Government's role in interethnic relations

By Aleksius Jemadu

BANDUNG (JP): Recently the Center for Information and Development Studies (CIDES) and Republika daily held a seminar on the relationship between Indonesian ethnic groups.

The seminar focused on the relations between wealthy Indonesians of Chinese origin, who are dominant in economic activities, on one side, and the relatively poor indigenous on the other (The Jakarta Post,Oct. 29).

Ideas coming up in the seminar included the need for big businesses to cooperate with small and medium entrepreneurs both indigenous and non-indigenous. Prominent businessman Sofjan Wanandi, who is of Chinese descent, supported this idea and agreed with a recent statement by former home affairs minister Rudini who raised concerns over the dichotomy of the two groups.

Rudini said a week earlier that Indonesia needed to own up the problem of the precarious relationship between the indigenous and nonindigenous people, and find a solution to it before it led to national disintegration.

The fact that some nonindigenous business tycoons have managed to build huge business empires cannot be separated from the acts of "benevolence" from some government bureaucrats who have provided them with facilities and privileges on a quid pro quo basis.

Many bureaucrats have formed an alliance with the nonindigenous in order to enlarge their sources of revenue. Unfortunately, such a collaboration does more harm than benefit to the public interest.

To some extent we can say that the dominance of the nonindigenous in local economies would not have been made possible without the tacit endorsement by some government bureaucrats.

Therefore, I would agree with Sofjan Wanandi who suggested that the government should make a strong commitment to fairly implement the law if we choose to protect the small, medium-scale enterprises and cooperatives (The Jakarta Post Nov. 5, 1997). It is the government's responsibility to ensure a just and fair distribution of development resources.

From an ideological point of view, all ethnic groups should be treated equally. However, there are also clear reasons for differences in treatment. The economic capacity of the nonindigenous is far greater than that of the indigenous.

Moreover, the former can afford a better standard of living, while most indigenous still have to struggle for their basic needs. These are also relevant differences which can be used to justify the government's different treatment of the two groups.

The government has actually tried to narrow the economic gap between the two ethnic groups. Unfortunately, the government approach has mainly focused on the benevolence of the nonindigenous to perform acts of charity.

For instance, business tycoons are "obliged" to set aside a certain percentage of their profit as financial assistance for small businesspeople. Such an ad hoc solution can never be effective in eliminating the economic gap.

Structural reforms in the government's economic policies and bureaucratic behavior are needed so that more economic opportunities can be made available for small indigenous businesses.

If we are really sincere in the effort to develop business partnerships or networks between conglomerates and small businesses, we can learn a lot from Japan. According to Francis Fukuyama, Japan has the greatest degree of spontaneous sociability among contemporary societies.

It is at the top of the list of high-trust societies. Keiretsu networks in Japan consist of nominally separate organizations which share capital, technology and personnel in ways not opened to firms outside the network. It is these networks which have made Japanese corporations more efficient than American ones.

Toyota, one of Japan's largest conglomerates, is the lead company in a so-called vertical keiretsu. It performs only design and final assembly functions. It is, however, linked with hundreds of independent subcontractors and parts suppliers in an informal but durable network.

Through its keiretsu partners, Toyota is able in effect to establish the scale economies in design, manufacturing and marketing of an organization.

Fukuyama argued that mutual trust among fellow citizens is a key to a nation's economic prosperity. Only societies with a high degree of social trust will be able to create the kind of flexible, large scale business organizations that are needed for successful competition in the emerging global market.

If we apply Fukuyama's idea to the general situation in our business sector here, we would see the scarcity of mutual trust among our businesspeople. A sharp dichotomy between indigenous and nonindigenous with all its social and economic implications is just an example of how difficult it is to unite the private sector.

The fact that a partnership program between big conglomerates and small businesses is unworkable shows another indication of a lack of spontaneous business cooperation.

It is high time now for the government to do something to encourage more spontaneous business cooperation and networks among businesspeople so that it can produce synergy in facing global challenges.

This can only be done if the government succeeds in increasing the business capacity of the indigenous. Business partnerships between nonindigenous and indigenous businesspeople can only be sustainable if it is based on a recognized independence instead of a half-hearted benevolence.

Interethnic conflict will only result in a weaker international competitiveness of the nation as a whole.

Wouldn't that be a setback for us all?

The writer is a lecturer at the school of Social and Political Sciences of the Catholic University of Parahyangan, Bandung. He holds a Ph.D in social sciences from KU Leuven, Belgium.