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Indonesia's notoriously crooked parliament is under pressure to pass a corruption bill before the current one expires. Meanwhile, a central bank president and an in-law of the president are jailed on... corruption charges. Corruption and rights dominate the first presidential debate. Indonesia outperforms other regional economies, after doubling tax collection. And Julia Roberts films "Eat, Pray, Love" in Bali.
Top News: Indonesia’s spirited fight against endemic corruption is now at the mercy of the country’s most corrupt institution – parliament. Lawmakers are under pressure to pass a new law that would extend the life of the powerful corruption court. The previous law is believed to be unconstitutional and expires in December.
Parliament, unsurprisingly, has been dragging its feet. The corruption court has sentenced numerous lawmakers over the last few years and parliament is not too interested in renewing its mandate. The dissolution of the corruption court would represent a major blow to the country’s anti-corruption campaign.
A judicial watchdog group handed out towels in parliament on June 18 because the group said it appeared parliament had completely thrown in the towel on the bill.
Over the last week, the corruption court jailed five high profile corruption suspects. One of them was a former Bank Indonesia deputy governor and an in-law of President Susilo Bambang Yudhoyono. The successful prosecution was seen as evidence of an improving corruption climate in Indonesia. Most analysts had expected interference from the president, but none came, possibly a wise political move for Yudhoyono two weeks before presidential elections.
Corruption and human rights were the topic of the country’s first-ever presidential debate on June 18. Yudhoyono and his two challengers, Megawati Sukarnoputri and Yusuf Kalla, all said they would continue to fight corruption, collusion and nepotism in Indonesia, which is regularly ranked as one of the most corrupt countries in the world.
The candidates offered few details, however, during a lackluster debate that seemed to highlight the candidates’ similarities more than their differences. The debate was hindered by a last minute decision to scrap the crucial cross-examination segment. Indonesians, who are culturally-conditioned to avoid confrontation, did not help foster a lively debate, either. There will be four more debates before the July 9 election.
Money: Finance minister Sri Mulyani continues to paint a hopeful future for Indonesia’s economy. The influential reformer suggested that the country would experience 7 percent growth by 2011. Several other economists agreed, adding that in 2010, it could reach 6 percent. Growth for the rest of the 2009 is expected to be a little over 4 percent.
The Indonesian economy, which is performing far better than any of its neighbors and has, in fact, largely shielded itself from the world economic crisis, is being helped along by strong consumer spending.
The Indonesian retail market, for instance, grew positively in the first four months of 2009. Consumers in both modern and traditional markets continue to spend more, according to a Nielsen survey. The survey also said the modern retail market grew more than 13 percent from January to April and the traditional market grew 4.1 percent in the same period.
Strong consumer spending among the country’s 240 million people, the fourth largest population in the world, is partly credited with helping Indonesia weather the economic storm.
Financial reforms instituted by Mulyani have also helped. She announced June 21 that the ministry had launched its second round of tax reforms, which aims to improve the capacity of tax collectors and to integrate taxpayer data. Previously, Mulyani had purged the tax office of rampant corruption – the first round of tax reform.
The Indonesian government has for years failed to collect taxes at a reasonable rate. But from 2005 to 2008, Mulyani’s term, tax revenue jumped from about $30 billion to almost $60 billion.
Elsewhere: In what is a major development for the region, Indonesia has completed an infrastructure project. It is one of the only large infrastructure projects to be completed in Southeast Asia’s largest economy since the Asian financial crisis in the late 1990s. The country’s longest bridge, called Suramadu, connects East Java to Madura Island. It opened June 10 to much fanfare… and looting.
Thieves have been pillaging the bridge for raw materials like steel and cement since its opening, threatening its stability.
Indonesia has struggled to push through an overhaul of the country’s poor network of roads, ports, airports and other infrastructure, a problem that seriously impedes the country’s ability to attract more foreign investment.
Julia Roberts, the American Hollywood sweetheart, will be shooting a movie in Ubud, Bali in October. “Eat, Pray, Love,” is based on the hugely popular book of the same title about a woman who travels to three different locals in search of herself. The last place she visits is Ubud, an artist’s paradise of tropical foothills, rice paddies and Balinese mythology.
It is the first American movie to be shot in Indonesia and local talent is already being cast for the film, which local directors hope will bolster the country’s struggling film industry. But it is Julia Roberts, of course, that has everyone talking.