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10 March 2010

Survey: Graft problem worsens in Indonesia

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Indonesia remains the most corrupt country in Southeast Asia and graft is getting even worse, a poll of businessmen says, dealing a blow to the president's efforts to clean up the country, AFP reported.

The news comes as President Susilo Bambang Yudhoyono is under mounting pressure with his vice president and finance minister facing a criminal probe into their role in the controversial bailout of a troubled bank.

The annual poll by the Political and Economic Risk Consultancy (PERC), made available to AFP Tuesday, put Southeast Asia's biggest economy last in a table of regional economies with a score of 9.27 out of the worst possible 10.

Indonesia also came last in 2009, but with a marginally better score of 8.32. Cambodia was ranked the second most corrupt regional nation with a grade of 9.10, followed by Vietnam and the Philippines. Singapore remained top of the list with a score of 1.42, while Australia was second with 2.28 and Hong Kong third on 2.67.

Zero means the country or territory is seen to suffer the least corruption among politicians and civil servants, PERC said in the report. The Hong Kong-based consultancy said Indonesian lawmakers' call for a criminal probe into the Yudhoyono government's bailout of Bank Century in 2008 reflected attempts by a corrupt establishment to maintain the status quo.

"Corruption has become a charge being used by corrupt people to protect themselves and to stifle reform," PERC said.

"The whole fight against corruption is in danger of being corrupted," it said. Vice President Boediono and Finance Minister Sri Mulyani Indrawati, who both authorised the 724-million-dollar bailout, have consistently ranked as among the most respected figures in Yudhoyono's cabinet among foreign investors.

The probe into their decision to rescue Bank Century may cost them their jobs, but "is entirely manipulated and entirely political", PERC said. Yudhoyono, a liberal ex-general who first came to power in 2004, was re-elected in 2009 on promises to root out corruption, which riddles every aspect of Indonesian public life, from the courts to the customs office.

Hong Kong slipped a place from a year ago, with PERC saying questionable tactics by powerful property developers in the Chinese territory likely dragged it down.

"There are still criticisms of some practices, particularly in the real-estate sector, concerning tactics used by developers that, to be generous, play on a lack of transparency that would not be allowed in many other markets," PERC said.

"This could account for why a number of perceptions this year for Hong Kong are slightly worse than last year. However, overall Hong Kong has maintained its favourable ranking in our survey," it said.

The United States -- included for comparison purposes -- placed fourth with a score of 3.42, followed by Japan (3.49), Macau (4.96), South Korea (5.98), Taiwan (6.28), Malaysia (6.47) and China (6.52).

"Measuring the level of corruption (in China) is nothing more than guesswork," PERC said.

"What is fairly clear is that the problem of corruption is more severe at the local level of government and business, particularly state-owned enterprises, than at the national level, although there are plenty examples of graft at the national level too," it said.

PERC's poll was conducted from December to February, and involved 2,147 mid-level and senior Asian and expatriate business executives working in the 16 economies.


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