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Bureaucratic Reform and Dynamic Governance for Combating Corruption: The Challenge for Indonesia Prof. Dr. Azhar Kasim, MPA, University of Indonesia Introduction Since 1998, after the collapse of Soehartos regime a lot of changes have taken place in Indonesia. The system of government has become more democratic, political parties are free from government control, and local governments have become more decentralized. There are freedom of speak, freedom to assemble and freedom to join an organization. There is a more equal opportunity to have basic education, and to increase income per capita. On the other hand, there are a lot of unsolved social problems, such as poverty and social inequality, low quality education, increasing deforestation, air and water pollution, chronic and widespread corruption, poor public service, fading nationalism spirit, and anarchies everywhere. Indonesia is considered as one of resource rich countries in Asia and has become a favorite emerging market for investors because of its large domestic market. Time magazine, September 12, 2008 edition mentioned that Indonesia has all ingredients for success - a stable democracy, a wealth of natural resources and a large consumer market. But why Indonesia is not keeping pace with Asias booming economies? People expect that government take the lead and play the strategic roles in improving the political and bureaucratic reforms, public service delivery and citizen participation in order to promote economic development.. This paper first studies the contents of Indonesias bureaucratic reform policy as well as its political and legal systems and practices. Then it critically assess why the reform did not bring about substantive changes, but fizzling out instead. The Existing Government Bureaucracy Why is the quality of public service delivered by Indonesian government bureaucracy poor? There are many factors that can influence the performance of government bureaucracies, that is, the lack of meritocracy (the best use of talent), recruitment is not from all segments of society, and selection and advancement of civil service are not on the basis of ability, knowledge and skill, under fair and open competition. In general, the placement of civil service is not on the basis of career (competency and

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performance) but on the basis of political consideration (spoils system) and patrimonialism. These situations become worse because of unfair and uncompetitive compensation system. Corruption in Indonesia is a chronic and widespread phenomenon that undermines good governance, erodes the rule of law, hampers economic growth effort, increases social inequality, and distorts national competitiveness in the global economy. President Yudhoyono admitted that there are still many perpetrators of corruption even in the government, parliament, and regional representatives and among law enforcers. (Reuters, August 16, 2012). Rent seeking is a common practice in Indonesia, for example, politicians used to solicit political campaign fund from bureaucrats in exchange for protection and from big companies in exchange for offers of business opportunities such as government contracts and purchasing, mining, logging and plantation permits. Transparency International reported that in 2010 Indonesias Corruption Perception Index (CPI) rank 100 out of 182 countries, was scored 3.0 on a scale from 10 (highly clean) to 0 (highly corrupt). Scores 5.0 or below are considered as corrupt. Meanwhile, there is an indication that bureaucrats lack integrity (the Integrity value of public sector in Indonesia is still low and not too far from a minimum integrity standard by KPK, namely 6.0 (on a scale of 1 the lowest to 10 the highest) and the widespread of manipulation practices in public financial accountability. Combating corruption is very difficult due to the rule driven public administration system which focuses on the formal truth rather than the materialistic truth (the truth of the matter). Most of rent seeking practices cannot be prosecuted because what they did was taking the opportunities through the loopholes of the existing legal system. Formally, the rent seekers obtained personal financial benefits by manipulating the social or political environment even though they might be not breaking any law (See: KPK, 2010) In LAKIP (Performance Accountability Report of Governmental Institution) there is a tendency to report only the good things, that is, those which are in-line with the rules and regulations, even though they do not fit in the institutions mission, and to hide all information which is not in-line with the good report. The LAKIP is biased because it is a self evaluation report. Furthermore, these practices have become complicated because of many rules and regulations that are in disharmony each other. Moreover, the problems become worse because of the absence of policy evaluation as well as program/project evaluation in Indonesian public administration system. Therefore, there is no adequate feedback to policy decision makers as well
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as to the people. That is why we cannot learn from our experiences and we tend to repeat the same mistakes again and again. Then corruption problems become vicious circles because of the lack of change due to status quo condition. In general, public administration and policy practice in Indonesia are still influenced by classical paradigm which relies on hierarchical top-down approach. The activities of government bureaucracy are supposed to start from policy formulation and then policy implementation including public service delivery. There is no evaluation; therefore, there is no feedback to the policy decision makers (See: Hughes, 2003, p.17; Nakamura and Smallwood, 1980, 10-12). The Indonesian experience can be described according to the theory of prismatic society of Fred W. Riggs (196427-31). Even though there is freedom of speak, the civic culture is not yet developed. Citizen participation in political processes is not yet existent or very minimum. The political activities are dominated by ruling elite who values subjective particularistic orientation such as nepotism, religious, ethnicity and narrow political orientation, etc. This condition causes the declining of common interest orientation such as nationalism and public interest orientation. The linear way of thinking is still dominant in government bureaucracy, therefore it tend to preserve the status quo. Nowadays, Indonesian government bureaucracy is still very much based on rigid rules and regulations and awesome procedures and is not responsive to citizens need of efficient public service. Systems thinking approach such as dynamic governance which favors comprehensive analysis of government bureaucratic problems and innovative problem solutions do not yet flourish in Indonesian government bureaucracy.

Governmental Bureaucratic Reform Effort The Government of Indonesia has launched bureaucratic reform that is aimed to develop clean, efficient, effective and productive bureaucracies. Moreover, the reform is designed to create transparent bureaucracy which serves the people, and be accountable to the public. The purpose of bureaucratic reforms is to increase government bureaucracy performance. See: 9 Acceleration programs of Ministry of Administrative Reform (MENPAN & RB) . Can this bureaucratic reform effort improve the performance of government bureaucracies in delivering public service and citizen
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empowerment? If we compare the essence of the problems faced by the bureaucracy with the scope of bureaucratic reform effort, it is obvious that the effort is not adequate because it is mainly about the implementation of the existing rules and regulations, and about what government wants to do based on the existing law and focuses on the implementation of the existing policy. In other words, it is not about the change of mindset, and harmonization of policy contents or rules and regulations. Whereas in fact, the major problem of government bureaucracy in Indonesia is caused by the disharmony of existing public policy, rules and regulations, the disharmony between Act No.32 Year 2004 on local government and Act No.17 Year 2003 on public finance; another example is the disharmony among nine Acts and hundreds of regulations on land use management, which are conflicting each other (See: KPK, 2006). The condition of government bureaucracy becomes more complicated because of the following practices:
1. A tendency of people to do rent seeking or to give bribery or

gratification to government officials in order to have special treatment in public service and especially, to obtain concessions or permits for exploitation of scarce natural resource deposits such as mining concessions and palm oil plantation permits;
2. Collusion between government officials and businessmen leading to

the practice of mark-up in government procurement, and giving gratification as kick back to the officials;
3. Political intervention in civil service recruitment as well as in

government procurement and contracts (spoils system);

4. Corruption in the law enforcement agencies, that is, the police,

attorneys, courts, and the tax officials. Based on the above phenomena, it seems that the problem faced by Indonesia government bureaucracy is not a linear problem, but a systemic, complex and dynamic one. There are many variables and interrelationships among the agencies as well as individuals involved in this problem, such as the cultural aspects --- values, beliefs and norms in the society. In relation to Indonesias higher government official behavior, the Economist wrote that some societies are controlled by guilt, others by shame. Then theres Indonesia, which is rarely controlled by either. While American (as well as Japanese, Korean, Indian and European) officials step down quickly enough

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over sex or corruption scandals. On the other hand, Indonesian leaders have a long record of refusing to resign no matter how serious the allegations against them are, no matter how high the level of public pressure is. It is a challenge for Indonesia to find the right format of administrative reform and national development strategy that maximizes the opportunity for dialogue among all stakeholders representing all segments of society. The Challenge for Indonesia The above problem is a challenge for all Indonesian people especially the Government of Indonesia to overcome by making the appropriate public policies that can serve as leverages to get out of vicious circle, and empower government apparatus as well as the citizens. Furthermore, we should answer the following questions:
1. What bureaucratic reform strategies should be chosen? 2. Who is responsible to lead this bureaucratic reform, and from which

point should he or she start? In order to solve this complex and dynamic problem we need more comprehensive strategies which include five major areas, namely, political leadership, public policy harmonization (including rules and regulations), merit system application in all government agencies, anti corruption movement, and national education system. Firstly, we need transformational leadership to lead radical change. Patrimonialism, nepotism, rules driven orientation, and rent seeking practice are very common among the Indonesian people regarding their ethnicity and religious background. These values and beliefs do not fit in democratic governmental system. Therefore, it is difficult to initiate radical change through the existing democratic mechanism due to the absence of civic culture. Furthermore, transactional style of leadership tends to reinforce the above values and beliefs. On the other hand, bureaucratic or administrative reform is a top-down approach; therefore, it must be led directly by the top official, that is, the president of Indonesia. Moreover, in order to initiate change, strong, visionary and transformational leadership is needed to motivate people and create synergy in national development. Also he or she must be able to lead anti corruption movement and eliminate high cost economy phenomena to create efficient and reliable government. It is necessary that leadership should demonstrate high personal integrity and commitment. He or she must take difficult and dilemmatic decisions in order

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to overcome various political, economic and social problems. Transformational and charismatic leadership can play a more important role in cultural change effort toward the creation of more conducive to values and paradigm for dynamic good governance (see: Van Wart and Dicke, eds. 2008:229-230). Secondly, the harmonization of existing policies, laws, rules and regulations. Almost all existing laws, rules and regulations are in disharmony each other due to the lack of coordination and synchronization among various public agencies in policy making as well as in implementation processes. For example in agrarian sector there are nine Acts and 285 rules and regulations that are in disharmony each other. Ideally, public policies must be in harmony each other in order to become effective leverages in national development initiatives. Strong, visionary and transformational leadership is needed to lead the effort of legal system change as the basis of bureaucratic reform. Indonesian people must be free from the trap of vicious circle of protracted problems of corruption and inefficiency. Even though Indonesia has some comparative advantages in natural as well as human resources, but in the long run it will not enough to survive the global competition. Therefore, national development programs must be focused on the development various industrial clusters to compete in the global economy. Thirdly, the application and protection of merit system include reward and punishment system in all government bureaucracies to prevent and reduce the chance to commit corruption among bureaucrats. Shafritz, et al. (1983:46) describes merit system principles clearly as follows:

Recruitment from all segments of society, and selection and advancement on the basis of ability, knowledge and skills, under fair and open competition. Fair and equitable treatment in all personnel management matters, without regard to politics, race, color, religion, and national origin, sex, marital status, age, or handicapping condition, and with proper regard for individual privacy and constitutional rights. Equal pay for work of equal values, considering both national and local rates paid by public employers, with incentives and recognition for excellent performance. High standards of integrity conduct and concern for public interest. Efficient and effective use of the (government) work force.

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Retention of employees who perform well, correcting the performance of those whose work is inadequate, and separation of those who cannot or will not meet required standards. Improved performance through effective education and training. Protection of employees from arbitrary action, personal favoritism, or political coercion. Protection of employees against reprisal for lawful disclosures of information.

Fourthly, anti-corruption movement includes preventive as well as curative measures. Law enforcement only is not enough to prevent corruption because of the disharmony of existing laws, rules and regulations. The weak legal system is a part of the problem. Ideally, a legal system reform should precede bureaucratic reform. We should consider that Indonesian legal system should also adopt the principle of presumption of guilt in areas of anti corruption, money laundering and taxation in order to reduce the opportunity for corruption. The existence of good governance enables government bureaucracy to perform quality and efficient public service delivery. The existing LAKIP (Performance Accountability Report of Governmental Institution) is not an objective measure because it is a kind of self-evaluation prepared by the head of governmental institution, and a tendency to report only the good things and to hide all deviations such as the practice of mark up in government purchases. Citizens and public in general should participate in controlling government bureaucracy because they are the major stakeholders, to whom government bureaucracy should be accountable for. Government bureaucracy must be strengthened, not only by planning and implementation of its activities but also by evaluation of the results of their activities by external and professional evaluators. Finally, national education system should be reformed on the basis of the long term need for qualified human resources, especially knowledge workers. The development of education sector should include providing qualified teachers, competence based curricula, learning proscess, physical infrastructure and so on. The development of national education system from primary school to higher education levels as well as non-formal education should close the gap between Indonesia and developed countries in its ability to produce knowledge workers as well as research findings that lead to international publications and innovative products. I

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The five strategies should create strong organizational capabilities of government bureaucracy that functions as leverages to enable people to get out of vicious circle of corruption and backwardness, and to create clean government and agile process. Government bureaucracy should have dynamic capabilities and should be able to participate in the process cycle of thinking ahead, thinking again, and thinking across. In order to be still in relevance with peoples needs, and national development programs should be dynamic, systemic and sustainable (Neo and Chen, 2007). The framework of dynamic good governance can be described as the follows:

Figure 1: Dynamic Good Governance Framework

Political Leadership

Dynamic Capability

Public Adm
(Agile Processes)

Change
Thinking ahead
Conceptualize Policy Challenge

Education
(Able people)

Thinking again
Customize

Adaptive Policies Execution

Dynamic Good Governance

Globalization
(External Practice)

Thinking across

Constrains

Confronts

Catalyzes

Culture: values, beliefs and norms

Sumber: Adapted from Neo dan Chen (2007)

Strong and visionary political leadership can play an important role in improving government bureaucracy performance. The above four strategies discussed can create conducive condition for bureaucratic reform especially in improving dynamic capacity in public service and citizens empowerment. Government bureaucracy wills are always relevant with the changing needs of society if it always adapt itself to its environment in innovative ways. Concluding Remarks In the rapidly changing world there is no assurance that a current Indonesia economic growth will be sustainable in the future. The situation will be even worse if the current government bureaucracy has become
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problematic. This paper discussed the current government bureaucratic problems in Indonesia, which are multi-dimensional and protracted as a vicious circle. Government bureaucratic reform efforts in Indonesia will not be successful if they are still carried out on the basis of a linear way of thinking that does not touch the root of the problem. This paper discussed how systemic and dynamic approaches to good governance can create the leverages to get out of slump vicious circle in innovative ways.

Reference: Anderson, James E. (1994) Public Policymaking: An Introduction. Second Edition, Boston: Houghton Mifflin Co. Hughes, Owen E. (2003) Public Management & Administration: An Introduction. New York: Palgrave Macmillan. Farazmand, Ali. (2002) Administrative Reform in Developing Nations. Westport, Conn: Praeger Fukuyama, Fransis. (2004) State Building: Governance and World Order in the Twenty-First Century. London: Profile Books Kasim,. Azhar. (2008)Peluang dan Tantangan dalam Pembangunan Indonesia: Permasalahan dan Upaya Mengatasinya JIANA, Vol.8,No.2, Juli, pp.122-130 ___________. (2011) Kerangka Dynamic Governance bagi Reformasi Administrasi Negara JIAMaP. Vol 1. No.1, Januari, pp. 9-13 KPK.(2016) Identification of Gaps between Laws/Regulations of the Republic of Indonesia and the United Nations Convention Against Corruption KPK: Directorate of Research and Development.(2010) Indonesia Public Sector Integrity 2009: Corruption Facts in Public Service Neo, Boon Siong and Geraldine Chen. (2007) Dynamic Governance: Embedding Culture, Capabilities and Change in Singapore. Singapore: World Scientific Osborne, David and Peter Plastrik.(1998) Banishing Bureaucracy: The Five Strategies for Reinventing Government. New York: A Plume Book

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10 Riggs, Fred W. (1964) Administration in Developing Countries: The Theory of Prismatic Society. Boston: Houghton Mifflin Companyy Shafritz, Jay M., Albert C. Hyde, and David H. Rosenbloom. (1981) Personnel Management in Government: Politics and Process. New York: Mercel Dekker World Bank: East Asia Poverty and Economic Management Unit. Combating Corruption in Indonesia: Enhancing Accountability for Development. October 20, 2003
www.time.com/time/world/article/0,8599,2094188,00.html, downloaded on Sept 4,2012

www.in-reuters.com//2012/Indonesia-president-idlNL4E8JG15, downloaded on Sept 4,2012

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Eropa Conference 2012, 28 October 1 November 2012 in Jakarta