This is written as a tribute to Prof. Joseph H.H. Weiler’s lecture
Published in http://www.upiasia.com/Economics/2010/03/29/asean-china_free_trade_pact_is_not_all_bad/2619/
How do we generally picture free trade/trade liberalization? Dreadful competition, losing jobs and livelihoods. To make matters worst, freetraders and economists, such as Paul Krugman, claim free trade is not concerned of phony number of jobs created or lost. To the ears of commoners, this sounds pompous, non-chalant and remorseless, which I would personally call a lost in translation. This is misquoted and at large, misunderstood. There are two archetypal claims against free trade in general. First and in more specific context free trade with China, popular believers claim that we will buy more than we sell. Translating into economics term, we will import more than we export. This sounds bad in terms of productivity. It is bad in analagous sense that we spend more than we earn.
Second, a more subtle thinker against free trade would say perhaps free trade generates a larger “pie” of economy, but they are not distributed proportionally to every segment of the societies. Hence, sacrificing jobs of the paupers for the benefits of the rich is not worthy. They also note that, perhaps, the economics could have been more efficient if free trade is in the picture, but they prefer less efficiency as it helps the poor. In other words, it is better to have less money but used for the needy, rather than to have more money but amassed in the rich’s pockets.
Now, let me put this claim into a context of ASEAN-China Free Trade Agreement and elaborate why those two claims are not as bad as they sound. First, claims against ACFTA generally revolves around the fact that China’s manufacture industries is by no doubt the largest in the world currently. Moreover, it is also a fact that China can produce almost any goods/products. Chinese anecdote suggests that “We can duplicate and produce anything except you mother.” Hence, by liberalizing trade, we will import more than export.
What do we get when we import? Goods of all kind, shoes, clothes, washing machines that are produced in China using either natural resources from China or other countries. What does China get in return? Money, many pieces of paper. They accept money because money represents the store of value which they will use to buy oil or raw materials for the next wave of productions. Of course, if we buy more products from China, the money in terms of quantity would diminish, so we will need to print more money. But you would not run out of papers to print money or another way of putting it, the intrinsic value of money is much smaller than the nominal value. If you print more money, your money gets weaker. In economics jargon, it is called inflation or erosion of purchasing power of your currency. So the question is how much do we lost compared to how much we got? We get all the goods useful for our daily lives and they in return receive astronomical number of pieces of money.
A more subtle argument is to examine whether the money China received would be used to purchase materials their nature does not provide. Will they purchase oil and raw materials for their manufature industries from Indonesia? Even if they do, how many percentage of oils and/or raw materials. The argument boils down into this precept: Money is of no value if there are no underlying substances, be it goods or services. We put values into money with the assumption that the same money can be used to buy other goods or services we need. So the underlying assumption is that there are more goods and services out there than the nominal value of money. Imagine if today, the world has foods only sufficient to feed 2 billions people, will money be of any worth? People will be accumulating foods rather than money. We used to barter goods for goods. So money represents the value of goods. Without those goods, money has no meaning/value.
Now, if we apply the same precept into ACFTA, what do we lose if we import substantially more than we import? The other factor, government must heed on carefully is whether the money China receives from our consumers will be used to purchase goods and services from us. If China buys oil or raw materials from other countries, the store value is used against other countries. In simpler explanation, we do not trade any of our goods with China. On the contrary, we receive goods and give them pieces of money which will be substantially used to purchase goods, such as oil and raw materials, from other countries.
Second, claims against ACFTA/trade liberalization subsequently argues: But many jobs will be lost because those industries that should be producing goods for our domestic consumption will run out of business.
There are two negative implications for protecting non-competitive jobs. First, you prevent increased productivity and second, you penalize the rest of the people to pay more than the should for goods they need. If you protect jobs which produce goods of basic and mass necessities such as food and clothes, you penalize yourself twice since you penalize your economy and your people. Productivity is prevented as there is no incentive to produce efficiently. Efficiently produced goods cannot compete with subsidized and less efficiently produced goods because their price remain expensive relative to subsidized goods thanks to tariffs.
I would argue that it is much better off for you to send a check at the home front of people losing jobs than damaging the economy and force them to pay more expensively than the should for goods serving basic and mass necessities.
The core question is what do jobs mean? Do jobs mean generator of money or dignity/pride/status of life or both? If both, which one remains the priority? Will we still work on jobs for the purpose of dignity if it does not generate money? The point is in government’s mind, jobs are meant to increase welfare and protect livelihood. Since such were the premise, wouldn’t it be better for farmers to lose their jobs but their children can go to school and when they are sick they are government funded health-care? Or better, farmers look for alternative jobs and train their human potentials through courses or education of sorts?
In the end, we need to see clearly through the heavily fogged glass on ACFTA issue. They are not all bad and in fact they are not bad at all. Politics and vested interest should be set aside if we want this to work. Anyway, Indonesia has ratified the agreement and there is no way back, so let’s look ahead clearly by clearing up the fog.
Tuesday, March 30, 2010
Wednesday, March 24, 2010
Natural Resources: The Curse of Developing Countries?
Published in http://www.upiasia.com/Economics/2010/03/04/natural_resources_the_curse_of_developing_countries/1243/
Jakarta, Indonesia —
People are dying while sitting in a land full of riches. Perhaps this is the horrid yet true picture of reality in most developing countries in the world; certainly it is true in Indonesia.
Covering approximately 1.9 million square kilometers, Indonesia is extremely rich in natural resources. Due to active volcanic activity, its soil is fertile and resources are abundant. Salt, for instance, is believed to have originated in Indonesia. The term “salary” originates from salt because it was once used as a form of payment. In old times, the person sitting closest to the salt at a table held the highest rank.
Many Indonesians are proud of their motherland. Every elementary school student is taught that the country is rich in natural resources. The citizens’ pride is rooted in the fact that the country is geopolitically important and can survive on its own – unlike Singapore, for example, which basically lives from its neighbors’ resources.
Ironically, these same children have to grow up witnessing or experiencing extreme poverty. This is more painful given the dreams they hold after being taught about the tishness of their land.
There is a long list of cases in which corporations – local and foreign – exploited and polluted the land, leaving toxic waste behind for the local people. From the human rights violations and destruction of peoples’ livelihoods caused by mining companies Freeport and Newmont, to the environmental damage by the pulp industry in Sumatra, to a plethora of cases of mercuric materials in drinking reservoirs, corporations have brought evil consequences to Indonesian people.
This excrutiating picture is replicated the world over. John Perkins, in his “Confessions of an Economic Hitman,” described foreign corporations’ agressive pursuit of oil and natural resources in Ecuador, Indonesia and Panama, where extraction plants are built for the benefit of elite groups of foreigners and their mercurial domestic counterparts while wastes and hazards are left behind for the locals.
Joseph Stiglitz, the 2001 Nobel Prize recipient for economic sciences, famously remarked, “Most countries with large (production) of natural resources do more poorly than those without, which is an irony.” The film “Blood Diamond” depicts a related situation in Africa, where exploration for diamonds institutes a civil war, disrupts a nation’s political stability and subjects its people to torment and anguish. One character vividly remarks, “I hope they do not find any more diamonds, otherwise we will start killing each other again.”
Though it may sound treacherous, at some points I almost wish this land were poor – and that may indeed be the wish of many Africans in Sierra Leone. The very inception of economic principles stems from resource scarcity; that is why their core mantra is one advocating efficiency in modes of production.
Imagine if the world provided sufficient natural resources that people could simply pick basic necessities – food, water, housing materials and clothes – from their immediate surroundings. In that scenario, economic principles may not even be needed. There are several caveats to ponder.
First, is it even true that our world does not provide sufficient resources to make this a reality? Is it even the case that resources are scarce, or is it human activity – greed, pure and simple – that makes it so? Humans always want to have what others have, even if they have more. Is it axiomatic that nature cannot naturally reproduce resources that humans have consumed?
Second, assuming that natural resources are scarce by nature, not by human greed, is it morally acceptable to suggest that those who are the most efficient at production get the biggest share of natural resources, while others who are less eficient should live at their mercy?
This is not to suggest that there is no place for economic principles, but they are not without flaws and not without vested interests. I would argue that those deficiencies manifest as the root cause of the torment many developing countries are suffering.
The very idea of insufficiency, or “resource scarcity,” pushes those with so-called “technology and capacity” to take over the management of the world’s resources; the idea of not having enough makes them look elsewhere. Natural resources become the prima donna, and everyone fights over her.
Without the technology and capacity developed countries command, developing countries will always lose in a game of resource management and accumulation. That is why in the fields of oil, gas and mineral exctraction, developing countries rabidly engage in joint venture agreements with foreign corporations from developed countries. The popular myth is that without foreign corporations, developing countries would not be able to extract these resources.
According to economic schemas imported by developed countries, developing countries would not be able to extract those things “efficiently.” In reality, the uneven playing field is exploited by huge corporations that wield mighty bargaining power in their domestic econo-political arrangements – which in Indonesia are called “corruption” and dictate the share division of natural resources and the procedural rules for their extraction.
The practical implications are not only frowned upon, but also suffered by many people in Indonesia. That is the cancer of the irony: people die sitting atop the riches of their lands, not because nature does not provide enough, but purely because of unrestrained human greed.
Jakarta, Indonesia —
People are dying while sitting in a land full of riches. Perhaps this is the horrid yet true picture of reality in most developing countries in the world; certainly it is true in Indonesia.
Covering approximately 1.9 million square kilometers, Indonesia is extremely rich in natural resources. Due to active volcanic activity, its soil is fertile and resources are abundant. Salt, for instance, is believed to have originated in Indonesia. The term “salary” originates from salt because it was once used as a form of payment. In old times, the person sitting closest to the salt at a table held the highest rank.
Many Indonesians are proud of their motherland. Every elementary school student is taught that the country is rich in natural resources. The citizens’ pride is rooted in the fact that the country is geopolitically important and can survive on its own – unlike Singapore, for example, which basically lives from its neighbors’ resources.
Ironically, these same children have to grow up witnessing or experiencing extreme poverty. This is more painful given the dreams they hold after being taught about the tishness of their land.
There is a long list of cases in which corporations – local and foreign – exploited and polluted the land, leaving toxic waste behind for the local people. From the human rights violations and destruction of peoples’ livelihoods caused by mining companies Freeport and Newmont, to the environmental damage by the pulp industry in Sumatra, to a plethora of cases of mercuric materials in drinking reservoirs, corporations have brought evil consequences to Indonesian people.
This excrutiating picture is replicated the world over. John Perkins, in his “Confessions of an Economic Hitman,” described foreign corporations’ agressive pursuit of oil and natural resources in Ecuador, Indonesia and Panama, where extraction plants are built for the benefit of elite groups of foreigners and their mercurial domestic counterparts while wastes and hazards are left behind for the locals.
Joseph Stiglitz, the 2001 Nobel Prize recipient for economic sciences, famously remarked, “Most countries with large (production) of natural resources do more poorly than those without, which is an irony.” The film “Blood Diamond” depicts a related situation in Africa, where exploration for diamonds institutes a civil war, disrupts a nation’s political stability and subjects its people to torment and anguish. One character vividly remarks, “I hope they do not find any more diamonds, otherwise we will start killing each other again.”
Though it may sound treacherous, at some points I almost wish this land were poor – and that may indeed be the wish of many Africans in Sierra Leone. The very inception of economic principles stems from resource scarcity; that is why their core mantra is one advocating efficiency in modes of production.
Imagine if the world provided sufficient natural resources that people could simply pick basic necessities – food, water, housing materials and clothes – from their immediate surroundings. In that scenario, economic principles may not even be needed. There are several caveats to ponder.
First, is it even true that our world does not provide sufficient resources to make this a reality? Is it even the case that resources are scarce, or is it human activity – greed, pure and simple – that makes it so? Humans always want to have what others have, even if they have more. Is it axiomatic that nature cannot naturally reproduce resources that humans have consumed?
Second, assuming that natural resources are scarce by nature, not by human greed, is it morally acceptable to suggest that those who are the most efficient at production get the biggest share of natural resources, while others who are less eficient should live at their mercy?
This is not to suggest that there is no place for economic principles, but they are not without flaws and not without vested interests. I would argue that those deficiencies manifest as the root cause of the torment many developing countries are suffering.
The very idea of insufficiency, or “resource scarcity,” pushes those with so-called “technology and capacity” to take over the management of the world’s resources; the idea of not having enough makes them look elsewhere. Natural resources become the prima donna, and everyone fights over her.
Without the technology and capacity developed countries command, developing countries will always lose in a game of resource management and accumulation. That is why in the fields of oil, gas and mineral exctraction, developing countries rabidly engage in joint venture agreements with foreign corporations from developed countries. The popular myth is that without foreign corporations, developing countries would not be able to extract these resources.
According to economic schemas imported by developed countries, developing countries would not be able to extract those things “efficiently.” In reality, the uneven playing field is exploited by huge corporations that wield mighty bargaining power in their domestic econo-political arrangements – which in Indonesia are called “corruption” and dictate the share division of natural resources and the procedural rules for their extraction.
The practical implications are not only frowned upon, but also suffered by many people in Indonesia. That is the cancer of the irony: people die sitting atop the riches of their lands, not because nature does not provide enough, but purely because of unrestrained human greed.
The Dark Ages return in Aceh
Published in http://www.upiasia.com/Society_Culture/2009/09/30/the_dark_ages_return_in_aceh/9108/
The local House of Representatives in Aceh, Indonesia, has passed a new bill that allows anyone who commits adultery to be stoned to death. Anyone who engages in premarital sexual relations will be whipped 100 times.
This application of Shariah law, the Islamic religious code, goes into effect 30 days after its enactment on Sept. 15, and will apply to everyone within Aceh’s territory irrespective of origin and religion. Prior to this, Aceh had already implemented other Shariah rules, obliging every Muslim to pray five times a day, to offer “sedekah,” or alms to the poor, and every Muslim woman to cover her head with a veil.
Social resistance to this law has been strident across Indonesia, even among Muslims. The same was true during the drafting of an anti-pornography law that went into effect in November last year; many institutions and common people had voiced opposition to it. The anti-pornography law contains various Islamic principles from both the “hadith,” or teachings of the prophets, and the Koran.
This was an example of resistance on a national level to the imposition of certain religious values in Indonesia. Most citizens consider that religious activities fall within the realm of private rights and should not be of concern to the government.
In addition, the imposition of Islamic laws and values discriminates against non-Muslim citizens. There are five major religions in Indonesia – Buddhism, Hinduism, Protestant Christianity, Catholicism and Islam. Even though 80 percent of Indonesians are Muslim, it is unfair to impose their values and beliefs on others.
Many historians and legal scholars have affirmed that the first of the five principles – the Pancasila – that comprise the philosophy of the Indonesian state does not indicate that Indonesia is based on one religion. The first principle states that Indonesia is based on a belief in the one and only God Almighty. Scholars agree that this means Indonesia acknowledges the existence of God and of religions, and affirms its acceptance of different religious beliefs.
Historically, there was a proposal to amend this provision to “a belief in God Almighty and the obligation for Muslims to follow Islamic law.” However, the founding father of Indonesia considered that this text would promote social intolerance and imply that Indonesia was an Islamic state.
Moreover, one member of the drafting committee, Wongsonegoro, rejected these words because it would impose on all Muslims the obligation to follow Islamic law. He considered such an imposition improper, as religion falls within the private realm of each individual.
The new law in Aceh invites much opposition from many parties for many reasons. First, non-Muslims will be bound to comply with this law. Second, not all Muslims agree to such a strict imposition of Shariah law, since many aspects of the law are the result of extensive interpretation of the Koran. Third, the law would apply to all Indonesian citizens who travel to Aceh.
The imposition of Islamic law is not entirely for moral and religious objectives. Historically, the rebel movement in Aceh was triggered by discontent over the central government’s share of local resources. Aceh people considered that the central government was exploiting their natural resources without fair compensation. The special autonomy law was passed for economic purposes, in fact.
The imposition of Shariah law enables local bureaucrats to reap economic benefits from Islamic teachings. For example, one article in the autonomous law of Aceh states that “zakat” – the obligation for Muslims to share some of their wealth, similar to tithing one-tenth of one’s wealth in Christianity – is part of local income. There is certainly economic interest in the new law.
Furthermore, Aceh is not particularly clean of corruption. The Financial Auditing Institution, or Badan Pemeriksa Keuangan, experiences immense difficulty in auditing Aceh due to bureaucratic resistance. In addition, politicians in Aceh can maneuver easily since the Koran serves as a legal instrument. Hence, certain policies can be executed by instilling fear of breaching religious obligations. Religious breaches carry profound social sanctions in Indonesia.
Also, the new law is not legitimate under national law. Indonesia Law No.32/2004 concerning local government regulates that the central government retains authority in six areas, namely foreign policy, defense, security, the judiciary, monetary and national fiscal law, and religion. Since the judiciary remains under central government authority, criminal law is the domain of the central government.
Moreover, Law No. 18/2001 concerning the special autonomy of Aceh also regulates that the Indonesian Supreme Court acts as the supreme institution for appeals. The law does not grant local governments the right to pass criminal legislation. This means the law in Aceh must be governed by national legislation.
The new law in Aceh involves the creation of two separate criminal laws, as well as private law and administrative law, in Indonesia. This is inconsistent with the principles of international law as well as national law.
We have witnessed the unacceptable cruelty in Afghanistan, where a woman can be raped by 10 men if her brother rapes a woman from another tribe; where women are humiliated and stoned to death in public places for committing adultery; where women are deprived of various rights including legal title to property and even freedom of movement. In some parts of the country women may not appear in public unless they are accompanied by a male family member.
This is definitely not what most Indonesian citizens want. Religious belief falls within the realm of private life; the government has no right to force people to comply with religious obligations, especially when it comes to criminal prosecutions and extending Islamic law to non-Muslim citizens.
The local House of Representatives in Aceh, Indonesia, has passed a new bill that allows anyone who commits adultery to be stoned to death. Anyone who engages in premarital sexual relations will be whipped 100 times.
This application of Shariah law, the Islamic religious code, goes into effect 30 days after its enactment on Sept. 15, and will apply to everyone within Aceh’s territory irrespective of origin and religion. Prior to this, Aceh had already implemented other Shariah rules, obliging every Muslim to pray five times a day, to offer “sedekah,” or alms to the poor, and every Muslim woman to cover her head with a veil.
Social resistance to this law has been strident across Indonesia, even among Muslims. The same was true during the drafting of an anti-pornography law that went into effect in November last year; many institutions and common people had voiced opposition to it. The anti-pornography law contains various Islamic principles from both the “hadith,” or teachings of the prophets, and the Koran.
This was an example of resistance on a national level to the imposition of certain religious values in Indonesia. Most citizens consider that religious activities fall within the realm of private rights and should not be of concern to the government.
In addition, the imposition of Islamic laws and values discriminates against non-Muslim citizens. There are five major religions in Indonesia – Buddhism, Hinduism, Protestant Christianity, Catholicism and Islam. Even though 80 percent of Indonesians are Muslim, it is unfair to impose their values and beliefs on others.
Many historians and legal scholars have affirmed that the first of the five principles – the Pancasila – that comprise the philosophy of the Indonesian state does not indicate that Indonesia is based on one religion. The first principle states that Indonesia is based on a belief in the one and only God Almighty. Scholars agree that this means Indonesia acknowledges the existence of God and of religions, and affirms its acceptance of different religious beliefs.
Historically, there was a proposal to amend this provision to “a belief in God Almighty and the obligation for Muslims to follow Islamic law.” However, the founding father of Indonesia considered that this text would promote social intolerance and imply that Indonesia was an Islamic state.
Moreover, one member of the drafting committee, Wongsonegoro, rejected these words because it would impose on all Muslims the obligation to follow Islamic law. He considered such an imposition improper, as religion falls within the private realm of each individual.
The new law in Aceh invites much opposition from many parties for many reasons. First, non-Muslims will be bound to comply with this law. Second, not all Muslims agree to such a strict imposition of Shariah law, since many aspects of the law are the result of extensive interpretation of the Koran. Third, the law would apply to all Indonesian citizens who travel to Aceh.
The imposition of Islamic law is not entirely for moral and religious objectives. Historically, the rebel movement in Aceh was triggered by discontent over the central government’s share of local resources. Aceh people considered that the central government was exploiting their natural resources without fair compensation. The special autonomy law was passed for economic purposes, in fact.
The imposition of Shariah law enables local bureaucrats to reap economic benefits from Islamic teachings. For example, one article in the autonomous law of Aceh states that “zakat” – the obligation for Muslims to share some of their wealth, similar to tithing one-tenth of one’s wealth in Christianity – is part of local income. There is certainly economic interest in the new law.
Furthermore, Aceh is not particularly clean of corruption. The Financial Auditing Institution, or Badan Pemeriksa Keuangan, experiences immense difficulty in auditing Aceh due to bureaucratic resistance. In addition, politicians in Aceh can maneuver easily since the Koran serves as a legal instrument. Hence, certain policies can be executed by instilling fear of breaching religious obligations. Religious breaches carry profound social sanctions in Indonesia.
Also, the new law is not legitimate under national law. Indonesia Law No.32/2004 concerning local government regulates that the central government retains authority in six areas, namely foreign policy, defense, security, the judiciary, monetary and national fiscal law, and religion. Since the judiciary remains under central government authority, criminal law is the domain of the central government.
Moreover, Law No. 18/2001 concerning the special autonomy of Aceh also regulates that the Indonesian Supreme Court acts as the supreme institution for appeals. The law does not grant local governments the right to pass criminal legislation. This means the law in Aceh must be governed by national legislation.
The new law in Aceh involves the creation of two separate criminal laws, as well as private law and administrative law, in Indonesia. This is inconsistent with the principles of international law as well as national law.
We have witnessed the unacceptable cruelty in Afghanistan, where a woman can be raped by 10 men if her brother rapes a woman from another tribe; where women are humiliated and stoned to death in public places for committing adultery; where women are deprived of various rights including legal title to property and even freedom of movement. In some parts of the country women may not appear in public unless they are accompanied by a male family member.
This is definitely not what most Indonesian citizens want. Religious belief falls within the realm of private life; the government has no right to force people to comply with religious obligations, especially when it comes to criminal prosecutions and extending Islamic law to non-Muslim citizens.
Religious schools are blasphemy to education
Published in http://www.upiasia.com/Society_Culture/2009/09/14/religious_schools_are_blasphemy_to_education/3151/
karta, Indonesia — Schools and churches, alongside parents, are institutions with an obligation to instill respect, tolerance and moral standards in children. These institutions are trusted as safe places for children, as well as places for education and moral and spiritual guidance.
Across Indonesia, particularly in Medan and Jakarta, various schools are emblazoned with names that declare certain religious beliefs. For instance, Methodist schools offer Christian instruction, while the name Al-Azhar indicates a school that is run based on Islamic principles.
I argue that such emblems promote social intolerance in Indonesia.
First, religion advocates the value of the “one and only” truth. Children are taught from a young age to believe in one particular religious standard. Various religions – particularly Christianity and Islam – believe that the only path to salvation or heaven is through that particular religion. This ostracizes all other religions as viable choices of belief.
The Holy Bible indicates this exclusive religious standard. For example, in 1 Timothy 2:5, it is stated: “For there is one God and one mediator between God and men, the man Christ Jesus, who gave himself as a ransom for all.” Moreover, In John 14:6, Jesus says: "I am the way, the truth, and the life. No one comes to the Father except through me."
As for Al-Quran, QS. Ali Imran : 19 and QS. An-Nuur : 39 indicate that the only godly religion is Islam and the “kafirs” – or non-Muslims – will not find the path to heaven open regardless of their good deeds.
I realize that these are incomplete citations from extremely complex and historically interpreted holy scriptures. However, it is conventional wisdom and accepted truth that Christians and Muslims believe in an exclusive path to heaven through their own religions.
Even in universities, students who adhere adamantly to certain religions tend to view that too much interaction with students of different religions, or non-religious students, can impair their beliefs. I would not discuss the merits of such claims; however, I am concerned that such beliefs destroy tolerance in society and can do damage, particularly to children.
Religions are judgmental. They adamantly declare what is wrong and what is right. Religious schools compel students and children to study only the one religion that the school endorses. Methodist schools provide compulsory Christian lessons; Al-Azhar provides compulsory Islamic lessons. Students are taught values that include exclusivity based on religion.
The problem with religious schools is that they deal with children or relatively young teenagers; this leads to my second point.
Second, children are susceptible to pressure. Religious schools create enormous pressure for children to accept and believe in their teachings; otherwise they become social outcasts. Although the same argument may be true for adults, at least adults can make informed choices and determine right and wrong values.
This is analogous to smoking, driving or drinking alcohol. Children are not allowed to decide on such issues because they are not wise enough to know wrong or right, bad or good. My personal experience in religious school taught me one thing: A good student is one who believes in the religion his school endorses.
Some schools will argue that they do not impose beliefs; however, most students come from families that share the religion the school endorses. Therefore social circles are built among those who embrace the same religion.
Students tend to ostracize classmates of a different religion, and worse, teachers do too. One person I interviewed told me that a teacher at a Christian school in Manado refused to give his sister first rank merely because she was a Muslim. Also, some Christian students will not invite students of a different religion to their birthday parties, for example.
Certainly I am not arguing against a teacher’s prerogative to decide on first rank, or a student’s right to decide who to invite to a birthday party. But to make such choices under the banner of religion is unjustifiable. Children are susceptible to such ostracism and this consequently creates enormous pressure to embrace religion, not because they believe in it but simply because they want to be accepted socially.
Third, schools have an important obligation to educate. This means more than providing informative lessons. It includes enabling children to grow in both cognitive and moral skills. To instill exclusive religious ideas is similar to a doctor executing a procedure without the informed consent of the patient. It is like imposing Sharia law on all Indonesian citizens, or requiring all women to wear veils.
The main problem is that religious schools force students to study only one religion. Also, students must score well in religion as it constitutes part of their academic assessment. Sometimes the assessment revolves around the quality of the students’ religious beliefs.
For example, in one Christian school in Medan, attending church on Sunday constitutes part of the assessment. This is why many non-Christian students attend church. Moreover, in several Methodist schools in Medan, students are encouraged to instill Christian values in their parents’ lives.
Christians believe they have a mission, originating from Jesus’ remark: “Go ye into all the world, and preach the gospel to every creature.” (Mark 16:15) Some students would go home and tell their parents to convert to Christianity because that is the only way for salvation.
It certainly outrages some parents that their children judge their moral standards; some tell their children not to go to church any longer. Teachers would advise these students to pray for their parents; when parents find their children praying before they sleep that their parents be forgiven for their sins and ignorance, they are again outraged at being judged by their own children.
We all agree that companies should not be allowed to discriminate between employees based on their religion; then why are schools allowed to do so? Companies deal with adults who are capable of making decisions, yet discrimination is not allowed. Schools deal with children who cannot make informed decisions, yet they are exposed to great pressure to embrace religious ideas and faced with discrimination if they do not.
In the end, the argument here is not whether the religious schools promote the right moral values, but whether religious schools educate children to allow them to make informed choices concerning religion. Even if religions teach the right moral values, it is still wrong for schools to compel children to choose one particular religion. If all religions teach the right moral values, why not allow children to learn different religious ideas?
karta, Indonesia — Schools and churches, alongside parents, are institutions with an obligation to instill respect, tolerance and moral standards in children. These institutions are trusted as safe places for children, as well as places for education and moral and spiritual guidance.
Across Indonesia, particularly in Medan and Jakarta, various schools are emblazoned with names that declare certain religious beliefs. For instance, Methodist schools offer Christian instruction, while the name Al-Azhar indicates a school that is run based on Islamic principles.
I argue that such emblems promote social intolerance in Indonesia.
First, religion advocates the value of the “one and only” truth. Children are taught from a young age to believe in one particular religious standard. Various religions – particularly Christianity and Islam – believe that the only path to salvation or heaven is through that particular religion. This ostracizes all other religions as viable choices of belief.
The Holy Bible indicates this exclusive religious standard. For example, in 1 Timothy 2:5, it is stated: “For there is one God and one mediator between God and men, the man Christ Jesus, who gave himself as a ransom for all.” Moreover, In John 14:6, Jesus says: "I am the way, the truth, and the life. No one comes to the Father except through me."
As for Al-Quran, QS. Ali Imran : 19 and QS. An-Nuur : 39 indicate that the only godly religion is Islam and the “kafirs” – or non-Muslims – will not find the path to heaven open regardless of their good deeds.
I realize that these are incomplete citations from extremely complex and historically interpreted holy scriptures. However, it is conventional wisdom and accepted truth that Christians and Muslims believe in an exclusive path to heaven through their own religions.
Even in universities, students who adhere adamantly to certain religions tend to view that too much interaction with students of different religions, or non-religious students, can impair their beliefs. I would not discuss the merits of such claims; however, I am concerned that such beliefs destroy tolerance in society and can do damage, particularly to children.
Religions are judgmental. They adamantly declare what is wrong and what is right. Religious schools compel students and children to study only the one religion that the school endorses. Methodist schools provide compulsory Christian lessons; Al-Azhar provides compulsory Islamic lessons. Students are taught values that include exclusivity based on religion.
The problem with religious schools is that they deal with children or relatively young teenagers; this leads to my second point.
Second, children are susceptible to pressure. Religious schools create enormous pressure for children to accept and believe in their teachings; otherwise they become social outcasts. Although the same argument may be true for adults, at least adults can make informed choices and determine right and wrong values.
This is analogous to smoking, driving or drinking alcohol. Children are not allowed to decide on such issues because they are not wise enough to know wrong or right, bad or good. My personal experience in religious school taught me one thing: A good student is one who believes in the religion his school endorses.
Some schools will argue that they do not impose beliefs; however, most students come from families that share the religion the school endorses. Therefore social circles are built among those who embrace the same religion.
Students tend to ostracize classmates of a different religion, and worse, teachers do too. One person I interviewed told me that a teacher at a Christian school in Manado refused to give his sister first rank merely because she was a Muslim. Also, some Christian students will not invite students of a different religion to their birthday parties, for example.
Certainly I am not arguing against a teacher’s prerogative to decide on first rank, or a student’s right to decide who to invite to a birthday party. But to make such choices under the banner of religion is unjustifiable. Children are susceptible to such ostracism and this consequently creates enormous pressure to embrace religion, not because they believe in it but simply because they want to be accepted socially.
Third, schools have an important obligation to educate. This means more than providing informative lessons. It includes enabling children to grow in both cognitive and moral skills. To instill exclusive religious ideas is similar to a doctor executing a procedure without the informed consent of the patient. It is like imposing Sharia law on all Indonesian citizens, or requiring all women to wear veils.
The main problem is that religious schools force students to study only one religion. Also, students must score well in religion as it constitutes part of their academic assessment. Sometimes the assessment revolves around the quality of the students’ religious beliefs.
For example, in one Christian school in Medan, attending church on Sunday constitutes part of the assessment. This is why many non-Christian students attend church. Moreover, in several Methodist schools in Medan, students are encouraged to instill Christian values in their parents’ lives.
Christians believe they have a mission, originating from Jesus’ remark: “Go ye into all the world, and preach the gospel to every creature.” (Mark 16:15) Some students would go home and tell their parents to convert to Christianity because that is the only way for salvation.
It certainly outrages some parents that their children judge their moral standards; some tell their children not to go to church any longer. Teachers would advise these students to pray for their parents; when parents find their children praying before they sleep that their parents be forgiven for their sins and ignorance, they are again outraged at being judged by their own children.
We all agree that companies should not be allowed to discriminate between employees based on their religion; then why are schools allowed to do so? Companies deal with adults who are capable of making decisions, yet discrimination is not allowed. Schools deal with children who cannot make informed decisions, yet they are exposed to great pressure to embrace religious ideas and faced with discrimination if they do not.
In the end, the argument here is not whether the religious schools promote the right moral values, but whether religious schools educate children to allow them to make informed choices concerning religion. Even if religions teach the right moral values, it is still wrong for schools to compel children to choose one particular religion. If all religions teach the right moral values, why not allow children to learn different religious ideas?
Saturday, March 20, 2010
ask what you can do for your country? try it in my shoes!
Published in http://www.upiasia.com/Society_Culture/2010/03/10/chinese_still_face_discrimination_in_indonesia/7057/
Jakarta, Indonesia — It is conventional wisdom that Indonesia’s education policy has traditionally discriminated against the Chinese minority living in the country. For a long time – especially before the 1998 downfall of President Suharto – the Chinese have not enjoyed equal educational opportunities.
For example, there would be a limited number of seats – or no seat at all – for Chinese on certain faculties; Chinese have had extreme difficulty in applying for scholarships; and they have faced impediments in seeking careers in state institutions such as the police, judiciary, legislature or government.
This phenomenon dates back to a post-1945 compromise in which Chinese were encouraged in economic activities while non-Chinese – especially the Javanese – had priority in running the country. A similar political compromise was made in Malaysia. Although in terms of its written laws discrimination has abated in Indonesia, in practice – with only trifling changes – discrimination is still rampant, particularly in Medan and cities far from Jakarta.
Given such circumstances, Chinese are inclined to seek better opportunities abroad if possible. Many Chinese do not want to stay in Indonesia to work, pay taxes and contribute their ideas and energy to the country.
It is a common secret, especially prior to 1998, that state universities have been exclusively reserved for non-Chinese. Since state universities are among the best schools, and it is expensive to study abroad, many young Chinese are denied access to the best education.
One outrageous story is that of a Chinese participant in the International Chemistry Olympics from my high school. Prior to qualifying for the international round, this student requested financial support and the use of school facilities from the Department of Education and his school. Both requests were declined. The department reasoned that he should seek such support from his own school, while his school reasoned that since he represented Indonesia he should seek support from the Department of Education.
In the end he had to raise funds on his own. Fortunately, he placed second in the competition. Noting his achievement, both the government and the school requested that his winner’s cup be placed in their “collection of achievements.” At the same time, a reputable university in Singapore offered him a full scholarship and financial support for his undergraduate degree under the condition that he register his cup under that university.
Some non-Chinese have faced a similar plight as the government simply does not fund such programs. But the reality is tougher for the Chinese.
Another story that may elicit similar outrage is the blatant discrimination in the faculty of medicine at one reputable university in North Sumatra. Many Chinese studying there have expressed outrage and discontent as to how placement tests were conducted. Out of 300, only 20 seats were available for Chinese until at least 2006. This limit was set before the test results were published. One non-Chinese student remarked, “Had the test results been transparantly disclosed, perhaps 70 to 80 percent of the seats would be assigned to Chinese.”
This is only a glimpse of the discrimination Chinese face with regard to access to education, either endorsed by law or condoned in practice.
Some people defend this reality, saying that discrimination is treating similar things differently; therefore it is not discrimination to treat Chinese differently from non-Chinese, as the two groups have unequal economic power. Second, even if there is discrimination, some argue that it aims to correct imbalances, hence it is justifiable. Third, it is the Chinese people’s fault if they are discriminated against, as they exhibit arrogance and ignorance toward the poor people.
The classic case for justifying discimination is that since the Chinese grew rich by stealing from others’ land – noting that they were originally immigrants and therefore not entitled to anything – it is fair to correct imbalances by discriminating in favor of the original inhabitants of the land.
There are generally two types of imbalance – one that is inherent or natural, and the other that is caused by certain actions. For example, men and women are innately different physically; therefore it is not discriminatory to establish separate divisions in sport for men and women. However, rich and poor are not innate conditions. If a person is poor because he or she is lazy, policies that favor such a person are discriminatory.
It is utterly unfair to punish hard workers for being rich and reward paupers for their sloth. Wealth is not given, it is achieved by hard work. Many Chinese came to Indonesia – as they did to many other countries – with little more than the clothes they were wearing. It is therefore a wrong assumption that all or even a substantial number of Chinese are rich.
Moreover, the Chinese have to pay the same taxes others do; in fact, in practice many bureaucrats blackmail the Chinese, who end up paying more than others due to lack of education and fear. How can this be construed as stealing when everyone pays the same tax and has equal opportunities? Simply some are more efficient in business than others.
If we assume that corrective measures should be taken with regard to economic imbalances, the government should tax the rich more and subsidize the poor. However, the government should tax the rich, not the Chinese, if the policy is aimed at correcting an imbalance in the distribution of wealth.
Before arguing that the Chinese are arrogant and ignorant, we must put ourselves in the Chinese people’s shoes. When almost every door to career development is closed, the only space the Chinese have to maneuver in is business. Given this restriction, the fact that some Chinese have built empires from scratch is a superb achievement. Without condoning or condemning, it is human to be arrogant to a certain extent. Arrogance is a characteristic of the rich, including non-Chinese. It is not justifiable to punish someone for arrogance.
The late U.S. President John F. Kennedy famously said, “Ask not what your country can do for you; ask what you can do for your country.” Many Indonesians feel that the Chinese are only taking from the country. But you cannot possibly ask someone to do something for you if you do nothing in return – or even worse, discriminate against them.
Jakarta, Indonesia — It is conventional wisdom that Indonesia’s education policy has traditionally discriminated against the Chinese minority living in the country. For a long time – especially before the 1998 downfall of President Suharto – the Chinese have not enjoyed equal educational opportunities.
For example, there would be a limited number of seats – or no seat at all – for Chinese on certain faculties; Chinese have had extreme difficulty in applying for scholarships; and they have faced impediments in seeking careers in state institutions such as the police, judiciary, legislature or government.
This phenomenon dates back to a post-1945 compromise in which Chinese were encouraged in economic activities while non-Chinese – especially the Javanese – had priority in running the country. A similar political compromise was made in Malaysia. Although in terms of its written laws discrimination has abated in Indonesia, in practice – with only trifling changes – discrimination is still rampant, particularly in Medan and cities far from Jakarta.
Given such circumstances, Chinese are inclined to seek better opportunities abroad if possible. Many Chinese do not want to stay in Indonesia to work, pay taxes and contribute their ideas and energy to the country.
It is a common secret, especially prior to 1998, that state universities have been exclusively reserved for non-Chinese. Since state universities are among the best schools, and it is expensive to study abroad, many young Chinese are denied access to the best education.
One outrageous story is that of a Chinese participant in the International Chemistry Olympics from my high school. Prior to qualifying for the international round, this student requested financial support and the use of school facilities from the Department of Education and his school. Both requests were declined. The department reasoned that he should seek such support from his own school, while his school reasoned that since he represented Indonesia he should seek support from the Department of Education.
In the end he had to raise funds on his own. Fortunately, he placed second in the competition. Noting his achievement, both the government and the school requested that his winner’s cup be placed in their “collection of achievements.” At the same time, a reputable university in Singapore offered him a full scholarship and financial support for his undergraduate degree under the condition that he register his cup under that university.
Some non-Chinese have faced a similar plight as the government simply does not fund such programs. But the reality is tougher for the Chinese.
Another story that may elicit similar outrage is the blatant discrimination in the faculty of medicine at one reputable university in North Sumatra. Many Chinese studying there have expressed outrage and discontent as to how placement tests were conducted. Out of 300, only 20 seats were available for Chinese until at least 2006. This limit was set before the test results were published. One non-Chinese student remarked, “Had the test results been transparantly disclosed, perhaps 70 to 80 percent of the seats would be assigned to Chinese.”
This is only a glimpse of the discrimination Chinese face with regard to access to education, either endorsed by law or condoned in practice.
Some people defend this reality, saying that discrimination is treating similar things differently; therefore it is not discrimination to treat Chinese differently from non-Chinese, as the two groups have unequal economic power. Second, even if there is discrimination, some argue that it aims to correct imbalances, hence it is justifiable. Third, it is the Chinese people’s fault if they are discriminated against, as they exhibit arrogance and ignorance toward the poor people.
The classic case for justifying discimination is that since the Chinese grew rich by stealing from others’ land – noting that they were originally immigrants and therefore not entitled to anything – it is fair to correct imbalances by discriminating in favor of the original inhabitants of the land.
There are generally two types of imbalance – one that is inherent or natural, and the other that is caused by certain actions. For example, men and women are innately different physically; therefore it is not discriminatory to establish separate divisions in sport for men and women. However, rich and poor are not innate conditions. If a person is poor because he or she is lazy, policies that favor such a person are discriminatory.
It is utterly unfair to punish hard workers for being rich and reward paupers for their sloth. Wealth is not given, it is achieved by hard work. Many Chinese came to Indonesia – as they did to many other countries – with little more than the clothes they were wearing. It is therefore a wrong assumption that all or even a substantial number of Chinese are rich.
Moreover, the Chinese have to pay the same taxes others do; in fact, in practice many bureaucrats blackmail the Chinese, who end up paying more than others due to lack of education and fear. How can this be construed as stealing when everyone pays the same tax and has equal opportunities? Simply some are more efficient in business than others.
If we assume that corrective measures should be taken with regard to economic imbalances, the government should tax the rich more and subsidize the poor. However, the government should tax the rich, not the Chinese, if the policy is aimed at correcting an imbalance in the distribution of wealth.
Before arguing that the Chinese are arrogant and ignorant, we must put ourselves in the Chinese people’s shoes. When almost every door to career development is closed, the only space the Chinese have to maneuver in is business. Given this restriction, the fact that some Chinese have built empires from scratch is a superb achievement. Without condoning or condemning, it is human to be arrogant to a certain extent. Arrogance is a characteristic of the rich, including non-Chinese. It is not justifiable to punish someone for arrogance.
The late U.S. President John F. Kennedy famously said, “Ask not what your country can do for you; ask what you can do for your country.” Many Indonesians feel that the Chinese are only taking from the country. But you cannot possibly ask someone to do something for you if you do nothing in return – or even worse, discriminate against them.
Tuesday, March 02, 2010
Indonesians discontent with ACFTA
Jakarta, Indonesia — Thousands of workers protested outside the House of Representatives complex in Central Jakarta, Indonesia on Jan. 28, demanding that the government abolish the Association of Southeast Asian Nations-China Free Trade Agreement, as it badly impacts workers.
ACFTA contains mutual commitments by all ASEAN member states and China to liberalize their markets. Simply put, ASEAN and China are under international obligation to gradually eliminate all tariffs and non-tariff barriers to trade. Such barriers include tax, regulatory measures and quantitative restrictions or quotas.
The agreement was ratified on Nov. 29, 2004 and as per Article 8 (1) of the preliminary agreement, obligations to liberalize markets are effective by 2010 for the ASEAN 6 group – Brunei, China, Indonesia, Malaysia, Philippines, Singapore and Thailand and 2015 for the ASEAN 4 group – Myanmar, Vietnam, Laos and Cambodia.
The public outcry in Jakarta rejecting the enforcement of ACFTA is due to at least two reasons: The Indonesian government’s failure to publicize the exact substance of the agreement and its inability to comprehend the consequences.
Free trade and ACFTA are two strenuous and delicate issues. It is impossible to expect a commoner to fully grasp what free trade is. Even if one reads the ACFTA, it is impossible to fully understand the intricate regime.
It is believed that the Indonesian government is not fully aware of the pertinent consequences or obligations it accepted when it ratified the agreement. For example, there was barely any published feasibility study of commitments undertaken within the ACFTA or public hearings before the agreement was ratified.
Second, the government’s support to fortify its domestic industries with comparative advantages is barely felt by any industry. This premise supports the conclusion in the previous paragraph.
Free trade is a tough game and therefore requires a country to prepare and contemplate the consequences carefully before liberalizing its market. For example, in a sprinting game an athlete can compete if he runs from the same starting point, using the same shoes, and has physical abilities relatively similar to other contestants. If any of such prerequisites are not met, it should come as no surprise if the athlete loses the race.
ACFTA was ratified in 2004. So the Indonesian government had some five years to improve its industrial competitiveness. But one is barely aware of any shocking revelation of economic strategy or industrial advancement in the international arena. In fact, Indonesia suffered from sugar and rice scarcities in 2008 and had to import both products despite being a major producer.
All the above explanations suggest that the Indonesian government does not know what it agreed to and has no idea how to tackle it now.
But when it figures out the danger, it surreptitiously conceals the information from the public. Think of it this way – the agreement was ratified during former President Megawati Sukarnoputri’s era but the effects of liberalization take place only in 2010. As Indonesia’s Constitution allows only a five-year term, assuming Megawati had won the 2004 election, she would not be responsible for the hardship faced by the 2010 administration.
Another possible scenario why President Susilo Bambang Yudhoyono’s 2004-2009 administration did not pay much attention to advance local industries’ competitiveness is because there was a possibility that he would not have won the 2009 election.
One of my strongest criticisms of democracy is the risk of self-absorbing, selfish and short-term policies where a president or political leader is discharged of formal responsibility over consequences arising out of his or her decisions and subsequently assumed by the next administration.
Indonesian businessman Sofjan Wanandi, during a seminar held by HukumOnline, said that the Indonesian government is not serious, or is even nonchalant, about local industries’ competitiveness. For instance, he complained that China’s imported products evade the 10 percent value added tax by illegal means while local industries have to pay the same up front. This provides China a 10 percent head start in terms of price competitiveness. In addition, poor quality control, labor exploitation and copyright violations are additional factors that contribute toward making Chinese products cheap.
Assuming that Indonesia’s local industries and China’s industries compete cleanly, I strongly believe that numerous industries in Indonesia will shut down. Among the many reasons for such a premise are economics of scale and productivity. Industries can reduce production costs by enhancing production quantities, which in turn reduce marginal costs incurred for one additional unit of production.
Presently, China’s manufacturing base is without a doubt the largest in the world. For instance, according to a BBC report, part of a global drive toward trade liberalization has resulted in a huge increase in Chinese clothing exports, with sales of certain items to the European Union rising by up to 500 percent.
Consequently, the EU had to fence off its textile industry due to huge Chinese imports. Second, China is well known for its hardworking culture of 16-18 hours a day. An extremely competitive environment also drives this culture. The ratio of China’s productivity compared to Indonesia’s average productivity is approximately 4:1.
That means if a Chinese worker can produce four shoes per day, an Indonesian worker can only produce one, assuming the Chinese worker receives two and a half times more in salary than that paid to workers in Indonesia. It is a misleading myth that China is famous for its cheap labor. Rather it has effective and cheap labor.
In the final analysis, market liberalization could hurt Indonesia the most when it least expects to be hit.
ACFTA contains mutual commitments by all ASEAN member states and China to liberalize their markets. Simply put, ASEAN and China are under international obligation to gradually eliminate all tariffs and non-tariff barriers to trade. Such barriers include tax, regulatory measures and quantitative restrictions or quotas.
The agreement was ratified on Nov. 29, 2004 and as per Article 8 (1) of the preliminary agreement, obligations to liberalize markets are effective by 2010 for the ASEAN 6 group – Brunei, China, Indonesia, Malaysia, Philippines, Singapore and Thailand and 2015 for the ASEAN 4 group – Myanmar, Vietnam, Laos and Cambodia.
The public outcry in Jakarta rejecting the enforcement of ACFTA is due to at least two reasons: The Indonesian government’s failure to publicize the exact substance of the agreement and its inability to comprehend the consequences.
Free trade and ACFTA are two strenuous and delicate issues. It is impossible to expect a commoner to fully grasp what free trade is. Even if one reads the ACFTA, it is impossible to fully understand the intricate regime.
It is believed that the Indonesian government is not fully aware of the pertinent consequences or obligations it accepted when it ratified the agreement. For example, there was barely any published feasibility study of commitments undertaken within the ACFTA or public hearings before the agreement was ratified.
Second, the government’s support to fortify its domestic industries with comparative advantages is barely felt by any industry. This premise supports the conclusion in the previous paragraph.
Free trade is a tough game and therefore requires a country to prepare and contemplate the consequences carefully before liberalizing its market. For example, in a sprinting game an athlete can compete if he runs from the same starting point, using the same shoes, and has physical abilities relatively similar to other contestants. If any of such prerequisites are not met, it should come as no surprise if the athlete loses the race.
ACFTA was ratified in 2004. So the Indonesian government had some five years to improve its industrial competitiveness. But one is barely aware of any shocking revelation of economic strategy or industrial advancement in the international arena. In fact, Indonesia suffered from sugar and rice scarcities in 2008 and had to import both products despite being a major producer.
All the above explanations suggest that the Indonesian government does not know what it agreed to and has no idea how to tackle it now.
But when it figures out the danger, it surreptitiously conceals the information from the public. Think of it this way – the agreement was ratified during former President Megawati Sukarnoputri’s era but the effects of liberalization take place only in 2010. As Indonesia’s Constitution allows only a five-year term, assuming Megawati had won the 2004 election, she would not be responsible for the hardship faced by the 2010 administration.
Another possible scenario why President Susilo Bambang Yudhoyono’s 2004-2009 administration did not pay much attention to advance local industries’ competitiveness is because there was a possibility that he would not have won the 2009 election.
One of my strongest criticisms of democracy is the risk of self-absorbing, selfish and short-term policies where a president or political leader is discharged of formal responsibility over consequences arising out of his or her decisions and subsequently assumed by the next administration.
Indonesian businessman Sofjan Wanandi, during a seminar held by HukumOnline, said that the Indonesian government is not serious, or is even nonchalant, about local industries’ competitiveness. For instance, he complained that China’s imported products evade the 10 percent value added tax by illegal means while local industries have to pay the same up front. This provides China a 10 percent head start in terms of price competitiveness. In addition, poor quality control, labor exploitation and copyright violations are additional factors that contribute toward making Chinese products cheap.
Assuming that Indonesia’s local industries and China’s industries compete cleanly, I strongly believe that numerous industries in Indonesia will shut down. Among the many reasons for such a premise are economics of scale and productivity. Industries can reduce production costs by enhancing production quantities, which in turn reduce marginal costs incurred for one additional unit of production.
Presently, China’s manufacturing base is without a doubt the largest in the world. For instance, according to a BBC report, part of a global drive toward trade liberalization has resulted in a huge increase in Chinese clothing exports, with sales of certain items to the European Union rising by up to 500 percent.
Consequently, the EU had to fence off its textile industry due to huge Chinese imports. Second, China is well known for its hardworking culture of 16-18 hours a day. An extremely competitive environment also drives this culture. The ratio of China’s productivity compared to Indonesia’s average productivity is approximately 4:1.
That means if a Chinese worker can produce four shoes per day, an Indonesian worker can only produce one, assuming the Chinese worker receives two and a half times more in salary than that paid to workers in Indonesia. It is a misleading myth that China is famous for its cheap labor. Rather it has effective and cheap labor.
In the final analysis, market liberalization could hurt Indonesia the most when it least expects to be hit.
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