Agribusiness firm's failure shows people's irrationality

Muhammad Nafik and Berni K. Moestafa, The Jakarta Post, Jakarta

The recent collapse of a private agro-business company that also brought down thousands of private investors has once again confirmed a recurring dilemma that people's greed during economic hardship makes them more gullible.

People are seeking external intervention as a way to help them cope with their depression or to gain huge profits within a short time by depending on lofty promises or dreams guaranteed by others, sociologist Imam Prasodjo from the University of Indonesia said on Monday.

"This proves that our society is fragile and its rational and empirical traditions are weak," Imam told The Jakarta Post.

He said the collapse of PT Qurnia Subur Alam Raya (QSAR) in Cisaat in the West Java town of Sukabumi served as a good example of the irrationality Indonesians display when investing their money.

At least 6,000 investors sank their money, amounting to a total of Rp 500 billion (US$55.5 million), into the company after they were promised relatively big profit shares.

PT QSAR has reportedly collapsed and its president director Ramli Araby and other top executives have allegedly disappeared with the investors' money. Their whereabouts remain unknown.

High-flying businesses promising huge profits are often offered through newspaper advertisements or leaflets distributed on streets across Jakarta and other major cities.

Another example of irrationality was recently displayed by Minister of Religious Affairs Said Agil Al Munawar, who ordered a much-condemned excavation of the Batutulis heritage site in Bogor, West Java.

The excavation was aimed at finding a state treasure believed to have been buried at the site.

Similarly, many people were promised millions of rupiah by several Islamic foundations, such as Yamisa and Amalillah, both based in Jakarta, provided they filed formal applications.

Amalillah, for example, offered to give each participant Rp 15 million (US$1,600) in return for a Rp 20,000 registration fee paid to the foundation six months earlier.

Thousands of people, mostly low-income residents in East Java, believed the promise and applied for the money, but there have been no reports that the foundation has disbursed the funds.

Sociologist Ignas Kleden said Indonesians tend to fix their minds on the results rather the process by which to reach them.

"It's about becoming smart without studying, rich without working," he said.

He cited an advertisement promising readers they could master English after a two-week course. "Nobody really wonders how this can be possible, instead they're fixed on the promised results."

However, people take a cue from society where rampant corruption, collusion and nepotism gives rise to instant stories of wealth, he added.

"And they see that not everyone who has studied hard is successful because of corruptive practices," he said.

Aside from fighting corruption, a good way to eliminate the condition is by revamping the national education system, he said.

"Our current system produces obedient citizens who bow to the government when what we need are independent citizens," he said, explaining that people therefore tend to "expect something from above" instead of doing it on their own.