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Today's Headlines Corruption
On 6 June 2023 Indonesia Investments released the May 2023 edition of our monthly report. The report discusses key economic, political and social issues that impacted on Indonesia in the month of May 2023.
On 22 December 2020 Indonesian President Joko Widodo announced that several ministers in his Onward Indonesia Cabinet (in Indonesian: Kabinet Indonesia Maju) were replaced in order to improve the performance of the cabinet. This message was no surprise as rumors about an upcoming cabinet reshuffle had grown increasingly strong over the preceding week.
Quite similar to the events in Hong Kong – where protesters have been demonstrating for months to express their objection to an extradition bill that would have given more power to China (and considering protests did not stop when the Hong Kong government announced it suspended the controversial bill, the movement has morphed into something much larger) – there have been several straight days of protests in Indonesia, especially in the bigger cities on Java and Sumatra.
On Monday (08/04) Indonesia Investments released the March 2019 edition of its monthly research report. The report aims to inform the reader of the key political, economic and social developments that occurred in Indonesia in the month of March 2019 and also touches upon key international developments that impacted on the Indonesian economy.
The local government of West Java said it is currently busy compiling all data related to the Lippo Group's ambitious Meikarta project. West Java Governor Ridwan Kamil said thorough investigation will then be done - based on the data - to decide whether the grand property project can resume or whether there are matters that need to be fixed.
While the central government of Indonesia is eager to improve the nation's investment climate, the Anti-Bribery Commission of Japan (ABCJ) reported a number of illegal charges that were requested by Indonesian government officials or civil servants from Japanese companies that operate in Indonesia. Such cases of corruption damage the attractiveness of Indonesia's investment climate.
Setya Novanto, the Chairman of Indonesia's House of Representatives (DPR), has been named as suspect in a corruption case by the country's corruption watchdog Corruption Eradication Commission (in Indonesian: Komisi Pemberantasan Korupsi, or KPK). The case involves the large-scale procurement project for the electronic identity card or e-ID card.
Bank Indonesia, the central bank of Indonesia, announced it has forced the shutdown of a total of 455 illegal money changers - across Indonesia - by May 2017. These illegal money changers also include many gold shops and travel agents where people can change rupiah for foreign exchange (and vice versa).
During the last couple of years of Susilo Bambang Yudhoyono (SBY)'s second cabinet (2009-2014) there erupted a number of high profile corruption cases that involved several of his ministers as well as leading figures in his Democratic Party (in Indonesian: Partai Demokrat, abbreviated as PD). As a result, the PD party dropped significantly in the 2014 parliamentary election (this loss was also caused by the inability of SBY to find a new charismatic leader for the party, while SBY himself could not participate in the 2014 presidential election as he was finishing his final presidential term).
Indonesia's Business Competition Supervisory Commission (KPPU), the country's anti-monopoly agency, penalized Yamaha Indonesia Motor Manufacturing (YIMM) and Astra Honda Motor (AHM) for forming a cartel with the purpose of conducting price-fixing and curtailing the distribution of Yamaha and Honda motorcycle sales in Indonesia, specifically those motorcycles with an engine capacity of 110-125 cubic centimeters.
Latest Columns Corruption
One of Indonesia's largest listed property developers - Agung Podomoro Land - saw its shares plunge 10 percent on Monday (04/04) after the Corruption Eradication Commission (KPK), the country's anti-graft agency, named the company's President Director Ariesman Widjaja a suspect in a bribery case that also involves a Jakarta legislator. Allegedly, Muhammad Sanusi, legislator of the Jakarta provincial assembly and member of Prabowo Subianto's Great Indonesia Party (Gerindra), accepted money in exchange for support related to the Pluit City project.
West Kalimantan, South Sulawesi and South Kalimantan are the three Indonesian provinces that scored the worst in the Local Government Performance Index (in Indonesian: Indeks Kinerja Pemerintah Daerah, or IKPD). This index, compiled by Indonesia's Corruption Eradication Commission (KPK), measures the degree of coordination and supervision within Indonesian provinces regarding policies and actions related to the prevention of corruption in the mining and energy sectors. The provinces that have the highest scores are Central Sulawesi and the Riau Islands.
Jero Wacik, Indonesia's former Minister of Energy and Mineral Resources (2011-2014) and Minister of Culture and Tourism (2004-2011), could face nine years in prison, a fine of IDR 350 million and may have to pay compensation up to IDR 18.8 billion to the government. These are the demands expressed by prosecutor Dody Sukmono at the Jakarta Corruption Court (Tipikor) on Thursday (21/01). Wacik is being accused of mishandling ministerial funds and extortion by the country’s Corruption Eradication Commission (KPK).
Former Indonesian Religious Affairs Minister Suryadharma Ali (who was also Chairman of the Islamic political party PPP) was sentenced to six years in jail and a fine of IDR 300 million (or three additional months in prison) by the Jakarta Corruption Court (Tipikor) on Monday (11/01). Suryadharma was found guilty of self-enrichment by deliberately mishandling state funds that were allocated to the hajj pilgrimage program covering the financial years 2010-2013.
Indonesia's Financial Services Authority (OJK), the central government's agency that regulates and supervises Indonesia's financial services sector, needs to hire hundreds of new staff in order to safeguard monitoring of the nation's banking sector and to enhance its early warning system in order to detect possible corruption cases. As up to 350 OJK workers are expected to return to the central bank per 1 January 2017, good monitoring of the banking sector is in jeopardy.
With the forest fires still raging on parts of the Indonesian islands of Sumatra and Kalimantan, damaging the tropical environment, while the toxic haze still spreads to other parts of Southeast Asia, having caused an estimated 500,000 cases of respiratory tract infection as well as 19 casualties, the ongoing disaster has been labelled a crime against humanity. A new and interesting research report, released by Dr. Herry Purnomo (scientist at the Bogor-based Center for International Forestry Research), points to a link between local elections and spikes in Indonesian forest fires.
Berlin-based Transparency International released the 2014 edition of its Corruption Perceptions Index (CPI) earlier this week. In the new edition Indonesia was ranked 107th (out a total of 175 countries), up from 114th in the previous edition. As such, Indonesia continues to improve gradually through the ranks of the index. However, with a score of 34 (out of a possible - and perfect - score of 100) the country still lags behind its regional peers such as Singapore (84), Malaysia (52) and the Philippines (38).
One strategy of Indonesian President Joko Widodo to generate more state revenues in order to enhance investments in social and economic development of Indonesia is by improving the country’s tax collection system. As the middle class as well as number of companies that are active in Indonesia has risen rapidly in recent years, it is disappointing that tax collection targets are rarely met in Southeast Asia’s largest economy: tax compliance is low, while corruption among civil servants (tax collectors) remains a structural problem.
President Joko Widodo’s unexpected visit to the Indonesia Investment Coordinating Board (BKPM) on Tuesday (28/10) signals that the new president of Indonesia is serious about wiping out severe bureaucracy that causes time-consuming and difficult procedures to obtain permits, licenses and certificates in a bid to ease doing business in Indonesia for both foreign and domestic investors. Joko Widodo, popularly known as Jokowi, is eager to tackle the country’s ‘red-tape’ problem as it curtails the pace of economic growth in Indonesia.
It took almost six hours for the Constitutional Court of Indonesia (Mahkamah Konstitusi) on Thursday (21/08) to read out 300 pages of a lengthy 4,392-page verdict in the case filed by defeated presidential candidate Prabowo Subianto, who claimed that the result of Indonesia’s July 2014 presidential election was invalid due to widespread violations and fraud that allegedly occurred during the voting and counting processes. During the read out it became increasingly clear that the court would reject Subianto’s claims due to a lack of evidence.
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