Corruption in the Indonesian arms business: tentative steps towards an end to impunity

In Indonesia, the military has long been regarded as highly corrupt, in spite of the country’s relatively successful transition to democracy since the fall from power of long-time dictator President Suharto in 1998, and the military’s subsequent withdrawal from the political sphere. Military reform has achieved considerable success overall, but has been severely limited in the economic sphere, where the military
retains considerable autonomy. Very little detail is provided of the annual defense budget, and systems of monitoring, control, and accountability are weak. Transparency International’s Government Defence Anti-Corruption Index for 2015 gave Indonesia a ‘D’ rating, indicating a high corruption risk.

Brokers and middlemen, frequently the conduit for corrupt payments from suppliers to decision-makers in international arms deals, are active in most procurement processes from a very early stage, creating ample opportunities for decisions to be distorted by corruption, from the setting of initial requirements to the final contract award. Despite this, before 2015 there were virtually no cases of military officers or defense officials being investigated in relation to corruption, and none in relation to arms procurement.

This paper examines the problem of corruption in the military sector in Indonesia in the post-Suharto era, in particular in relation to arms procurement, and discusses the significance of recent tentative signs of greater efforts by the Indonesian civil and military authorities to address the problem. It illustrates three crucial points about democratization and corruption in the arms trade.

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