The Year to Fight Corruption in
by William Pesek Jr.
Jan. 19 (Bloomberg) -- ``Our reputation and credibility as a nation is at stake.''
Rarely have truer words been written about
The government is worried, too.
``One of the most persistent challenges
Even Bakrie harbors doubts that anti-corruption efforts will be enough to eliminate the siphoning of cash that routinely dogs
What's so breathtaking about
Even President Susilo Bambang Yudhoyono lacks trust in his government. Rather than having Indonesian agencies monitor corruption in the tsunami-ravaged Aceh province, he turned to Berlin-based Transparency International for help. The watchdog group ranks
Tsunami Funds
The stakes are high.
Now,
President Suharto is gone, ousted by public uprisings in 1998 at the height of the Asian crisis. Yet the political system, and, by extension, the financial one, Suharto created in his 32 years in power lingers. Its vestiges mean few of this nation's 235 million people benefit directly from its 5 percent growth.
`Kleptocracy'
All this hampers the quality of public investment and, ultimately, economic growth. ``Corruption in
The nation's ``kleptocracy,'' as observers used to call it, took corruption to highly refined levels -- so much so that it may even involve the evaporation of corporate debt.
Corruption isn't the only reason more investors aren't flocking to
Some Optimism
Still, it's corruption that most often scares investors away. For one thing, bribes and other hidden costs employers pay to do business lead to paltry wages, perpetuating poverty. For another, the combination of corruption, a weak legal system and a lack of corporate transparency mean debt investors can have a very hard time getting repaid.
The good news is that some local business people are optimistic. ``The political will is there'' to fight corruption, says James Riady, who heads the Lippo group of companies. ``He (Yudhoyono) set very good values.''
Ditto for some foreign observers. ``
A Major Test
Yet the sudden rush of tsunami aid is a major test for Yudhoyono. When he took office in October, the world thought he would have time to prove his anti-corruption mettle. That was not to be. Now, Yudhoyono must see to it that aid is delivered to those who need it with a minimum of corruption. If reports of aid siphoning become widespread -- some have already surfaced -- much of the pledged aid may not come.
That's a problem, considering
Here's the bottom line: If lots of money is lost to dodgy dealings, nations offering moratoriums on
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Prudent Investor says
Corruption, corruption, aaaah it is in the headlines again. Isn't this the chic word to go on government bashing? Corruption hither and thither. Well quite bizarrely and contrary to the common perception, the financial markets for these two (which means including us!) most corrupt countries have been the best performers in the region for the year 2004. Does this indicate that the more the corrupt the better it is for the markets? Hardly. It just reveals that corruption is not the sole determinant for capital flows. For the jackasses who unwaveringly thinks the country would fester mainly due to perceptions is bound to shoot himself/herself in the foot.
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