Individual Corruption

According to the Transparency International’s Global Corruption Barometer 2010, citizens in Indonesia report that they may encounter corruption in connection with obtaining registrations and permits. The US Department of State 2010 also reports that some ethnic groups have encountered bribery when obtaining citizenship certificates. Furthermore, corruption is also deeply entrenched in the education sector, where for example, bribes are needed in order to obtain a kindergarten permit. According to Freedom House 2010, the government has taken steps to tackle such problems by increasing teachers’ salaries in 2009, however, the problem still remains.

Business Corruption

Companies should be aware that gifts are sometimes expected in order to obtain access to public utilities, such as telephone, water and electricity connections. A considerable number of the surveyed companies in the World Bank & IFC Enterprise Surveys 2009 cite that they are expected to give gifts in return for construction permits and operating licences. Moreover, companies report that the amount paid in irregular fees to obtain required licences and permits is often based on personal relationships, according to the Heritage Foundation 2011.

Political Corruption

According to Transparency International’s Global Corruption Report 2009, the rapid expansion of the Indonesian airline industry in the late 1990s created many safety issues, as well as opportunities for corrupt practices. The same source also reports that all matters related to certificates such as obtaining operating permits and pilot licence extensions, can reportedly be resolved by bribes, despite that standard requirements have not been met.

Frequency

The World Bank & IFC: Doing Business 2011:
- Starting a company requires the entrepreneur to go through 9 administrative procedures, taking 47 days at a cost of 22% of GNI per capita.

- Dealing with construction permits in Indonesia requires a company to go through 14 administrative steps, which take an average of 160 days at a cost of 173% of income per capita.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the government administrative requirements (permits, regulations, reporting) in Indonesia a score of 3.7 on a 7-point scale (1 being 'extremely burdensome' and 7 'not burdensome at all').

Transparency International: Global Corruption Barometer 2010:
- 10% of households who had contact with registry and permit services in 2009 report to have paid a bribe.

- 7% of households who had contact with the utilities services in 2009 report to having paid a bribe.

- 16% of households who had contact with medical services in 2009 report to have paid a bribe.

The World Bank & IFC: Enterprise Surveys 2009:
- 15% of companies surveyed expect to give gifts to public officials in order to 'get things done'.

- 26% of companies surveyed expect to give gifts in order to get an operating licence.

- 37% of companies surveyed expect to give gifts in order to get a construction permit.

- 22%, 16% and 23% of the companies surveyed expect to give gifts in order to obtain a water, telephone and electrical connection respectively.

Transparency International: Bribe Payers Index 2008:
- Business executives give the registry and permit services a score of 3.7 on a 5-point scale (1 'not at all corrupt' and 5 'extremely corrupt').