Strength from competition

The storm is still blowing through our economy. I do not intend to forecast the future for our economy but I want remind everyone that the era of fortress Indonesia must end.

Turning our country into a stronghold by using policies such as non-tariff barriers to foreign entry and controlling domestic distribution systems has not succeeded in helping local firms hold onto the lions share of the domestic market and has not put our country's comparative advantages, such as low cost labor, to the best of use.

Japanese automobile manufacturers dominated our car market, and indeed European and North American markets. Microsoft dominates our computer software market. These companies have risen to preeminence by concentrating on single markets. They do not attempt to move beyond their field of expertise and, for example, produce cement or do other business.

In this light it is interesting to note the announcement of the top 200 tax payers in Indonesia. PT H.M. Sampoerna, a private Indonesian company, was ranked fourth behind foreign-owned PT Freeport Indonesia and two state-owned companies, PT Telekomunikasi Indonesia and PT Indosat.

PT H.M. Sampoerna has risen to success by producing cigarettes. Only cigarettes. By concentrating on one market in which it has expertise, Sampoerna has risen to a position from which it can compete with cigarette industry giants.

Honda, Microsoft and Sampoerna know their markets in great detail and develop their products using this knowledge. They compete in their respective markets on a level playing field, without undue government assistance or protection. This open competition has honed them into robust entities, capable of weathering difficult times and reacting to changing circumstances without depending upon help from the government.

There is a lesson in this for all Indonesian business.

MUHAMMAD SJAHRUDDIN

Jakarta