Government monopolies<\/p>\n
Patrick Guntensperger
\nBusiness Consultant
\nJakarta
\nttpguntensperger@hotmail.com<\/p>\n
Polls indicate that the quality of services provided by
\ngovernment utility monopolies is among the most frequent
\ncomplaints here in Indonesia. A fresh government could take those
\ncomplaints and turn them into an opportunity for real progress in
\nthis country.<\/p>\n
While publicly owned and operated utilities, if run well, can
\nbe the most efficient way of providing necessary services to a
\nlarge population, Indonesia has a dilemma on her hands. The sad
\ntruth is that the Indonesian government is simply incapable of
\nrunning any large corporation efficiently. The inexperience of
\nthe bureaucrats, the instability of any given political party
\nand, let's face it, the appalling and rampant corruption that
\ntypify Indonesian government make it a virtual certainty that any
\nnational utility provider, or any government monopoly, will be a
\nblack hole into which money disappears and out of which nothing
\n(including services) ever returns.<\/p>\n
On the other hand, privately owned utilities would have to be
\nclosely monitored and regulated. In Indonesia, this would mean
\nenormous amounts of bribery and graft to the bureaucrats who
\nwould be responsible for that control and a few government
\nofficials and their pet corporations would get wealthy while
\nservices remained non-existent at worst and undependable at best.
\nWhat to do?<\/p>\n
The simple answer is that there is no simple answer. Each type
\nof service would have to be evaluated to determine whether it is
\nin the countrys best interest to maintain or grant a monopoly.
\nSome services and products, if allowed to compete freely and
\nhonestly, are best left to private entrepreneurs; the competition
\nprovides a free market control over price gouging and encourages
\nconstant improvement and ongoing research & development in an
\neffort to maintain a competitive edge.<\/p>\n
Other types of businesses should be run by or at least be
\ndirectly accountable to the government. In Indonesia, there
\nshould be as few as possible of these and each government
\ncorporation, particularly if it is granted a monopoly, should be
\nsupremely transparent and absolutely accountable to the public.<\/p>\n
In those cases, that is, the vast majority, where it is deemed
\nto be more appropriate to allow free competition for the
\nprovision of goods or services, there must be rigidly enforced
\nlaws regarding price-fixing and other attempts to influence the
\nmarket artificially.<\/p>\n
In those few government monopolies that are licensed, we must
\nbe constantly vigilant to ensure that the services and goods
\nprovided are of acceptable quality and price and that no
\ngovernment officials are milking it for their personal gain.<\/p>\n
One need not be cynical, merely realistic, to point out that
\nhere in Indonesia, every tool we have in the box will have to be
\ndeployed in order to combat corruption, both in privately owned
\nbusinesses and government controlled ones. We can rest assured
\nthat without stern preventive measures, a government monopoly
\nwill be initially perceived as a cash cow for the fortunate civil
\nservants entrusted with its administration.<\/p>\n
But equally, it will be necessary to exercise extreme
\nvigilance against attempts at market control by privately owned
\ncorporations. Some countries take such a strong position against
\ncollusion among competitors to fix prices, that, for example, it
\nis a criminal offense for two Realtors to agree to charge any
\ngiven commission rate to their clients. Price fixing must be
\neliminated if the market forces are to be allowed to have their
\nsay.<\/p>\n
What goods and services should be provided by government-
\ncontrolled monopolies and which should be allowed the freedom of
\nthe marketplace? The answer to that question defines the type of
\ncountry Indonesia will be.<\/p>\n
Indonesia needs to have as few government controlled
\nmonopolies as possible. The government and the civil service
\nsimply don't have the experience or the trust of the public that
\nis necessary to run big corporations. We couldn't have the
\ngovernment run in any effective manner corporations that provide,
\nsay, the manufacture and distribution of consumer goods.<\/p>\n
The government must, however, be responsible for control of
\nthe military and the police. We must at all costs avoid the
\ndevelopment of private armies or armed security forces that can
\neasily become paramilitary groups. The Nazis in 1930s Germany
\nstarted out by merely creating their own force as security for a
\npolitical party. Eventually they controlled most of Europe and
\nalmost the entire world.<\/p>\n
Every voter must consider the pros and cons of having the
\ngovernment manage businesses like electrical and gas supply,
\nairlines, telephone and other communications services, health
\ncare and internal transportation. Do we believe that the
\ngovernment is capable of the honest and efficient management of
\nthese enterprises?<\/p>",
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