Thursday, August 26, 2010
Piracy Leaves Black Mark on Indonesia
Piracy levels in Indonesia remain among the highest in the world. The lack of rule of law has been a major criticism against Indonesia for some time now.
Indonesia’s economic rise is impressing more people every day. The country’s stable political and macroeconomic environment, coupled with its strong domestic consumption, is attracting new investors to the country. But the country’s economic strength is also bringing greater scrutiny on the country’s legal system and law-enforcement capabilities.
On the day that Japanese consumer electronics giant Panasonic affirmed its plan to relocate its production facilities from China to Indonesia, a survey by Hong Kong’s Political and Economic Risk Consultancy found Indonesia to have the worst record in Asia of protecting intellectual property rights.
These two conflicting faces of Indonesia must somehow be reconciled. The country cannot aspire to be a major economic player if it does not respect and protect intellectual property rights.
Panasonic’s heightened interest in Indonesia must we welcomed and praise should go to the Investment Coordinating Board (BKPM) and the Ministry of Industry for rebuilding the country’s industrial sector. It has been a long time coming, but all the signs of a major pickup in the manufacturing sector are now evident.
Rachmat Gobel, chairman of Panasonic Gobel Indonesia, said that the electronics giant has been increasing its investment here every year. At three factories in Indonesia — in Jakarta, Surabaya and Batam — Panasonic develops home appliances, electronics and batteries.
With the move, the company will increase its $400 million investment over the next few years, which means more high-paying jobs should be coming this way.
If other major Asian manufacturers think like Panasonic, Indonesia can develop into a major industrial base in Asia. The country has a large and relatively well-trained labor force, ample natural resources and is ideally located. What it does not have is adequate infrastructure and conducive labor policies. The government must work urgently on both these fronts if the country is to maximize its current economic momentum.
And as the economy continues to grow, the government can no longer continue to ignore the blatant disregard for intellectual property rights in the country.
Indonesia seems to have lost its desire to crack down on IPR abuses and make local system more compliant with international standards, PERC concluded in its study. That’s a damning verdict that the country cannot afford to bear.
The key problem, the study notes, is that although Indonesia has passed laws that should improve protection of intellectual property, rules are not enforced effectively. As a result, piracy levels in Indonesia remain among the highest in the world.
The lack of rule of law has been a major criticism against Indonesia for some time now. Indonesia cannot have sustainable economic growth and prosperity if this issue is not resolved. Jakarta Globe