Watchdog muzzled

PUBLISHED : Saturday, 21 September, 1996, 12:00am
UPDATED : Saturday, 21 September, 1996, 12:00am

Many people who do business in Indonesia quickly learn that it is a country where graft and corruption are part of the culture.

This reputation will only be increased by news that the country's watchdog committee, the National Supervision and Development Board, has complained it is powerless to act in most of the cases it uncovers.

According to the chief of the organisation, only 27 per cent of the 14,572 cases which it reported in the fiscal year 1995-96 were ever settled. The total sum involved was $175.76 billion.

Part of the reason, it is alleged, is that the government departments affected are too embarrassed by the findings to take action. The board also claims that internal auditors appointed to government departments are so poorly trained that they do not understand the nature of their jobs.

These revelations should cause discomfort in the Government, even though the administration has so often shown itself impervious to criticism from within the country or outside.

In the last three decades, Indonesia has emerged as an 'Asian tiger' with huge economic potential given its size. But corruption poses a threat to its continued growth and its ability to attract international investment.

Neighbouring countries can offer equally low labour costs, and, as their economies climb, they will be more attractive to investors if they are freer of nepotism, and evolve towards more open and above-board ways of doing business.

One aspect of moving ahead in the global market is to develop a reputation for reliability and trustworthiness. The board's report indicates how far Indonesia has to go in that respect.