Not Enough to Eradicate Corruption
In societies where the level of corruption is similar to that in Indonesia, imposing half-hearted measures of punishment is no longer effective. Where to start is also a big problem.
Corruption is closely related to collusion and nepotism.
The practices of collusion and nepotism have only grown with the passage of so-called Reformasi (reform era). So the war against corruption also entails a fight against collusion and nepotism, not just corruption.
That corruption is destructive in all aspects of the nation's life does not need to be elaborated further, because we can feel this in our daily lives.
Acts of corruption, collusion and nepotism (KKN) are perpetrated beyond stealing state budget funds. It preys massively on natural resources without any concern about the consequences of destroying the environment.
We must appreciate the establishment of the Corruption Eradication Commission (KPK), which showed the government’s more serious intention, relatively to its previous stance, to eradicate corruption.
I say “relatively” because the implementation still seems selective in being sharply “top down" and bluntly “bottom up". With all its shortcomings, however, we must still appreciate and support it.
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Without exactly knowing the root cause, KKN has been very difficult to handle. Identifying the root cause of KKN and being aware of the subsequent processes will make us think responsibly about how to prevent it.
Corruption may begin when people are given power while their monthly remuneration is only enough to cover two weeks, whereas around them, large funds flow.
Their salary is only Rp 6 million, while what is needed is Rp 12 million to accommodate monthly needs. The opportunity to steal through markups arrives when an employee handles goods purchases worth Rp 100 million.
Once he gets away with this, he is overjoyed at having an unusually large amount of money. Seeing that he has made his wife and children happy, he feels the urge to do it again. Need now turns into greed, which recognizes no bounds.
A crucial factor that helps encourage KKN is the attitude of the public that tends to look up at the rich, even though they are known to have gained their wealth through KKN.
Corrupt mind
KKN occurs because people lose their rational thinking and sense of shame. The formal basic salary of a member of the House of Representatives is around Rp 16 million. Every working of the brain, every hand movement, every eye that reads must be rewarded with money, so a salary of Rp 16 million becomes an income of around Rp 500 million.
In an episode of the TV show Mata Najwa (Najwa’s eye) that featured an interview with a deputy governor, he admitted that he received quite a high salary. Responding to a question if it was true that the administration allocated a monthly “operational fund” of Rp 1.7 billion and if the fund was used up in a month, the deputy governor said, “That is true, and it is fully spent every month.”
There are many more instances of KKN practices under the pretext of "not touching the state budget".
A highly respected Cabinet minister once said that a case of a minister buying goods or services for the government and "extorting" the supplier by asking for a percentage as a kickbacks, or not signing a contract at all, was not a form of corruption because the minister was simply “extorting” the supplier, not siphoning state funds.
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A sane person would ask why the proceeds of the “extortion” were not handed over to the state, as “extorting” the supplier was successful by virtue of their position as a state minister.
For example, a minister procures a large tanker worth US$100 million with a two-year construction term. Before it is finished, the ship is resold at a price of $170 million, with $20 million of the $70 million sales margin going to the state reserves and $50 million into the minister’s pocket.
This is not categorized as a form of corruption because it “benefits” the state. The fact that this minister’s decision has deprived the ministry of a large tanker so it must again resort to another game of procuring an international carrier vessel does not seem to be enough to make it liable for corruption charges. Financially it is not, but the minister’s rational thinking, logic and morals have been damaged without him realizing it. He still feels he has performed his duties as a minister.
State administrators like him believe in their own criteria of what is right and what is wrong. A sane person would look at him as though he were a mentally affected man directing traffic, imagining that he was a traffic police officer.
Many of our “leaders” have gone insane. They have been caught in sting operations and exposed to the media, but they still smile and give a thumbs-up.
Carrot-and-stick measures
To get rid of KKN is simple, namely by applying the carrot-and-stick method. This has been proven to work by many countries such as Singapore, and what is currently underway in China.
A “carrot” is a reward in the form of net income for civil servants, including members of the military and police personnel. The income must meet the wage standards, adjusted accordingly to their education level, knowledge, leadership, rank, and the weight of their responsibilities.
If necessary, the income should be high enough not only to live a decent life, but also to be proud about living a "lavish" life style. This is not necessarily an exaggeration, but it should not be less than the income of those with the same educational qualifications, abilities, and leadership in the private sector.
A “stick” is given if they have been rewarded fully but they still dare to commit corruption. So they deserve punishment, if necessary the death penalty, because there is no reason whatsoever for KKN.
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The pay system must be improved by basing it on merit. Those with higher job levels and responsibilities must earn larger net incomes. The pay grade system must be proportionate and fair.
What seems to be currently in effect is that the salary of the head of state is lower than that of a president of a state-owned enterprise (BUMN). A minister's net income is lower than that of a manager at a private company.
So the first priority action is to fix the overall net income of government employees, members of the military and police personnel in alignment with a proportional and fair pay system based on merit.
We have around 4 million civil servants. Looing at the sprawling ministry buildings, non-departmental government institutions and other government buildings, people might wonder how many civil servants work there. The public can’t help but wonder what is being done during working hours.
Reform and downsizing
That the civil service corps is so large is inseparable from the fact that an audit has never been carried out on the organizational structure, employee number, policy communication, scope of authority, decision-making systems and procedures, and so on.
This smacks of what is known in organization science and management science as Parkinson's Law.
The British organizational expert C. Northcote Parkinson found that human beings have a tendency of wanting to be seen as important by those around them. Their importance is reflected by having many subordinates in the organizational hierarchy.
So subconsciously, everyone in that organization wants to show that he is important by appointing many subordinates. The more subordinates they have, the more important their position in society is. Applying this theory, every organization has a tendency to swell structurally, regardless of urgency.
In developed countries, it has long been the custom that organizations are audited regularly, every three to five years for example, to determine whether an organization is running optimally to achieve its written goals.
Management experts and consultants do not look at the existing organizational structure. They interview the leaders about the goals the organization wants to achieve. All of this is assessed prudently.
These consultants then use their expertise to develop the organization so it runs on track in achieving its goals.
What they compile is not only the organizational structure, but also the number of employees, their qualifications, division of work, responsibilities, decision-making systems and procedures, communication systems and scope of authority.
Restructuring an organization so it operates optimally is known as the “structure follows strategy” approach. This is the opposite of what we are used to.
Whenever a new organization is formed or an old organization is about to be reformed, the first thing to do is to sketch the organizational structure that we are already familiar with, namely the vertical and horizontal flowchart.
After the structural sketch is complete, it is then filled with the names of the people who will be appointed to the positions as described in the boxes. This process is incorrect, but it is common because of lack of knowledge in organization science and management science.
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This process is called “strategy follows structure”, and it makes evident that strategy comes second to organizational structure.
How can the goal be achieved in an optimal way? We can see what has happened with our 76-year-old bureaucracy that has never been audited, and try to imagine how much the civil service corps could be reduced, with all the downsizing that is to follow.
What is the relationship between bureaucratic reform and corruption eradication? The relationship is very close. I firmly believe that if the bureaucracy is structured according to the need to achieve goals, the number of civil servants can be greatly reduced. The amount of expenditures for salaries, working space, stationery, electricity, travel costs and so on would be saved significantly.
The result is that ample funds that are needed are made available to augment the net incomes of government employees to implement the carrot-and-stick method.
With civil servants enjoying sufficient incomes, even enough to pursue "luxury" or comfortable lifestyles, we can feel “more at ease” with punishing corruptors with the harshest possible punishment. An indirect impact of eradicating corruption through bureaucratic reform is an effective bureaucracy.
As the bureaucracy shrinks, we can expect the most capable people to be in the right positions. They are expected to be more committed and responsible, because their net incomes are highly adequate and possibly the same rate as employees in the private sector, where the pay is already based on a merit system.
The problem is financing. The necessary funding is very large, because we have to provide severance pay for those who are laid off. This severance pay must also be large enough.
First is to consider the humanitarian aspect, second is to encourage employees to resign voluntarily, and third is to allow those who have been laid off enough time to find another job.
Kwik Kian Gie
To finance this, taking out a loan can be considered. If this way of preventing KKN is successful, it will result in huge savings that can easily be used to pay off debts.
In societies where the level of corruption is similar to that in Indonesia, imposing half-hearted measures of punishment is no longer effective. Where to start is also a big problem, because it can be said that all have been infected with the disease of corruption.
Kwik Kian Gie, Former coordinating economic minister (1999-2000) and national development planning minister/head of the National Development Planning Agency (2001-2004)
This article was translated by Musthofid.
