Economic Transformation of China and Indonesia

Both China and Indonesia are undergoing economic transformation. China's economic reforms and rapid growth have spawned new opportunities and incentives for corruption. Indonesia is undergoing its worst economic crisis that has spawned natural, economic, financial and political crises. In both countries corruption is systemic. In Indonesia, corruption is so prevalent and widespread that it is known by the acronym KKN for "corruption, collusion and nepotism" (Marshall, 1998, 1). In China, corruption is also systemic but officials are reluctant to discuss it or disclose information. Nevertheless, the Economist (2002) notes that "every case that comes to light further exposes a system that breeds corruption at every level" (1). This analysis will look at corruption in both Indonesia and China, including the kinds of corruption that exist and the causes for them. A conclusion will address some measures for reform that would aid each country in reducing the current levels of corruption.

The government of Indonesia has been more receptive to cooperating with international specialists on anti-corruption efforts than the Chinese government. There are three main reasons driving the government to accept such efforts. First, Indonesia is experiencing the worst economic crisis in its history. This has prompted crises that include financial, political, and social. Second, the government's credibility among the international community and among citizens as rapidly er

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ack of transparency and lack of integrity with respect to corrupt actions by public and political officials. Some experts argue that the current crises facing the government offer an atmosphere that is conducive to change. As Harahap (1999) explains: "Almost everyone who lives and works in Indonesia goes along with corruption including foreign investors, aid donors, and international financial institutions. However, the current financial turmoil in Indonesia presents an opportunity to address and fight corruption, known as KKN" (4). The lack of a code of conduct for public officials makes many accept bribes as the normal mode of operation. Declarations of wealth or income are nonexistent and political officials can keep private business activities hidden. However, the government's response to the current crisis has been to seek help from the international community to devise anti-corruption policies that will eliminate KKN as a reality in Indonesian society. To this end a group of organizational leaders in Indonesia made a pledge to create a corruption-free Indonesia that included the following pledges: Each organization will promote honesty, transparency and integrity. Always put the well-being of the people of Indonesia ah

Category: Economics - E