Mayors share ideas on good governance

The Jakarta Post, Jakarta | Fri, 10/29/2010 11:05 AM 

Anticorruption award-winning mayors shared ideas on key strategies to bring about good governance in their respective administrations throughout their ground-breaking tenure at the Bung Hatta Anticorruption Award 2010.

The awards were officially handed to Yogyakarta Mayor Herry Zudianto and Surakarta Mayor Joko Widodo on Thursday night in a ceremony attended by well-respected figures — including academics, activists and the media — concerned with corruption eradication.

The judges chose the two over 36 other candidates.

Herry, however, asked that his award to be bestowed to his administration, saying that the achievement would not have been possible without all the civil servants in his office.

“Good governance in Indonesia is like a rolling snowball: it can’t be stopped,” he said. “The paradigm shift can come from outside forces, or it can come from our willingness to change.”

Some of the novel systems that Herry has implemented in his administration include a one-stop licensing agency in which one office handles all administration procedures and the information and complaint service unit through which Yogyakarta residents voice their aspirations.

Herry added that he viewed leadership not as an avowal of social position, but as a sharing of responsibility with his colleagues.

“I consider myself more as the head of services in Yogyakarta rather than a mayor,” he said, adding that he nurtured his spirit of service during his previous profession as a batik entrepreneur.

Joko, who was a furniture entrepreneur before assuming office, said that he too implemented lessons learnt during his previous profession in his administration.

He stated that in his 21 years of dealing with foreign customers, he learnt the importance of quality, timeliness and finances, which he implemented by strengthening small-scale enterprises in Surakarta.

Joko is lauded for his success in the peaceful relocation of 5,817 street vendors and the establishment of 15 markets in his five years in office.

Clear-cut communication detailing the benefits of relocation overcame the vendors’ fears, he said.

“I apply the same method of communication with fellow politicians. I talk to them and provide them with detailed explanations of my concept,” he said.

Natalia Subagjo, one of the founders of the foundation giving out the award, which was established in 2003, said bureaucratic reforms were the focus of this year’s award.

“It was not easy to fund non-corrupt individuals in this country,” she said. “But it wasn’t impossible since there are still many individuals who hold onto their integrity and remain unaffected by the habits of those around them. Instead, they are the ones who influence their surroundings.” (gzl)

RI economy to grow 6.3 pct this year: BI official

Antara News, Friday, October 29, 2010 00:35 WIB

Mataram, W Nusa Tenggara (ANTARA News) - The Indonesian economy is expected to expand 6.0-6.3 percent this year on strong private consumption and exports, a central bank official said.

Household consumption was expected to contribute 4.9-5.2 percent, government consumption 4.2-4.5 percent, exports 13.4-13.7 percent, and imports 17.9-18.2 percent to the 2010 economic growth, Bank Indonesia Monetary Management Director Handar said at a seminar here on Thursday.

The strong private consumption would be the result of non-food consumption, car and motorcycle sales, electronic goods sales and consumer goods imports, he said.

On the financing side, consumer credit growth was still high, suggesting that private consumption remained strong, he said.

"Even the economy is expected to pick up in the next several years. In 2011 it is projected to grow 6.0-6.5 percent," he said.

Investment would likely continue to increase particularly starting the second semester of this year along with rising demand for additional production capacity, he said.

On the production side, several sectors were expected to grow at a higher pace, including the transportation and telecommunication sector, the financial sector and the construction sector, he said.

Since early this month exports also had been on the increase in line with the global economic recovery and improving commodity prices on the global market, he said.

Govt will be able to put bad debtors in jail

The Jakarta Post, Jakarta | Thu, 10/28/2010 10:36 AM

Under a draft law to manage state credit, the government will soon be able to imprison bad debtors without undergoing a judicial process, a senior finance official says.

This would be a breakthrough for the government as many bad debtors had not shown good faith in repaying their debts, Finance Ministry state assets director Hadiyanto said in Jakarta Wednesday.

The new authority is part of a draft law due to be submitted to the House of Representatives later

this year.

“It will have a deterrent effect on bad debtors,” Hadiyanto said, adding that the new law would replace the 1960 Law on State Credit Management.

Separately, state credit director Soepomo said the government faced many difficulties in collecting unpaid debts because debtors used many different approaches to avoid repaying their debts.

“Under the proposed law, we will have a stronger legal umbrella to deal with bad debtors,” he said.

According to the Finance Ministry, the state credit committee (PUPN) is managing Rp 62 trillion worth (US$6.94 billion) of bad debts, comprising Rp 20 trillion from state-owned banks, Rp 1.1 trillion from state-owned companies, Rp 9 billion from state institutions and Rp 41 trillion from governmental institutions.

About Rp 30 trillion of the amount due from governmental institutions is owing from the now-defunct Indonesian Bank Restructuring Agency (IBRA) debtors, including businessmen Samadikun Hartono and Kaharudin Ongko.

The IBRA was established in 1998 to restructure the national banking system following an economic crisis that caused several of Indonesia’s banks to fail.

One of the agency’s tasks was to manage the distressed assets seized from financially troubled banks.

In February, 2004, the IBRA was shut down and handed over all of its assets and documentation to the Finance Ministry.

Apart from tougher law enforcement, Soepomo said the government could offer conditional debt abolishment to cooperative debtors.

“We may give conditional debt abolishment to debtors who are found to be unable to pay their debts,” he said.

However, decisions to give such a facility should be made carefully.

With the new law, the government was upbeat it could collect most of the Rp 62 trillion in unpaid debts by 2014, Soepomo said.

“It won’t be achieved without tougher law enforcement on bad debtors,” he said.

Many bad debtors, especially ex-IBRA debtors, had left Indonesia since the Asian financial crisis of 1997-1998, which had led to the collapse of several private banks.

Samadikun, for example, has been on the police’s wanted list since that time.

Many other bad debtors said that they were unable to pay their debts, while in fact, they have many assets in foreign countries. (edf)

Indonesia’s Fight Against Corruption Stalls: Transparency International

Jakarta Globe, Nivell Rayda | October 26, 2010

Indonesia position on Transparency International’s latest global Corruption Perception Index is unchanged.Transparency International Indonesia chairman Todung Mulya Lubis said on Tuesday that this surprises him, given the lack of commitment to fight graft by President Susilo Bambang Yudhoyono, pictured. (Antara Photo)

Jakarta. Indonesia’s fight against corruption has hit the wall based on Transparency International’s latest global Corruption Perception Index released on Tuesday.

Indonesia ranked 110 out of 178 countries surveyed by the Berlin-based group, a slight improvement on last year’s ranking of 111, though less countries were surveyed.

Indonesia, like last year, received an appalling 2.8, with 0 being the most corrupt and 10 the least.

“I am not surprised at all. In fact I am shocked that Indonesia could maintain a score of 2.8,” Transparency International Indonesia chairman Todung Mulya Lubis said. “I was suspecting that we would score lower than last year because the fight against corruption has weakened in the past year.”

Todung cited last year’s spat between elements within the Corruption Eradication Commission (KPK) and the police. Many suspected that law enforcers attempted to frame KPK deputy chairmen Bibit Samad Riyanto and Chandra Hamzah, who are accused of receiving Rp 5.1 billion in bribes from a businessman.

“This is a battle between two ideologies, that of anticorruption and against corruption,” he said. “Antigraft institutions are systematically weakened. The government has failed to raise the integrity of the judiciary and law enforcement agencies. People are asking is the government committed to eradicating corruption?”

Three countries are tied with a score 9.3 as the cleanest countries: Denmark, New Zealand and Singapore. This year’s most corrupt country is Somalia with a score of 1.1.

Neighboring country Brunei scored 5.5 this year and ranked number 38, making it the second cleanest country in Southeast Asia after Singapore. Malaysia, another Southeast Asian county, ranked 56 with a score of 4.4 while Thailand ranked 78 with 3.5.

Indonesia fairs slightly better than Vietnam (116 with a score of 2.7) and the Philippines (134 with a score 2.4). Burma is the second most corrupt in the world with a score of 1.4.

Free at Last: AGO Drops Case Against Antigraft Officials Bibit and Chandra

Jakarta Globe | October 25, 2010

Trumped up charges against Corruption Eradication Commission deputy chairmen Bibit Samad Riyanto and Chandra Hamzah have been dropped, the Attorney General's Office said on Monday. (Antara Photo)

Jakarta. Indonesia’s Attorney General’s Office has been forced to resort to an old Dutch law to drop criminal charges against respected Corruption Eradication Commission deputy chairmen Bibit Samad Riyanto and Chandra Hamzah.

Muhammad Amari, the deputy attorney general for special crimes, said it had implemented the ‘deponering’ principle, that allows prosecutors to halt a prosecution in the public interest.

Bibit and Chandra were accused of extorting Rp 5.1 billion ($570,000) from businessman Anggodo Widjojo in exchange for halting a criminal investigation into his brother, Anggoro Widjojo, and lifting an overseas travel ban on him.

The case was widely believed to be part of a conspiracy involving elements of the national police and AGO to discredit the respected commission, also known as the KPK, which has made powerful enemies within the two institutions during its struggle against Indonesia's endemic corruption.

The case against the deputies was dropped by the Attorney General’s Office last year but the Jakarta High Court later ruled it must continue. The Supreme Court recently ruled that the pair must stand trial, prompting the AGO to select the deponering option.

President Susilo Bambang Yudhoyono has previously been reported as calling on all parties to settle the matter out of the courts.

Had the case gone to trial, the government’s case was believed to be weak. Senior police and AGO officials were alleged to have lied about the evidence they had, though no action was ever taken against them.

Related Article:

AGO decides to conduct 'deponeering' on KPK deputies

BI ready to join Asian nations to avoid ‘currency war’

The Jakarta Post | Sat, 10/23/2010 11:33 AM

As currencies of Asian emerging markets have risen due to surging capital inflows, Bank Indonesia (BI) has agreed with international observers who suggested Friday that the region should get together to avoid a “currency war”.

BI Deputy Governor Halim Alamsyah said that Indonesia, as well as other emerging markets, needed to work in harmony in pushing forward efforts to avoid a currency war.

“We don’t want a currency war to happen, it’s not going to benefit any country,” Halim said on the sidelines of a seminar on the macroeconomy and financial policies organized by BI at Hotel Mulia in Jakarta.

International observers from the International Monetary Fund (IMF), Asian Development Bank (ADB) and Bank of Thailand addressed the importance of policy coordination among Asian nations as the favorite destination of global investors.

“The currency war could be tackled if countries cooperate, and therefore coordination is needed,” said Iwan J. Azis, an ADB economist.

Iwan added that China’s reluctance to let the yuan appreciate was one thing that the region could work on in order to maintain each country’s competitiveness. If China strengthens its currency, Iwan explained, then its exports would lose competitiveness compared to Indonesia, Thailand and Vietnam, which exported similar products.

“China would want to let the yuan appreciate if other countries did so too. Nations can conduct talks and discuss the issue. This is the kind of coordination I was talking about.”

China has been preventing the appreciation of the yuan in order to maintain the competitiveness of its exported products in the global market.

Advanced economies, primarily the US, have viewed this policy as unfair, as China’s economy has expanded significantly enough — 9.6 percent in the third quarter of this year — for the country to be able to tackle currency appreciation.

The term “currency war”, according to economists, refers primarily to the two countries, the US and China, but has been widened by some to include emerging markets versus the advanced economies as far as currency values are concerned.

Currencies of emerging markets in Asia have appreciated, with the Malaysian ringgit rising about 11 percent and the Thai baht about 10 percent so far this year.

In Indonesia, the rupiah has appreciated by about 5 percent, also due to heavy inflows of foreign funds.

Foreign investors have pumped over US$12 billion into the nation’s stock and debt markets, while the foreign exchange reserves at the central bank reached $86.5 billion by the end of September, compared to $50.6 billion at the end of December 2009.

BI Deputy Governor Halim said the central bank had curbed the rupiah from appreciating too fast to maintain competitiveness. Unlike other currencies, he said, the rupiah had been appreciating moderately, thanks to BI’s efforts to restrain it from strengthening too fast.

“We did, let’s say, intervene so the rupiah does not appreciate too strongly,” he said, without providing details on concrete actions and the timeframe of the intervention. However, local economists believe the central bank has been buying dollars to keep the rupiah steady. (est)

Related Article:

Group of 20 vows to avoid currency devaluations

North Sumatra governor detained over graft case

The Jakarta Post, Jakarta | Fri, 10/22/2010

The Corruption Eradication Commission (KPK) on Friday detained North Sumatra governor Syamsul Arifin in connection with corruption he allegedly committed during his tenure as Langkat regent from 2000 to 2007.

Syamsul Arifin (JP/Apriadi Gunawan)

The alleged graft is estimated to have inflicted Rp 102 billion in losses to the local administration.

After a seven-hour questioning, Syamsul said he was not too surprised by his detention.

“It is partly a risk a leader has to face,” Syamsul told reporters. He declined to comment further.

Syamsul’s attorney, Yoni Agustiono, said his client had conveyed objection to the arrest, citing his health reasons and his duty as the North Sumatra governor.

“However, the investigators rejected his request, saying the mechanism in the commission required them to do so,” Yoni said. (lnd)

China provides 250 million US dollars for RI

Antara News, Wednesday, October 20, 2010 22:42 WIB

Beijing (ANTARA News) - The Chinese government disbursed 240 million US dollars for trade and investment under a funding agreement between Indonesia and Exim Bank with the Industrial and Commercial Bank of China.

"The 250 million US dollars bring the total which had earlier been mentioned by Minister of Trade Mari Elka Pangestu to 350 million US dollars," president director of the Indonesian Eximbank I Made Gde Erata said after signing an agreement in the presence of Vice President Boediono and his Chinese counterpart Xi Jinping at Great Hall of the People in Beijing, here on Wednesday.

Gde Erata said the funding cooperation covers an increase in trade, investment, and finance between the two countries. The cooperation covers an increase in trade of mechanical and electronic products, technological products, energy and raw materials.

The cooperation is also to support infrastructure and energy projects in the two countries or those set up by Indonesian or Chinese companies. The funding is also aimed at supporting construction projects built by the two countries.

"It was also aimed at supporting the small and medium business companies in Indonesia and China. The funding loan from the ICBC to the Indonesian Eximbank was also meant for projects relating to the two institutions," he said. The loan for small and medium businesses was already been explored by Indonesian textile associations.

With regard to interest, he said it has not been set as it will be discussed by the textile team. But it is estimated at more than 10 percent.

A similar statement was made by Mari Elka Pangestu prior to signing the accord. She said the cooperation between the Indonesian Eximbank and the CBC has a low interest.

"The conditions are lower, and to facilitate new exports the interest rate has been set at the competitive rate of 10 percent," Mari Elka said when accompanying Boediono after meeting Prime Minister Wen Jiabao.

Foreign funds will not create bubble: WB

The Jakarta Post, Jakarta | Wed, 10/20/2010 9:52 AM

Indonesia remains safe from the dangers of an economic bubble despite growing concerns that the currently large inflow of foreign funds into the country could push up asset prices to an unrealistic level, a World Bank economist says.

World Bank (WB) senior economist in Jakarta Enrique Blanco Armas said Tuesday that the large amount of foreign capital inflow into Indonesia’s debt and equity market had not yet posed a threat to the country’s economy.

“Whether [the capital inflow] will make a bubble in the Indonesian economy, it will be very little,” he told journalists after the launching of the WB’s latest East Asia and Pacific economic update titled “Robust Recovery, Rising Risks”.

However, he said, the central bank should avoid using an interest rate instrument to curb the inflation resulting from the increase in the liquidity as the consequence of the foreign capital influx. “An increase of the interest rate would attract more capital inflow,” he said. 

The central bank’s recent move to raise the reserve requirement in order to ease the liquidity was the right decision, he said. “It’s a correct one,” he stressed.

Driven by massive global liquidity resulting from a recovered global economy, capital inflows to developing countries have risen sharply this year. 

In Indonesia alone, foreign holdings of government bonds climbed by Rp 78.8 trillion (US$8.8 billion) this year to Rp 186.8 trillion as of Oct. 5. In addition, the foreign funds have pumped a net $2.4 billion into Indonesian shares so far in 2010.

“We have to keep a careful eye, because the volatility of capital flows may bring risks to the sustainability of the country’s economy,” Vikram Nehru, WB chief economist for the East Asia and Pacific Region, said in a teleconference from Tokyo.

A large amount of capital from developed countries had flowed to the East Asian countries to seek higher returns, he said.

“It’s complicating the policy makers. They have to manage the capital inflows to maintain the economic stability while, at the same time, they have to make sure that the economic growth is maintained,” he said.

To cope with the massive capital inflows, he said, the East Asian authorities would bear tough challenges in balancing the inflows by, among others, ensuring competitiveness, financial sector stability and low inflation.

He said East Asian growth was not only robust but also pretty wide spread because five countries in the region had their growth rates at about 7 percent. The growth was no longer driven by fiscal stimulus packages, since it was now driven by the private sector.

“Private investment is coming back, as well as consumption. So [the economic growth] will be more sustainable,” he said. (ebf)

Indonesia's Young Minds on Corruption

Jakarta Globe, Tasa Nugraza Barley | October 18, 2010

Experts agree: corruption is killing Indonesia. But nobody seems to be doing anything about it. With government officials seen as making up a large percentage of those illegally lining their pockets, it is not surprising that their actions often go unpunished.

‘I think the death penalty should be implemented for
those who are corrupt’ Nabila, high school student.

There is, however, a glimmer of hope on the horizon. Most young people in Indonesia are aware of what’s right and wrong. And when questioned, many are vocal in speaking out against corruption.

Radya Isra Nugraha, 9, says his parents always tell him that corruption is a form of stealing other people’s money.

“It’s something very evil to do,” he says. “Of course I don’t want to be a corrupt person when I grow up.”

Nabila, a high school student in East Jakarta, says that she hears about corruption on the news every day.

“I think it’s such a shameful thing that there are so many people who like to be corrupt in this country,” she says.

Although Indonesia has a lot of potential, Nabila says, it continues to lag behind other countries in Southeast Asia because of corruption.

“I know from the textbooks that I read in school that Indonesia is a very rich country,” she says. “But why are there still millions of people who live on the streets and beg?”

“Until the government can fix the problem of corruption, our country will never be prosperous,” she adds.

Kevin Giovanni Layandro, a high school student, says he is aware of corruption because his teachers often discuss the topic in class.

“The reason corruption has become a big problem is simply because justice is not properly implemented in this country,” he says.

Ramzi Intishar, also high school student in West Jakarta, says corruption is on the rise in Indonesia because “people want to get easy money.”

“I will never be corrupt because I don’t want to go to jail,” Ramzi says. “More than that, I don’t want to disappoint my parents and my family.”

While these youngsters all agree that the problem of corruption needs to be addressed for the country to prosper, many high-ranking officials don’t seem to share the same view.

When the era of political reform arrived in 1998 after 32 years under the Suharto regime, there was a sense of hope among most Indonesians for a government that was clean and that would work for them and their interests.

That has not always happened and many people believe that democracy has failed them.

Some people even say corruption is now worse than it ever was under Suharto.

There are certainly plenty of examples to support this claim.

In March, tax official Gayus Tambunan made headlines after Rp 28 billion ($3.2 million) was discovered in his bank accounts.

The money is believed to have come from companies that Gayus helped avoid their tax bills.

Then there is Bahasyim Assifie, a former director of tax investigations currently on trial for corruption, who has been reported to have Rp 932 billion in bank accounts in the names of his wife and daughter.

It is alleged that the money was extorted from taxpayers.

The list of disgraced government officials continues to grow, and doesn’t show any signs of slowing anytime soon.

According to a survey by Indonesia Corruption Watch, one of the country’s leading antigraft organizations, there were cases of high-level corruption in at least 27 provinces in the first half of 2010.

North Sumatra topped the list with 26 cases, while Jakarta was in third with 16 cases.

The world is taking notice. In the 2009 Corruption Perceptions Index — a yearly survey by Transparency International to show how countries around the world deal with corruption — Indonesia was at No. 111 when it came to corruption.

In the survey, which involved 180 countries, Indonesia was tied with Togo, Solomon Islands, Mali, Kribati, Egypt and Algeria.

It was well behind four other Southeast Asian countries: Brunei at No. 39; Malaysia, 56; Thailand, 84; and Singapore, which at No. 3 was seen as doing a better job of fighting corruption than many Western countries, including the United States, Germany and the United Kingdom.

Ending Indonesia’s mentality of corruption has proven difficult and many observers are concerned that the problem, and the behavior, could be passed on to today’s youth.

Orissa Anggita Rinjani, a psychologist at the University of Indonesia who specializes in children’s education, says that exposing children and teenagers to corruption through the media could have a damaging effect.

She says that in a sense, corruption had become the norm in Indonesia because perpetrators often went unpunished.

“If we all agree that corruption is bad, then why do we see that there are so many important people and high-ranking officials who are responsible for corrupt activities but don’t suffer the consequences?” she says.

It’s very dangerous when people begin to say to themselves, “If they can do it, why can’t I?” she adds.

Orissa says that because children learn from their environment, it’s important that parents and schools serve as positive role models.

Young people can grow up to be staunchly against corruption “if the place where they interact and spend the most time doesn’t tolerate corruption,” she says.

Education Minister Muhammad Nuh agrees. He says that his ministry is planning to integrate anticorruption classes into the national curriculum early next year.

Nuh adds that the culture of corruption has long haunted the education system.

He points out that many students cheat during exams, manipulate the attendance sheets or get others to do their projects.

“Those are things that have to be thrown out and erased from our educational environment. Hopefully, [a curriculum that integrates anticorruption lessons] will be able to help the young generation avoid corruption and really fight it,” he told state news agency Antara.

While the minister is focused on educating a new generation to hate corruption, high school student Nabila says the authorities need to start getting tough on those committing the crime.

“I think the death penalty should be implemented for those who are corrupt, that way people will never even think about doing it,” she says.

She is not alone in this sentiment. The chief justice of the Constitutional Court, Mahfud MD, has come out in support of introducing the death penalty for those convicted of corruption.

“The death penalty is possible if there’s danger. China has been implementing it and the people are satisfied,” Mahfud said at Dr. Soetomo University in Surabaya on Saturday.

He said that he thought current laws were too lenient on people found guilty of corruption.

“The highest sentence handed down has been 20 years,” he said, adding that most people found guilty of corruption only go to jail for one to four years.

But high school student Kevin suggest an even tougher way to put an end to corruption: “We should kidnap the children of people who are corrupt. That way, they know how it feels to lose something that they really care about.”

Related Articles:

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Corruption Trail Revealed in Indonesian Government’s ‘Lost’ $1 Billion

Corruption Trail Revealed in Indonesian Government’s ‘Lost’ $1 Billion

Jakarta Globe, Dion Bisara | October 13, 2010

Jakarta. Despite the central government’s efforts to foster improved governance, the state lost about $1 billion last year due to misspent or misappropriated budget allocations, the Supreme Audit Agency reported on Tuesday.

Hadi Poernomo, chairman of the agency, known as the BPK, told a plenary session of the House of Representatives that it had uncovered losses of Rp 9.55 trillion in the financial reports of ministries, state agencies, local governments and state-owned enterprises during the 2009 fiscal year.

Hadi said the results offered clear indications of widespread corruption, and demonstrated the weak internal supervision of government spending and non-compliance with regulations.

Most of the lost money — Rp 4.98 trillion — was channeled through central government ministries and state agencies, and only Rp 40 billion has been returned.

The BPK had for five consecutive years issued a disclaimer on government financial reports, meaning too much data was unclear or missing.

The 2009 reports, in which the $1 billion in losses was discovered, were the first to have all data considered valid.

In citing examples of malfeasance, Hadi pointed to Public Works Ministry, which he said had overpaid contracted consultants by Rp 4.46 billion.

In addition, the price of a Finance Ministry tax office building in Kotamabagu, North Sulawesi, had been marked up by Rp 2.98 billion.

“We also found a false travel expense document in the Home Affairs Ministry that potentially cost the state Rp 1.57 billion,” he said.

Hadi said budget losses in regional and local governments totaled Rp 3.55 trillion, of which only Rp 38.22 billion had been returned.

Some of the unauthorized spending included Rp 6.92 billion on personnel at the Manado municipal government and a Rp 5.24 billion markup in the procurement of health care equipment for the Banten provincial government.

Arif Nur Alam, coordinator of the Indonesia Budget Center, said the BPK report should be a wake-up call for the government to take stronger measures in budget planning and spending.

“President Yudhoyono should use this report to evaluate the ministries, make sure that they use the budget for people’s welfare,” he said.

Arif pointed to the Home Affairs Ministry’s travel budget as a common example of graft.

“The report only strengthens people’s perception that official travel, whatever they tag it, does not serve the needs of the people at all. Their travel is only for their own interests,” he said.

Harry Azhar Azis, deputy chairman of House Commission XI, which oversees financial affairs, said the government should follow up on the BPK report and try to recover as much of the lost money as possible.

“The BPK in the future should not only report the losses, but how much can be recovered as well.”

Harry noted that while some of the losses were certainly due to corruption, others might be a result of simple incompetence.

Related Articles:

BPK Investigating Tax Office in Upcoming Audit

Sjahril Djohan Guilty of Graft, but Jailed for Just 18 Months

Finance Ministry Official Named World Bank Director

Jakarta Globe, Dion Bisara | October 11, 2010

Finance Ministry Inspector General Hekinus Manao has been elected as the World Bank’s executive director for the East Asia-Pacific region.

He is scheduled to take over the position at the bank’s headquarters in Washington on Nov. 1, and will oversee 11 countries: Indonesia, Brunei, Fiji, Laos, Malaysia, Burma, Nepal, Singapore, Thailand, Tonga and Vietnam.

“A star performer of high integrity within Indonesia’s bureaucracy, Dr. Manao was nominated for the directorship by Indonesian Finance Minister Agus Martowardojo,” the World Bank said in a statement.

“Executive directors are responsible for making decisions on all proposed investments to be made by three of the main organizations under the World Bank group, namely the International Bank for Reconstruction and Development, the International Development Association and the International Finance Corporation,” it explained.

Finance Ministry spokesman Harry Z Soeratin welcomed the announcement.

“It was an achievement,” he said, adding that Agus had endorsed Hekinus with the aim of strengthening the Indonesian government’s ties to the World Bank.

Hekinus was officially elected to the position at the bank’s annual meeting, which wrapped up in Washington on Sunday.

The World Bank’s board of executive directors has 24 members, of which five are appointed and 19 are elected. Regular elections for executive directors are held every two years, and are normally concluded at the bank’s annual meeting.

Each elected executive director represents a group of countries in a specific region. The directorship is rotated among nations within that group.

Hekinus enters the new position with a long history of experience in both Indonesian and international financial affairs.

He was promoted to inspector general of the Finance Ministry in 2008, after having been the director of the ministry’s accountancy and financial report for four years.

On the international front, he has served as a member of the G20 Working Group on Enhancing Sound Regulation and Strengthening Transparency.

Hekinus was first trained as an accountant at the State Accountant School (STAN), graduating in 1984.

He went on to earn a master’s degree in accounting from Case Western Reserve University in Cleveland, Ohio, in 1990.

He then earned a doctorate in business administration at Cleveland State University.

Clear skies ahead as govt to abolish exit tax next year

The Jakarta Post | Fri, 10/08/2010 9:57 AM

Indonesians traveling abroad from Jan. 1, 2011 will no longer be required to pay the fiscal exit tax, a senior tax official said.

“We will abolish the exit tax, which must be paid by Indonesians and residents who travel abroad,” Directorate General of Taxation spokesman Iqbal Alamsyah told The Jakarta Post on Thursday.

Under the new policy, all taxpayers will be exempt from the exit tax, he said.

According to the 2008 Income Tax Law, the  exit tax would be valid until Dec. 31, 2010.

On Jan. 1, 2009, the government abolished the payment for taxpayers who could provide their tax ID number (NPWP).

The decision was made to encourage the people to get an NPWP, since many Indonesians do not have one, and do not pay tax.

“Starting Jan. 1, 2011, the policy will be extended to all people traveling abroad assuming that

more taxpayers would have obtained their tax ID numbers by then,” he said.

Currently, those without NPWPs have to pay Rp 2.5 million (US$280) when traveling abroad by air and

Rp 1 million by sea.

Travelers with NPWPs need only show copies of their NPWP cards, passport, boarding pass and family card for spouses and for children under the age of 21.

Children older than 21 can continue to use their parents’ NPWP as long as they remain listed on the family cards.

Iqbal said the decision to abolish the exit tax would not discourage the people from registering as taxpayers, because the NPWP would be still needed for other business purposes.

Currently there are several groups exempted from paying the exit tax, including foreigners who stay in Indonesia for less than 183 days in a 12-month period, diplomatic officials, representatives of international organizations, pilgrims and Indonesian migrant workers.  (ebf)

Mayors win antigraft award

The Jakarta Post, Jakarta | Tue, 10/05/2010 9:54 AM

The Yogyakarta municipal administration under Mayor Herry Zudianto and Surakarta Mayor Joko Widodo has won the 2010 Bung Hatta Anti-Corruption Award, the panel of judges announced Monday.

The two winners beat 36 other candidates in the selection rounds that took about six weeks.

Zoemrotin K. Susilo, on the judges’ panel, said that both Joko and Herry had succeeded in building transparent systems in their regional administrations.

“They tried to establish transparent budgeting and one-stop public service centers, which have resulted in efficiency,” Zoemrotin said.

One of Herry’s efforts, she said, was to issue a mayoral decree stipulating that the municipal administration would provide schools with an additional budget allocation to eradicate “illegal fees” imposed on students.

“Previously the municipal administration received a lot of reports about the illegal fees. With the issuance of the decree, he tried to respond to the problem and overcome corruption,” she added.

The other winner, Joko, succeeded in handling street vendors in a humane way, Zoemrotin said.

“The municipal administration always communicated with the street vendors instead of just evicting them as is commonly seen in other cities. Joko made a good approach by moving the vendors into strategic business locations and they only had to pay daily retribution fees,” Zoemrotin said.

“Doing this, he has shown that it is not low-income people who should be treated as enemies, but poverty itself,” she added.

According to Zoemrotin, the judges evaluated the nominees based on their credibility, commitment to corruption eradication, and their new systems, along with the impacts. “For example, the reform that Herry initiated has changed the people’s perception of corruption in Yogyakarta. We can also see his breakthroughs in the regulations and their impacts,” she said.

The Bung Hatta Anti-Corruption Award Foundation was established in 2003. It first granted the award to the late Moh. Yamin, Syamsul Qomar, Erry Riyana Hardjapamekas and Karaniya Dharmasaputra in 2003. In the following year, it honored Gamawan Fauzi and Saldi Isra.

After an absence of three years, the foundation issued the award again in 2008 with a focus on law and finance. The award went to former finance minister Sri Mulyani Indrawati, former Corruption Eradication Commission (KPK) deputy leader Amien Sunaryadi, and Judicial Commission chairman M. Busyro Muqoddas.

Natalia Soebagjo, the chairwoman of the foundation that grants the award, said that the 2010 award focused on bureaucratic reform and delivery of public services. “The goal of corruption eradication is to improve public services to the people,” Natalia added.

The judges, Betti Alisjahbana, Zoemrotin, Eko Prasojo and Rikard Bagun, selected the two from eight names who passed two selection rounds. (lnd)

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