply by
sharing the money. Rent seeking extends to the Fifth Estate too.

This explains why it is possible at the moment to read front
page articles in the local media about the cat and mouse illegal
activities of small CD and DVD traders, but why we rarely read
detailed articles about business involving really big money, such
as drugs for sale in discos or how gambling profits are shared.

Fortunately, the new technologies such as cellphone networks
and the internet are helping President Susilo Bambang Yudhoyono's
anti-corruption efforts shine a light of public awareness into
many previously darkened corners.

The entire rent seeking culture of patronage networks
(including those lobbyists who influence the making of new laws)
is based on a parasitic economic model. Like vermin, these
networks live off their hosts; they thrive in dark and hidden
corners, away from the spotlight of public scrutiny.

Under the Soeharto regime these networks multiplied and rooted
themselves into any part of the economy where there was an
opportunity to collect tolls, fees or other kinds of levies. Too
many of these levies, legal and otherwise, exist to this day.
Exactly where and to whom the money goes is often not transparent
(which is a polite way of saying that the fees are too often
being embezzled).

To extend the vermin metaphor, any householder can tell you
that the best way to eliminate rats or cockroaches is to destroy
the habitat and remove sources of food. Least effective is the
tactic used in the current anti corruption campaign of
eliminating pests one by one.

If we are to look at eliminating the type of habitat under
which rent seeking thrives, we need first to study which
government bodies are not achieving what they were set up to do
under the law. Those departmental divisions which are not doing
their job (there are many), can be abolished without loss -- to
be shut down altogether or replaced by private sector services.
The Swiss inspection company SGS is a model. For a period of 10
years, it managed Indonesia's import inspections and did the job
more professionally and honestly than Customs and Excise.

For example, a hard nosed review of the Forestry Ministry will
find divisions which are almost completely disfunctional.
Protected forests being heavily logged, with or without
intervention of forestry officials. If certain departmental
divisions are not serving the country a useful purpose, they can
be dismantled and replaced by an accountable private sector
consultancy firm or reputable NGO.

A job-for-life in the civil service is not a basic human
right.

As we abolish Indonesia's unenforceable laws and non
performing ministries, society will see three immediate benefits:

1. Scarce funding diverted to boost the functionality of the
remaining departments;

2. Experienced departmental administrators become available to
do productive work in the private sector;

3. Administrative efforts more tightly focussed upon this
country's Number One priority: National development.

Ultimately, the number of civil servants serving this country
could shrink by half. Think of the positive effect on the economy
if such resources were freed up to do productive work!

Meanwhile, newly democratic Indonesia has dragged itself to a
cross roads where every policy decision is a battle between those
trying to create investment-friendly clarity and those who want
to maintain a murky status quo of ambiguity and uncertainty.

Indonesia's corridors of power are still clogged by an army of
self serving lobbyists. Can President Susilo's and other
democratically elected local governments wrest control? Can the
power of cellphone networks and the internet expose the rent
seeker's agendas before their lobby smothers open debate under a
blanket of suppressive laws?

The writer is a business analyst.