Corruption in Asia

Released on 2002

Multilateral and bilateral aid agencies now direct much of their East Asia activities to so-called ''governance'' reform. Almost every major development project in the region must now be justified in these terms and will usually involve an element of legal institutional reform, anti-corruption initiatives or strengthening of civil society - and often a mix of all of these. Most are, in fact, major exercises in social engineering. Aid agencies and major multilateral players like the IMF, the World Bank and the Asian Development Bank, are attempting not just to improve governance systems and combat corruption but, implicitly, to restructure entire national political systems and administrative structures. ''Conditionality'' puts real weight behind these projects. If successful, they could transform the face of East Asia. Defining ''governance'' and understanding ''corruption'' are therefore not minor issues of terminology. However, a great deal of optimism is required to believe that social engineering for good governance will succeed in either Indonesia or Vietnam within the foreseeable future. In Indonesia, there is neither the political will nor the mechanism to act, since the legal system is itself utterly corrupted. Better laws have been passed, but they fail in implementation. In Vietnam the problems are somewhat different, but the outcomes are similar. Corruption is widely recognised to be a major political, social and economic issue - even by the Party itself - but few cases are ever tried. The bureaucracy (including the legal system) and the party are so complicit that reform is impossible. These systemic problems point to the basic flaw in the good governance agenda and strategy. A politically powerful alliance of foreign and domestic interests is necessary. Foreign multilateral agencies, donors and NGOs are able to set the international policy agenda, but their domestic allies are politically weak. In the absence of rule of law, the basic institutions of these transitional societies remain largely as they were and there is, as yet, no viable alternative system in either Indonesia or Vietnam. The argument of this book is that more might be achieved sooner by much better understanding of political, legal, commercial and social dynamics in Indonesia and Vietnam, not as they are meant to be but as they are. Multilateral agencies, donors, NGOs, business firms and scholars on the one hand; and local politicians, bureaucrats, business people, lawyers, journalists, academics, and NGOs on the other hand have much usefully to discuss. Only out of that dialogue, a dialogue between the world as it is and the world of ideals, can steady progress be made. This book examines these problems initially in an abstract theoretical sense before testing the frameworks thus established through a series of case studies of Indonesia and Vietnam, two very different Asian states: one (Vietnam) still socialist but in difficult transition from command economy to a limited market structure; the other (Indonesia) embracing a market economy and an emerging democratic system; one with a Confucian legal and political tradition, the other not; one with a socialist, the other a civil law, legal system. The book is divided into three parts. The first, ''Frameworks'', establishes some theoretical approaches to the problem of corruption and governance (including a East European example). The second part looks at case studies from Indonesia; and the third part looks specifically at Vietnam. Relevant legislation and judicial decisions can be found in the table of cases and a detailed glossary and list of abbreviations will assist readers unfamiliar with the countries under examination.ABOUT THE CONTRIBUTORSIbrahim Assegaf is the Executive Director of the Centre for Indonesian Law and Policy Studies (Pusat Studi Hukum dam Kebijakan Indonesia) and the Managing Director of the Indonesian law website, http://www.hukumonline.com. He is also a member of the Steering Committee for the Establishment of the Anti-Corruption Commission and for the UNDP''s Partnership for Governance Reform. Paul Brietzke is a Professor at Valparaiso University Law School (USA) and from January 1999 to August 2000 was Legal Advisor at the then Ministry of Justice of Indonesia in Jakarta. Howard Dick is an Associate Professor in the Australian Centre for International Business, University of Melbourne, Australia. John Gillespie is Associate Professor in the Law School, Deakin University, Melbourne, Australia. Gary Goodpaster is Professor of Law Emeritus, University of California School of Law, Davis; and former Chief of Party, Partnership for Economic Growth, a joint economic policy development project of USAID and the Government of Indonesia. Leslie Holmes is a Professor of Political Science and Director of the Contemporary Europe Research Centre at the University of Melbourne, Australia. He is also the President of the International Council for Central and East European Studies. Kanishka Jayasuriya is Senior Research Fellow, South East Asia Research Centre, City University of Hong Kong Tim Lindsey is Director of the Asian Law Centre and an Associate Professor in the Law School, both at the University of Melbourne, Australia. Elizabeth Maitland is Associate Director of the Australian Centre for International Business, University of Melbourne. Pip Nicholson is Associate Director (Vietnam) of the Asian Law Centre and a Senior Fellow of the Law School, both at the University of Melbourne, Australia. Veronica Taylor is Professor of Law and Director of the Asian Law Center, University of Washington, Seattle.