ANALYSIS - Indonesia's police scandal is a chance for reform

By Sara Webb and Ed Davies

JAKARTA (Reuters) - A gripping scandal in Indonesia's notoriously corrupt law enforcement agencies could pave the way for reform of the police and attorney-general's office, speeding up the fight against graft and helping to attract investment.

Analysts and reformers said a plot to undermine the country's respected anti-corruption agency by framing two of its senior officials gives President Susilo Bambang Yudhoyono an excuse to make top-down, sweeping changes in the attorney-general's office and police.

On Thursday, Yudhoyono told a news conference his government would tackle legal reform as part of its 100-day programme by eradicating the "legal mafia" -- a reference to the network of corrupt judges, lawyers and law enforcers who pervert the country's legal system.

If Yudhoyono shakes up Indonesia's law enforcement institutions and appoints officials known for their integrity and commitment to reform, he would improve investor confidence in Southeast Asia's biggest economy.

The police, judiciary, and courts rank among the country's most corrupt institutions, and foreign firms frequently cite corruption and legal uncertainty as deterrents to investing in Indonesia, despite its abundant natural resources and large, relatively cheap labour pool.

Such is the reputation of the police that few ordinary Indonesians go to the police for help when they are in trouble.

If you are burgled and ask the police for help, they are likely to ask for an upfront "fee" to cover their expenses.

The issue of corruption in the police and attorney-general's office came to a head this week following a police investigation of the anti-corruption agency.