ASEAN KEY DESTINATIONS
Indonesia's Corruption Eradication Commission (KPK) has warned that the country’s high-cost election campaigns will encourage politicians to misuse their power and commit graft in their attempts to find easy money in the days leading up to the 2014 general election.
Speaking in a discussion with The Jakarta Post on Tuesday, KPK deputy chairman Bambang Widjojanto predicted that graft in the banking and financial sectors would soon intensify due to its ability to offer liquid financial rewards.
“Compared to other graft techniques, like collusion in a government project tender, graft in these sectors allows corrupt politicians to pocket cash much more quickly,” Bambang said, citing the Bank Indonesia liquidity support (BLBI) scandal and the controversial Bank Century bailout, which took place ahead of the 1999 and 2009 general elections respectively.
Irregularities surrounding the BLBI fund concerns the fate of 702 trillion rupiah (US$57.6 billion) in bailout funds disbursed by the central bank during the 1997-1998 Asian financial crisis.
Following advice from ministers, including former state-owned enterprises minister Laksamana Sukardi, in 2002 former president Megawati Soekarnoputri issued Presidential Decree No. 8/2002, which regulated the “release-and-discharge” letters, freeing recipients of the funds from being obliged to pay their debts in full.
KPK prosecutors previously summoned a number of Megawati’s former ministers from the Indonesian Democratic Party of Struggle (PDI-P), and grilled them about their role in the BLBI case.
The Bank Century case, meanwhile, centers on the government’s controversial decision to give the ailing bank a 6.7 trillion rupiah bailout package in 2008 - a considerably larger amount than the previously agreed-upon 632 billion rupiah. The government claimed that had it not intervened at the time, Bank Century’s collapse would have caused systemic failure in the banking sector.
Other potential instances of graft that may take place prior to the upcoming election, according to Bambang, are those related to the disbursement of the government’s social assistance funds (Bansos) and to the issuance of concessions in the mining and forestry sectors.
“Our study three years ago confirmed that local governments had issued major concessions to the forest and coal sectors ahead of local elections,” Bambang added.
Many have condemned the failure of political parties to maintain grassroots support and develop reliable recruitment systems as the main factors behind the soaring costs of election campaigns.
Democratic Party (PD) lawmaker Didi Irawadi Syamsuddin, for example, said he prepared at least 1 billion rupiah to fund his re-election bid. Most of the money, he said, was allocated for purchasing campaign materials.
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