Investors May Lose Confidence

Kompas/Heru Sri Kumoro

Former Secretary of the Supreme Court, Nurhadi (vest) left the Corruption Eradication Commission Building, Jakarta, Tuesday (2/6/2020). Nurhadi and Rezky are suspects of bribery or gratification cases related to handling cases in the Supreme Court with a value of around Rp 46 billion. They were arrested after almost four months before they were wanted.

JAKARTA, KOMPAS —The decline in Indonesia’s Corruption Perceptions Index (2020) could have an impact on its image in the international community, as well as reduce investor confidence. Improving the CPI will require systemic reform, especially in politics.

The 2020 CPI published by Transparency International Indonesia (TII) on January 28 showed that Indonesia had a score of 37, down three points from 2019. In a range of 0-100, higher scores indicate a greater perception that the country is free from corruption. With a score of 37, Indonesia ranks 102nd out of the 180 countries surveyed.

Also read: Score in Corruption Index Falls, Alarm bells ring for Corruption Eradication

Since 1999, Indonesia has seen a decrease in CPI only twice. The first decline occurred in 2007, when Indonesia’s CPI index was 2.3, lower than the score in 2006 of 2.4 (prior to 2012, the CPI was within a range of 0-10).

TII researcher Alvin Nicole, who was contacted from Jakarta, Friday (29/1/2021), said that Indonesia’s decline in CPI indicated a decrease in the level of trust among business actors, investors and experts. “Perceptions of rampant corruption will endorse the view that politics and the costs of doing business in Indonesia are very high and risky,” he said.

These are investors who want to do business by complying with the principles of sustainability, respect for the environment, human rights and labor.

According to Alvin, this correlates with the increasingly unqualified sectors of the economy, law enforcement, political integrity and democracy. The consequences that arise is that investors will become hesitant. These are investors who want to do business by complying with the principles of sustainability, respect for the environment, human rights and labor.

Executive director of the Center for Constitutional Studies, Andalas University, Padang, Feri Amsari said that the decline in CPI was attributed to laws, policies and actions committed by the state that did not align with intentions of eradicating corrupting.

KOMPAS/WAWAN H PRABOWO

Corruption Eradication Commission (KPK) investigators exit a Bank Indonesia (BI) branch on Jl. Imam Bonjol, Jakarta, Monday (13/1/2020). The KPK team searched the building, which served as a temporary office for the General Elections Commission (KPU), in connection with a bribery case involving the replacement of a 2019-2024 House of Representatives member that has implicated General Elections Commission (KPU) commissioner Wahyu Setiawan.

As for the indicators that make up the 2020 CPI, Indonesia saw five data sources decline from the previous year’s findings. The five were Global Insight Country Risk Ratings, which fell to 12 points, PRS International Country Risk Guide, which dropped 8 points, IMD World Competitiveness Yearbook, which fell by 5 points, PERC Asia Risk Guide, which fell 3 points and Varieties of Democracy Project, which dropped by 2 points.

The three other indicators have stagnated and only one indicator rose 2 points, namely the World Justice Project Rule of Law Index.

Systemic reform

Krisnadwipayana University criminal law professor Indriyanto Seno Adji said that improving the Indonesian CPI could be done by returning to the institutional law enforcement system. Apart from bureaucratic structure and regulations, it is important to regard legal culture.

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According to Indriyanto, cultural reform is key to improvement through a systemic approach. Low levels of legal and social order disrupt the structure and substitution of the legal system.

Additionally, Syarif Hidayatullah State Islamic University professor Azyumardi Azra also suggested improvements be made in bureaucratic services. The appointment of officials at the central and regional levels should be based on a system of merit, performance achievement and integrity.

On the other hand, Corruption Eradication Commission (KPK) spokesman Ipi Maryati reminded that the epicenter of corruption in Indonesia was in its weak political system, especially in terms of political parties.

“The current political system has become a breeding ground for the growth and development of corrupt politics. The KPK has provided recommendations for improving the political system, including the reformation of political parties,” Ipi said.

As a result, parties may potentially resort to other methods, which are sometimes close to corruption, to fund their activities.

Based on the results of KPK studies and research in politics, the recruitment and regeneration of political parties are factors to be improved. Funding for political parties is still an issue. Conventional funding sources, such as membership fees, have not been able to cover the costs of political parties’ activities. As a result, parties may potentially resort to other methods, which are sometimes close to corruption, to fund their activities.

KOMPAS/RADITYA HELABUMI

Corruption Eradication Commission (KPK) investigators display Rp 110 million in cash at a press conference on the results of a sting operation on bribery allegations related to a waterway project in Yogyakarta at the KPK building in South Jakarta on Aug. 20. (20/8/2019).

Previously, Coordinating Political, Legal and Security Affairs Minister Mahfud MD said he neither was surprised nor objected to the decline in Indonesia’s CPI. Perception is the impression after the public sees something. Therefore, for the government, the results of the CPI published by TII was accepted as good input for improvement.

(This article was translated by Kesya Adhalia).