There's no such thing as a free lunch...Or is there?

Image
It's official. The next president of Indonesia is former army general Prabowo Subianto. Quite how the next five years will pan out is anyone's guess but hopefully the foreign pundits who always bring up his dodgy human rights record will be proven wrong. Nonetheless, on policy making, Prabowo's popularist move to literally offer the poor 'a free lunch' every day of the week does not augur well for the future. Such a policy - if it ever came to fruition - would cost a phenomenal amount of money and likely lead to huge inefficiencies (food waste) and poor incentives (make people lazy). Another concern is Prabowo's strong nationalist bent. Thus, in the possible event that he finds himself with his back against the proverbial wall in the face of stern economic challenges, there is a big chance that he will simply scapegoat foreigners. But he will have to be careful. Construction of the new capital city, Nusantara, for example, is highly dependent on foreign in

When Google is bigger than Indonesia

This is from today’s Guardian: 

Shares in Google keep marching higher - they are now five times the $85 offer price when the company joined the market 18 months ago. The brokerage firm Bear Stearns earlier this month lifted its price target for the next year from $360 to $550. Piper Jaffray expects the shares to hit $600 this year. One analyst at the brokerage Caris & Company speculated that the shares could reach as much as $2,000 apiece. The market currently values the business at more than US$130bn. 

This is quite incredible when you think about it. A company which is essentially invisible (what are its assets?), is worth more than all of the companies listed on Indonesia’s stock exchange (they are valued at around US$80bn in total)!! 

Now while this may show that Google is a phenomenal company with an incredible business model, it also shows something else: 

Brains are far more important than natural resources. 

 So you’d think that Indonesia would be doing everything it can to attract intellectual capital into the country to help stimulate economic growth. But you couldn’t be more wrong. In fact, Indonesia does everything it can to keep out foreign intellectual capital. 

Costly and highly bureaucratic procedures are put in place to discourage foreigners from working here and setting up businesses. Moreover, foreigners are given no ownership rights whatsoever: they can’t even legally own an automobile let alone a house or apartment. There are even plans in the pipeline (or have they been forgotten?) to give foreigners tests in the Indonesian language and to require them to pay a dowry if they marry an Indonesian woman. 

So while the economies of India and China surge ahead, showing impressive growth, it is little surprise Indonesia trails far behind. 

Whatever happened to the concept of reformasi?

Comments

Popular posts from this blog

The 10 best plus plus massage spas in Jakarta

20 things you should know about Indonesian women

The comfort zone (Jakarta hotel and spa)