Feudalism still prominent in business

Feudalism still prominent in business

JAKARTA (JP): Extensive business activities conducted by the
children of high-ranking government officials are partly
encouraged by prevailing cultural values which lead to a
feudalistic business atmosphere.

Djisman S. Simandjuntak, executive director of the Prasetiya
Mulya Graduate School of Management, pointed this out yesterday,
saying that since the public was extremely aware of this
condition, they often viewed the success of many businessmen in
Indonesia as a case of mere luck and having the ability to get
close to the center of power.

"To a certain extent, this may be true, but many such
businesses -- which are not based on professionalism -- often
perish quickly," he said during a luncheon held to commemorate
the 16th anniversary of the Eksekutif monthly magazine.

The question on the business activities of the children of
senior and influential government officials was raised by members
of the House of Representatives in a hearing with Attorney
General Singgih earlier this month, which discussed the current
campaign against corruptions and collusions between government
officials and business people.

The children of government officials -- including those of
President Soeharto, who are known to own extensive businesses in
the country -- defended themselves, saying that being Indonesian
citizens, they had the right to make a living.

Their argument was backed by State Minister of Administrative
Reform T.B. Silalahi, who said that once the children are married
or financially independent, they should be allowed to run their
own businesses.

Unavoidable

Businessman Soedarpo Sastrosatomo, who also addressed
yesterday's luncheon, acknowledged that feudalistic practices in
business were still unavoidable in spite of "revolutionary"
efforts to boost efficiency and professionalism.

"Feudalism indicates practices where people obtain good
positions in a business without having the appropriate skills to
be there," he said, defining the term.

He said that times have changed and his generation went
through tougher, fairer competition than the generation of his
children.

"The least we can do now is speak to officials' children and
hope they can be aware that what they are doing is harmful to
others," he said.

Responding to recent comments from economists -- including
Bank Indonesia's Governor J. Soedradjad Djiwandono -- who
consider that Indonesia needs to further diversify its export
commodities, Djisman said the problem was that the government
could not convince foreign investors to enter the country.

"Since 1989 in particular, it was strongly felt that
diversification of businesses did not go as planned," he said.

Export-oriented investments continued to decline since that
year and after footwear manufacture, there has been no major
industrial sector producing goods for exports, he said.

Local investors, Djisman said, were still reluctant to go "all
out" to boost exports and preferred to sell their products on the
domestic market.(pwn)