by anon1984

Created on: April 23, 2008   Last Updated: February 02, 2010

Corruption is one of the hot issues faced by developing and under developing countries. But, it does not mean developed countries have no issues in corruption, it still exists but different in the scale, type, and form. Without a doubt, corruption in developing and under developing countries have been rooted and found in the whole system, even it becomes a culture.

It has been known that developing and under developed countries are the potential places for business purposes. I will use my country, Indonesia, as an example. For many reasons (for example cheap labor costs, cutting off distribution lines, and availabilities of raw materials) Indonesia is one of potential countries for business. Therefore, many foreign companies grab this opportunity and invest in my country. But, bureaucracy and corruption had been highlighted previously. Both were tightly bond and power was used to shorten the bureaucracy processes. And the power was corruption, collusion and nepotism.

Therefore, business activities had to deal with the corruptions activities if the business people wanted their aims being achieved. Bribery was the most common corruption form. It could be founded from beginning of business processes such setting up a company or registering a company. For example a foreign company wanted to do business in Indonesia, therefore it had to declare and register at the Ministry of Law and Justice, Trading bureau, and other related departments. To shorten the processing time, the company should give some money or bribery for smoothing the process and the company did not need to wait for 2 or 3 months before being approved. Once the licence had been approved and the company able to start their business activities, other fees should be paid. For instance the company should pay for security fees either to local people or local government and many other types of fees that should be paid. Finally, the production costs increased because these additional costs and the company should sell the products slightly higher than their competitors. Thus, the company did not able to compete and win from their competitors.

By understanding those problems, the solutions can be derived. One of the most probable causes is the company belongs to foreigners. Here, people are still thinking that foreigners are wealthy and they also have less knowledge about the local condition. So, foreigners can be seen as an additional income for some people. So, there are some tips that are useful:

Foreign company should understand about the local culture Build relationship and network with local people Hire local people who able to negotiate with their own people Try to avoid doing any activities by yourself and asking your local employee's helps. Hire local people who understand law and government because mostly the corrupter scares with these people Confidence is the most important thing when you face with any problems. Try to hide your anxious and curiosity, once the corrupter knows that you are afraid then you will face with a big trouble Try to avoid confrontation, do diplomacy

Although Indonesian business climate have changed a lot in the last 5 years, but in my opinion these tips can be applied in other corrupt countries because understanding local habits and cultures will help you to do business in corrupt countries.

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