Unlike in Africa, Indonesia's Bandits Come With a Smile
Wijayanto | September 06, 2010

If someone were to ask me to recommend two books for weekend reading, I would 
recommend "False Economy" by Alan Beattie and "Bad Samaritans" by Ha-Joon 
Chang. Both are well written and discuss complex economic issues in a simple 
way. What's more interesting, both have a chapter on corruption in Indonesia. 

In his book, Beattie compares prosperous but corrupt Indonesia and clean but 
poor Tanzania, while Chang explains why corrupt Indonesia is much more 
prosperous than corrupt Zaire, despite the fact that Zaire was much wealthier 
in the 1970s. 

According to the authors, even though corruption is prevalent in Indonesia, 
most of the dirty money stays in the country to keep the economy rolling. 

The corrupt invest the money in various businesses, buying houses, cars and 
enjoying extravagant lifestyles. Interestingly, many of them also donate money 
to the poor or various social organizations, and build campuses or schools. 

By contrast, Zaire's corrupt keep their money in Swiss banks, draining the 
country at a time of great need for capital, turning the economy into total 

Why do corrupt Indonesian officials and businesspeople keep their money in the 
country while those in Zaire deposit the money abroad? 

Mancur Olson's "Tyranny, Anarchy and Democracy" helps us understand this 
phenomenon. According to Olson, two type of "bandits" exist: the roving bandit 
and the stationary bandit. 

Each behaves differently in the ways they commit crime and in how they spend 
the wealth they gain. 

The first type is made up of those who have short-term interest and act like 
ordinary criminals. Just like in cowboy movies, bandits like this come in 

They attack small towns, rob banks and hotels, destroy buildings and then 
leave. These bandits have no interest in staying and move from one town to 

Stationary bandits have a different strategy. They come to a town, live there 
and become part of society. Using their intellect and charm they try to win 
over the hearts of the people. 

Their main goal is to enter the highest levels of society. In many cases, they 
prefer to become kingmakers and install their puppets in various public 

Often, they themselves become the king and control the town administration. 

Once in control, the bandits transform the system so they can enrich 
themselves. By changing the rules of the game they ensure they are protected by 
the law. 

If they do break the law, their influence means they always win the legal 

Stationary bandits control government budgets, dominate access to natural 
resources and run various businesses. A more prosperous society means a larger 
market and a higher profit. 

It also means more tax revenue for the government and a larger government 
budget which they can then usurp. 

It is in their interest to develop the town. They don't destroy the physical 
form, but the institutions, the law, the political system and the fabric of 

The roving bandit is the perfect description of many corrupt governments in 
Africa, including Zaire. In contrast, Indonesia is the perfect example of the 
stationary bandit phenomenon. 

Stationary bandits are much tougher to fight than roving bandits, since they 
will create a system to camouflage their actions and protect themselves 

Stationary bandits can be very elegant people. 

However, despite their appearances, they destroy the environment, disregard 
financial and capital market regulations, force people to resign from 
government, help smuggle oil to neighboring countries, evade tax on a grand 
scale, buy political support and control the media to mislead the public. 

The existence of stationary bandits has made our collective dream to turn 
Indonesia into a clean country a distant reality. The fight against corruption 
started only a few years after Indonesian independence in 1945. 

In fact, Indonesia was one of the first countries in Asia to have an 
anticorruption law. 

However, the existence of stationary bandits has weakened the anticorruption 
effort and diverted it from its original goal. 

In 2004, President Susilo Bambang Yudhoyono stated: "I myself will lead the war 
against corruption." 

Interestingly, this statement is similar to President Suharto's remark on 
Independence Day in 1971, when he said: "There is no hesitancy that I myself 
will lead the war against corruption." 

But let's hope that the end of the story will not be the same. SBY still has 
four years to prove that he is different from his predecessor and to leave a 
legacy as a leader who freed his people from the trap of corruption. 

A journey to the moon begins with a single step. The first step for SBY is to 
clean his inner circle of stationary bandits. 

Wijayanto is deputy rector of Paramadina University and managing director of 
the Paramadina Public Policy Institute. He can be reached at This article also appears in the September issue of 
GlobeAsia Magazine.

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