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‘Jokowi can focus on development, but first issue Perppu on KPK Law’: Economists
“Corruption has been empirically proven to be an obstacle in investment and infrastructure construction, human resources development and the state budget in various countries,” the economists' paper reads.
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Rest in peace: Employees at Corruption Eradication Commission (KPK) lay flower and wreaths on top of a casket in front of the KPK's headquarter in Kuningan, Central Jakarta, on Friday, Sept. 13, 2019. (JP/Seto Wardhana)
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fter massive student protests happened nationwide last month demanding President Joko “Jokowi” Widodo to issue a regulation in lieu of law (Perppu) annulling revisions made to the 2003 Corruption Eradication Commission (KPK) Law, hundreds of economists have shown their support by publishing a joint research paper on the negative impact of corruption in the country’s economy.
Forty scholars from various universities at home and abroad, including University of Indonesia economist Faisal Basri, Center of Reform on Economics (CORE) Indonesia research director Piter Abdullah and Budy Resosudarmo from the Australian National University, presented an open letter to Jokowi on Monday, urging him to issue the Perppu. At the time of writing, 233 scholars have endorsed the open letter, arguing that the revision would hit the economy hard.
Six economists also prepared a 50-page academic paper, sourced from a joint study, to support their stance.
“Corruption has been empirically proven to be an obstacle in investment and infrastructure construction, human resources development and the state budget in various countries,” the paper reads.
Corruption also causes inefficiencies in regional administrations’ spending, forcing the public to spend 50 percent more on goods and services, it says. Corruption also weakens the government’s fiscal and legal capacity. As a result, the country may have to bear the fiscal burden of the government’s reliance on debts for state financing, it continues.
The paper also quoted research showing that corruption lowered the tax to gross domestic product (GDP) ratio by between 1 percent and 2.9 percent, which would be significant as the value of the country’s state budget was only around 12.76 percent of GDP last year.
Read also: ‘Corruption hampers investment’: Economists urge Jokowi to issue Perppu on KPK Law
