The Jakarta Post, 23 September 2002, OPINION & EDITORIAL
'There are casualties in successful businesses'
,Director, Business Watch Indonesia,Researcher, Unisosdem Jakarta,firstname.lastname@example.org The head of The Indonesian Control Body for Stock Market (Bapepam) Herwidayatmo last monthstated that the number of public investors in Indonesia now number only 55,000, down from 1995when there were more than two million investors.Herwidayatmo said this is caused by three main factors: The economy, lack of good corporategovernance and investor disappointment with stock market services. Are these reasons valid? Let'slook at some other facts.Between 1973 and 1995, the portion of developing countries in global trading skyrocketed from 6.6percent to 24.7 percent and from the mid 1970s to 1996 foreign currency trading jumped more than1,000 fold, i.e. from US$1 billion to $1.2 trillion per day.The UN reported in the
Human Development Report
that in 1960, the top 20 percent of the world'srichest individuals controlled 70.2 percent of world's business while the bottom 20 percent controlled amere 2.3 percent. In 1989, the former had controlled 82.7 percent, and the latter only 1.4 percent (UN,1992). In the U.S., the top 5 percent of families increased theirs by 23 percent and the top 1 percentby a whooping 50 percent.Even in Indonesia, a researcher pointed out that 61.7 percent of market capitalization is controled by15 families. Another study published last year shows that while 51 of the world's 100 largesteconomies are now corporations, only 49 are nation-states.We might have not seen what the process of the above mentioned capital and profit accumulationcontains. The writer Ellwood (2001) reveals that since 1950 global business output has soared from$3.8 trillion to $18.9 trillion, a nearly five-fold increase. This means we have consumed more of theworld's natural capital in this brief period than during the history of mankind.William Rees (2001), an economist and ecologist estimates that around 10 acres to 14 acres (4hectares to 6 hectares) of land are used for the consumption of the average person in the West; yet,the world's total available productive land is about 4.25 acres per person. The difference is what Reescalls "appropriated carrying capacity", which basically means that the rich are living off the resourcesof the poor.According to the World Bank (2001), in 1960 gross domestic product in the richest 20 countries was18 times that of the poorest countries. By 1995, this gap had widened to 37 times. About 12economies in Asia and Latin America account for 70 percent of exports from the developing world andabsorb almost 80 percent of investment flow to the developing world and receiving more than 90percent of the portfolio investment flow.Clearly, free trade-centered globalized distribution of benefits and cost are unequal. This is indicatedby market exchange rates and purchasing-power parity, as the global gap becomes rapidly wider.Ellwood (2001) again states that The World Conservation Union's (IUCN) 2000 Red List of ThreatenedSpecies warns that the global extinction crises is accelerating, with dramatic declines in thepopulations of many species.IUCN sees habitat loss, human exploitation and invasion by alien species as major threats to wildlife.In the last 500 years, human activity has led to the extinction of 816 species -- while scientistscalculate the normal extinction rate is one species every four years.