Salim's move is purely business<\/p>\n
By Aleksius Jemadu<\/p>\n
BANDUNG (JP): The Salim Group's move to sell Indocement's 50.1
\npercent stake in the world's largest noodle-maker to a Singapore
\nbased bread-maker, QAF Ltd, has come under fire recently.<\/p>\n
While the government has no objection to such a move, many
\ncondemned the Salim Group for being unpatriotic. Tycoon
\nProbosutedjo, for example, likened the move to \"a capital flight
\nand an act of tax evasion\" (The Jakarta Post, July 25, 1997).<\/p>\n
At the heart of the matter is whether or not, in the context
\nof a global economy, the nation-state can be viewed as a relevant
\nplace for business decision-making, especially with regard to the
\nlocation of the investment.<\/p>\n
Can we insist our businesspeople invest their capital at home
\nwhen there are a lot of profitable business opportunities abroad?
\nWouldn't it be an anachronism to limit their investment
\nactivities for the sake of nationalism?<\/p>\n
In his book The End of the Nation-state, Kenichi Ohmae
\nquestioned the relevance and effectiveness of the nation-state as
\nan organizational unit for so-called postindustrial business
\nactivities. Ohmae argued that the flow and mobility of
\ninvestments, industry, information technology and individual
\nconsumers (the 4 \"I's\") are no longer constrained by national or
\npolitical boundaries.<\/p>\n
Most of the investments moving across national borders today
\nare private, and governments do not have to be involved at either
\nend. The nation-state has come to a point where it is under
\nincreasing pressure to share its \"sovereignty\" with global market
\nforces.<\/p>\n
According to Ohmae the role of the nation-state will be taken
\nover by what he calls \"the region-state\". It consists of
\n\"networks of interdependent private enterprises and regional
\nentities\".<\/p>\n
He defined the region-state as \"an area (often cross-border)
\ndeveloped around a regional economic center with a population of
\na few million to 10 million to 20 million\".<\/p>\n
In fact the Indonesian government has been involved in
\npromoting the emergence of such growth centers. The Indonesia-
\nMalaysia-Singapore Growth Triangle (IMS-GT) and the Australia-
\nIndonesia Development Area (AIDA) are two examples.<\/p>\n
Mathew Horsman and Andrew Marshall who wrote After the Nation-
\nstate (1994) argued that changes in the global economic
\nstructure, technological advances and the end of the Cold War
\nhave carried new threats to the nation-state as a traditional
\nspace of investment decisions.<\/p>\n
The three factors have led to the emergence of two
\ncontradictory trends in global politics.<\/p>\n
First, countries in several regions tend to integrate their
\neconomies by establishing free trade areas. Economic regionalism
\nhas turned out to be the only way to maximize economic and
\ninvestment opportunities and minimize the negative consequences
\nof unavoidable competition.<\/p>\n
Second, the supremacy of the nation-state is increasingly
\nconfronted by tribalism, \"the retreat by individuals into
\ncommunities defined not by political association or by the state
\nborders that enclose a political nation but similarities of
\nreligion, culture, ethnicity or some other shared experience\".<\/p>\n
It should be noted that the acceptance of economic
\nliberalization at a global level has necessitated the primacy of
\nindividuals as economic actors who are free to make their
\ninvestment decisions.<\/p>\n
The fact that Salim Group has divested its 50.1 percent stake
\nin Indofood and injected it into QAF Ltd should indicate that the
\ngroup has changed its orientation in doing business from a heavy
\nreliance on political connections to pure business
\nprofessionalism.<\/p>\n
It might be the case that Salim Group wants to strengthen its
\nmarket competitiveness in preparation for the ASEAN Free Trade
\nArea in 2003. Therefore, we have to be willing to face a
\nsituation in which the nation-state may no longer become a
\nrelevant space for investment decision.<\/p>\n
What then is the role of governments in the midst of the
\nprimacy of liberalist perspective which seems to dominate courses
\nof events in the global economy?<\/p>\n
According to the liberalists, the role of government in
\ninternational trade is limited in the sense that it may not
\ncreate barriers to the free flow of goods and services.<\/p>\n
A government's excessive intervention in international trade
\nwould be a disturbing variable in the formation of fair prices.
\nThe promotion of free trade may not necessarily mean that
\na government should withdraw from the scene. It has a legitimate
\nand even necessary role to ensure the operation of a free and
\ncompetitive market, the establishment of national security, the
\nprotection of copyrights and the promotion of social justice.<\/p>\n
The government has to provide a good education for its
\ncitizens and establish modern infrastructure in order to
\nfacilitate business activities. By doing so the government would
\nenable its citizens to compete in international trade.<\/p>\n
It might be interesting to learn that more and more Chinese-
\nIndonesian business tycoons have established corporate beachheads
\nin Singapore. This is widely regarded as one of the most
\nimportant \"business capitals\" for the Chinese.<\/p>\n
Former prime minister of Singapore, Lee Kuan Yew, is the
\nstrongest proponent of the establishment of business networks
\namong overseas Chinese. Their role in the global economy,
\nespecially in Asia Pacific, cannot be underestimated.<\/p>\n
It is no exaggeration to suggest that the accumulative
\neconomic power of the Chinese in the Asia Pacific could dictate
\ncourses of events in stock markets (John Naisbitt, 1996). There
\nis no doubt that they are the engine of growth in this region.<\/p>\n
Given the extent of their assets and the indispensability of
\ntheir role in this region, it would be unwise if we did not
\nengage the Chinese in promoting Indonesia's interests abroad.
\nUnfortunately, any discussion about the role of the Chinese in
\nIndonesia always emphasizes the negative aspects of their
\neconomic dominance.<\/p>\n
Rarely, if ever, is their tenacity in doing business regarded
\nas a national asset. It may be high time to develop a more
\n\"constructive engagement\" instead of letting Chinese
\nbusinesspeople find their own way in making business ventures in
\nthe global market. Wouldn't it be wise if the government used
\ntheir networks to promote Indonesian interests abroad?<\/p>\n
The writer is the director of the Center for International
\nStudies (PACIS) at the Catholic University of Parahyangan,
\nBandung.<\/p>\n
Window: The fact that Salim Group has divested its 50.1 percent
\nstake in Indofood and injected it into QAF Ltd should indicate
\nthat the group has changed its orientation in doing business from
\na heavy reliance on political connections to pure business
\nprofessionalism.<\/p>",
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