Barring direct investment in Internet unwise

Barring direct investment in Internet unwise

By Zatni Arbi

JAKARTA (JP): As the Internet penetrates everyone's life, one
of the major phenomena that it brings is the dot-coms that offer
almost any conceivable type of goods and services through the web
of sites: books, CDs, toys, computers, clothes, groceries,
houses, airline tickets, cars, information, late-breaking news,
you name it. The "com" itself stands for the word "company", and
thus we have Internet companies such as amazon.com, ebay.com and
etrade.com.

Why do people choose to do business on the Internet? Because
it enables them to efficiently reach a global market that,
according to statistics, already consists of 289.78 million
Internet users all over the world. Dot-coms represent another
fundamental global revolution, and the Internet is the vehicle.
Therefore, when a government thinks it should do something to
slow it down, something must be wrong.

While the Indonesian government's decision to stop foreign
direct investment in Internet companies (e-commerce, portals,
etc.) in Indonesia is still blurry at the moment, as Presidential
Decree No. 96/2000 has not been made officially public, it should
be made absolutely clear right away that any such intention would
only take the country into a collision course with the trends of
the Internet era. Worse, in the long term, it is our own nation
that would be the loser. Yet, as The Jakarta Post reported on
Aug. 7, the word is that the government is doing just that.

There is a problem of definition to begin with. The policy
seems to confuse Internet and multimedia. These are two different
things. An Internet company does not have to be a multimedia
company, and vice versa. The Post reported that there was no
mention of Internet and dot-com in the new ruling. If that is the
case, we will have a less than sufficient basis for including
dot-coms in the negative list for foreign direct investment.

The Internet is a fast-changing environment and the world is
still grappling with its ramifications. Therefore, if we put the
brake on the so-called "foreign invasion" that has actually
contributed positively to our understanding of the Internet,
where else will we have the opportunity of gaining hands-on
experience of how the Internet smorgasbord really work?

In Indonesia, the existing dot-coms such as detik.com,
astaga.com, indoexchange.com, wetmarket.com, catcha.co.id, all
have given us the opportunity to increasingly participate in the
world. In fact, most of them are backed by foreign investors.

However, no matter how strong their financial backing is,
there is always a level playing field for everybody, as on the
Internet no one will know how small or how big a company really
is. What matters most is the products and services being offered
-- and a sound business plan to drive the business. Therefore,
official statements such as "giving more space to local players
to grow" sound so "un-Internet".

Besides, these dot.coms have also served as an educational
institution for a lot of people. It is believed that 80 percent
of the Internet content is still in English. Therefore, working
in an Internet-based company with foreign bosses will provide an
unparalleled opportunity for a lot of our own young, budding
professionals to master the language. For them, it is a kind of
paid, on-the-job training unavailable in a local company.

It is true that many dot-com companies here have been known
for luring away the best talent from local business organizations
with irresistible salaries and other benefits. Offers up to four
times the previous salary have not been uncommon. However, while
this may set the "wronged" organization back, as they will have
to recruit and retrain new employees, the huge salaries will go a
long way for the newly hijacked dot-comers and new job
opportunities will become available for others.

Where else can our young professionals experience a more
competitive working environment than in a dot-com company? Where
else can they learn to meet deadlines set not by their bosses
but, instead, by their competitors? Where else can they better
learn that huge income also equals hard work?

And, most importantly, our government should fully understand
that geographical location does not matter at all in the Internet
economy. The government can ban foreign investors from setting up
dot-coms in Jakarta, but they can always operate from Singapore,
Kuala Lumpur, Bangkok or Manila and still access the market of
210 million people that we have been touting. Worse, this may
eventually lead to yet another brain drain exodus, as these dot-
com companies, being barred from investing here, may end up
luring our brightest talents to their cities.

Clearly, banning foreign direct investment in Internet-based
businesses from entering Indonesia would be another hastily
conceived policy with tragic consequences, and sadly we have had
far too many of these already.

On the other hand, once our young professionals graduate from
the training camp of the foreign-backed dot-com companies, they
will be a very different breed of Indonesians. They will become
totally prepared for the competitive environment of the global
market. With their ability to speak English, a couple of years of
work experience in a fast-paced, highly dynamic working
environment and a global outlook, they will be able to build
their own internet business powerhouses.

Hasn't there been ample evidence that Indonesians are just as
capable and as entrepreneurial as any foreigners, and isn't it
time we had true faith in our own young professionals?

And, now, should we deprive them of such an unprecedented
opportunity for advancement in their life with the myopic
decision to protect "local players"?

The writer is a regular contributor of IT articles to The
Jakarta Post.