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Indonesia's
President Susilo Bambang Yudhoyono talks during a news
conference with
Australia's Prime Minister Julia Gillard (not pictured) at the
Northern
Territory Parliament House in Darwin July 3, 2012. (Credit:
Reuters/Daniel Hartley-Allen/Pool)
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(Reuters) -
Indonesia's President Susilo Bambang Yudhoyono said on Thursday corruption is
on the rise, even in parliament, in his most explicit comments yet on a scourge
that he warned threatened economic growth in Southeast Asia's largest economy.
Corruption
is widely seen as holding back the economy and Yudhoyono has been criticized
for letting the fight against it slow as he comes towards the end of his second
five-year term.
A series of
corruption scandals have rocked the president's Democrat Party, weakening it in
advance of elections in 2014 when Yudhoyono will step down.
"The
drum of war on corruption should not dissipate. Corruption should be completely
eradicated," Yudhoyono said in a speech to parliament ahead of the
country's Independence Day anniversary.
"I
have to admit there are still many perpetrators of corruption even in the
government, parliament, regional representatives and among law enforcers,"
Yudhoyono said.
There are
few estimates of how much corruption costs Indonesia but watchdog groups say it
is prevalent in the civil service, police and judicial system and that it adds
to business costs in part by weakening confidence in the rule of law.
Despite
rampant graft, resource-rich Indonesia has become a favorite of emerging market
investors because of its large domestic market as the world's fourth most
populous country, rising middle class, relatively stable fiscal framework and
low levels of public debt.
Economic
growth picked up to a stronger-than-expected 6.4 percent last quarter, defying
a global downturn because of domestic consumption and investment.
Yudhoyono's
wide-ranging speech ahead of Independence Day was the latest in a series to
touch on corruption.
He said
cooperation between the anti-graft body the KPK, the Supreme Court, police and
the Attorney General's office was paramount in fighting corruption.
Yudhoyono
said the government must provide a safe legal environment for investors if it
is to promote economic growth, as well as removing hurdles to investment and
promoting infrastructure growth.
One analyst
said he was skeptical that the speech signaled any real stiffening of
government resolve on corruption.
"This
speech is normative because if you say such things you have to show concrete
examples. The president mentions extraordinary action to face corruption but
there is no realization on the ground," said Donal Fariz of Indonesia
Corruption Watch, a graft watchdog.
Europe's
economic crisis also provided a threat to growth in Indonesia, and that the
government needed to cautiously give a fiscal stimulus, though he did not give
any details, Yudhoyono said.
Economists
say the government needs to spend more to overhaul infrastructure to drive
long-term growth, though central government spending usually falls below target
because of corruption and bureaucratic inefficiency.
(Additional
reporting by Aditya Suharmoko, Adriana Nina Kusuma and Rieka Rahadiana; Writing
by Matthew Bigg; Editing by Jonathan Thatcher)
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