Probe into central bank shows 'chronic' corruption in Indonesia, say analysts

Alleged misuse of social aid funds to benefit MPs is third case involving graft at the institution

- Wahyudi Soeriaatmadja

Corruption in Indonesia has become "chronic and sophisticated", say analysts, as the nation's anti-graft agency, KPK, intensifies a probe into the central bank for allegedly misusing its social aid funds to benefit certain MPs.

The case centres on allegedly illegal payments by Bank Indonesia (BI) to MPs via third-party non-profit foundations in the name of social aid, an act that analysts see as currying favour with influential lawmakers.

The central bank has defended itself, saying it operated within the law and that institutions are allowed to hand out social aid via foundations.

KPK told reporters on Dec 17 that it had begun the investigation several months ago. Mr Asep Guntur Rahayu, KPK's director of investigation, said on Jan 2 that the agency is looking into the possibility that the foundations receiving funds from BI are not independent or that they are affiliated with certain MPs.

"An MP might have recommended a certain foundation (to the central bank), or the MP himself runs the foundation that he recommended," he said.