00074918.2012.728667
Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Book reviews
Ross Garnaut , Jean-Luc Maurer , Anne Booth , Peter McCawley & Ross H.
Mcleod
To cite this article: Ross Garnaut , Jean-Luc Maurer , Anne Booth , Peter McCawley & Ross
H. Mcleod (2012) Book reviews, Bulletin of Indonesian Economic Studies, 48:3, 437-446, DOI:
10.1080/00074918.2012.728667
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Bulletin of Indonesian Economic Studies, Vol. 48, No. 3, 2012: 437–46
BOOK REVIEWS
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Jusuf Wanandi (2012) Shades of Grey: A Political Memoir of Modern
Indonesia, 1965–1998, Equinox, Singapore, pp. 295. Paper: US$19.95.
Jusuf Wanandi’s political autobiography illuminates our understanding of contemporary Indonesian political culture, institutions and ideological orientation.
It adds considerably to our understanding of how an internationally open economy and pluralist democracy emerged from an unlikely background. It does this
through a shockingly honest account of the author’s intimate participation in
major political events from the mid1960s to the early years of the 21st century.
The transformation of 20 years of chaotic, inward-looking economic policy
making, instability and stagnation under Soekarno into three decades of sustained, strong, internationally oriented economic growth under Soeharto’s New
Order seems improbable to people observing it from afar. Similarly, the collapse of
the New Order economy and military-dominated political system in the last years
of the 20th century, and its replacement by today’s expanding economy within a
democratic framework, are hard to comprehend. Wanandi’s fresh insights from
personal observation help us to understand these globally important transformations. Common to both, says Wanandi, was the restraint of outgoing leaders in
using their residual powers so as to avoid unnecessary damage to the nation.
The accounts of modern history are highly personal without being egocentric.
We are told enough about the author’s personal story to understand how it
affected his objectives, opportunities and constraints in an Indonesian intellectual
and political life. As a member of a large Chinese family engaged in small business in West Sumatra, Wanandi grew up to be interested in emerging national and
international politics. He identiied strongly with Indonesian nationalism. He is
conident in the religious and cultural diversity and tolerance that emerged from
a Javanese and Malay society’s absorption of successive waves of immigrants and
inluence from India, the Arab world, China and Europe.
As Chinese and Catholic, Wanandi worked with other Indonesians who
favoured a pluralist polity that would provide a legitimate, comfortable and
productive place for minorities. That meant taking every chance to reinforce the
values of Pancasila in the face of pressures to adopt syariah law. It meant doing
everything it took to resist the apparently inexorable movement to power of the
Indonesian Communist Party (PKI) in the mid1960s.
Some of the asides on religious culture are fascinating. Wanandi suggests a
distinction between Christian tolerance and forgiveness and the Old Testament
‘tooth for tooth’ that is more inluential in the other Abrahamic religions. He
distinguishes Catholics from other Christian groups for the clarity with which
they identiied and pursued their interests in a pluralist polity. The Catholic
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background brought contact with likeminded people in the Philippines through
a group led by Australian Bob Santamaria.
Wanandi’s quick intelligence, cheerful, generous disposition and shocking
frankness shine through the story, and are captured in a photograph of a conident, bright, mischievouslooking junior high school boy scout.
The author talks about what ‘we’ were thinking and hoping and doing. ‘We’
is usually a group of mostly Chinese, mostly Christian intellectuals who worked
with other Indonesian groups to resist the advance of communism in the sixties
and were crucial to establishing the Soeharto regime; who played central roles
in bringing an international orientation to Soeharto’s government, including
through the ending of Confrontation with Malaysia, the establishment of ASEAN,
the building of APEC and the normalisation of diplomatic and economic relations with China; who were at the forefront in the incorporation of Papua and
then East Timor into the Indonesian nation; who became disappointed with New
Order proclivities and fell out of inluence through the eighties; and who were
inluential at the margins in Indonesia’s later movement towards pluralism and
democracy.
After the formation of Indonesia’s Centre for Strategic and International Studies (CSIS) in 1971, ‘we’ covers the people who with Wanandi built and sustained
CSIS as a think-tank for the government and then the society on political, economic and strategic issues, especially in the international sphere – notably Harry
Tjan, Sofjan Wanandi, Clara Joewono, Daoed Joesoef and Hadi Soesastro. Hadi
was ‘our brightest mind’, and ‘certainly one of the best political economists East
Asia ever had’. Those who knew Hadi’s international work well agree.
‘We’ often included two central igures in the political events that saw the rise
and consolidation of Soeharto’s regime, Ali Moertopo and Benny Moerdani. These
powerful igures were benefactors to the CSIS group, as well as beneiciaries of
its networks, analysis and advice. Moertopo’s incorruptibility is seen at once as
a source of inluence and a source of vulnerability. We learn that Moerdani, for a
period head of the army and the second most powerful leader of the republic, was
advised that his inluence would expand if he converted to Islam, but he chose to
hold to values that he judged to be higher than politics.
Most fascinating of all is Wanandi’s insider account of several of the largest
events in Indonesian political history: the crushing of the PKI and the emergence
of Soeharto as president; the massacre that followed the attempted coup of 30
September 1965; the incorporation of Papua and later East Timor into the republic; the ending of Confrontation; and the emergence of a democratic alternative
to military power as Soeharto’s authority ebbed in inancial and economic crisis.
Through the early 1960s, Wanandi and those close to him thought it likely that
the PKI would ascend to power through constitutional processes. This expectation
concentrated their minds on resisting communist rule through whatever means
were available to them. The PKI failed partly because it placed mass mobilisation
of Indonesians and not armed struggle at the centre of its efforts. Its failure was
important to the path of political development in China, the communist country
with which the PKI was most closely linked. Soeharto’s subtle accretion of power
and care to avoid breaches of the constitutional framework contrasted with the
impatience of many of his supporters and, together with luck, were important to
his overwhelming success.
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439
Wanandi describes the mid-1960s massacre as the darkest episode in Indonesian history. It was an anti-communist and not an ethnic irruption. For as long
as the political complexion of the republic was at stake, human rights were far
from mind. Later, with the pluralist polity secure, Wanandi and his associates
sought to assist surviving victims.
Insights into Soeharto’s decline are similarly illuminating. His domination of
opportunities for corruption was important to the political culture of the New
Order. It grew into a major threat to the state as the ‘irst children’ matured.
Indonesian and Australian perceptions of a threat of communist inluence
on an independent East Timor regime were seen as the spur to the 1975 invasion. Australian readers will learn important things about their own history from
Wanandi’s account of the lead-up to this fateful event.
This fascinating political memoir is a model of its genre in its clarity, honesty
and intimacy.
Ross Garnaut
University of Melbourne and ANU
© 2012 Ross Garnaut
Hal Hill, Muhammad Ehsan Khan and Juzhong Zhuang (eds) (2012)
Diagnosing the Indonesian Economy: Toward Inclusive and Green Growth,
Asian Development Bank and Anthem Press, Manila and London,
pp. xxi + 482. Cloth: £60.00; US$99.00.
This thick volume attempts a diagnosis of the Indonesian economy and an analysis of how economic growth can be made more inclusive and sustainable at a time
of climate change risks and increasing environmental challenges. It is the result
of a collaboration between the Asian Development Bank (ADB), the Government of Indonesia, the International Labour Organization (ILO) and the Islamic
Development Bank (IDB). While most of its 23 authors are ADB economists, it
has contributions from ILO and IDB staff, researchers from two respected Jakarta
‘think tanks’ – the Centre for Strategic and International Studies and the SMERU
Research Institute – and a couple of renowned academics. Relecting this close collaboration between international organisations and research institutions, between
academics and practitioners, the book aims to ‘identify the critical constraints to
medium-term economic growth and poverty reduction …’ and to ‘provide some
recommendations that policymakers can consider in addressing these constraints
so as to achieve broad-based growth …’.
In the irst of 12 chapters, the coeditors outline the methodological backbone
of the book. They present the ‘growth diagnostics’ framework developed by
Hausmann, Rodrik and Velasco in a 2005 paper of that name, and adapted by
the ADB to analyse and promote the concept of inclusive growth. After a broad
and classical overview of Indonesian development policies and performance in
the last half-century (chapter 2), chapters 3 and 4 ‘provide the analytical framework for the study, focusing respectively on the critical constraints to growth and
poverty reduction’. Each of the eight remaining chapters deals with a key area
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or sector: macroeconomic management (chapter 5); industrialisation (chapter 6);
infrastructure (chapter 7); education and human capital (chapter 8); growth and
employment (chapter 9); poverty reduction (chapter 10); decentralisation (chapter
11); and green growth (chapter 12). Most follow a detailed analysis with policy
options and recommendations.
Three characteristics make this volume particularly valuable as a guide to Indonesia’s economic and social development. First, it follows a rigorous and original
analytical framework that gives clarity to the diagnosis and the policy options
proposed. Second, the contributors make good use of recent statistical data. Third,
the chapters are based on a strong knowledge of the literature; the specialised
bibliography at the end of each chapter is an excellent idea.
The discussion gives a sense that the glass is both half-full and half-empty. On
the one hand, Indonesia has made tremendous economic and social progress from
its weak departure point in the 1960s. It is now a lower middle-income country
following generally sound macroeconomic policies; the living standards of the
majority of the population have improved markedly; and poverty has been spectacularly reduced. Since the Asian inancial crisis (AFC) and the fall of the authoritarian Soeharto regime, Indonesia has also become the world’s largest democratic
Muslim country, following an ambitious though tortuous political and institutional reform agenda that has had many positive results. On the other hand, Indonesia still confronts huge development challenges. Its recent economic growth is
not strong and inclusive enough to eradicate poverty and reduce inequality. In
many respects it lags behind close neighbours and competitors such as Thailand,
Malaysia and even Vietnam. And it is losing ground, as the comparisons in the
volume show. The most serious challenge is how to return to a path of growth that
is sustainable and generates employment, and to reverse the trend towards deindustrialisation that emerged after the AFC. In order to do this, further reforms
are needed almost everywhere, to boost economic growth and accelerate poverty
reduction; to transform the education system and create formal and stable youth
employment; to make proper investments and improve infrastructure at all levels;
to change dysfunctional administrative practices that are embedded in tradition;
to deepen the decentralisation process and make it more eficient; and to curb the
massive and widespread corruption that still plagues the country. Furthermore,
all this must be done at a time of ‘green restructuring’, making the challenges
much more complicated than before. Indonesia is once more at a crossroads, and
‘illing the glass’ of its development calls for renewed courage and political will.
Alongside its many strengths, this volume has two main weaknesses. The
irst is the absence of a separate chapter on agriculture. Its incidental treatment
throughout the book is inadequate for a country whose agricultural transition
is uninished, and which urgently needs green growth. The second shortcoming
is that income inequality and social inequality are given too little importance:
the iveline paragraph on inequality in chapter 4 looks almost ridiculous alongside the consistent treatment of poverty throughout the volume. It is true that
igures on inequality are hazy and disputed. But one cannot avoid dealing with
its marked increase since the start of the present globalisation process, in Indonesia as elsewhere in Southeast Asia and much of the world, and with the serious economic, social and political barriers it presents to inclusive development.
Could this omission be linked to the fact that most of the authors are neo-classical
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441
economists, who consider poverty a more important issue than inequality? Such a
perspective is illustrated by expressions such as ‘[the] sentimental notion of food
selfsuficiency’ (p. 200) or ‘[the] populist decision to reduce regional disparities’
(p. 231). However, this is balanced by support for the idea that labour market
rigidities are not the only explanation for employment problems.
Some of the text is rather technical for non-economist readers, with the impressive abundance of statistics, tables and graphs sometimes counterproductive; the
organisation of the book makes some repetition inevitable and, purely in terms of
form, the way that ‘boxes’ are integrated with the text is not very clear and creates
confusion.
Despite these few laws, the volume is solid, articulate, useful and timely. It is
highly recommended to all interested in Indonesia’s economic and social development, be they students and academics or practitioners and policy makers. In
fact, it could well become a desktop reference for most of them.
Jean-Luc Maurer
Graduate Institute of International and Development Studies, Geneva
© 2012 Jean-Luc Maurer
Aris Ananta and Richard Barichello (eds) (2012) Poverty and Global Recession
in Southeast Asia, Institute of Southeast Asian Studies, Singapore,
pp. xxviii + 432. Paper: S$49.90/US$45.90.
The title of this edited collection might suggest that the papers will focus on the
impact of the current global recession on Southeast Asia. In fact the chapters
(15 in all) range widely over a variety of subjects, countries and time periods.
The volume originates from a conference held in Singapore in 2009; some of the
chapters examine recent problems, some look again at the 1997–98 crisis and one
(on Malaysia) examines trends over several decades. In most of the chapters the
analysis and data do not go beyond 2009. The editors in their introduction (written
in March 2010) suggest that the ‘world recession is over’, but from the perspective
of late 2012 this appears too optimistic. The euro crisis, a sluggish recovery in the
US, continuing stagnation in Japan, and slower growth in both China and India
will all affect Southeast Asia for several years to come.
Barichello’s chapter on the impact of world recession on rural poverty and food
security in Southeast Asia looks at lessons from 1997–98, when the severe growth
collapse in Indonesia and Thailand led to an increase in poverty in both urban
and rural areas. Indonesia experienced the worst growth collapse, but rural poverty increased less than might have been expected, and after 1999 the headcount
measure of poverty declined. Barichello suggests that this might have been due
to the relative isolation of many rural communities who were not well integrated
into the non-farm economy. In Java and parts of the outer islands this argument is
doubtful. The evidence from the 1993 agricultural census showed that many rural
households both in Java and elsewhere were very dependent on off-farm incomes
in 1993, which suggests that rural households would still have been able to secure
non-farm employment after 1998.
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Several authors point out that Indonesia has been the bright spot in Southeast Asia since 2008 in terms of GDP growth. Ananta and Ariin show that the
headcount measure of poverty fell steadily from 1999, with the exception of 2006,
when the sharp increase in rice prices led to a jump in the headcount measure.
They also show that in recent years the Gini coeficient of inequality has been rising, although they claim that it is still quite low by international standards. More
recent data for 2010 and 2011 show a further rise in the Gini, which of course in
Indonesia refers to expenditure distribution, not income distribution. It is likely
that income distribution in Indonesia is now quite skewed, at least in comparison
with other parts of Asia, although we lack the data to make robust international
comparisons. But recent data suggest that the Indonesian government cannot be
complacent about trends in inequality, and the skewed access to education and
employment that results from it.
A number of the chapters look at issues relating to the economics and politics
of food supply and food pricing. There is a broad consensus across the region
that poverty estimates are particularly sensitive to food prices, since food still
accounts for a considerable share of the consumption expenditures of the poor.
Several countries have tried to provide rice at subsidised prices, although, as
Tigno argues in his chapter on the Philippines, the rice subsidy program there
has become highly politicised, and a considerable burden on the budget. Several
studies have argued that other policies better targeted to the poor would be much
more cost-effective. In their chapter on the political economy of rice and fuel pricing in Indonesia, Patunru and Basri point out that in postSoeharto Indonesia
farm lobbies have become quite powerful, and in 2006 persuaded the government
to restrict rice imports, thus pushing up prices and hurting the poor. The parliament, relecting the views of the urban middle classes, has also prevented a reduction in fuel subsidies, which beneit the betteroff to a disproportionate extent.
Even in afluent Singapore, where the government still refuses to implement
comprehensive social safety nets, the economic downturns since 1998 have forced
many people to take less well remunerated and less secure jobs. Tan argues that
‘the secure, comfortable middleclass career trajectory’ is now a thing of the past
for many Singaporeans, given the changing global environment. Jinjarak shows
that the poorer groups in Singapore are still hurt by sharp rises in food and fuel
prices, as they are in other parts of the world.
Ramesh, in a chapter on social security, argues that the 1997–98 crisis forced
several countries in Southeast Asia to adopt social safety net policies, which previously they had refused to do. Now even the IMF seems to support targeted
programs. Ramesh gives Indonesia some credit for continuing the task of building targeted social security policies after the crisis abated. Political pressures are
also forcing governments to be more proactive; after the 2005 election even the
Singapore government began a workfare program. Ramesh argues that governments in Asia will have to get rid of their ideological aversion to welfare policies
and provide more protection to their citizens in times of hardship. But more welfare spending will inevitably mean higher taxes, and it is far from clear whether
governments across Southeast Asia are really willing to raise taxes on the rich to
assist the less fortunate.
Those looking for an in-depth analysis of the impact of the post-2008 global
downturn on Southeast Asia might be disappointed with this volume. But all 15
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443
chapters have something to offer in terms of analysing recent trends in poverty
and relative deprivation across Southeast Asia. Inevitably, given the huge differences in incomes and economic structures around the region, different governments are faced with different challenges, and will have to experiment with
different policies. Even if they want to implement comprehensive welfare policies, most countries in the region will not be able to afford them. But it seems inevitable that, in coming years, their citizens will demand that they do more, both in
terms of service provision and in terms of better safety nets when times are hard.
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Anne Booth
School of Oriental and African Studies, University of London
© 2012 Anne Booth
Patrick Daly, R. Michael Feener and Anthony J.S. Reid (eds) (2012)
From the Ground Up: Perspectives on Post-Tsunami and Post-Conlict Aceh,
Institute of Southeast Asian Studies, Singapore, pp. 262. Paper: S$39.90/US$32.90.
The great Asian tsunami of 2004 took the lives of almost 170,000 people in Aceh
alone. The resulting aid response was one of the largest single humanitarian
efforts the international community has ever undertaken in a developing country.
At the same time, intensive negotiations to overcome the long-standing separatist
conlict in Aceh resulted in the August 2005 Helsinki peace accord.
This book offers an excellent overview of these related events. The introduction
to the essays provides an eficient executive summary. The main part of the book
(eight chapters) examines various aspects of the aid response to the tsunami. The
second part (four chapters) provides important views on the peace process. A
wide range of issues is taken up in the 12 chapters. To capture the lavour, it will
be useful to focus irst on three aspects of the aid process, and then on the Helsinki
peace accord.
One notable aspect of the aid program in Aceh was the debate that emerged
over the goal of linking relief, rehabilitation and development (LRRD) with social
protection. This discussion relected marked disagreements between aid agencies
(including domestic donor agencies) and the local Acehnese community about
the objectives of the large assistance program. To what extent, for example, should
the aim of assistance be to respond to immediate challenges of recovery, and to
what extent should there be an emphasis on long-term development goals? Further, given that all assistance programs are temporary, to what extent should aid
be designed to shift disaster-affected communities back towards reliance on local
social protection institutions?
Second, the much discussed aim of aid agencies (domestic and international
alike) to ‘build back better’ in Aceh comes under critical scrutiny. This goal was
heard on every side, in hundreds (perhaps thousands) of speeches and in pamphlets issued by aid donors. But was this strategy really such a good idea? The
fourth chapter of the collection offers sobering relections on the approach. The
authors note (p. 59) that ‘We see build back better not just as a negative statement
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about Aceh and its cultural and social institutions prior to the tsunami, but also
as part of a globally accepted justiication for imposing an externallydriven top
down reconstruction agenda’.
Third, the wide range of topics covered by the collection serves to illustrate
clearly how complex the task of planning for and delivering a large-scale emergency humanitarian program is. In principle, aid delivery agencies need to
consider dozens of short-term and long-term questions covering numerous crosscutting areas such as gender aspects of programs; land and environmental issues;
and social, community and legal matters. And there is much pressure to do this
both at speed and with great care to ensure that a myriad of bureaucratic rules are
observed, so that accountability, transparency and anti-corruption guidelines are
followed. In truth, the task is close to impossible.
The second part of the book considers the peace negotiations that led to the
signing of the Helsinki Memorandum of Understanding in 2005. Given the high
degree of apparent overlap between the aid response to the tsunami in 2004 and
the peace negotiations in 2005, many observers have come to regard these two
processes as closely aligned. While this perception is understandable, in fact the
two processes had very different dynamics. The fact that the peace has held irm,
and that the local political processes have been working effectively in Aceh for
over seven years, relects the remarkable success of the Helsinki agreement.
A survey book of this kind is especially valuable because, as time passes, memories of these dramatic events are dimming. The international community and
Indonesian scholars have invested much effort in creating a large body of knowledge about all aspects of the 2004 Asian tsunami and the Helsinki peace negotiations. But much of the material is dificult to access and is little used. There is a
shortage of good surveys that provide eficient overviews of the complex issues.
This book is a welcome step towards illing the gap.
Peter McCawley
ANU
© 2012 Peter McCawley
Simon Butt (2011) Corruption and Law in Indonesia,
Routledge, London, pp. xvi +162. Cloth: £85.00.
The author begins with the dispiriting observation that ‘well over a decade after
Soeharto’s fall ..., reformers have been unable to dislodge one of his enduring
legacies: corruption’. Many reformers have been encouraged by the success of
the Corruption Eradication Commission (KPK) and the related AntiCorruption
Court (ACC), both established in 2003. Butt puts this ‘success’ into perspective,
describing the increasingly strong resistance to these institutions, mainly through
the law – ‘whether judicial process ... or the passage of new laws or amendments’.
He presents a fascinating story that, in other hands, might have been accessible
only to legal professionals.
Combating corruption is immensely dificult when it is endemic, because many
charged with acting against corrupt oficials are themselves corrupt.
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Most post-Soeharto anti-corruption reforms and institutions ... have faced stiff
resistance from government oficials ... seeking to maintain the status quo .... [In
particular], police, prosecutors and courts ... have perpetuated the corrupt practices
... by themselves taking bribes in return for dropping investigations, presenting
sloppy prosecutions and issuing light sentences or acquittals.
The KPK and the ACC were established to circumvent this problem. These independent institutions focus solely on corruption, relying on carefully selected
leadership and staff and on special investigative powers, but also subject to special constraints. By clearly differentiating them from the ‘justicesector maia’ the
government hoped to empower them to act vigorously against corruption. In
broad terms the experiment worked, at least for some time, but the very success
of the KPK/ACC in detecting corrupt behaviour and prosecuting and convicting
perpetrators – including parliamentarians – has given rise to a strong ‘pushback’
that makes the prognosis seem unpromising. Indeed, as this review was being
written, reports emerged of strong police resistance to KPK investigation of several senior police oficials, so the publication of this book could hardly be more
timely. Its topic is of interest not only to lawyers and political scientists but also
to economists, because ‘if corruption remains unchecked, then illicit payments,
rather than public interest, are likely to dictate state policy and decision-making’,
particularly in relation to economic matters.
Chapter 2 reviews the new institutions’ performance relative to the ordinary
police, prosecutors and general courts. Chapter 3 deals with the period 2004–07,
when the pushback played out largely in the Constitutional Court (CC, also established in 2003), through challenges to the constitutionality of the KPK Law and
the Corruption Eradication Law of 1999. Succeeding chapters cover the period
from late 2008, which irst saw direct legal attacks on the KPK leadership and,
later, signiicant modiication of the legal basis of the KPK/ACC.
While anti-corruption reformers applaud the 100% conviction rate to 2011 in
cases the KPK brought before the ACC, this onesided record sometimes relects
anti-corruption activism rather than careful application of the law. For example,
an Elections Commission oficial was convicted of corruptly procuring indelible
ink (used to mark the ingers of those who have just voted). Butt argues, persuasively, that this oficial had made commonsense choices in dificult circumstances,
had broken no law and received no beneit from the transactions in question, and
thus should not have been convicted.
Although some CC decisions threatened the ACC’s perfect conviction rate, in
practice, ways were found to get around the obstacles thus created. Perhaps for
this reason the pushback strategy widened to encompass attacks on top KPK oficials. First, in 2009 the KPK chairman was convicted of ordering the assassination
of a businessman, and sentenced to 18 years imprisonment. Butt examines this
case carefully, arguing that most of the evidence was ‘weak, unreliable or contradictory’, and concluding that he ‘should probably have been acquitted’. Later that
year two other KPK commissioners were suspended following charges of bribery
and misuse of authority; they were eventually reinstated after wiretapped conversations revealed plans to frame them.
With this relentless series of attacks it was inevitable that eventually one of
them would succeed in doing serious damage to the KPK/ACC. One of the
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constitutional challenges argued that bringing some corruption cases to the general courts and others to the specialist ACC created a dual system that undermined the principle of equality before the law. The CC concurred, demanding
enactment of a new law speciically for the ACC. Previous and prospective corruption convictions against signiicant numbers of parliamentarians gave legislators good reason to want to emasculate the anticorruption institutions; the
demand for this new statute provided the opportunity to do so.
A key feature of the ACC had been that its panels consisted of two ‘career’
judges and three ‘ad hoc’ judges – the latter presumed to be outsiders to the highly
corrupt justice sector. Under the CCmandated new ACC law, the panels no longer
require an ad hoc judge majority. Further, the new law allows cases to be brought
before the ACC by prosecutors from the public prosecution service – known for its
corruption and incompetence – and not just by KPK prosecutors. Unsurprisingly,
the irst case brought to the ACC by a public prosecutor following the enactment
of this new law was lost.
My only concern about this valuable book is the author’s presumption that the
most effective way to reduce corruption is simply to imprison more perpetrators.
Butt’s observation that the KPK and ACC have been ‘immensely effective’ is correct, but only at the micro level; at the macro level corruption remains undiminished a decade after their establishment. The KPK launched just 157 prosecutions
for corruption during 2005–09, while ordinary prosecutors handled 4,281 cases.
Even the latter igure is almost certainly tiny relative to the actual incidence of
corruption. Under the new law, all corruption cases are now to be heard by the
ACC, with its very limited resources.
The law enforcement approach cannot eradicate endemic corruption, not least
because of the scale of the problem. Eradication requires not just strong sanctions against those convicted but also an attack on the root causes: failure to
pay marketcomparable salaries to public sector oficials, to ensure rapid career
advancement of the honest and competent, and to allow open competition for
public sector positions.
Ross H. McLeod
ANU
© 2012 Ross H. McLeod
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Book reviews
Ross Garnaut , Jean-Luc Maurer , Anne Booth , Peter McCawley & Ross H.
Mcleod
To cite this article: Ross Garnaut , Jean-Luc Maurer , Anne Booth , Peter McCawley & Ross
H. Mcleod (2012) Book reviews, Bulletin of Indonesian Economic Studies, 48:3, 437-446, DOI:
10.1080/00074918.2012.728667
To link to this article: http://dx.doi.org/10.1080/00074918.2012.728667
Published online: 20 Nov 2012.
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Date: 18 January 2016, At: 00:30
Bulletin of Indonesian Economic Studies, Vol. 48, No. 3, 2012: 437–46
BOOK REVIEWS
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Jusuf Wanandi (2012) Shades of Grey: A Political Memoir of Modern
Indonesia, 1965–1998, Equinox, Singapore, pp. 295. Paper: US$19.95.
Jusuf Wanandi’s political autobiography illuminates our understanding of contemporary Indonesian political culture, institutions and ideological orientation.
It adds considerably to our understanding of how an internationally open economy and pluralist democracy emerged from an unlikely background. It does this
through a shockingly honest account of the author’s intimate participation in
major political events from the mid1960s to the early years of the 21st century.
The transformation of 20 years of chaotic, inward-looking economic policy
making, instability and stagnation under Soekarno into three decades of sustained, strong, internationally oriented economic growth under Soeharto’s New
Order seems improbable to people observing it from afar. Similarly, the collapse of
the New Order economy and military-dominated political system in the last years
of the 20th century, and its replacement by today’s expanding economy within a
democratic framework, are hard to comprehend. Wanandi’s fresh insights from
personal observation help us to understand these globally important transformations. Common to both, says Wanandi, was the restraint of outgoing leaders in
using their residual powers so as to avoid unnecessary damage to the nation.
The accounts of modern history are highly personal without being egocentric.
We are told enough about the author’s personal story to understand how it
affected his objectives, opportunities and constraints in an Indonesian intellectual
and political life. As a member of a large Chinese family engaged in small business in West Sumatra, Wanandi grew up to be interested in emerging national and
international politics. He identiied strongly with Indonesian nationalism. He is
conident in the religious and cultural diversity and tolerance that emerged from
a Javanese and Malay society’s absorption of successive waves of immigrants and
inluence from India, the Arab world, China and Europe.
As Chinese and Catholic, Wanandi worked with other Indonesians who
favoured a pluralist polity that would provide a legitimate, comfortable and
productive place for minorities. That meant taking every chance to reinforce the
values of Pancasila in the face of pressures to adopt syariah law. It meant doing
everything it took to resist the apparently inexorable movement to power of the
Indonesian Communist Party (PKI) in the mid1960s.
Some of the asides on religious culture are fascinating. Wanandi suggests a
distinction between Christian tolerance and forgiveness and the Old Testament
‘tooth for tooth’ that is more inluential in the other Abrahamic religions. He
distinguishes Catholics from other Christian groups for the clarity with which
they identiied and pursued their interests in a pluralist polity. The Catholic
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background brought contact with likeminded people in the Philippines through
a group led by Australian Bob Santamaria.
Wanandi’s quick intelligence, cheerful, generous disposition and shocking
frankness shine through the story, and are captured in a photograph of a conident, bright, mischievouslooking junior high school boy scout.
The author talks about what ‘we’ were thinking and hoping and doing. ‘We’
is usually a group of mostly Chinese, mostly Christian intellectuals who worked
with other Indonesian groups to resist the advance of communism in the sixties
and were crucial to establishing the Soeharto regime; who played central roles
in bringing an international orientation to Soeharto’s government, including
through the ending of Confrontation with Malaysia, the establishment of ASEAN,
the building of APEC and the normalisation of diplomatic and economic relations with China; who were at the forefront in the incorporation of Papua and
then East Timor into the Indonesian nation; who became disappointed with New
Order proclivities and fell out of inluence through the eighties; and who were
inluential at the margins in Indonesia’s later movement towards pluralism and
democracy.
After the formation of Indonesia’s Centre for Strategic and International Studies (CSIS) in 1971, ‘we’ covers the people who with Wanandi built and sustained
CSIS as a think-tank for the government and then the society on political, economic and strategic issues, especially in the international sphere – notably Harry
Tjan, Sofjan Wanandi, Clara Joewono, Daoed Joesoef and Hadi Soesastro. Hadi
was ‘our brightest mind’, and ‘certainly one of the best political economists East
Asia ever had’. Those who knew Hadi’s international work well agree.
‘We’ often included two central igures in the political events that saw the rise
and consolidation of Soeharto’s regime, Ali Moertopo and Benny Moerdani. These
powerful igures were benefactors to the CSIS group, as well as beneiciaries of
its networks, analysis and advice. Moertopo’s incorruptibility is seen at once as
a source of inluence and a source of vulnerability. We learn that Moerdani, for a
period head of the army and the second most powerful leader of the republic, was
advised that his inluence would expand if he converted to Islam, but he chose to
hold to values that he judged to be higher than politics.
Most fascinating of all is Wanandi’s insider account of several of the largest
events in Indonesian political history: the crushing of the PKI and the emergence
of Soeharto as president; the massacre that followed the attempted coup of 30
September 1965; the incorporation of Papua and later East Timor into the republic; the ending of Confrontation; and the emergence of a democratic alternative
to military power as Soeharto’s authority ebbed in inancial and economic crisis.
Through the early 1960s, Wanandi and those close to him thought it likely that
the PKI would ascend to power through constitutional processes. This expectation
concentrated their minds on resisting communist rule through whatever means
were available to them. The PKI failed partly because it placed mass mobilisation
of Indonesians and not armed struggle at the centre of its efforts. Its failure was
important to the path of political development in China, the communist country
with which the PKI was most closely linked. Soeharto’s subtle accretion of power
and care to avoid breaches of the constitutional framework contrasted with the
impatience of many of his supporters and, together with luck, were important to
his overwhelming success.
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Wanandi describes the mid-1960s massacre as the darkest episode in Indonesian history. It was an anti-communist and not an ethnic irruption. For as long
as the political complexion of the republic was at stake, human rights were far
from mind. Later, with the pluralist polity secure, Wanandi and his associates
sought to assist surviving victims.
Insights into Soeharto’s decline are similarly illuminating. His domination of
opportunities for corruption was important to the political culture of the New
Order. It grew into a major threat to the state as the ‘irst children’ matured.
Indonesian and Australian perceptions of a threat of communist inluence
on an independent East Timor regime were seen as the spur to the 1975 invasion. Australian readers will learn important things about their own history from
Wanandi’s account of the lead-up to this fateful event.
This fascinating political memoir is a model of its genre in its clarity, honesty
and intimacy.
Ross Garnaut
University of Melbourne and ANU
© 2012 Ross Garnaut
Hal Hill, Muhammad Ehsan Khan and Juzhong Zhuang (eds) (2012)
Diagnosing the Indonesian Economy: Toward Inclusive and Green Growth,
Asian Development Bank and Anthem Press, Manila and London,
pp. xxi + 482. Cloth: £60.00; US$99.00.
This thick volume attempts a diagnosis of the Indonesian economy and an analysis of how economic growth can be made more inclusive and sustainable at a time
of climate change risks and increasing environmental challenges. It is the result
of a collaboration between the Asian Development Bank (ADB), the Government of Indonesia, the International Labour Organization (ILO) and the Islamic
Development Bank (IDB). While most of its 23 authors are ADB economists, it
has contributions from ILO and IDB staff, researchers from two respected Jakarta
‘think tanks’ – the Centre for Strategic and International Studies and the SMERU
Research Institute – and a couple of renowned academics. Relecting this close collaboration between international organisations and research institutions, between
academics and practitioners, the book aims to ‘identify the critical constraints to
medium-term economic growth and poverty reduction …’ and to ‘provide some
recommendations that policymakers can consider in addressing these constraints
so as to achieve broad-based growth …’.
In the irst of 12 chapters, the coeditors outline the methodological backbone
of the book. They present the ‘growth diagnostics’ framework developed by
Hausmann, Rodrik and Velasco in a 2005 paper of that name, and adapted by
the ADB to analyse and promote the concept of inclusive growth. After a broad
and classical overview of Indonesian development policies and performance in
the last half-century (chapter 2), chapters 3 and 4 ‘provide the analytical framework for the study, focusing respectively on the critical constraints to growth and
poverty reduction’. Each of the eight remaining chapters deals with a key area
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or sector: macroeconomic management (chapter 5); industrialisation (chapter 6);
infrastructure (chapter 7); education and human capital (chapter 8); growth and
employment (chapter 9); poverty reduction (chapter 10); decentralisation (chapter
11); and green growth (chapter 12). Most follow a detailed analysis with policy
options and recommendations.
Three characteristics make this volume particularly valuable as a guide to Indonesia’s economic and social development. First, it follows a rigorous and original
analytical framework that gives clarity to the diagnosis and the policy options
proposed. Second, the contributors make good use of recent statistical data. Third,
the chapters are based on a strong knowledge of the literature; the specialised
bibliography at the end of each chapter is an excellent idea.
The discussion gives a sense that the glass is both half-full and half-empty. On
the one hand, Indonesia has made tremendous economic and social progress from
its weak departure point in the 1960s. It is now a lower middle-income country
following generally sound macroeconomic policies; the living standards of the
majority of the population have improved markedly; and poverty has been spectacularly reduced. Since the Asian inancial crisis (AFC) and the fall of the authoritarian Soeharto regime, Indonesia has also become the world’s largest democratic
Muslim country, following an ambitious though tortuous political and institutional reform agenda that has had many positive results. On the other hand, Indonesia still confronts huge development challenges. Its recent economic growth is
not strong and inclusive enough to eradicate poverty and reduce inequality. In
many respects it lags behind close neighbours and competitors such as Thailand,
Malaysia and even Vietnam. And it is losing ground, as the comparisons in the
volume show. The most serious challenge is how to return to a path of growth that
is sustainable and generates employment, and to reverse the trend towards deindustrialisation that emerged after the AFC. In order to do this, further reforms
are needed almost everywhere, to boost economic growth and accelerate poverty
reduction; to transform the education system and create formal and stable youth
employment; to make proper investments and improve infrastructure at all levels;
to change dysfunctional administrative practices that are embedded in tradition;
to deepen the decentralisation process and make it more eficient; and to curb the
massive and widespread corruption that still plagues the country. Furthermore,
all this must be done at a time of ‘green restructuring’, making the challenges
much more complicated than before. Indonesia is once more at a crossroads, and
‘illing the glass’ of its development calls for renewed courage and political will.
Alongside its many strengths, this volume has two main weaknesses. The
irst is the absence of a separate chapter on agriculture. Its incidental treatment
throughout the book is inadequate for a country whose agricultural transition
is uninished, and which urgently needs green growth. The second shortcoming
is that income inequality and social inequality are given too little importance:
the iveline paragraph on inequality in chapter 4 looks almost ridiculous alongside the consistent treatment of poverty throughout the volume. It is true that
igures on inequality are hazy and disputed. But one cannot avoid dealing with
its marked increase since the start of the present globalisation process, in Indonesia as elsewhere in Southeast Asia and much of the world, and with the serious economic, social and political barriers it presents to inclusive development.
Could this omission be linked to the fact that most of the authors are neo-classical
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441
economists, who consider poverty a more important issue than inequality? Such a
perspective is illustrated by expressions such as ‘[the] sentimental notion of food
selfsuficiency’ (p. 200) or ‘[the] populist decision to reduce regional disparities’
(p. 231). However, this is balanced by support for the idea that labour market
rigidities are not the only explanation for employment problems.
Some of the text is rather technical for non-economist readers, with the impressive abundance of statistics, tables and graphs sometimes counterproductive; the
organisation of the book makes some repetition inevitable and, purely in terms of
form, the way that ‘boxes’ are integrated with the text is not very clear and creates
confusion.
Despite these few laws, the volume is solid, articulate, useful and timely. It is
highly recommended to all interested in Indonesia’s economic and social development, be they students and academics or practitioners and policy makers. In
fact, it could well become a desktop reference for most of them.
Jean-Luc Maurer
Graduate Institute of International and Development Studies, Geneva
© 2012 Jean-Luc Maurer
Aris Ananta and Richard Barichello (eds) (2012) Poverty and Global Recession
in Southeast Asia, Institute of Southeast Asian Studies, Singapore,
pp. xxviii + 432. Paper: S$49.90/US$45.90.
The title of this edited collection might suggest that the papers will focus on the
impact of the current global recession on Southeast Asia. In fact the chapters
(15 in all) range widely over a variety of subjects, countries and time periods.
The volume originates from a conference held in Singapore in 2009; some of the
chapters examine recent problems, some look again at the 1997–98 crisis and one
(on Malaysia) examines trends over several decades. In most of the chapters the
analysis and data do not go beyond 2009. The editors in their introduction (written
in March 2010) suggest that the ‘world recession is over’, but from the perspective
of late 2012 this appears too optimistic. The euro crisis, a sluggish recovery in the
US, continuing stagnation in Japan, and slower growth in both China and India
will all affect Southeast Asia for several years to come.
Barichello’s chapter on the impact of world recession on rural poverty and food
security in Southeast Asia looks at lessons from 1997–98, when the severe growth
collapse in Indonesia and Thailand led to an increase in poverty in both urban
and rural areas. Indonesia experienced the worst growth collapse, but rural poverty increased less than might have been expected, and after 1999 the headcount
measure of poverty declined. Barichello suggests that this might have been due
to the relative isolation of many rural communities who were not well integrated
into the non-farm economy. In Java and parts of the outer islands this argument is
doubtful. The evidence from the 1993 agricultural census showed that many rural
households both in Java and elsewhere were very dependent on off-farm incomes
in 1993, which suggests that rural households would still have been able to secure
non-farm employment after 1998.
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Several authors point out that Indonesia has been the bright spot in Southeast Asia since 2008 in terms of GDP growth. Ananta and Ariin show that the
headcount measure of poverty fell steadily from 1999, with the exception of 2006,
when the sharp increase in rice prices led to a jump in the headcount measure.
They also show that in recent years the Gini coeficient of inequality has been rising, although they claim that it is still quite low by international standards. More
recent data for 2010 and 2011 show a further rise in the Gini, which of course in
Indonesia refers to expenditure distribution, not income distribution. It is likely
that income distribution in Indonesia is now quite skewed, at least in comparison
with other parts of Asia, although we lack the data to make robust international
comparisons. But recent data suggest that the Indonesian government cannot be
complacent about trends in inequality, and the skewed access to education and
employment that results from it.
A number of the chapters look at issues relating to the economics and politics
of food supply and food pricing. There is a broad consensus across the region
that poverty estimates are particularly sensitive to food prices, since food still
accounts for a considerable share of the consumption expenditures of the poor.
Several countries have tried to provide rice at subsidised prices, although, as
Tigno argues in his chapter on the Philippines, the rice subsidy program there
has become highly politicised, and a considerable burden on the budget. Several
studies have argued that other policies better targeted to the poor would be much
more cost-effective. In their chapter on the political economy of rice and fuel pricing in Indonesia, Patunru and Basri point out that in postSoeharto Indonesia
farm lobbies have become quite powerful, and in 2006 persuaded the government
to restrict rice imports, thus pushing up prices and hurting the poor. The parliament, relecting the views of the urban middle classes, has also prevented a reduction in fuel subsidies, which beneit the betteroff to a disproportionate extent.
Even in afluent Singapore, where the government still refuses to implement
comprehensive social safety nets, the economic downturns since 1998 have forced
many people to take less well remunerated and less secure jobs. Tan argues that
‘the secure, comfortable middleclass career trajectory’ is now a thing of the past
for many Singaporeans, given the changing global environment. Jinjarak shows
that the poorer groups in Singapore are still hurt by sharp rises in food and fuel
prices, as they are in other parts of the world.
Ramesh, in a chapter on social security, argues that the 1997–98 crisis forced
several countries in Southeast Asia to adopt social safety net policies, which previously they had refused to do. Now even the IMF seems to support targeted
programs. Ramesh gives Indonesia some credit for continuing the task of building targeted social security policies after the crisis abated. Political pressures are
also forcing governments to be more proactive; after the 2005 election even the
Singapore government began a workfare program. Ramesh argues that governments in Asia will have to get rid of their ideological aversion to welfare policies
and provide more protection to their citizens in times of hardship. But more welfare spending will inevitably mean higher taxes, and it is far from clear whether
governments across Southeast Asia are really willing to raise taxes on the rich to
assist the less fortunate.
Those looking for an in-depth analysis of the impact of the post-2008 global
downturn on Southeast Asia might be disappointed with this volume. But all 15
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chapters have something to offer in terms of analysing recent trends in poverty
and relative deprivation across Southeast Asia. Inevitably, given the huge differences in incomes and economic structures around the region, different governments are faced with different challenges, and will have to experiment with
different policies. Even if they want to implement comprehensive welfare policies, most countries in the region will not be able to afford them. But it seems inevitable that, in coming years, their citizens will demand that they do more, both in
terms of service provision and in terms of better safety nets when times are hard.
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Anne Booth
School of Oriental and African Studies, University of London
© 2012 Anne Booth
Patrick Daly, R. Michael Feener and Anthony J.S. Reid (eds) (2012)
From the Ground Up: Perspectives on Post-Tsunami and Post-Conlict Aceh,
Institute of Southeast Asian Studies, Singapore, pp. 262. Paper: S$39.90/US$32.90.
The great Asian tsunami of 2004 took the lives of almost 170,000 people in Aceh
alone. The resulting aid response was one of the largest single humanitarian
efforts the international community has ever undertaken in a developing country.
At the same time, intensive negotiations to overcome the long-standing separatist
conlict in Aceh resulted in the August 2005 Helsinki peace accord.
This book offers an excellent overview of these related events. The introduction
to the essays provides an eficient executive summary. The main part of the book
(eight chapters) examines various aspects of the aid response to the tsunami. The
second part (four chapters) provides important views on the peace process. A
wide range of issues is taken up in the 12 chapters. To capture the lavour, it will
be useful to focus irst on three aspects of the aid process, and then on the Helsinki
peace accord.
One notable aspect of the aid program in Aceh was the debate that emerged
over the goal of linking relief, rehabilitation and development (LRRD) with social
protection. This discussion relected marked disagreements between aid agencies
(including domestic donor agencies) and the local Acehnese community about
the objectives of the large assistance program. To what extent, for example, should
the aim of assistance be to respond to immediate challenges of recovery, and to
what extent should there be an emphasis on long-term development goals? Further, given that all assistance programs are temporary, to what extent should aid
be designed to shift disaster-affected communities back towards reliance on local
social protection institutions?
Second, the much discussed aim of aid agencies (domestic and international
alike) to ‘build back better’ in Aceh comes under critical scrutiny. This goal was
heard on every side, in hundreds (perhaps thousands) of speeches and in pamphlets issued by aid donors. But was this strategy really such a good idea? The
fourth chapter of the collection offers sobering relections on the approach. The
authors note (p. 59) that ‘We see build back better not just as a negative statement
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about Aceh and its cultural and social institutions prior to the tsunami, but also
as part of a globally accepted justiication for imposing an externallydriven top
down reconstruction agenda’.
Third, the wide range of topics covered by the collection serves to illustrate
clearly how complex the task of planning for and delivering a large-scale emergency humanitarian program is. In principle, aid delivery agencies need to
consider dozens of short-term and long-term questions covering numerous crosscutting areas such as gender aspects of programs; land and environmental issues;
and social, community and legal matters. And there is much pressure to do this
both at speed and with great care to ensure that a myriad of bureaucratic rules are
observed, so that accountability, transparency and anti-corruption guidelines are
followed. In truth, the task is close to impossible.
The second part of the book considers the peace negotiations that led to the
signing of the Helsinki Memorandum of Understanding in 2005. Given the high
degree of apparent overlap between the aid response to the tsunami in 2004 and
the peace negotiations in 2005, many observers have come to regard these two
processes as closely aligned. While this perception is understandable, in fact the
two processes had very different dynamics. The fact that the peace has held irm,
and that the local political processes have been working effectively in Aceh for
over seven years, relects the remarkable success of the Helsinki agreement.
A survey book of this kind is especially valuable because, as time passes, memories of these dramatic events are dimming. The international community and
Indonesian scholars have invested much effort in creating a large body of knowledge about all aspects of the 2004 Asian tsunami and the Helsinki peace negotiations. But much of the material is dificult to access and is little used. There is a
shortage of good surveys that provide eficient overviews of the complex issues.
This book is a welcome step towards illing the gap.
Peter McCawley
ANU
© 2012 Peter McCawley
Simon Butt (2011) Corruption and Law in Indonesia,
Routledge, London, pp. xvi +162. Cloth: £85.00.
The author begins with the dispiriting observation that ‘well over a decade after
Soeharto’s fall ..., reformers have been unable to dislodge one of his enduring
legacies: corruption’. Many reformers have been encouraged by the success of
the Corruption Eradication Commission (KPK) and the related AntiCorruption
Court (ACC), both established in 2003. Butt puts this ‘success’ into perspective,
describing the increasingly strong resistance to these institutions, mainly through
the law – ‘whether judicial process ... or the passage of new laws or amendments’.
He presents a fascinating story that, in other hands, might have been accessible
only to legal professionals.
Combating corruption is immensely dificult when it is endemic, because many
charged with acting against corrupt oficials are themselves corrupt.
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Most post-Soeharto anti-corruption reforms and institutions ... have faced stiff
resistance from government oficials ... seeking to maintain the status quo .... [In
particular], police, prosecutors and courts ... have perpetuated the corrupt practices
... by themselves taking bribes in return for dropping investigations, presenting
sloppy prosecutions and issuing light sentences or acquittals.
The KPK and the ACC were established to circumvent this problem. These independent institutions focus solely on corruption, relying on carefully selected
leadership and staff and on special investigative powers, but also subject to special constraints. By clearly differentiating them from the ‘justicesector maia’ the
government hoped to empower them to act vigorously against corruption. In
broad terms the experiment worked, at least for some time, but the very success
of the KPK/ACC in detecting corrupt behaviour and prosecuting and convicting
perpetrators – including parliamentarians – has given rise to a strong ‘pushback’
that makes the prognosis seem unpromising. Indeed, as this review was being
written, reports emerged of strong police resistance to KPK investigation of several senior police oficials, so the publication of this book could hardly be more
timely. Its topic is of interest not only to lawyers and political scientists but also
to economists, because ‘if corruption remains unchecked, then illicit payments,
rather than public interest, are likely to dictate state policy and decision-making’,
particularly in relation to economic matters.
Chapter 2 reviews the new institutions’ performance relative to the ordinary
police, prosecutors and general courts. Chapter 3 deals with the period 2004–07,
when the pushback played out largely in the Constitutional Court (CC, also established in 2003), through challenges to the constitutionality of the KPK Law and
the Corruption Eradication Law of 1999. Succeeding chapters cover the period
from late 2008, which irst saw direct legal attacks on the KPK leadership and,
later, signiicant modiication of the legal basis of the KPK/ACC.
While anti-corruption reformers applaud the 100% conviction rate to 2011 in
cases the KPK brought before the ACC, this onesided record sometimes relects
anti-corruption activism rather than careful application of the law. For example,
an Elections Commission oficial was convicted of corruptly procuring indelible
ink (used to mark the ingers of those who have just voted). Butt argues, persuasively, that this oficial had made commonsense choices in dificult circumstances,
had broken no law and received no beneit from the transactions in question, and
thus should not have been convicted.
Although some CC decisions threatened the ACC’s perfect conviction rate, in
practice, ways were found to get around the obstacles thus created. Perhaps for
this reason the pushback strategy widened to encompass attacks on top KPK oficials. First, in 2009 the KPK chairman was convicted of ordering the assassination
of a businessman, and sentenced to 18 years imprisonment. Butt examines this
case carefully, arguing that most of the evidence was ‘weak, unreliable or contradictory’, and concluding that he ‘should probably have been acquitted’. Later that
year two other KPK commissioners were suspended following charges of bribery
and misuse of authority; they were eventually reinstated after wiretapped conversations revealed plans to frame them.
With this relentless series of attacks it was inevitable that eventually one of
them would succeed in doing serious damage to the KPK/ACC. One of the
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constitutional challenges argued that bringing some corruption cases to the general courts and others to the specialist ACC created a dual system that undermined the principle of equality before the law. The CC concurred, demanding
enactment of a new law speciically for the ACC. Previous and prospective corruption convictions against signiicant numbers of parliamentarians gave legislators good reason to want to emasculate the anticorruption institutions; the
demand for this new statute provided the opportunity to do so.
A key feature of the ACC had been that its panels consisted of two ‘career’
judges and three ‘ad hoc’ judges – the latter presumed to be outsiders to the highly
corrupt justice sector. Under the CCmandated new ACC law, the panels no longer
require an ad hoc judge majority. Further, the new law allows cases to be brought
before the ACC by prosecutors from the public prosecution service – known for its
corruption and incompetence – and not just by KPK prosecutors. Unsurprisingly,
the irst case brought to the ACC by a public prosecutor following the enactment
of this new law was lost.
My only concern about this valuable book is the author’s presumption that the
most effective way to reduce corruption is simply to imprison more perpetrators.
Butt’s observation that the KPK and ACC have been ‘immensely effective’ is correct, but only at the micro level; at the macro level corruption remains undiminished a decade after their establishment. The KPK launched just 157 prosecutions
for corruption during 2005–09, while ordinary prosecutors handled 4,281 cases.
Even the latter igure is almost certainly tiny relative to the actual incidence of
corruption. Under the new law, all corruption cases are now to be heard by the
ACC, with its very limited resources.
The law enforcement approach cannot eradicate endemic corruption, not least
because of the scale of the problem. Eradication requires not just strong sanctions against those convicted but also an attack on the root causes: failure to
pay marketcomparable salaries to public sector oficials, to ensure rapid career
advancement of the honest and competent, and to allow open competition for
public sector positions.
Ross H. McLeod
ANU
© 2012 Ross H. McLeod