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.