Corrupt but growing

 

If someone were to ask me to recommend two books for weekend reading, I would recommend False Economy by Alan Beattie and Bad Samaritans by Han-Joon Chang. Both are well-written and discuss complex economic issues in a simple way. More interestingly, both dedicate a chapter on corruption in Indonesia.

Beattie compares prosperous but corrupt Indonesia with clean but poor Tanzania. Chang explains why corrupt Indonesia is much more prosperous than corrupt Zaire, despite the fact that Zaire was much wealthier in the 1970s.

According to the authors, even though corruption is prevalent in Indonesia, most of the dirty money stay in the country and keep the economy rolling. Corruptors invest the money in various businesses. Many of them also donate to the poor or various social organizations, or build campuses or schools.

By contrast, corruptors in Zaire keep their money in Swiss banks. Such action drains the country at a time of great need for capital. It turns the economy into total disarray. Corruption is bad, but in Zaire it is extremely bad.

Roving and Stationary Bandits
The two books explore corruption from a unique perspective. They still however do not answer the riddle. Why do corruptors in Indonesia keep their money in the country while those in Zaire deposit the money abroad?

Mancur Olson’s Power and prosperity help us understand this phenomenon. According to Olson, two types of bandits exist: the roving bandit and the stationary bandit. The two behave differently in the ways they commit crime and spend the wealth they extort.

The first type is those with short term interests. They act like ordinary criminals. As in bandits are nomads.

Stationary bandits have a different strategy. They come to a town, live there, and become part of society. They use their intellect, charm, and positive image to win the hearts online pharmacy home delivery of the people.

Their main goal is to enter the elite of the society and later on politically and economically control. In many cases, they prefer to become king makes by installing their “puppets” in various public positions. Often, they themselves become king and control the town’s administration.

Once they gain control, the bandits transform the system to enrich themselves. They change the rules of the game to ensure their actions are legally protected. Even if they break it, why would win the legal battle.

Stationary bandits control government budgets, dominate access to natural resources, and run various businesses. A more prosperous society means a larger market and higher profit. It also means more tax revenue for the government and a larger government budget, which they see to then corrupt. It is in their interest to grow the town. They will not destroy the town’s physical form. They would instead destroy the intuitions, law, political system,  and fabric of society.

The roving bandit is the perfect description for many corrupt governments in Africa, including Zaire. In contrast, Indonesia is the perfect example of the stationary bandit phenomenon.

Dancing with the Bandits
Stationary bandits can appear pleasant in public while destroying the environment, making fun of financial and capital market regulations, forcing good ministers to resign from the cabinet, installing their puppets, helping smuggle oil to neighboring countries, evading trillions of rupiahs in tax, channeling tons of money to b political support, and controlling the media to mislead the public.

The existence of stationary bandits has made the collective dream to run Indonesia into a clean country a distant reality. Indonesia began fighting corruption a few years after Independence Day in 1945. The fight has continued since. In fact, Indonesia was pioneer in Asia in anti-corruption effort. She was also among the first to divert the effort from its original goal.

A lot need to be done. Strong commitment from the top leadership to distance themselves from bandits’ influence is essential. It has to commit in fighting corruption at whatever costs. In 2004, president SBY stated, “I myself will lead the war against corruption.” Interestingly this statement is similar to President Suharto’s remark on Independence Day in 1971, when he said, “There is no hesitancy that I myself lead the war against corruption.”

Despite the similarity, we hope and believe that the end of the story will not be the same. Ever body knows that president Suharto failed to lead the war against corruption. In fact, he became part of the  problem. (*)

 

This article is part of Wijayanto Samirin’s book No Easy Way (2014)

 



Author: Wijayanto Samirin
Director at Paramadina Public Policy Institute