From Tapos to Bali<\/p>\n
The business gathering in Bali over the weekend was very
\nsimilar to the one at President Soeharto's Tapos cattle ranch in
\nWest Java more than five years ago. The central topic of
\ndiscussions at the two meetings was the steep inequality in
\nincome distribution and asset ownership. The participants, the
\nowners of the largest business groups which account for about 70
\npercent of the country's economic activity in the private sector,
\nwere almost the same.<\/p>\n
Only the format differed. The Tapos meeting in early March,
\n1990, was led and dominated by President Soeharto and was later
\nbroadcast nationwide by the state TVRI. The 32 participating
\nbusinessmen -- all ethnic-Chinese Indonesians except for two --
\nacted mostly as listeners. The Bali gathering, which featured
\nseveral cabinet ministers and the Armed Forces chief as the main
\nspeakers, was characterized by free-wheeling discussions among
\nalmost 100 businessmen. The three-day meeting therefore was
\nclosed to the mass media to allow for frank, vigorous exchanges
\nof views.<\/p>\n
It is unreasonable to expect the Bali gathering to have
\nproduced more than the seven-point declaration it issued on
\nSunday. The most important outcome, as stipulated in the
\ndeclaration, is the conglomerates' commitment to redressing
\nexisting inequalities.<\/p>\n
However, we are afraid that efforts to bridge the inequalities
\nthrough the development of small and medium-scale firms and
\ncooperatives will remain ad hoc in nature if both parties -- the
\nbusiness community and the government -- do not have the same
\nperception of the issues.<\/p>\n
We sympathize with businessmen Sofyan Wanandi and Eka Tjipta
\nWidjaya, who complained about the mass media's bashing of
\nconglomerates as the main culprits whenever the issue of
\ninequality arises.<\/p>\n
While a number of the businessmen began their business empires
\nwith the windfall profits they accumulated from \"cash-cow\"
\nbusinesses, monopolies or preferential procurement contracts from
\nthe government, they should not shoulder all of the blame. They
\nacted only on the permission of the government, which, due to
\nsheer ignorance or collusions, must also be held partly
\nresponsible for widening inequalities.<\/p>\n
When the government started the industrialization program in
\nthe 1970s, it was right to protect big manufacturing industries
\nin the infant stages. But it forgot to do the same for small and
\nmedium firms when the massive deregulation program was launched
\nin 1985 even though the government knew that the capacity of
\nsmall and medium enterprises to tap the emerging business
\nopportunities was much smaller than that of big businessmen who
\nhad at that time accumulated a strong base of capital. Even
\nworse, government policies or individual officials still tend to
\ncause market distortions in favor of big businesses.<\/p>\n
Unless this misperception is removed, we will never be able to
\ndevelop programs to enhance business linkages between the big,
\nmedium and small enterprises. Mutually beneficial business tie-
\nups cannot be decreed or instructed. Such linkages are
\nsustainable only on the basis of normal business concepts and in
\nan economic climate that allows for fair and open competition.<\/p>\n
A business climate of equal partnerships between big and small
\nand medium enterprises must be established through simple
\nlicensing procedures, for entry to and exit from the business
\nsector, and supported by regulations designed to ensure fair
\nmarket competition to prevent the abuse of market dominance.<\/p>\n
The development of small enterprises always exacts learning
\ncosts and these costs cannot be forced entirely down the throats
\nof big businesses. Instead, the government should set up a
\ngeneral, but transparent mechanism of incentives and preferential
\ntreatment to encourage big groups to tie up with smaller firms.
\nEven the United States, whose capitalist concept is somewhat
\nalien to our economic terminology, has the Small Business Act,
\nwhich awards preferential treatment under a fully transparent
\nsystem to help small firms survive in the free market. South
\nKorea and Taiwan enforce dozens of laws and regulations regarding
\nsmall businesses.<\/p>\n
Our small business bill, which has been in the drafting
\nprocess for more than five years now, has yet to be proposed to
\nthe House of Representatives for deliberation.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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