Anger … students in Makassar, South Sulawesi, stage a protest against government officials to mark International Anti-Corruption Day this month. Photo: AP
ONE of the most compelling characters in the new documentary The Act of Killing is an obese, cross-dressing gangster-cum-actor named Herman Koto.
When he's not performing in women's clothes, Koto is a frightening, if eccentric, standover man. At one stage he runs for political office and, as his campaign progresses, it dawns on him that being a local politician will radically expand his opportunity to extort money.
(Koto's campaign is unsuccessful, ironically, because he cannot afford the other prerequisite of Indonesian politics: bribing people to vote for him. The scene on the campaign trail where he hands his name card to a housewife who responds indignantly, ''Is that all you've got?'' is one of this film's many high points.)
Koto's big talk lays bare in detail how Indonesian politics works, and the corrupted millions available to its practitioners.
The preoccupations of the Australian public with Indonesia this year have remained largely about the traffic in asylum seekers and the tragic deaths that result; of travellers' mishaps in Bali and a diminishing interest, 10 years after the Bali bombing, in terrorism.
The Australian government is also concerned with aid and, as laid out in the Asian Century white paper, the economic and investment opportunities on offer from a tiger economy growing at 6 per cent a year.
But to realise success in business and to make sure aid money is spent well, Australia needs to know a lot more about the Kotos of this world. Corruption is endemic in Indonesia. It consumes the attention of the people, while leaving them seemingly powerless to respond.
In the past 12 months Indonesia's corruption eradication commission, the KPK, has unearthed, publicised and prosecuted eye-watering levels of graft that have delegitimised the whole political class and decimated the senior ranks of President Susilo Bambang Yudhoyono's Democrat Party. In early December the President lost his first minister, (and confidante) Andi Mallarangeng, to a scandal.
So strong is the whiff around the ruling party that it has so far failed to come up with a candidate for the July 2014 presidential election - the other subject obsessing Indonesians.
High-level scandals are one thing, but it's the smaller-scale payoffs - the bribes requested for almost every interaction with bureaucracy - that are so demoralising and expensive. Any bureaucrat with the power to say ''no'' has the power to increase their income by saying it.
The tax office is considered a ''wet area'' - it's seen as so corrupt that Indonesians resist paying tax - so there are only 8.5 million individual taxpayers registered out of 40 million workers. About 25 per cent of the anaemic revenue thus collected goes to subsidise fuel prices, keeping them the lowest in Asia. Services such as health and education are hugely underfunded.
The push since democracy arrived in Indonesia to devolve power to regional governments means there are more ticket-clippers than ever. It's also made it less certain that a proponent will get what he or she paid for.
''The resulting increased unpredictability has almost certainly soured the investment climate, and therefore exacted a significant economic cost,'' Australian National University Professor Hal Hill wrote earlier this year.
Graft lurks behind so many transactions in Indonesia that it is hard to tell where corruption ends and poor policy begins.
This year, mining companies suddenly found themselves subject to new regulations restricting their level of foreign ownership to 49 per cent. They will also be forced to smelt their ore in Indonesia.
A number of projects ran into problems with overlapping land-use licences. The Indonesian partner of Intrepid Mining made a new business alliance and shut the Australian company out of its own project; Australian businessman Dennis Connell is in prison in Jakarta after another business dispute involving an Indonesian partner.
All sorts of barriers were erected for importers, including quotas for Australian cattle exports, which were cut by nationalist politicians. This raised the beef price for poor Indonesians and devastated northern Australia's cattle industry.
Meanwhile, the environment plays second fiddle to the desire of rich political donors to increase the acreage of their oil palm plantations or mines. Some of this may ease after the 2014 election, when the need to pay for votes subsides for another few years, but in the meantime it's a corruption frenzy.
As Australia seeks to grow more enmeshed with its biggest neighbour, graft is something to which it will be forced to pay more attention.