President alleges business resists antigraft drive

President alleges business resists antigraft drive

Rendi A. Witular, The Jakarta Post, Jakarta

The government's efforts in combating chronic corruption in the
country is confronting stumbling blocks from businessmen and
bureaucrats whose personal interests would be threatened by the
move, President Susilo Bambang Yudhoyono says.

"The fact is that a number of businessmen and bureaucrats are
disturbed by my efforts to combat corruption as their businesses
and interests have been severely affected by the move," he said
on Tuesday, responding to reports that a number of high-profile
businessmen and bureaucrats were opposing his anti-corruption
drive.

However, the President did not disclose any names.

Speaking before members of the Indonesian Chamber of Commerce
and Industry (Kadin) when officially opening the organization's
two-day national conference at the State Palace, Susilo warned
the businessmen "not to disrupt the ongoing anti-corruption
drive".

"Kadin should play a role in preventing their members from
engaging in corruption," he said.

Foreign investors have long complained about the high economic
costs of doing business here as a result of corruption within the
bureaucracy as well as illegal fees collected by law enforcers
and hoodlums.

The high costs have caused locally made products to become
uncompetitive in the global market and reduced profits of the
private sector meaning lower state revenues through taxes on
these profits.

Susilo's remark was made at a time when the government is in
the process of offering a number of massive infrastructure
projects to foreign investors. The first batch offers 91 projects
valued at US$22.5 billion, to be followed later in November by a
second offering of projects worth $57.5 billion.

There are concerns that the projects will be granted to those
with strong political ties, or that the bidding process will not
be transparent and involve a huge amount of kickbacks.

Susilo said the utmost requirement for making the country's
economic system healthy and competitive and helping the
government achieve above 6.6 percent annual economic growth was
to curb the high cost economy.

"If our economic system is free of corruption, our economy
will grow and investment will flourish. Eventually, the
government's revenue will be increased to help build
infrastructure needed for the businesses," he said.

Chairman of the National Economic Recovery Committee Sofjan
Wanandi acknowledged that businessmen often committed corrupt
practices.

"In the past, it was impossible for a business to survive
without giving kickbacks to bureaucrats when obtaining licenses.
Therefore, bureaucrats, law enforcers and businessmen should
agree now to drop such practices together to create a healthy
business environment," he said.

Sofjan said Kadin would no longer tolerate or defend members
who are involved in corrupt practices as the group was trying to
campaign for healthy business practices to eliminate the high-
cost economy.

"I agree with the President's remark that a number of
businessmen have resisted the anti-corruption drive. Of course,
those who smuggle goods will be affected by the move," he added.

Kadin chairman Mohamad S. Hidayat, however, said calls for
"clean" businesses could only take place if corruption within the
bureaucracy was curbed and red tape cut back, especially at
regional administration levels.

"The government and local administrations must demonstrate
efforts to clean up corrupt practices among state officials and
reform the bureaucracy. It's to prevent corruption," he said.

He pointed to the autonomy law that has given tremendous
authority to local administrations and enabled local businessmen
to collude with local leaders to gain projects or to obtain
certain licenses for operations.

"Unhealthy business competition is rampant at the provincial
level. Local leaders prefer to appoint businessmen who
financially support them during their election campaign to manage
procurements for the administration," he said.

To end unfair business practices and prevent corruption within
local administrations' bureaucracy, Kadin is slated to sign a
memorandum of understanding (MOU) with governors throughout the
country on Thursday.