From The Jakarta Post

'Transparency reforms the key to controlling corruption'

Jail sentences are becoming more and more common for those judged guilty of corruption, but according Daniel Kaufmann of the World Bank, prison is not going to be enough to wipe out graft. Kaufmann, an expert on corruption monitoring and control systems, and director of Global Programs at the World Bank Institute, discussed issues of governance and corruption with The Jakarta Post's Riyadi Suparno.

Based on the World Bank's governance index, where does Indonesia stand, especially in terms of controlling corruption? And what challenges does Indonesia face to improve its standing?

In terms of the improvement by Indonesia on controlling corruption, our work and indicators show progress: in 2002 Indonesia was 16th from the bottom, while currently it is about 40th from the bottom among the over 200 countries we rate.

The good news is that Indonesia has improved substantially in recent years. The challenging news is that Indonesia has a long way to go to continue improving, involving political will to implement far-reaching regulatory and civil service reforms. That's what we call the supply-side governance reforms, i.e. reforms in helping the public institutions develop.

But we also need governance reforms from the demand side such as the free press, women's equality and empowering the citizens at the local level.

Free press, for example, is absolutely important. The evidence is clear. Free press is not only a moral and human rights issue, it is a developmental issue. We can show that countries with a free press will have better governance, better development, more growth and less poverty.

We have been pushing forward those reforms, but many of them are still in tatters. What's the next stage we should pursue to make those reforms work and to address corruption?

The next stage of reforms in governance is related to transparency.

Transparency reform components include the public disclosure of assets and incomes of candidates, public officials, politicians and legislators; the public disclosure of political campaign contributions by individuals and firms and of campaign expenditures; the public disclosure of parliamentary votes; effective implementation of conflict of interest laws, separating business, politics, legislation and government; fiscal and financial transparency, both at the center and local budgets; and the effective implementation of freedom of information laws, with easy access to all to government information.

It seems to be a long way off for Indonesia. We want the freedom of information act, but the government wants the state secrecy law. Based on your international experience, how should we address this issue?

I think some countries repeal their secrecy laws. And what they do is adopt the modern freedom of information law, in which they put an exception, or negative list, to whatever you consider confidential or secrets. By putting these under the freedom of information act, rather than the secrecy law, anything you consider state secrets, you put them on a negative list, which is clearly, narrowly defined. In the state secrecy act, anything you are allowed to access is put there, but everything else is secret. It's like turning the presumption of guilt to presumption of innocence.

In a democratic society, our first priority is transparency and freedom of information. And it is absolutely important to combat corruption.

Anti-corruption measures mostly focus on the public sector. In reality, powerful private interests often make life harder for anti-corruption campaigners. How do you think we could address this problem?

It is a conventional notion that when there is poor governance and high level of corruption, all the problems are in the public sector. But it needs two to tango. For anybody who is bribed, there must be a briber. And some of them are extremely powerful, and can capture the policy, regulation, institutions and even the state.

From international experience, there are a number of things that can help you address the issue of state capture.

First, you must have better economic competition by having liberalization reforms. So, you must have no export or import restrictions, no excessive licensing, no barriers to entry.

Second, political competition is important too. You must give political rights and civil liberties to everyone, so that every competent person could compete for public office.

Third, freedom of the press is needed. The press becomes the instrument to prevent state captures by exposing them when they happening. So people would be informed and make decisions with their votes.

What can international financial institutions like the World Bank do to help institute governance in developing countries like Indonesia?

Indonesia itself is a good example of what international institutions like the World Bank can do to help.

First, we learned from our past mistakes because there were certain things in the past that we did not take as seriously as we should have. We don't know how much corruption (there was of bank projects) in the past, but I know for sure that the 30 percent estimate, which is widely reported, is totally unreliable. But, it does not matter whether it is three, eight or ten percent, it is just too much.

And today, Indonesia is regarded by the bank as the forefront, in terms of how the bank's programs can help improve governance and help in the fight against corruption.

There is a totally different system nowadays to minimize corruption in our projects. The bank has an anti-corruption committee, inside the bank office in Jakarta, through which every project has to go through right from the beginning.

Also, we now give much attention to strategies to promote governance and corruption control in the public sector. The bank's country assistance strategy for Indonesia, for instance, is not about seven different priorities, it is a governance and corruption control strategy.
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