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The Jakarta Post, Opinion & Editorial, 21 October 2002

Business after the tragedy

Yanuar Nugroho,
Director, The Business Watch Indonesia,
Lecturer, Sahid University, Surakarta,
Researcher, Unisosdem Jakarta,

The world is shocked. Bali and Manado, two areas known for their calmness and peacefulness,
were brutally disrupted by deadly explosions. Hundreds are dead and badly wounded. Most of
them were overseas tourists -- and a shocked world is now an angry world.

Australia sent its humanitarian and military missions and the United Nations Security Council
unanimously enacted a resolution to "help Indonesia in finding out the responsible parties in the

The biggest daily newspaper in Indonesia, Kompas even put up a red sign on its front page,
Indonesia in danger for several days after the sorrowful day. And 50 percent of the 300,000 or so
people here who depend on the tourism sector in Bali face lay-offs and bankruptcy due to the
sharp decline in tourism.

Many parties will inevitably, to varying degrees, take advantage of the blasts.

The Sept. 11 tragedy marked an historic moment in the political-economic trajectory of the United
States in last 30 years. This also applies to Oct. 12 in Bali, one of Asia's symbols of tourism in the
last three decades. And as the fear of economic protectionism emerged after Sept. 11, such is
the case with the tourism industry, or services, in general.

This brings us to movements of "capital" and "labor". In the last 30 years, it has been the
movement of capital that has been the most dramatic development which has led to the mania of
economic globalization.

There will certainly be protective measures to guard the system from being a financial haven for
terrorist groups -- maybe in the form of tougher scrutiny and prevention of money laundering
centers and tourism areas, such as Nauru, Cayman Islands, etc.

There will be an injection of financial regulations into the global financial system. But it is the
movement of labor that will likely be most affected, in the direction of more protection, largely
influencing immigration, education, shipping, air travel, tourism, etc.

Of course, tourism has been hit hard, not only in Bali and not only in Indonesia. Isn't this a sign to
start seriously thinking about small-scale tourism rather than relying on the nexus of big financial

For the global capitalists, the mobility of financial capital in the past 20 years is too entrenched to
be held back or reversed. First, they are "profit accumulators on a global scale" rather than
"patriots". Second, their profit accumulation so far very much depends on the free movement of
their financial resources.
The gross domestic production (GDP) of the U.S. and Western Europe very much depends on
unhindered movement of their trans-national corporations (TNCs). True, the U.S. markets are
vast, for it is itself a vast continent.

But the U.S. has great interest in what it is good at -- exporting their brands (Coca Cola,
Starbucks, etc), technology (software, management service, etc), and entertainment (films, pop
music, etc). The repatriation of profits from such exports is crucial for the GDP and wealth of their
rich citizens. Besides, many of these businesses in the developing countries operate as franchise
industries, which pay high fees to the U.S. patented owners.

Will the tragedies of the World Trade Center and Bali really lead to enough trauma to end this
need for profit accumulation?

If the U.S. starts pioneering protectionist measures, it still has to secure the consent of Western
Europe. And there is tough competition for global economic power between the EU and the U.S.
And this kind of struggle involves not only governments, but many competing TNCs.

The TNCs of the U.S. and Europe may not be on good terms, and both simply ask their
respective governments to fight the battles for them. The current case of agricultural products is a
telling example, to the point that both the U.S. and European Union governments fuel these
battles with high tariffs and huge subsidies.

These latter issues angers developing countries most, for agricultural products from these
countries can never enter freely into the U.S. and EU markets (sugar, wheat, corn, coffee, etc.).

The business downturn after the WTC and Bali tragedies will not mean a decrease of business
power, but the tragic consequence of an unintended logic of power. Likewise the workers, as well
as the guests, at the Sari Club in Bali had never been intended subjects for the working of such a
power based on capital movement.

Business may be even more powerful than before; they just need to operate in a more
sophisticated manner and rely less on the free movements of labor -- humans vulnerable to be
blown up. Globalization may then be more of the mobility of financial capital and less and less of
the mobility of labor. With information technology, "remote control" now serves power, legitimate
or otherwise.

Indeed, life is a newborn that eats its own umbilical cord. And human emotional experiences
triggered by these tragedies often drive people to different conclusions, positions and even a leap
to the opposite end -- as reflected by various reactions to Oct. 12. Humans are very frail and must
live in a paradoxical world.

Perhaps the measure of intelligence lies not in its ever stronger capacity to invent a consistent,
linear logical way of thinking -- but in its ability to accept the complexity and the paradoxes of life.
The Bali tragedy has forced us to admit it. Otherwise, we will go nowhere.