Mental revolution of Indonesia bureaucracy still a work-in-progress

WHEN Indonesia's president, Joko Widodo, inaugurated the country's first real estate investment trust to be backed by state owned assets, he was in no mood for niceties. The Reit, based on income from the Jakarta-to-Bogor Jagorawi toll road - the country's oldest and busiest - ought to have been a no-brainer to set up and sell.

But nine months passed before the Reit got off the ground, an unconscionably long time for a country desperate for infrastructure investment. So, when Jokowi, as he is popularly known, summoned Desi Arryani, the head of the state owned enterprise (SOE) that operates the toll road, Jasa Marga, to account for her tardiness, he was in for a shock. After Ms Desi stepped onto the dais at the ceremony at the Indonesian Stock Exchange in Jakarta late last month, she hesitated before explaining to her boss that the fault was not hers but with the Ministry of Finance. The ministry's directorate general of taxation held up the Reit on concerns over whether the securities ought to be charged a value added tax.

Nearly three years after sweeping to power on calls for a mental revolution that would usher in a culture of accountability and meritocracy among his countrymen, much of Mr Joko's bureaucracy remains mired in status quo. Petty turf wars and dysfunction, even treachery, stymie the overseas investment that World Bank has said needs to top 9 per cent a year if Mr Joko has any hope of starting to meaningfully rebuild the country's woeful infrastructure before the end of the decade.