Wed, 04 Jun 2008
Achmad Zen Umar Purba, Jakarta

This is certainly not a joke -- unless data provided by the World Bank (WB) in Doing Business 2008 is incorrect.

In the book, the WB ranked Indonesia 123 of 178 countries in terms of doing business.

We are far behind Singapore, which ranked number 1. But this isn't news. Or that we are left behind Thailand, which ranked 15; what else we can do? Or even Malaysia, which ranked number 24, never mind!

But knowing that Indonesia falls to less-acknowledged countries Mauritius (27), Fiji (36), Armenia (39), Samoa (61) and Nicaragua (93) as well as Swaziland (95), who would not feel humiliated?

Perhaps we could say that those countries like Singapore who rank higher than Indonesia might have less complicated day-to-day issues and smaller populations. Such an excuse, however, is no longer valid, because China, which holds the biggest population in the world, was able to hold the position of number 83. Is this our fate?

For Indonesia, as for other developing countries, currently the need of foreign direct investment (FDI) is imperative. Regardless of various criticisms, such foreign money could liberate us from the inevitable constraints of feeding ourselves. That is also one reason, among others, the government decided to amend the 1967 law on FDI with the 2007 law on investment, which created various incentives for investment -- one of which was annulled recently by the Constitutional Court.

Frankly speaking, there is one prevailing facility that seems to be less-acknowledged, namely the series of legislative actions on the protection of intellectual property. Those actions are very significant to attracting FDI. Various equipment and processes of production from foreign investors could be protected by means of patents.

As for products, a trademark system would help differentiate one product from the others. Before investing abroad one of the first questions to be asked by potential investors is regarding the laws and regulations of intellectual property rights (IPR), including their practice and implementation.

However, there is still a controversy. Industrialized or developed countries want IPR legislation to conform to minimum standards provided by Trade-Related Aspects of Intellectual Property Rights (TRIPs), an addendum to the WTO Agreement.

They argue that all countries, including developing ones, are obligated to comply. Developing countries hold a different view. Some developing countries refuse to incorporate TRIP provisions in their entirety since it would escalate development costs in their countries. They say compliance to TRIPs would inevitably be a burden in terms of cost, as the cost would just be a rent transfer to intellectual property owners for the rights that they own monopolistically.

Notwithstanding the above, there are also developing countries with realistic views. They say that since TRIPs are an addendum to the WTO Agreement, should one have ratified the WTO Agreement, one has to implement TRIPs as well. Indonesia figures among the latter group of developing countries as it has enacted laws regarding IPR based on TRIPs. It is wise to emphasize this aspect of our campaign to attract FDI.

Having a realistic attitude on this issue does not necessarily mean that Indonesia is only a patron to such international agreements. Indonesia is actively participating in various endeavors to reform TRIPs.

The biggest criticism of TRIPs is they do not accommodate the interests of developing countries, which have the economic potential of traditional knowledge and cultural expressions as well as genetic resources. Furthermore, the potential is often illegally exploited by foreign companies. Such biopiracy is condemned even by some Western experts and writers.

Various international endeavors and discussions have been made to reach multilateral provisions which essentially would serve as a revised TRIPs. One of the means is provided by the World International Property Organization, a United Nations body which deals with IPR, whether on its command-base at Geneva, or elsewhere.

A seminar held in Bali in April discussed, among other things, matters relating to the strategic use of intellectual property for traditional knowledge and genetic resources and to explore their economic potential. On a national level, Indonesia is drafting a bill of law regarding the protection of traditional knowledge and expression of traditional cultures. This is a good sign, since in the past, like any other developing country, our attitude towards the issue was reactionary.

We should use IPR to attract FDI and simultaneously participate in the perfection of TRIPs.

The writer is former director general of intellectual property rights at the Department of Justice, now an advocate and the founding member of Ali Budiardjo, Nugroho, Reksodiputro Foundation.



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