Underfunded bureaucracy depends on illegal fees
Rendi A. Witular, The Jakarta Post, Jakarta
After wrapping up his Friday prayers with a hasty request for prosperity, Arman -- not his real name -- rushed to the canteen to meet his colleagues.
The gathering had more to it than would meet the eye. The dozen or so civil servants in the canteen at the headquarters of the Directorate General of Immigration were waiting for their additional "salary", which is regularly paid after Friday prayers.
The source of the extra income is not from the state budget, but allegedly from money collected illegally from immigration offices throughout Jakarta, including from extorting passport applicants and foreigners caught violating immigration laws.
"My monthly salary is about Rp 900,000 (less than US$95). It is far from enough to cover my daily expenses in Jakarta. If I happen to be able to cope on that, it is what they call 'the magic' of civil servants," said Arman.
Arman, who has been working under the directorate since 2002 when he obtained his university degree, said he usually walked out of the canteen with around Rp 700,000.
Illegal fees paid for public services help keep the underfunded bureaucracy running as most of the six million public servants, particularly middle- and high-ranking officials, are not paid according to their value.
For example, a first echelon deputy to the State Minister of State Enterprises receives close to Rp 10 million take-home pay a month, which is low considering that the official is tasked with supervising state enterprise executives, who earn more than Rp 100 million a month.
Aware of the imbalances in civil servants' earnings, the government recently decided to raise the take-home pay of civil servants by between 5 percent and 30 percent as of next year.
However, this is barely enough to reduce the rampant corruption in the bureaucracy, nor to increase the productivity of civil servants, in particular those who have the authority to issue a strategic public policy.
"The most reasonable range for the monthly wages of civil servants is between Rp 700,000 for the lowest level and up to Rp 42 million for the highest level," said Erry Riyana Hardjapamekas, deputy chairman of the Corruption Eradication Commission (KPK), recently.
"I am sure the state budget could allow for that as long as the government and the legislators have the will. The state could provide around Rp 160 trillion to bail out banks during the 1998 financial crisis, why can't the same be done for civil servants?," he asked.
The government has allocated for this year around 7 percent of state revenue or Rp 34.6 trillion for the salaries and allowances of civil servants, police and military officers, as well as pensioners.
With the planned increase, the state would need to provide additional funds of at least Rp 5 trillion.
Chairman of the House of Representatives budgetary commission Emir Moeis said the state could afford to raise civil servants' salaries by 100 percent, however, the side effects of such a decision would be detrimental to the overall economy.
"I agree that civil servants' salaries need to be higher in order for them to improve public services. But it should be done gradually, to avoid higher inflationary pressure and disruptions to macro-economic stability," said Emir.
Based on his calculation, the state would have to fork out an additional Rp 22 trillion if it raised the salaries by 100 percent.
"The budgetary commission is likely to approve a 20 percent increase next year. There is a possibility that we will raise it further to 50 percent in 2007, so that the structure of civil servants' salaries is reasonable," he said.