The end of monopolies?

Even as the rupiah was enduring relentless pressure, the surprise statement reached us about government plans to remove monopolies. The statement, made by the Coordinating Minister of Economic Affairs and Finance/Development Supervisor, Saleh Afiff, immediately sparked comment and won the strong support of people, some of whom even wanted to see the plan realized.

This spontaneous reaction can be attributed to at least three facts. First, monopolist practices have existed for too long in our national economy. They are as old as the present New Order, which means they have had 30 years to take root in our society.

Second, monopolies are unsound because they hurt the people. The practice allows consumer prices to soar, while huge profits are reaped by monopoly holders. Third, monopolies cause distortions that in the long run can damage the national economy. Monopolistic practices also eliminate any transparent and efficient market mechanisms, which leads to an imbalance in the distribution of assets.

Public support (for the plan) is essential so the national economy can operate according to the workings of the market mechanism and achieve a balance between producer and consumer interests. This ensures that the goal of establishing an affluent and prosperous society can be achieved.

Any attempts to eliminate monopolistic practices, however, are closely linked to efforts to achieve economic democracy. Without economic democracy, it will be impossible to eliminate monopolistic practices. This is one grave challenge that we have to face before we can enter the free trade era, which will be characterized by intense competition between countries. The political will of the government is therefore needed, especially to enforce all existing regulations with strong sanctions.

-- Bisnis Indonesia, Jakarta