Uncertainty crippling economy

The Indonesian government once again demonstrated its determination to cover up corruption in the highest levels by invoking the banking secrecy law as a legal pretext for not fully disclosing the results of the PricewaterhouseCoopers audit of the transactions relating to the Bank Bali scandal. A similar excuse was used in June to protect former attorney general Andi M. Ghalib from prosecution on allegations of corruption.

The government's stubborn refusal to lay bare all the pertinent facts of the Rp 546 billion (around US$80 million) scandal, despite the relentless demand for full disclosure from the House of Representatives, all those concerned by a seemingly pervasive abuse of power and multilateral creditors, simply reflects its total disregard of the principles of morality, ethics, transparency and accountability.

This scandal negates all the official campaigns and new laws against corruption, collusion and nepotism, and makes it imperative to move forward the presidential election from mid- November to early October in order to replace the Habibie administration. The longer Habibie retains the presidency, the greater the uncertainty and tension, which is already crippling the economy, will grow.

One should not be so surprised by the highly orchestrated attempt to cover up and reduce the magnitude of the scandal, which, according to the findings of the independent auditor, involved House members, senior public and political party officials and members of President B.J. Habibie's inner circle.

But given the devastating impact of the high-profile case on the economy and on investor and creditor confidence in the country, it is alarming to see how Habibie has rashly employed all the tricks at his disposal to cling to power, without consideration to the damage done to the economy.

The refusal to fully disclose the audit results virtually nullifies the government's widely hailed move to appoint an independent auditor in the first place, admittedly a move it made only after some pressure from the International Monetary Fund. Indonesia may be the first country in the world willing to accept the indignity of allowing a foreign auditor to poke its nose into its central bank, the fortress of its monetary system. The nation was forced to suffer this humiliation because its government has such low credibility and integrity in the eyes of the international community.

Now the great sacrifice of appointing a foreigner auditor, a move aimed at regaining international confidence, is at risk of being wasted by the government's refusal to fully make public the findings of the audit.

The IMF has so far been true to its word that it would delay disbursing further aid to the country as long as this scandal remained unresolved, and the World Bank and the Asian Development Bank will surely follow in the IMF's steps. Though economic ministers attempted to play down the impact of the aid suspension, this punishment will surely hurt the state budget because the three multilateral agencies account for about half of the $43 billion bailout of Indonesia.

And no amount of diplomacy will be effective in securing the release of the $23 billion portion of this bailout which was committed by government creditors. This money will be extended only after the portion pledged by the three multilateral institutions is disbursed.

The IMF and other multilateral institutions were not exaggerating when they warned last month of a disaster for Indonesia if the politically charged Bank Bali scandal was not properly resolved. Nor are they attempting to intervene in the country's internal affairs, for what really happened at Bank Bali was the daylight robbery of a huge sum of taxpayers' money at a time when millions of people have either lost their jobs or plunged below the poverty line because of the economic crisis. Corruption, collusion and nepotism, the underlying causes of the economic, social and political crises here, are fully embodied in the Bank Bali scandal.

It is therefore most urgent now for the major reformist political parties to put aside their own interests and join forces to save the nation by accelerating the process of forming a credible government that values the principles of accountability and transparency. The longer this current uncertainty prevails, the greater the damage to the country's economy and the more vulnerable the next government will be to economic, social and political instability.