Inequality exacerbates corruption by elites

Foto: The Jakarta Post
Foto: The Jakarta Post

Corruption and economic inequality are like a vicious circle. Both have a significant impact on each other. Unfortunately, growing discourse on corruption and its eradication rarely mention economic inequality as a crucial issue.

Indonesia Corruption Watch recorded 454 corruption cases in 2018. A survey by Transparency International in 2018 ranked Indonesia 89th on the corruption perception index, much worse than neighboring countries such as Malaysia ( 61 ), Singapore (3) and Brunei Darussalam ( 31 ).

Meanwhile, inequality has remained extremely high. Statistics Indonesia (BPS) reported that as of September 2018, Indonesia’s Gini ratio stood at 0.384, with a ration of 1.0 reflecting perfect inequality.

The Palma ratio, another measurement alternative to the Gini ratio that places zero as perfect equality, gave 1.8 to Indonesia for 2010-2017.

This ratio is calculated by dividing the gross national income by 10 percent of the richest population with the 40 percent of the poorest.

Nevertheless, discussion mostly emphasized corruption as a cause of perpetual inequality. Not much discourse sees inequality as a “scapegoat” for rampant corruption.

Consequences of the high level inequality are the super-rich and wealth accumulation.

The latest Credit Suisse report stated that the concentration of wealth in Indonesia was alarming. The richest 1 percent of the 265 million people controlled 46.6 percent of the total wealth, which according to the Global Wealth Report 2018, was US$ 1.5 trillion.

Anthony B. Atkinson, a British economist who conducted a study on inequality, said the elites with abundant wealth could influence public policy.

In other words, the super-rich are oligarchs, according to political scientist Jeffrey A. Winters. In his book Oligarchy, Winters defines oligarchs as actors who control large concentrations of material resources.

The material resources can then be used to maintain or increase personal wealth and their exclusive social position. Meanwhile, an oligarchy is defined as the politics of wealth defense by actors who have such material wealth.

The urge of oligarchs to defend or protect their material wealth prompted them to use instruments of democracy to achieve their agenda. In extreme inequality, super-rich people or oligarchs in Indonesia are inevitable.

An oligarchy is a driving factor in the proliferation of corrupt practices. With their wealth, oligarchs can influence various democratic processes, including public policy. The attempt is made to defend or expand their wealth.

When oligarchs influence policies to benefit their private interests, “state capture” occurs. Policies are engineered in such a way that they no longer favor public interest.

In this case, oligarchs can intervene with the decisionmakers, both executive and legislative actors. Bribes to influence and decide policies are then inevitable.

The same pattern can also occur in law enforcement. Rampant bribery to influence court decisions can occur due to oligarchic interests.

Elections are democratic processes that are also not free from the influence of oligarchs. The oligarchs can be the driving factor of rampant transactional politics. Particularly in direct elections, the support of resources for political parties and candidates is essential.

As most political parties lack funds, oligarchs have the opportunity to contribute money or other resources to the parties or candidates. Worse, they can even determine the candidate chosen by the public.

There is no such thing as a free lunch. When political parties and candidates win the elections, they are obliged to facilitate the interests of the oligarchs. Thus, the practice of transactional politics is wide open.

Policy has been determined even before the winner occupies public office. This type of corruption is difficult to detect by many parties.

Another practice that benefits oligarchs is vote-buying. Oligarchs can stimulate this practice. The voters who are in the shadow of poverty will easily vote to earn money.

An abundance of resources can be given by the oligarchs to political parties and candidates to perpetuate vote-buying. What is clear in this practice is that wealth inequality will ultimately lead to political inequality.

The conditions above show the importance of connecting the issue of economic inequality and corruption. The problem of inequality should be seen as a significant factor in perpetuating corruption. Inequality can encourage rampant corruption. As a result, corruption can hamper attempts to overcome inequality.

Attempts to tackle corruption and inequality must be done simultaneously.


Opinion by Egi Primayogha, researcher at Indonesia Corruption Watch, in The Jakarta Post


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