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Today's Headlines Corruption
On 6 June 2023 Indonesia Investments released the May 2023 edition of our monthly report. The report discusses key economic, political and social issues that impacted on Indonesia in the month of May 2023.
On 22 December 2020 Indonesian President Joko Widodo announced that several ministers in his Onward Indonesia Cabinet (in Indonesian: Kabinet Indonesia Maju) were replaced in order to improve the performance of the cabinet. This message was no surprise as rumors about an upcoming cabinet reshuffle had grown increasingly strong over the preceding week.
Quite similar to the events in Hong Kong – where protesters have been demonstrating for months to express their objection to an extradition bill that would have given more power to China (and considering protests did not stop when the Hong Kong government announced it suspended the controversial bill, the movement has morphed into something much larger) – there have been several straight days of protests in Indonesia, especially in the bigger cities on Java and Sumatra.
On Monday (08/04) Indonesia Investments released the March 2019 edition of its monthly research report. The report aims to inform the reader of the key political, economic and social developments that occurred in Indonesia in the month of March 2019 and also touches upon key international developments that impacted on the Indonesian economy.
The local government of West Java said it is currently busy compiling all data related to the Lippo Group's ambitious Meikarta project. West Java Governor Ridwan Kamil said thorough investigation will then be done - based on the data - to decide whether the grand property project can resume or whether there are matters that need to be fixed.
While the central government of Indonesia is eager to improve the nation's investment climate, the Anti-Bribery Commission of Japan (ABCJ) reported a number of illegal charges that were requested by Indonesian government officials or civil servants from Japanese companies that operate in Indonesia. Such cases of corruption damage the attractiveness of Indonesia's investment climate.
Setya Novanto, the Chairman of Indonesia's House of Representatives (DPR), has been named as suspect in a corruption case by the country's corruption watchdog Corruption Eradication Commission (in Indonesian: Komisi Pemberantasan Korupsi, or KPK). The case involves the large-scale procurement project for the electronic identity card or e-ID card.
Bank Indonesia, the central bank of Indonesia, announced it has forced the shutdown of a total of 455 illegal money changers - across Indonesia - by May 2017. These illegal money changers also include many gold shops and travel agents where people can change rupiah for foreign exchange (and vice versa).
During the last couple of years of Susilo Bambang Yudhoyono (SBY)'s second cabinet (2009-2014) there erupted a number of high profile corruption cases that involved several of his ministers as well as leading figures in his Democratic Party (in Indonesian: Partai Demokrat, abbreviated as PD). As a result, the PD party dropped significantly in the 2014 parliamentary election (this loss was also caused by the inability of SBY to find a new charismatic leader for the party, while SBY himself could not participate in the 2014 presidential election as he was finishing his final presidential term).
Indonesia's Business Competition Supervisory Commission (KPPU), the country's anti-monopoly agency, penalized Yamaha Indonesia Motor Manufacturing (YIMM) and Astra Honda Motor (AHM) for forming a cartel with the purpose of conducting price-fixing and curtailing the distribution of Yamaha and Honda motorcycle sales in Indonesia, specifically those motorcycles with an engine capacity of 110-125 cubic centimeters.
Latest Columns Corruption
Apart from the five tax incentives that I have mentioned in a previous column, the Indonesian government also intends to ease two other tax rules in order to boost investments in Indonesia from 2014 onwards. These are the tax holiday and tax allowance. Relaxation of the tax holiday involves an alteration to the period as well as the size of the investment, and relaxation of procedural difficulties. Relaxation of the tax allowance involves the revision of the number of sectors that are eligible and a relaxation of procedures in the form of tax clearance.
In my previous column, I outlined the emergence of a new and promising class of Indonesian consumers that is most likely to bring a positive effect on the country's economic growth in the years ahead. I also pointed out that the level of prosperity of a population is an influential factor towards the state (and future) of democracy in a country: the wealthier a population becomes in terms of per capita GDP, the longer the life expectancy of its democracy will be.
Last Saturday, the Democratic Party (PD) selected Indonesia's president Susilo Bambang Yudhoyono as the new chairman of the crumbling political party through an extraordinary congress in Bali. Yudhoyono thus replaced former chairman Anas Urbaningrum, who resigned from his post last month after being accused of involvement in a corruption case. It will be Yudhoyono's task to repair the image of his PD party, while still performing his duties as president.
Yesterday Lembaga Survei Indonesia (LSI), a leading Indonesian public opinion research institute, published the result of a survey that indicated Megawati Soekarnoputri is leading the poll to become the country's next president in 2014. In the survey she is closely followed by Aburizal Bakrie and Prabowo Subianto. This preliminary result can be regarded negative as these names are 'products' of the old regime and thus will not support further democratization.
Despite the fact that Indonesia reported the world's third-highest GDP growth in 2012 (behind China's 7.4 percent and Saudi Arabia's 7.1 percent), supported by rising consumption by a burgeoning middle class and significant increased foreign direct investment, the country's performance in terms of competitiveness is disappointing. It is cheaper to import products from countries that contain competitive businesses than to produce them in Indonesia.
President Susilo Bambang Yudhoyono has nominated Agus D.W. Martowardojo, currently serving as Finance minister, to replace Darmin Nasution as governor of Bank Indonesia, Indonesia's central bank. Nasution, who has been governor since September 2010, will see his term end in May this year. To become the next governor, Martowardojo still needs approval of Indonesia's House of Representatives (DPR), and that might be a bottleneck.
Just a few years ago, Susilo Bambang Yudhoyono's Democratic Party (in Indonesian Partai Demokrat or PD) enjoyed huge popularity among Indonesia's population. More than one fifth of the electorate voted for the 'Democrats' in the 2009 parliamentary election, a notable achievement in Indonesia's pluralistic society. In particular, the party's hard stance towards corruption was likened by the people. Now, however, the party crumbles under its own weight.
