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.