Porn on BlackBerry Overshadows Nastier Obscenity: William Pesek

If you want to know what’s afoot in Indonesia, solid clues can be found in buoyant retail sales, property prices and stock valuations. For an even better indicator, just walk the streets of Jakarta.

Validation of Moody’s Investors Service’s move this week to upgrade Indonesia’s credit rating to the highest level since the 1997 Asian financial crisis can be found everywhere. Swanky eateries, luxury shopping malls and hyper-modern office towers are abuzz with signs that Southeast Asia’s biggest economy is going places.

Yet a less favorable metric also deserves consideration, and it involves pornography.

Research In Motion Ltd. says it will bow to public outrage and government requests to block porn websites on its BlackBerry browsers. That this issue is controversial in the nation with the largest Muslim population isn’t surprising. It’s disappointing, though, that Indonesia’s 240 million people aren’t equally upset about a bigger outrage: corruption.

This column isn’t a defense of porn. If a government wants to crack down on materials it deems objectionable, then so be it. My worry is about misplaced anger. Why aren’t Indonesia’s masses just as incensed by their leaders’ failure to raise tens of millions out of poverty at a significantly faster rate?

The problem is institutionalized graft. It relegates all too many to the ranks of those living on $2 a day by keeping the benefits of rapid growth concentrated among the elites, not the masses.

Attacking Corruption

As of 2007, 29 percent of Indonesians lived on $1.25 a day, according to the Asian Development Bank. President Susilo Bambang Yudhoyono aims to cut Indonesia’s poverty rate by about a third over the next four years. The nearly 7 percent growth he expects won’t be enough. He needs to attack corruption head on.

Indonesia is making progress. Just yesterday, the South Jakarta District Court found Gayus Tambunan, a former tax official, guilty of violating anti-corruption laws and sentenced him to seven years in prison. Also, the nation’s ranking in Transparency International’s corruption perception index improved to 110 last year from 111 in 2009 and 126 in 2008. Yet Indonesia still ranks behind Senegal and Kazakhstan and far behind India and Thailand.

Many hoped that after his re-election in 2009, Yudhoyono would clean things up more aggressively. Now is the time to do just that to win investment-grade status. Moody’s raised Indonesia’s foreign and local-currency bond rating to Ba1 from Ba2, one step below investment grade.

Investor Optimism

Improvements to Indonesia’s public-debt position are commendable and investors are noticing. On a four-nation trip last week -- to Thailand, Indonesia, Malaysia and Singapore -- Standard Chartered Plc economists polled more than 800 clients. Those in Jakarta were by far the most optimistic about 2011.

“Cutting corruption will certainly help to further enhance the country’s appeal in international business,” says Tai Hui, the bank’s Singapore-based head of Southeast Asian research.

So would addressing inflation. Indonesia’s central bank has kept its benchmark interest rate at a record low of 6.5 percent for more than a year, fanning overheating fears. It needs to hike rates without slamming growth.

Yet I worry we’re missing the plot here. It happened in 2006 when thousands took to the streets of Jakarta to denounce Playboy. Erwin Arnada is in jail for publishing an Indonesian version of Hugh Hefner’s magazine without nudity. The irony is that all too many cronies of former dictator Suharto won’t see the inside of a prison cell for the untold wealth they bilked from their people. Isn’t massive public graft an outrage at least as worthy of anger as Playboy?

Indonesia Beckons

Indonesia’s appeal can be seen in entertainment trends. Artists like Michael Buble, 311, Stone Temple Pilots, Ne-Yo and Janet Jackson are all flocking to Jakarta to cash in on rising consumption. Its market is a force to be reckoned with.

And credit where it’s due. The fourth-most populous nation has performed remarkably since the dark days of the 1990s. Its vast natural resources and enviable demographics -- about 27 percent of the population is under 15 -- are a big plus at a time when developing nations are outperforming richer ones. The government has worked to reduce the risk of terrorist attacks.

Corruption, however, stands between Indonesians and greater affluence, and deserves more attention.

Indonesia isn’t alone. Take Malaysia’s reservations about Beyonce’s bellybutton. In 2009, the American singer cancelled a concert there as activists complained about her provocative stage clothes and dance moves. If only Malaysians were equally aggrieved by public corruption or how the ruling United Malays National Organisation cares more about clinging to power than making the nation more competitive.

Marcos Legacy

The Philippines often sees greater outrage over author Dan Brown’s “Da Vinci Code” series than family members of late President Ferdinand Marcos winning political office. His wife Imelda now sits in the House of Representatives. It’s a wonder why fictional books and movies often raise blood pressures more.

Objecting to porn or other forms of entertainment is indeed the purview of governments. I just wish the obscenity of public officials lining their pockets would evoke similar passions.

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net

To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net

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