Are businesspeople ready for globalization?<\/p>\n
By Aleksius Jemadu<\/p>\n
BANDUNG (JP): As we approach the end of the 20th century,
\nmounting awareness and concern about our international
\ncompetitiveness seems to increase. We may never fully understand
\nthe meaning of the concept of international competitiveness. Yet,
\nas a matter of fact, this concept has become a familiar slogan of
\npoliticians and government leaders aspiring to rally support for
\ngreater national efforts in succeeding in the global economy.<\/p>\n
Questions about international competitiveness have become a
\nregular part of public discourse in Indonesian domestic and
\nforeign economic policies. Has Indonesia lost competitiveness to
\nother ASEAN countries, like Malaysia, Thailand, Singapore, the
\nPhilippines, and Vietnam? How much protection should the
\ngovernment give to local private corporations so that they may
\nnot lose their competitiveness with their foreign competitors? To
\nwhat extent are our political and economic structures suitable
\nfor global competition?<\/p>\n
A nation is said to have a high degree of competitiveness if
\n\"it can, under free and fair market conditions, produce goods and
\nservices that meet the tests of international markets while
\nsimultaneously expanding the real incomes of its citizens\" (David
\nP. Rapkin and Jonathan R. Strand, 1996).<\/p>\n
This definition consists of three variables: conditions in a
\ncountry's export markets, the ability to produce and sell goods
\nand services in those markets, and the real incomes, or standard
\nof living, of its citizens.<\/p>\n
This article attempts to analyze the suitability of our
\npolitical and economic structures for a free trade era and
\neconomic globalization. It should be noted that economic
\nliberalization at a global level requires progressive
\ntransformation from a traditional organization of economic life
\ninto a modern one. This transformation involves the creation of a
\nprogressive sector in the economy which is characterized by a
\nhigh level of productive efficiency and economic integration.<\/p>\n
There are three forces at work in the process of making the
\nIndonesian economy more competitive in the international market.
\nThe three forces are economic, organizational or institutional,
\nand technological. The economic factor includes the basic
\ncharacteristics of our macroeconomic policies. As far as
\ninternational trade is concerned, the bottom line of our economic
\npolicies has been the expansion of our non-oil exports. So far
\ngovernment's priority has been to create a conducive atmosphere
\nfor the expansion of manufacturing industries and to make them
\nhighly competitive at a regional as well as global level. The
\ngovernment has spent a considerable amount of investment to
\nadvance communications and transportation in order to reduce
\ntransactional costs.<\/p>\n
There is, however, a concern about the fact that the
\nIndonesian economy has increasingly become high-cost. We have to
\nget rid of a rent-seeking economy if we want to increase the
\nefficiency of our economy. It is often said that our national
\nentrepreneurs are overburdened with illegal payments to
\ngovernment officials to the effect that they are compelled to
\nincrease their profit margin by raising the price of their
\nproducts. This in turn creates an extra burden for domestic
\nconsumers because they have to cope with the ever-increasing
\nprice of consumer goods. At an international level, Indonesian
\nproducts could have been more competitive without such
\nirregularities in dealing with government bureaucracies.<\/p>\n
Another element in the process of price formation is the
\nsalary of industrial workers. There is an increasing tendency
\nthat our industrial workers want a bigger share from the
\nexpansion of our national economy. The government is now under
\nconstant pressure to increase regional minimum wage so that
\nlaborers can cope with an urban standard of living. There is also
\ngrowing pressure from Western leaders and international
\norganizations that Indonesia should improve its record in taking
\ncare of the social and economic welfare of its laborers. Indeed,
\nthe form of state-society relations (linking government,
\nbusiness, and labor) influences a country's capacity to compete
\nwith its neighbors.<\/p>\n
The role of businesspeople in expanding our international
\nmarket share is obviously indispensable. Entrepreneurship
\ncombined with skills in trade negotiations and a good command of
\nforeign languages (especially English which inevitably has become
\nthe language of the global market) should be promoted. In this
\nregard the role of business associations is critical. In some
\ncases the government can also intervene by creating a supporting
\natmosphere for national entrepreneurs to grow in. Unfortunately,
\nmost of our conglomerates are said to have grown not so much by
\ntheir skill in business but rather by their close connections to
\nthe political elite.<\/p>\n
The fact that a merit system is not determinant in the general
\nevolution of Indonesian entrepreneurship should make us worry
\nabout the preparedness of some of our conglomerates in coping
\nwith highly competitive international traders. So far some
\nconglomerates have survived and have even grown bigger because
\nthey have had an ensured domestic source of appropriation.
\nSustained economic growth over the last three decades has helped
\ncreate a bigger market for consumer goods. To some extent
\nIndonesian conglomerates have been tremendously benefited by this
\nachievement.<\/p>\n
The experience of South Korea in nurturing the growth of its
\nconglomerates teaches Indonesia a good lesson. When South Korea
\nstarted its process of industrialization in the 1960s under
\nPresident Park Chung-hee, South Korean infant industries were
\nhighly protected. However, in the 1980s, South Korean business
\ngroups began to grow and expand on their own. And now they are
\nhighly regarded by their counterparts in industrialized
\ncountries.<\/p>\n
What we can learn from South Korea is the way it
\ninstitutionalized its \"national systems of innovation\", defined
\nas \"the network of institutions in the public and private sectors
\nwhose activities and interactions initiate, import, modify and
\ndiffuse new technologies\" (Freeman, 1987).<\/p>\n
A network approach should be promoted in improving our
\ninternational competitiveness. Through a network the government
\nand the private sector can build mutual trust and interdependence
\nin overcoming all obstacles in international trade. If our
\ndomestic political and economic structures are not part of the
\nsolution to the problem, then they become increasingly part of
\nthe problem itself. Hopefully not.<\/p>\n
The writer is a lecturer at the Faculty of Social and
\nPolitical Sciences at Parahyangan University, Bandung.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/are-businesspeople-ready-for-globalization-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}