Saturday, November 12, 2005

Good news from villagers for Susilo

The Jakarta Post, Jakarta | Sat, 11/12/2005 3:41 PM | Opinion

It is perhaps surprising to see the results of some polling that shows that President Susilo Bambang Yudhoyono still remains popular after one year in office, despite the impact of the drastic increase in fuel prices.

Why is he still popular?

There are at least four factors at work here.

First, the tough actions of new National Police Chief Gen. Sutanto against gambling, especially togel (illegal lotteries), drugs and street criminals. These acts have created a stronger sense of security in the community.

Second, the sharp fuel hike severely affected people. The situation in the countryside, however, shows an interesting phenomenon. Take, as an example, the case of villagers in North Sumatra. During Idul Fitri, people still made cakes, in particular dodol, a sweet made from sticky rice, coconut milk and palm sugar.

If we ask them, how could they afford to make such a luxurious sweet amid our worsening economic conditions? The answer is surprising: Although fuel prices are up, the prices of oil palm kernel and rubber have also increased at the same time. Apart from this, because gambling has become more difficult, housewives say that their husbands do not waste money buying togel tickets, which means they can save more money.

Most of people in North Sumatra are farmers and many of them have small oil palm and rubber plantations. The rubber price is currently around Rp 6,000 (US$ 60 cents) per kilogram, and palm kernel price Rp. 600 per kilogram. A typical rubber farmer with a small plantation usually sells 60 kilograms of rubber a week, meaning he can earn Rp. 360,000 in a week.

So, his income increases because of the combined effects of the rubber and CPO prices on the world market, and rupiah depreciation against the greenback. In the previous era, even though the prices of rubber and palm oil were high, people in the villages kept buying togel as they dreamed of becoming rich instantly. Now that situation has changed.

Third, people in the villages feel encouraged when observing that government officials, politicians and others are increasingly fearful about committing acts of corruption. They believe that such fear was triggered by Susilo's leadership.

Fourth, many poor people have received cash compensation worth Rp 100,000 per month from the government as part of the government's policy to minimize the impact of fuel price increases.

In conclusion, many people in our village in North Sumatra feel that the drop in popularity of the President and Vice President is not justified.

In many respects, they have gained much advantage from government policies in fields such as law enforcement, security, morality and the economy. And in particular, the popular cash compensation fund (BTL), which is being read as concrete evidence of the government's concern for its people.

Nonetheless, the government needs to fix its distribution of this cash assistance to needy people for the sake of fairness.

Most Indonesians are farmers, and palm and rubber plantations are also extensive in many other provinces besides North Sumatra. People in these provinces may be sharing in the same good fortune as the people of North Sumatra, whose incomes have gone up because of the increase in commodity prices and the weakening of the rupiah against the dollar.

It also shows that government policy should be focused very much on the agricultural sectors. As an agricultural economist and a businessmen respectively, both Susilo and Kalla have in-depth knowledge and experience of this.

Jhon Tafbu Ritonga is a senior lecturer at the school of economics, North Sumatra University (USU), and Mara Untung is a graduate of that university.

Wednesday, October 5, 2005

Budget analysis of graft at election commission

The Jakarta Post, Jakarta | Tue, 05/10/2005 4:40 PM | Opinion

The Supreme Audit Agency has submitted its audit report on the General Elections Commission (KPU) to the House of Representatives (DPR). The report found strong indications of corruption involving Rp 90 billion (US$9,625,668) out of the total Rp 800 billion ($85,561,497) in its procurement budget.

The suspected abuse was about 11.28 percent of the procurement budget or 2.3 percent of the KPU's total operating budget of Rp 3.9 trillion.

From the macroeconomic point of view, the House disappointment with the auditors' findings raised questions. Why was the House unsatisfied with the discovery of such a massive abuse of state funds.

Was the House not institutionally involved in planning the KPU budget last year? Why did the House ignore the mark-up in the proposed budget that left a lot of room for corruption?

Analyzing the case by macroeconomic perspectives can be done based on the 1945 Constitution and Law No. 17/2003 on state finance, which stipulate, among other things, that the state budget is compiled and proposed by the government to the House for approval. Consequently, the state budget is an agreement between the government and the House.

Based on Law No. 17/2003, the state budget (including the allocation for KPU) is a part of the mechanism for accountability and management and economic policy. As an instrument of the economic policy, the budget functions to produce economic growth, stability and income equity.

One of the yardsticks used to assess the state budget, as stipulated in the law on state finances, is the implementation of Performance Based Budgeting, meaning output and outcome oriented budget plan.

For example, in the planning of the funds allocated for the KPU, the output was the ballots, envelopes, ballot boxes, voting booths, ink and information technology that were needed to hold the 2004 general elections. The outcome would be the 14,000 legislative members, 128 members of the Regional Representatives Council and the President and Vice President for 2004-2009 term of office.

The 2004 general elections consisted of the April 5 legislative race, the July 5 first round of the presidential election, and the Sept. 20, second round. for the implementation of the elections, the KPU provided 585,000 polling stations and distributed some 60,000 tons of election materials (see table) all over the country. The organization of the elections involved some five million people. Even though the election system was completely new and the KPU had very little experience before in holding elections, the international community praised the elections as fairly transparent and peaceful.

From a macroeconomic perspective, the alleged corruption case involving the KPU can be analyzed against a performance-based budgeting system. It is a fact that both the output and outcome have been produced. The materials that were procured fully supported and facilitated the holding of the elections. Thus, from a macroeconomic point of view, the KPU performance was good.

However, the alleged abuses of funding should apparently be followed up according to laws.

Most of The KPU members -- well-known academic figures -- had been hailed for their idealism and good integrity. However, it is worth noting that the machinery of the KPU secretariat was operated by government bureaucrats. And it had been said that some of the public officials assigned to the KPU were not the best ones -- and thus vulnerable to corruption. Consequently, there was a possibility that the KPU officials had been influenced by the corrupt working environment.

The legal process will provide the truth.

Another macroeconomic dimension is evaluating the efficiency of the 2004 election budget. With a measurable scope of activities, the executive and legislative bodies should be able to account for the budget needed for the procurement of ballot materials and equipment for 150 million voters.

Since the KPU had little previous experience and the areas of distribution were spread out across the world's largest archipelago, the task was indeed quite challenging. And since not all areas had adequate public transportation, the KPU had to provide one billion ballot sheets. If the price of each ballot was Rp 260, the cost of ballot procurement would be Rp 260 billion, larger than the allocated budget of Rp 189.2 billion.

The question is was the Rp 260 ballot price fair? Did the procurement of information technology (8,000 PCs plus its system) and infrastructure truly cost Rp 225.6 billion?

If it is proven that the funds allocated for the elections were excessive, the blame should be laid upon those who approved the election budget -- both the executive and legislative branches. The executive and legislative bodies should have assessed the budget proposal much more carefully instead of approving a budget that was too big and provided broad leeway for price markups and opportunities for corruption.

Law No. 17/2003 on state finances requires that the KPU budget provide enough for a successful election. Meanwhile, the outcome was the newly elected legislative members and President and Vice President. Consequently, based on the principles of performance-based budgeting, the KPU budget actually was successful in terms of the outcome of the 2004 General Elections.

As an instrument of economic policy, the KPUD (provincial branches) budget also functioned in supporting economic growth, stability and income equity, because the budget had been spent across the whole country.

Economists assumed that the 2004 general elections was one of the factors supporting the economic growth and the election budget also promoted equitable distribution of income because it directly provided temporary jobs for around five million people and indirectly created jobs for millions of others who were engaged in the production of balloting papers and equipment.

However, the law on state finances also stipulates that the state budget must be strictly managed. Based on that, there are several things that do still require our attention.

Concerning the aspects of a strictly managed budget, implementing laws and regulations, we should consider that the 2004 general Election was a monumental task.

As it concerns the economics of effective management of the state budget, it should have been the responsibility of the government and the House to design and formulate the budget for the election in such a way that minimized opportunities for corruption.

If the KPU members or staff members abused the funds and all election materials for the elections had still been adequate, the executive and legislative branches of the government must also be morally and legally responsible.

Concerning the effectiveness of the budget, it was quite obvious that, set against the objective of fair, clean and smooth elections, the budget implementation had indeed been quite effective. The elections were lauded even by the international community as fair and clean.

With regard to accountability by considering justice and acceptability, it was possible that there had been violations of procedures and regulations. However, one also must remember that the KPU encountered very tight deadlines and was required to implement a completely new election system.

Moreover, the procedures of cash flow analysis and accountability reports were rather complex, and most regional KPU offices were not familiar with accounting systems.

The writer is an economist living in Medan. He is also as lecturer in the Economic Development department at North Sumatra University. He can be reached at jtritonga@yahoo.com.


Friday, April 29, 2005

Somasi Ditjen Pajak dan Mulyana W Kusumah

http://www.pajakonline.com/index.php

JIKA dicermati secara substantif ada benang merah yang bisa ditarik dalam kasus somasi Ditjen Pajak terhadap Kwik Kian Gie dan Faisal H Basri dengan kasus penangkapan anggota Komisi Pemilihan Umum Mulyana W Kusumah.

DITJEN Pajak mensomasi Kwik karena tulisannya yang menyebut bahwa PPN Nonmigas hilang Rp 180 triliun. Sementara somasi pada Faisal ialah karena dia menyatakan bahwa penerimaan pajak menguap Rp 40 triliun (Kompas, 8/4).

Menanggapi somasi itu, Kwik akhirnya membuat iklan pernyataan maaf kepada Ditjen Pajak di Harian Kompas (4/4/2005) dengan ukuran 5 kolom x 270 mm. Hitung-hitung biaya iklan itu puluhan juta rupiah.

Di Harian Bisnis Indonesia (11/4) Kwik menyatakan dirinya memilih membuat permintaan maaf secara terbuka karena khawatir akan diinterogasi berjam-jam, mungkin berhari-hari, dan harus menyewa advokat dengan tarif yang mahal, mondar-mandir ke kantor polisi dan pengadilan dan sebagainya.

Sementara itu, kasus penangkapan Mulyana terkesan berawal dari kekhawatiran yang sama karena adanya temuan yang kurang beres di KPU. Dalam keterangan persnya Mulyana menyatakan bahwa penangkapan atas dirinya sebagai "pemerasan berakhir jebakan" (Kompas, 16/4).

Menurut Mulyana, kasusnya berawal dari adanya temuan audit investigasi oleh BPK. Seperti yang diungkapkan oleh Media Indonesia (16/4), Mulyana menelepon Khairiansyah pada awal Maret 2005 guna mengajak bertemu. Tujuannya ialah agar audit investigatif BPK tidak berdampak negatif terhadap Panitia Pengadaan Kotak Suara.

Singkat ceritanya, pada 3 April 2005 Mulyana bertemu dengan Khairiansyah dan menyerahkan uang Rp 150 juta. Pada 8 April 2005 dia bertemu lagi untuk menyerahkan uang Rp 150 juta dengan harapan supaya laporan temuan investigatif BPK dikoreksi sehingga proporsional dan tidak mengandung tuduhan terhadap KPU. Pada hari itulah Mulyana ditangkap tangan oleh KPK.

Berbeda dengan Kwik, Faisal secara tegas menolak minta maaf dan bahkan menantang Ditjen Pajak debat publik. Faisal balik meminta supaya Ditjen Pajak membuktikan bahwa di instansinya tak ada korupsi. Faisal berani mengatakan bahwa dia punya bukti bahwa korupsi terjadi di Ditjen Pajak seperti pejabat pajak yang punya kekayaan sangat banyak.

Tampaknya sikap tegas Faisal yang bergeming akan menyadarkan Ditjen Pajak juga bahwa analisis Faisal yang menyimpulkan bahwa dana pajak menguap Rp 40 triliun tak bisa dibawa ke meja hijau. Sejumlah ekonom yang mengerti alat dan metode analisis di Ditjen Pajak tentulah mengerti bahwa Faisal punya bukti ilmiah atas kesimpulannya itu.

Pembuktian mikro

Dari ketiga kasus tadi dapat dilihat bahwa Kwik memasang iklan permohonan maaf karena khawatir akan menjadi repot dan keluar duit lebih banyak hanya karena mempertahankan hasil analisisnya sebagai seorang ekonom. Sementara Faisal mungkin sangat paham bahwa bila Ditjen Pajak membawa kasusnya pengadilan tak akan berbuntut pada tuntutan pidana.

Oleh karena itu, Faisal berani menantang Ditjen Pajak. Sedangkan Mulyana, sesuai pengakuannnya, bisa ditafsirkan sebagai upaya menghindari tuntutan korupsi karena adanya temuan investigatif BPK di KPU. Mungkin saja secara material Mulyana tak merasa melakukan korupsi, misalnya memotong uang pembayaran pengadaan kotak suara atau sama sekali tak pernah menerima uang sogok dari pemborong.

Oleh karena itu, dia berani bersumpah bahwa perhitungan harga kotak suara dilakukan secara profesional, tak ada rekayasa atau karena komitmen pada perusahaan tertentu (Media Indonesia, 16/4). Berdasarkan doktrin "hukum praduga tak bersalah" (presentetion of innocent), ada kemungkinan Mulyana memilih jalan "damai" dengan cara meminta bantuan Kahiriansyah "memperbaiki" laporan temuan investigatif BPK. Upaya perbaikan laporan ditempuh oleh Mulyana mungkin karena sadar bahwa pihaknya tidak memiliki bukti akuntansi yang mendukung sumpahnya tersebut.

Sayangnya untuk menghindari urusan panjang yang didasarkan pada dugaan korupsi, Mulyana memilih cara-cara yang salah, yakni menyuap Rp 150 juta pada 3 April 2005 dan dilanjutkan dengan Rp 150 juta pada 8 April 2005. Perjalanan sosok Mulyana mungkin akan menjadi lebih menarik dan simpati jika dirinya menolak "berdamai" dan siap diseret kepengadilan bahwa di KPU tak ada korupsi, sedangkan temuan investigatif itu ialah akibat peraturan dan prosedur yang membuat korupsi terjadi secara sistemik di negara ini.

Kelebihan Kwik ialah pada keputusannya meminta maaf secara terbuka kepada Ditjen Pajak. Kwik paham bahwa dirinya tak mungkin menyediakan bukti yang diminta oleh Ditjen Pajak. Kwik juga sadar bahwa dengan sistem hukum positif yang ada sekarang pembuktian secara akademik mungkin saja tak bisa digunakan sebagai bukti hukum.

Akan lain kejadiannya sekiranya sistem pengadilan di Indonesia menggunakan sejumlah orang juri yang memberikan penilaian sebelum hakim membuat keputusan. Atas dasar pertimbangan lemahnya bukti- bukti hukum itulah mungkin yang membuat Kwik seperti ketakutan pada somasi Ditjen Pajak, dan minta maaf dengan biaya besar.

Sebagai ilustrasi, seorang kepala bagian pengadaan barang di satu instansi mengunjungi acara penjualan komputer dengan harga Rp 15 juta per unit. Kalau dibeli dengan prosedur yang baku, biaya pengadaan komputer bisa mencapai Rp 25 juta per unit. Si pejabat tak akan membeli langsung di arena penjualan komputer, tetapi dia ke kantor dulu dan membentuk panitia pembelian barang, membuat penawaran dan seterusnya.

Jika si pejabat membelinya langsung sehingga harga cuma Rp 15 juta per unit, dia bisa dianggap melakukan penyelewengan karena tak memenuhi syarat dan prosedur pengadaan barang. Sebagai seorang pejabat yang baik, dia akan membeli barang dengan prosedur baku meskipun harganya lebih mahal Rp 10 juta per unit.

Logika ekonomi akan membenarkan bahwa tak tertutup kemungkinan si pejabat pengadaan barang tersebut akan lebih menyukai harga mahal karena lebih terjamin dari tuduhan korupsi dan bahkan menerima komisi yang besar. Selaku mantan petinggi negara, Kwik mungkin sangat mengerti bahwa kalau si pejabat membeli komputer dengan harga Rp 15 juta, si pejabat pengadaan barang itu bisa dituduh korupsi dan tak mendapat komisi sepeser pun. Sedangkan kalau dibeli dengan harga Rp 25 juta, kepala pengadaan barang itu pasti aman dari tuduhan karena prosedur dipenuhi dan bukti akuntansinya lengkap.

Latar belakang kesarjanaan Kwik (ekonomi perusahaan) pantas membuat dirinya menyadari betapa lemah bukti yang digunakannya ketika menyebut kebocoran pajak Rp 180 triliun. Sebagai seorang pejuang yang selama ini dikenal cukup pemberani, keputusan Kwik meminta maaf karena tak akan bisa membuktikan analisisnya secara administratif tentu saja sangat paradoks dengan pendirian Faisal.

Sebagai seorang ekonom yang berlatar belakang ekonomi makro (pernah menjadi Ketua Jurusan Ilmu Ekonomi dan Studi Pembangunan FE UI), Faisal pasti sangat yakin pada metode dan hasil analisisnya yang sampai pada kesimpulan pajak menguap Rp 40 triliun.

Sosok Kwik selama ini dikenal jujur, cerdas, intelek, tokoh partai besar (PDI-P) dan pernah jadi menteri ternyata kurang nyali menegakkan kebenaran dan keadilan. Tapi keputusan Kwik itu juga bisa ditafsirkan sebagai langkah yang cerdas secara ekonomi. Sebagai mantan menteri Kwik tentu sangat paham lika-liku penegakan hukum di negeri ini.

Secara ekonomi pun biaya meminta maaf lebih kecil daripada membayar pengacara dan bolak-balik ke pengadilan. Apalagi dengan iklan permintaan maaf itu, Kwik toh bisa menggunakan iklan itu untuk menunjukkan bahwa betul-betul ada kebocoran pajak. Iklan permintaan maafnya tidak akan membuat opini publik berubah bahwa di Ditjen Pajak tak ada korupsi. Oleh karena itu Dirjen pajak jangan pula menggangap instansinya sudah bebas korupsi.

Logika kebenaran dalam perspektif ekonomi sebenarnya berada di pihak Kwik. Di tengah masyarakat yang sangat permisif pada korupsi dengan ketentuan-ketentuan bikrokrasi yang sangat membuka peluang korupsi secara sistematik, petugas pajak dan wajib pajak sangat mungkin melakukan sogok menyogok.

Misalnya, seorang wajib pajak menghitung pajak yang harus dibayarnya Rp 100 juta. Setelah bernegosiasi dengan petugas, ada peluang bisa membayar Rp 50 juta asalkan si wajib pajak mau membayar fee konsultasi Rp 30 juta. Secara ekonomi si wajib pajak akan memilih membayar Rp 70 juta daripada membayar Rp 100 juta. Tapi, apa boleh buat, kalau diminta bukti mikro (akuntansi) pastilah Kwik menyerah.

Pembuktian makro

Adapun Faisal yang berdarah batak dan percaya diri ialah karena metode dan hasil analisis makro memang dapat membuktikan secara ilmiah bahwa terjadi korupsi. Bukan secara yuridis. Kebenaran yuridis dan kebenaran ilmiah dalam perspektif ekonomi mungkin saja tidak sama.

Seorang ekonom, seperti Faisal, memang harus percaya pada model dan metode analisisnya. Oleh karena itu, jika secara ilmiah ekonom berkesimpulan terjadi kebocoran dan pemborosan, sang ekonom harus percaya pada hasil analisisnya.

Tampaknya Kwik bertindak seperti politisi atau pedagang. Sementara Faisal bertindak sebagai seorang akademisi. Kwik memang pengusaha dan pengamat yang menjadi politisi dan Faisal ialah dosen dan pengamat yang pernah mundur dari panggung politik.

Pada masa Orde Baru, begawan ekonomi Indonesia Prof. Dr Sumitro Djojohadikusumo pernah membuat heboh beberapa orang menteri. Waktu itu Sumitro berbicara di satu acara ISEI, dia menyatakan anggaran pembangunan mengalami kebocoran dan pemborosan (waste and loss) sebesar 30 persen.

Hasil analisisnya itu kemudian membuat beberapa orang menteri heboh membantah seraya meminta bukti otentik. Sudah tentu Sumitro tak punya bukti administratif dan apalagi bisa digunakan sebagai bukti hukum. Kalangan ekonom hanya bisa geleng kepala atas sikap menteri-menteri yang seperti kebakaran jenggot itu.

Sebagai seorang ekonom, Sumitro kemudian membuat tulisan yang menjelaskan metode analisis yang digunakannya bahwa terjadi kebocoran dan pemborosan hingga 30 persen. Analisisnya menggunakan ICOR (Incremental Capital Out put Ratio), suatu parameter yang menunjukkan besarnya pertambahan modal untuk menambah out put. Berdasarkan angka ICOR Indonesia sekitar 5,0 dan ICOR negara tetangga hanya 3,5, Sumitro menyimpulkan bahwa di Indonesia terjadi kebocoran dan pemborosan sebesar 30 persen dari 5,0 yakni 1,5 lebih besar dari ICOR tetangga.

Contoh sederhana yang lain ialah seorang pemilik uang yang memberi modal kerja kepada mitra bisnisnya Rp 10 juta untuk menjalankan bisnis. Dengan modal itu mereka mendapatkan laba kotor Rp 1 juta per bulan. Suatu hari pemodal menambah modal kerja Rp 5 juta.

Logika ekonominya pertambahan modal kerja harus menambah laba kotor minimal menjadi Rp 1,5 juta per bulan. Manakala laba kotor hanya Rp 1,2 juta berarti ada kebocoran dan pemborosan sebesar Rp 0,3 juta atau 20 persen dari potensi laba minimal. Si pemilik modal tak membutuhkan bukti akuntansi untuk sampai pada kesimpulan bahwa terjadi kebocoran dalam bisnis mereka sebesar 20 persen.

Dalam perspektif ekonomi, indikator atau parameter ekonomi merupakan informasi dalam membuat analisis apakah ekonomi berjalan efisien atau boros. Kalau tak efisien berarti ada kebocoran dan pemborosan, baik karena manajemen maupun korupsi. Seperti analisis yang digunakan Kwik, setelah bernegosiasi dengan petugas seorang wajib pajak hanya membayar separuh dari kewajibannya.

Oleh karena itu, jika total penerimaan pajak Rp 180 triliun, maka yang hilang adalah Rp 180 triliun. Kalau diminta bukti akuntansi (mikro) yang bisa digunakan dalam proses peradilan, Kwik pasti tak punya karena hasil perhitungannya itu ialah analisis ekonomi.

Penutup

Keputusan Kwik yang meminta maaf dan Faisal yang bertahan pada pendapatnya mengingatkan kita pada kisah Socrates (329SM-399SM) yang kena hukum mati karena mempertahankan pendapatnya. Ataupun kisah hidup Aristoteles (384 SM-322 SM) yang akhirnya meninggal dipembuangan karena didakwa oleh penguasa melakukan tindakan yang kurang ajar terhadap Dewa.

Kisah hidup Galileo (1564- 1642) yang menemukan teori bahwa planet Bumi mengitari Matahari juga ada benang merahnya. Karena pendapatanya dianggap salah, maka Galileo dipaksa mencabut teorinya dan karena bertahan pada kebenaran yang diyakininya, Galileo dijatuhi hukuman mati.

Sayang sekali, Mulyana yang selama ini dikenal sebagai sosok yang idealis dan pemberani, sepertinya lupa sehingga dia memilih cara lain yang tak ada benang merahnya dengan sejarah Socrates, Aristoteles, dan Galileo. Selamat kepada Kwik, dan salut kepada Faisal. Horas, Lae!

Jhon Tafbu Ritonga Ekonom dan Dosen Pascasarjana Ekonomi Universitas Sumatera Utara

* Tulisan ini merupakan pendapat pribadi

KCM / Jum'at, 29 April 2005

Wednesday, April 20, 2005

Providing evidence of corruption in economic perspective

The Jakarta Post, Jakarta | Wed, 04/20/2005 2:58 PM | Opinion

Two prominent economists who are well-known for their critical analysis of economic affairs and corruption were legally warned by Taxation Directorate of the State Department of Finance. In the warnings, the directorate challenged the two economists to prove the corruption at the tax office, which they had alleged.

The first case was related to Kwik Kian Gie, who wrote in a nationally circulated newspaper, that a total of Rp 180 trillion (US$19 billion) in value-added tax had been lost. Similarly, Faisal H. Basri said Rp 40 trillion ($4.3 billion) in tax revenues had been lost.

The legal threats against Kwik and Faisal could influence the success of the eradication of corruption in this country, and may even threaten democracy and academic freedom.

It was unfortunate that Kwik had succumbed to the tax directorate's demand and apologized to them via a very large advertisement in Kompas newspaper earlier this month.

Based on the size of the advertisement, Kwik likely paid the equivalent of thousands of dollars for that advertisement, much greater than the small fee Kwik probably received for his article in the same newspaper.

Kwik said he placed the advertisement/apology only because that was much cheaper and simpler than a litigation process that could cost him much more in terms of money and time.

In contrast to Kwik, Faisal has stood firm and refuses to apologize. He has now challenged the tax office to a public debate, demanding that the tax office prove that it was free of corruption. He also asserted that the burden of proof should fall on tax officials by proving that their wealth had been acquired through legal means.

If the cases were brought to court, Kwik and Faisal would surely lose because academic evidence cannot be accepted as legal evidence.

As an experienced economist and former chief of the Department of Economics and Development Study of the University of Indonesia, Faisal must have been quite sure about his method and analysis that brought him to a conclusion that Rp 40 trillion (US$4.3 billion) in potential tax receipts had been embezzled.

Kwik's decision to apologize is a small portrait of how difficult it is to eradicate corruption in this country. A well-known, honest, clever and intelligent man, Kwik is also a key figure in the second largest political party (PDI-P) as well as a former minister. That he did not have the courage to stand up against the tax directorate is telling indeed and a real setback for the anti-graft camp.

However, Kwik's decision can also be understood as a fairly clever move economically. As a former minister, Kwik would surely understand the process and system of law in this country. Economically, the price he paid for publishing the request for forgiveness was much smaller than the price he would have had to pay for lawyers if the case went to trial.

Meanwhile, Faisal feels sure that his method and analysis can academically, though not legally, prove that corruption has taken place. Legal evidence and the truth of science might be two different things.

An economist such as Faisal must believe in his model and analysis, while Kwik seems to be acting more like a politician. Kwik and Faisal remind me of Socrates (329BC-399BC) who had to face the death penalty for his scientific opinion, or Aristotle (384 BC-322 BC) who died in exile, and Galileo (1564-1642) who was forced to withdraw his theory that the earth revolves round the sun.

During the New Order era, the guru of Indonesian economists Sumitro Djojohadikusumo also criticized the government for wasting 30 percent of its development budget.

Speaking at a forum of the Indonesian Economists Association Sumitro said the state budget wasted 30 percent of taxpayers' money through inefficiency and corruption. Sumitro did not have concrete administrative and legal evidence.

The then Cabinet ministers under the Soeharto administration, who were attacked by Sumitro's observation, did not serve a legal warning on Sumitro, as the tax officials did against Kwik and Faisal.

However, as an economist, Sumitro then wrote his method of analysis explaining the 30 percent waste and loss. His analysis used the ICOR method (Incremental Capital Output Ratio), a parameter that shows how much investment needs to be made to generate one unit of output.

Sumitro described then that Indonesia had an ICOR 5, while its neighboring countries had only 3.5. Using the ICOR method, Sumitro concluded that Indonesia needed to invest much more than its neighboring countries to generate one unit of output, meaning that there had been losses amounting to 1.5 percentage points, or 30 percent of 5.

This is the way economic science provides evidence of losses, both because of bad management and corruption.

In the perspective of economics, economic indicators, or parameters, are information in analyzing whether the economy runs efficiently or inefficiently. If it runs inefficiently, it means that there is a waste and loss because of bad management or corruption, just like Kwik's analysis.

If a taxpayer, through unscrupulous negotiations with tax officials, is able to pay only half his or her actual tax obligation, then about 50 percent of potential tax receipts are lost.

Consequently, if the total tax revenue is Rp 180 trillion ($19 billion), it means the total potential waste and loss will be another Rp 180 trillion (US $19 billion). If the Taxation Directorate challenges him to provide legal evidence or supporting documents, which legally and administratively validate his conclusions in court, Kwik must have been unable to do so because what he presented is an analysis of economic science.

Another example is Ari Kuncoro's research findings carried by the Bulletin of Indonesian Economic Studies (BIES), Volume 40 No. 3, December 2004). The research shows that nearly 74 percent of 1,808 respondents confessed that they felt compelled to bribe tax officials and the bribe money represented an average of 10.3 percent of their production costs.

If the government challenges Ari to provide evidence by mentioning who bribes whom and who is being bribed, how much money is involved on each transaction, when and where, Ari must be unable to do so. However, the conclusion that corruption does exist is scientifically clear and convincing. The logic of economic science proves that.

At the end of the day, the tax directorate's legal warnings against Kwik and Faisal are a threat to democracy and the freedom of scientists.

The experiences of Kwik and Faisal shows that corruption tends to be more and more difficult to eradicate in this country.

Actually, in the perspective of economic science, providing the evidence of corruption does not need the legal evidence such as who and where, or even a receipt. Government, in this case the Taxation Department, should not be making efforts to restrict the freedom of scientists by hiding behind the law.

The scientific world has its approaches, tools and methods to analyze and provide evidence of corruption and the management of the country's economy. But with the tax office's legal threats, economists will now be wary of legal action, which will obviously restrict most of them.

The writer is economic observer life in Medan. He is also a lecturer in the Economics Department at North Sumatra University. He can be reached at jtritonga@yahoo.com.