Since the ouster in 1998 of the Suharto regime, Indonesia's process of democratization has made remarkable progress. The peaceful re-election of President Susilo Bambang Yudhoyono this year for a second five-year term served as the latest chapter, adding yet another layer of political stability to the country's democratic advances.
However, an extraordinary saga that sees the country's independent anti-corruption commission (KPK) locked in a battle for survival against the police and the Attorney General's Office (AGO) is an indicator of some of the difficulties the country still faces in its quest to grow into a mature democracy. The battle is highly significant for both Indonesia and Yudhoyono, for whom it could very well be a legacy-defining moment.
Established in 2002, the KPK really acquired some bite in 2004, when Yudhoyono rose to power on an anti-graft platform. Granted investigative powers and its own tribunal, the agency went on to convict dozens of parliamentarians and erstwhile untouchables, including a former national police chief, an influential prosecutor, and several former Bank of Indonesia senior executives (among them a relative of the president).
The commission has been praised for its boldness by local activists and the international business community. But it has irked others in the graft-ridden system that flourished here during Suharto's three decades in power.
Corruption is rife at every level of Indonesia's society. Transparency International ranked the country 126th out of 180 in its 2008 Corruption Perceptions Index, with the police, the judiciary and Parliament considered its most corrupt institutions.
In recent weeks, two senior KPK members, Chandra Hamzah and Bibit Rianto, were arrested by police on dubious grounds. The pervasive feeling of a witch hunt was all but confirmed when taped conversations -- presented to the Constitutional Court and broadcast on national TV -- exposed senior members of the police and prosecutors' office as conspiring with a high-level corruption suspect, Anggoro Widjojo, to frame two respected KPK members in order to halt their activities.
Though not yet formally confirmed as authentic, the tape has already resulted in the release of the two KPK members from custody, the resignation of Deputy Attorney General Abdul Hakim Ritonga, and the temporary suspension of Police Chief Detective Susno Duadji. The latter two are now suspects in the alleged anti-KPK plot.
But the revelations may only be the tip of the proverbial iceberg, underscoring the extent and tenacity of corruption in Indonesia's unreformed institutions. The outcome of the ongoing attack on the commission will determine whether anti-corruption efforts continue to make progress, or whether the last holdouts of the country's feudal system of patronage will halt Indonesia's transition to democratic rule of law.
Yudhoyono, who disappointed many by reacting only after his name was mentioned in the tapes, is the key to it all.
The well-publicized carnival of sleaze prompted a "people power" movement of sorts in Indonesia, with people taking to the streets and creating a pro-KPK Facebook page, whose supporters now number over 1 million. This has further empowered Yudhoyono, who already enjoys widespread public support and commands a large majority in Parliament.
The president seems to have acknowledged the momentous opportunity presented by the recent revelations, claiming that "the eradication of legal mafia" ranks first among the new government's 15 priority programs. Translated into action, this would more than likely mean a radical housecleaning of the police and AGO.
Such an effort would require an overhaul of personnel as well as a revamp of the civil service recruitment and promotion systems, combined with tough punishment for violations. Half-measures would leave Indonesia's democratic transition vulnerable. They would also sink Yudhoyono's legacy, which is irrevocably linked to his promise to eradicate corruption.
Moreover, should Yudhoyono hesitate, it is likely that he would also fail in his pledge to achieve a target of 7 percent GDP growth by 2014, and to reduce poverty by about half and to bring down unemployment to a manageable 5 percent within the next five years.
World Bank data indicates that about half of Indonesia's 240 million people live on less than $2 a day. It is also estimated that some 40 million are unemployed or underemployed.
Yudhoyono has acknowledged that to achieve his targets, he needs to attract a steady flow of foreign investment. Data from the Investment Coordinating Agency shows that under Yudhoyono, Foreign Direct Investment (FDI) has grown from $4.5 billion in 2004 to $14.2 billion in 2008, with the largest increase recorded in the last two years. FDI accounts for almost 80 percent of Indonesia's direct investment total.
The recent increases are due to the country's newfound political stability, better economic indicators and what appeared to be a slow trend towards better legal clarity and predictability. The fate of the KPK could have a major impact on whether these trends are reinforced or reversed.
**Fabio Scarpello is the Southeast Asia correspondent for the Italian news agency Adnkronos International. He is based in Denpasar, Indonesia.