'Protection leads to monopoly'<\/p>\n
JAKARTA (JP): The government's infant-industry protection for
\nmost of Indonesia's conglomerates in the last 25 years has
\npampered them and made them oligopolistic and monopolistic in
\nnature, an economist says.<\/p>\n
\"With the upcoming liberal trade era, protection and
\ngovernment subsidies as well as intervention in the business
\nworld must be transparent and should only be permissible in very
\nspecific conditions,\" said Christianto Wibisono, the director of
\nthe Indonesian Business Data Center.<\/p>\n
Speaking at a seminar on Reconstructing the Goals of Our
\nRepublic held by the Indonesian Institute of Sciences,
\nChristianto said that monopolistic protection has allowed giant
\nbusinesses be inefficient and have high-cost performances.<\/p>\n
He said that in the future countries will have to eliminate
\nall forms of protection, which may result in market distortions,
\nsuch as trade regulations and non-tariff barriers.<\/p>\n
Christianto said that Indonesia would also have to face the
\nproblem of re-identifying and redefining its national interests.<\/p>\n
\"Indonesia has been focused on emotionally protecting national
\neconomic strengths. Both state-owned and private companies have
\nbeen catered to for the sake of a sense of nationalism and
\npatriotism...All of this is an abstract concept to logic,\" he
\nsaid.<\/p>\n
Christianto pointed out that in many developed countries,
\nalthough a company may belong to a family network, it was usually
\npublicly listed and managed professionally.<\/p>\n
Such segregation between the individual and public interest,
\nhe said, \"can only happen in a politically democratic atmosphere
\n-- which happens to occur in the West -- which is rigid and
\ncannot be compromised\".<\/p>\n
In Indonesia, he said, the process of conglomeration in many
\ngiant enterprises usually has many side effects, including the
\ndevelopment of a weak economic structure.<\/p>\n
\"The syndrome of a 'one man show' and founder of a corporation
\ncannot adapt to the needs and challenges of present times. It is
\nalso unable to make management restructurings and
\nreorganizations,\" he said.<\/p>\n
He said that \"random expansion\" in doing business was no
\nlonger popular and had been abandoned by businessmen in the
\nUnited States in the 1960s.<\/p>\n
\"It was corrected in the 1980s when large enterprises returned
\nto de-conglomeration, consolidation and core businesses,\" he
\nsaid. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/protection-leads-to-monopoly-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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