KKN

KKN which stands for Kolusi, Korupsi, Nepotisme is one of the buzz words in Indonesia. Although Indonesia did not make Forbes Magazine’s Top 20 Most Corrupt Countries this year, korupsi is still very much part of everyday life.

The last Governor of Aceh is currently in jail for purchasing a Russian-made helicopter for more than the going rate, and pocketing the difference. He was the first high profile government official to be arrested since Indonesia's new President, Susilo Bambang Yudhoyono (SBY), promised he would make fighting corruption one of his government's top priorities.

But KKN doesn’t happen just in the government but is a way of life here. Working from the perspective of a bilateral donor, I hear stories of local organizations engaged in funny business. For example, we have been giving grants to this local NGO. We found out recently that some of the funding and materials we purchased for the NGOs operations has been misappropriated, i.e. motorcycles meant for field staff going to the villages have been given to the mother of the head of the NGO. After a little more investigating, turns out the leader’s mom, and sister also hold management positions in the organization…kind of sketchy. I’ve also seen a lot of dubious receipts from grantees...The husband is a head of the organization and rents cars from a vendor, that turns out is owned by his wife...grantees buying water pumps from a cell phone store...funny business.

In earlier posts I’ve mentioned that we’ve been doing a lot of recruitment and I’ve been conducting quite a few interviews. We were hiring a couple of Procurement Officer. We asked one particular young man how he choose a vendor and how did he negotiate the price. He said proudly that at his current unnamed-international-NGO, he would get 3 quotations from 3 different vendors (we liked this), and that he would take the lowest price to the 2 other vendors and ask them to match it. But sometimes the vendors with a slightly higher price would offer him a commission/kickback. He then would award it to that vendor, justifying the decision with something like faster delivery time, or better service. He was eager to point out that he didn’t keep that money but instead passed it to his boss, who’s an expat (we did not like this). The young man was really proud of this and made it sound like a selling point to me and the other expat that was conducting the interview. It was really sad that he did not see anything wrong with his actions. We did not hire him.

Damn, and I was hoping those kickbacks would fund my exotic vacations.

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On a slightly different note: I used to read about barriers to FDI (Foreign Direct Investment) and obstacles to conducting business in foreign countries and now I've experienced it first hand. After 9 months and 4 days, I have received my Indonesian working perming and multiple entry business visa. It's an efficient place.