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“Corruption Ruins Everything”: Gridlock over Suharto's Legacy in Indonesia (Part I)

Published online by Cambridge University Press:  07 May 2025

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Indonesia since the fall of Suharto in 1998 under reformasi remains subject to powerful tendencies for disintegrasi—both province-based “separatism” and general socio-political decay. These tendencies are greatly aggravated by the failure of democratically elected presidents and parliaments to effectively tackle endemic corruption or reform the armed forces, which continue to enjoy near-total immunity as a major practitioner, guarantor and enforcer of corrupt business practice and extortion. This article notes the activism of civil society and liberal media on the corruption issue and the commendable new array of anti-corruption institutions. But it argues that reform efforts have been virtually nullified by broad collusion of Indonesia's political, bureaucratic, military and business elites in sustaining—while “democratizing” and decentralizing—the system of corruption inherited from Suharto. The reform effort is now subject to political stasis or gridlock induced by money politics. Some reformers believe that politics in Indonesia has been effectively replaced by “transactions”. In arguing that “KKN” “ruins everything”—people's well-being, investment prospects, government budgets and development planning, democratic politics, the justice sector (including its corruption-fighting capacities), military professionalism, the environment and more—the author is serious. The article suggests that real change must await new social and political constellations and struggles initiated outside the parliamentary arena.

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References

Endnotes

[1] Korupsi, Kolusi dan Nepotisme

[2] Based on analysis of an Indonesian electronic clippings archive Gerry Van Klinken informs me ‘that disintegrasi leaps into the popular vocabulary in 1998, stays there to the end of 2001, then drops away again as quickly as it had appeared. ‘Email, 19 July 2005

[3] Edward Aspinall, The Helsinki Agreement: A More Promising Basis for Peace in Aceh? East West Center, Washington, 2005, p 6

[4] CIA estimate. The CIA's estimate of GDP at purchasing power parity (PPP) was $948.3 billion for 2006. See ‘Indonesia’, CIA Factbook, 2007

[5] ibid

[6] See Combating Corruption in Indonesia: Enhancing Accountability for Development, East Asia Poverty Reduction and Economic Management Unit, World Bank, October 2003

[7] George Aditjodro, ‘Suharto has gone – but the regime has not changed’, in Richard Holloway (ed., English edn), Stealing From the People: 16 Studies of Corruption in Indonesia in four volumes. Book I: Corruption from Top to Bottom, Aksara Foundation for the Partnership for Governance Reform in Indonesia, Jakarta, 2002.

[8] ‘Wiranto's Game Plan’, Tempo, 10 October 2006. It is widely believed, in Tempo's words, that Wiranto undertook to ‘guarantee the safety of the Suharto family’ in the crisis of May 1998, but it seems the safety of the clan included its riches.

[9] Heedless of subverting Papua's special autonomy law, the military-dominated Home Affairs Ministry has pushed hard for the creation of new provinces in Papua with an eye to installing retired military and former nationalist militia figures in power, ensuring TNI accesss to regional and special autonomy funding and the setting up of new military commands. ‘Military presence in Papua under OTSUS’, Tapol Bulletin, No 187, July 2007

[10] Bill Guerin ‘Indonesia seeks lost trillions in Singapore’, Asia Times Online, 2 May 2007

[11] ‘The ultimate cost of the bailout (which…went largely to the pockets of the owners of conglomerates) was far more, perhaps $50 billion, and this took the form of an equity injection in the form of government bonds to the banks in question. The IMF will get all its money back, eventually, if not already. It is the Indonesian general public that has ended up footing the bill. ‘Ross McLeod (Editor, Bulletin of Indonesian Economic Studies), email, 20 April 2006.

[12] Such major scams of the Suharto period as those involving power plant construction by the private sector to supply PLN (PT Perusahaan Listrik Negara – the state electricity company), which have produced greatly inflated power costs through inflated pricing, remain unresolved. See ‘Publicly Guaranteed Corruption: Corrupt Power Projects and the Responsibility of Export Credit Agencies in Indonesia’, ECA Watch website.

[13] Akbar Tanjung, chair of the Golkar party and Speaker of the DPR (Dewan Perwakilan Rakyat—People's Representative Council), was convicted in 2002 of embezzling Rp 40 billion (US$4.8 million) of Bulog funding from a food-distribution program intended for the poor. (The money was destined to fund Golkar's impending election campaign in 1999.) He was sentenced to three years jail, but did not resign his posts and the Supreme Court overturned his conviction in 2004 on the ground that he had acted on then-President Habibie's orders. See Gary LaMoshi ‘Tanjung acquittal: Verdict against reform’, Asia Times Online, 14 February 2004

[14] Tommy Suharto is dealt with below. Bob Hasan, a Sino-Indonesian Muslim convert and dominant figure in the plywood and timber industry, was convicted of cheating the state of US$75 million in a scam involving satellite mapping of forest areas and given a six-year prison sentence. See Richard Borsuk, ‘Suharto Crony Stays Busy Behind Bars’, Wall Street Journal, 13 August 2003. He has been released early.

[15] 'What's Wrong with Freeport's Security Policy?' [Summary Report: ‘Results of Investigation into the Attack on Freeport Employees in Timika, Papua, Finds Corporation Allows Impunity of Criminal Acts by Indonesian Armed Forces'], ELSHAM (Institute for Human Rights Study and Advocacy), Jayapura, 21 October 2002

[16] See Peter King, West Papua and Indonesia since Suharto: Independence, Autonomy or Chaos? University of New South Wales Press, Sydney, 2004, Chapter 5, ‘The TNI and Papua’. Seven Papuans on trial for the killings protested: ‘We're not the perpetrators! We only have crossbows. We don't have guns!' The alleged leading conspirator, Antonius Wamang, was sentenced to life in prison. See ‘Papua trials may continue without defendants.' Jakarta Post, 30 August and 8 November 2006.

[17] Hilmar Farid, ‘Indonesia's original sin: mass killings and capitalist expansion, 1965–66‘, Inter-Asia Cultural Studies, Vol 6, No 1, March 2000

[18] See King, West Papua and Indonesia since Suharto, Chapter 5, ‘The TNI and Papua’.

[19] East Timor made a transition to independence in 1999-2002, while a peace agreement for Aceh was signed in Helsinki by the Free Aceh movement (GAM) and the Indonesian government in August 2005.

[20] Witness for instance the state of school text books and the astounding survival, seven years after his “fall”, of the centrepiece of Suharto anti-komunis mythology, the historical diorama inside Monas, the national monument in central Jakarta. On text books see Gerry van Klinken, ‘The Battle for History After Suharto: Beyond Sacred Dates, Great Men, and Legal Milestones’, Critical Asian Studies, Vol 33, No 3, September 2001. Jalan Cendana in Menteng, Jakarta, is where the extended Suharto family continue to reside in undisturbed luxury.[21] S Eben Kirksey and Andreas Harsono, ‘Murder at Mile 63: Cutting the Network of Antonius Wamang’, Paper delivered in Panel 9: The State and Illegality in Indonesia at the EUROSEAS Conference, Naples, 12-14 September 2007. The objective of the murders was presumably to remind the mining company that the US Foreign Corrupt Practices Act is not a sufficient reason to slash the TNI multi-million dollar annual “take” from the Freeport mine.

[22] Judges and Tomy Winata vs Tempo', Laksamana.Net, 2 October 2003. Nevertheless Bambang Harimurti, who had recently been sentenced to a year in jail by the Central Jakarta district court, was remarkably cool about the whole affair when I interviewed him in November 2004. He had still not seen the inside of a prison. In the end Tempo's financial collapse in the face of $26m. worth of libel suits was averted by the Supreme Court early in 2006. Goenawan Mohamad is still living in his own house.

[23] Roy Tupai, ‘Chronology of Tommy Suharto's Legal Saga: From Playboy Defendant to Fugitive Murderer to Pampered Prisoner & Soon to Freedom’, Paras Indonesia, 19 August 2005

[24] Cited in Bali Update, #452, 9 May 2005

[25] Peter Gelling, ‘Jakarta drops case against Suharto’, International Herald Tribune, 12 May 2006

[26] ‘Indonesian lawyers fail to agree Suharto settlement’, Reuters, 4 September 2007. ‘Prosecutors are seeking a total of US$440 million of state funds in the suit, and a further 10 trillion rupiah ($1.07 billion) in damages for alleged misuse of funds in one of Suharto's foundations.‘

[27] ‘Indonesian court to hear Tommy Suharto's corruption case’, Straits Times, 12 November 2007

[28] Peter King, ‘Corruption at Indonesia's highest levels: attempts at reform have largely failed’, The Australian Financial Review, 17 August 2007

[29] Arie Rukmantara, ‘Walhi told to focus on human resources’, Jakarta Post, 17 October 2005

[30] ‘Environmentalists [in North Sumatra] receive death threats’, Jakarta Post, 16 November 2005

[31] ‘KPU Under Fire’, Tempo, 21 June 2005; ‘Hamid Denies Involvement in KPU Scandal’, Jakarta Post, 29 September 2005. The NGO coalition which blew the whistle on the KPU in a report to the KPK estimated that markups on the acquisition of election materials caused losses of US$41.6 million (Rp375 billion) to the state. Phar Kim Beng, ‘Indonesia's Peaceful Poll: How They Did It, Asia Times, 29 September, 2004

[32] ‘Munir Quits Legal Aid Group’, Laksamana.Net, 5 December 2001

[33] For a summary see John Wing and Peter King, Genocide in West Papua? The role of the Indonesian state apparatus and a current needs assessment of the Papuan people, Report prepared for the West Papua Project at the Centre for Peace and Conflict Studies, University of Sydney, and ELSHAM Jayapura, CPACS, Sydney, August 2005, Chapter 1

[34] Of the 137 cases of illegal logging uncovered in Papua by the police in Operasi Hutan Lestari 52 never went to trial; 13 were dropped for lack of evidence, while 18 proceeded to trial but all defendants were acquitted. Jakarta Post, 18 July 2006. A large amount of equipment was also seized but its present whereabouts would be worth researching.

[35] The reformist general Agus Wirahadikusumah was appointed by Gus Dur to head Kostrad (the TNI Strategic Reserve Command) in 2001, but was sacked by the army high command within four months after turning up a $22 million dollar embezzlement by his predecessor, Djadja Suparman. The money came from Mandala Airlines, which is owned by Kostrad's Yayasan Dharma Putera. See King, West Papua and Indonesia since Suharto, Chapter 4, ‘The TNI in Business, Politics and Repression’, p 101

[36] Lisa Misol, ‘High Time for the Government to Take Over All Military Businesses’, Jakarta Post, 7 October 2005; Tiama Siboro, ‘Military May Retain Many Businesses’, Jakarta Post, 20 October 2005

[37] TNI's treasured impunity includes immunity from even Presidential direction. Like Gus Dur before him, and despite his retired general's rank and constitutional status as Commander in Chief, SBY has trouble making his writ run in the army's last open frontier, Papua. One of the sternest US critics of TNI's activity in Papua, Congressman Eni Faleomavaega of American Samoa was induced to give his blessing to Papua's very flawed special autonomy in July 2007 following an hour-long session with SBY at Istana Merdeka. When finally allowed to visit Papua in November, accompanied by the American ambassador and with Presidential blessing and guarantees of access to Papuan leaders and the Papuan capital, the event proved to be a truncated fiasco, as he made clear in a highly critical letter to SBY, reproduced in ‘Congressman's disappointing visit’, Tapol Report, 6 January 2008.

[38] ‘Military Joins Bali Terrorist Hunt’, Trade and Investment News, Coordinating Ministry for Economic Affairs, 10 October 2005.

The territorial function—supposedly purged of Suharto period abuses–is still stoutly defended in TNI circles. MajGen (ret'd) Kiki Syanakhri contends that the army remains popular and trusted (approachable) or at least respected at the grass roots by comparison with the police. “People do not fear them,” he says, and they are “weak” and “loose” by comparison with the army. He strongly defends TNI's record of intel coups against terrorists in the past. Interview, Jakarta, 27 October 2004.

In after-army life Kiki is a President-Director of Artha Graha Bank, reflecting the army's former 20 per cent stake in it through its Yayasan Kartika Eka Paksi's (YKEP). This bank has been under Bank Indonesia control since the financial crisis of 1998 but remains in the orbit of two Sino-Indonesian tycoons, A Guan [Sugianto Kusuma] and the notorious Tomy Winata. Kiki was tasked in 2001 by then TNI commander, Endriartono Sutarto, to oversee the civilianizing of the army's business empire, or at least the restructuring of its yayasan. He also still appears in the Masters of [East Timor] Terror book and website.

[39] ‘TNI ordered to help in terror fight’, AsiaViews, 11 October 2005; ‘In consideration of Indonesia's strategic role in the fight against terrorism, last November the US State Department issued a waiver removing all remaining congressional restrictions on US military assistance to Jakarta. ‘Jakarta Post, 7 June 2006

[40] The car park check was suggested by an anonymous employee of the AGO itself. See Nadirsyah Hosen, ‘This Is the War on Corruption, Mr. President!‘, Jakarta Post, 3 November 2004

[41] Notoriously the World Bank, for good Cold War (Washington) reasons, turned a blind eye to a 30 per cent level of embezzlement in its own loans to the Suharto government. This reinforced the profound structural problems of reform under his successors. See Jeffrey Winters, ‘Criminal Debt in the Indonesian Context’, Paper presented at the INFID Seminar Jakarta, 3 July 2000.

Less notoriously the Australian government in 1993 under Prime Minister Keating (who famously called Suharto “bapak”) licensed a casino on Christmas Island which turned over a surprising A$12 billion in the first two years. It was later shown to have been largely a handy money-laundering instrument for the most notorious of bapak's sons, Tommy, and his associates in Jakarta rackets. See ‘The Christmas Party’ Four Corners, ABC, 1 July 1992

[42] Tempo, 23 November 2004

[43] Roy Tupai, ‘Munir Murder Trial Flawed’, Paras Indonesia, 8 September 2005.

Tupai points out that in 1998 Muchdi was sacked as Kopassus commander after Munir helped to expose his role in the kidnapping and torture of pro-democracy activists. Munir was apparently working on TNI corruption in Aceh at the time of his murder.

[44] Presentation by Rachland Nashidik, executive director of Imparsial (and member of Yudhoyono's Tim Pencari Facta), Centre for Peace and Conflict Studies, University of Sydney, 30 November 2007

[45] Hendropriyono was reported as asking what was so special about Munir's death. At a May 2005 press conference, his lawyer, Sjamsu Djalal, said: ‘And I'm sorry to say this, but who's this Munir anyway that a presidential regulation had to be issued? A lot of people die, but no regulations are ever made [for them].' James Balowski, ‘Spy Agency Implicated in Activist's Murder', Green Left Weekly, 22 June 2005

[46] Police inaction has its rewards, as police action has its dangers. Many officers at National Police Headquarters, including, apparently, Megawati's Police Chief Da'i Bachtiar, were lavishly bribed by suspects and accused in the Rp1.2 trillion BNI (Bank Negara Indonesia) embezzlement case of recent years, which saw the chief accused, businessman Adrian Waworuntu, escape to Singapore for a time. (This was the most prominent of the Bank Indonesia liquidity fund [BLBI] cases.) See ‘Four-star Treatment’, Tempo, 1 November 2005, and ‘Letters Real but Secondhand?‘, Tempo, 22 November 2005

[47] Stephen Fitzpatrick, ‘Garuda chiefs on poisoning charges’, The Australian, 29 September 2007

[48] ‘Second Time Around’, Tempo, 29 January 2008

[49] Muninggar Sri Saraswati, ‘Yusril, Anwar in row over graft case’, Jakarta Post, 18 November 2005. Suharto's half brother Probosutedjo has admitted passing 16 billion rupiah to his own lawyer for bribing Supreme Court judges in his appeal against a graft conviction concerning timber reforestation funds. See Eva C. Komandjaja, ‘Probo's case highlights corrupt system: Experts’, Jakarta Post, 17 October, 2005