Protection never benefits people<\/p>\n
JAKARTA (JP): Protected industries never help the people and
\nnever become competitive, said noted Japanese business and
\npolitical expert Kenichi Ohmae.<\/p>\n
When speaking to local journalists here yesterday, the
\nvisiting expert pointed out that the protection given to
\nIndonesia's automotive industry and Japan's rice business serve
\nas good examples.<\/p>\n
"The protection of the automobile industry here is very
\nstrange because the price of automobiles is very high here. Who
\nare you protecting, auto importers or auto companies?" Ohmae
\nasked.<\/p>\n
In Japan, he said, protection was given to the automobile
\nindustry until the industry was competitive. Domestic automobile
\nfirms are now forced to compete and consequently automobile
\nprices are very low and not subsidized by tariff barriers.<\/p>\n
"You see, here it is very strange because the tariff barrier
\nis very high and everyone raises the prices of automobiles to
\nthat level and enjoys it. This way, you give the privilege to the
\nlicensed companies only," Ohmae contended.<\/p>\n
Under last May's deregulatory measures, tariff barriers on
\nsedans and station wagons, which are assembled domestically, were
\nreduced to the current level of 125 percent. Import tariffs on
\npickups and minibuses were cut to 50 percent and 75 percent
\nrespectively.<\/p>\n
He noted that such protection is often given in the name of
\nnational sovereignty and based on political consideration, not
\nbusiness sense.<\/p>\n
Rice<\/p>\n
"We have the rice policy in Japan, that is the worse example.
\nIt was given in the name of sovereignty. What is the benefit of
\ngrowing rice in Japan? Nobody asks. They just said that we have
\nto have food independence. That's bull," Ohmae remarked, adding
\nthat Japan has to earmark US$60 billion a year in subsidies for
\nits rice farmers.<\/p>\n
"Do they become competitive as a result of the protection? No,
\nthey have become less and less competitive in the world market,"
\nOhmae said, adding that the production cost of a kilo rice in
\nJapan currently stands at 350 Japanese yen (US$3.50), compared to
\n25 yen in Australia.<\/p>\n
Known as "Mr. Strategy" in his native Japan, Ohmae is a well-
\nknown public speaker and the author of over fifty books on
\nbusiness and politics, including The Mind of the Strategist
\n(McGraw-Hill, 1982), Triad Power (Free Press, 1985), Beyond
\nNational Borders (Dow Jones Irwin, 1987), The Borderless World
\n(Harper Business, 1990) and The End of the Nation State: The Rise
\nof Regional Economies (Free Press, 1995).<\/p>\n
He was in the city to give a series of speeches, including one
\nat the two-day seminar entitled "Asia Pacific Exchanges in the
\nBorderless World," organized by the Jakarta Stock Exchange and
\nanother at the Center for Strategic and International Studies.<\/p>\n
Ohmae suggested that given its large size and diversity,
\nIndonesia needs to consider giving more regional autonomy and
\nfreedom to its regions and provinces in order for them to
\nprosper.<\/p>\n
"I think regional autonomy is a very crucial element for large
\ncountries like Indonesia because you cannot lift up everything
\nfrom the central government," Ohmae said, adding that such a size
\nis the main barrier to an equitable distribution of wealth.<\/p>\n
Like a company, he said, a country has its optimal size. If a
\ncountry has grown to be so large, it needs to reorganize itself
\nby attaining more regional autonomy. A small company with better
\nmanagement is better than large but unmanageable one, he added.<\/p>\n
"Optimum size is when people get excited about the vision,
\nmeaning that the vision is shared within the community. Optimum
\nsize is when you don't sacrifice one group of people over
\nanother," Ohmae said.<\/p>\n
He explained that Japan had its optimal size for the entire
\ncountry until about 20 years ago, when the population stood at
\n100 million people.<\/p>\n
Now Japan has its problem because it is no longer has an
\noptimal size. Today in the information era, it is no longer
\npossible to centrally manage the country.<\/p>\n
"That's why I'm proposing to the government to decompose Japan
\ninto 11 autonomous republics," Ohmae said. "Therefore, instead of
\nTokyo defining a single solution for the entire Japan, let each
\nautonomous region define its own solution."<\/p>\n
He said the standard was changing, but that 10 million to 11
\nmillion people per autonomous region was an optimal size. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/protection-never-benefits-people-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}