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Deswin Nur, Aug 17, 2015
The urgency of having a national competition law in Indonesia was first addressed in the 1980s, responding to major economic reforms. At that stage, Indonesia opened herself to globalization and started to promote foreign investment. It was then that the idea for a comprehensive competition policy was elevated for public discussion. Debates by scholars, enterprises, and the government occupied national newspapers. The question was: Does Indonesia need a competition law? It was a never-ending debate. No one ever won it. Drafts on national competition law prepared by the government and opposing political parties continued for many years.
Then the global crisis hampered the Indonesian economy in 1997-1998. With a vulnerable economic structure caused by concentrated industries, the crisis cracked the backbone of our long-standing and smooth development. The lack of a competitive environment caused “the big” to fail. Indonesia needed fresh funds to get her back on her financial feet. The International Monetary Fund offered to lend funds, but required Indonesia to put together a national reform agenda to obtain those funds. This agenda included the need to introduce competition law, as well as other provisions dealing with consumer protection, anticorruption, and the holding of a general election.
Indonesia raised the level of discussion about national competition law and put it on the agenda in the first quarter of 1999. We understand that if you rush something, you may not achieve an optimum result. That is what happened with competition law. It was clear to some people that the legislative outcome of this new competition law was more a political compromise and a result of intense negotiation rather than a coherent, undisputed piece of legislation.
A key point for the success of competition law is commitment. Commitment comes from awareness of the law and acknowledgement of its importance. To ensure awareness and acknowledgement of its importance, targeted outreach or advocacy activities should take place to promote interest among relevant parties. However, the problem is advocacy takes time and money. It is not cheap to engage in outreach activities. It takes time to build confidence by parties to agree on the introduction of something big like competition law.
Another way to introduce competition law is through foreign commitment, like bilateral or multilateral agreements. In the Indonesian case, many activities took place in helping with the drafting of competition law. But it was only our cooperation with international organizations that was able to force the introduction of competition law. In ASEAN, we have learned that the ASEAN Economic Community has become a trigger for the development of competition law in some countries, like Myanmar and Brunei Darussalam. Indonesia and Thailand were driven by financial commitments from international organizations as a result of the Asian Financial Crisis. China was driven by their membership at World Trade Organization. So we needed an international momentum to trigger the adoption of a national competition law.
