The 21st century is the century belongs to Asia. In 2050 over half the world's gross national product
would be dominated Asia. China, displacing the United States, will become the world's strongest
player, followed by India at the third position. So, what role and in which the position of Indonesia at
that time?
China and India with all its expansion, based on the current number of parameters and predictions
of the future, it was clear was the winner in an open battle field in a globalizing world, where there
are no more barriers not only for the movement of information, capital, goods, services, humans,
but also the state ideology and nationalism.
Economic globalization and corporate globalization also raises the corporate and individual line of
new global players. Five years ago, 51 of the 100 largest economic power is no longer in the hands of
the state or territory, but in the hands of corporations.
Revenue WalMart, the U.S. retail company's network, in 2001 already exceeded the gross domestic
product (GDP) of Indonesia as a country. Acceptance of Shell oil company exceeded the GDP of
Venezuela, a member of the Organization of Petroleum Exporting Countries (OPEC) are influential.
Revenues of the world's number one car company from the U.S., General Motors, is approximately
equal to the combined GDP of three countries: New Zealand, Ireland, and Hungary. Transnational
corporations (TNCs), the largest of the world, General Electric, control assets 647.483 billion U.S.
dollars, or nearly three times the GDP of Indonesia.
So great is the power of money and influence that these corporations so as to control the decision-
making at government level and determine the direction of movement of trade and the global
economy.
In the early 1990s there were 37,000 TNCs with about 170,000 affiliated companies spread around
the world. In 2004 the number increased to about 70,000 TNCs with a total of 690,000 affiliates.
About 75 percent of TNCs are based in North America, Western Europe, and Japan, and 99 of the
100 largest TNCs from developed countries as well.
However, recent world-class players from developing countries, especially Asia, started poking here
and there. In the list of world's 100 largest non-financial TNCs (by assets) version of the World
Investment Report 2005, there were names such as Hutchison Whampoa Limited (sequence 16)
from Hong Kong, SingTel Ltd (66) from Singapore, Petronas (72) from Malaysia, and Samsung (99 )
from South Korea.
While the list of world's 50 largest financial TNCs, there are three representatives from China, the
Industrial & Commercial Bank of China (sequence 23), Bank of China (34), and China Construction
Bank (39).
Big leap
According to data from United Nations Conference on Trade and Development, in 2004 China is the
world's third largest exporter for the goods (merchandise goods) and the ninth largest commercial
services, with a share of 9 and 2.8 percent of total world exports.
China's export volume reached 325 billion U.S. dollars in 2002 and last year's 764 billion U.S. dollars.
Manufacturing accounted for 39 percent of China's GDP. China's manufacturing output in 2003 is the
third largest after the U.S. and Japan. In the service sector, China's ninth largest after the U.S., Japan,
Germany, Britain, France, Italy, Canada, and Spain.
While India ranked 20th exporter of merchandise goods (1.1 percent) and ranked 22 for commercial
services (1.5 percent). Gross national product (GNP) by 2050 China is estimated to 175 percent of
U.S. GNP, while India's GNP will have to match the U.S. and making it the world's third largest
economy, outperforming the European Union and Japan.
When China opened itself to the world two decades ago, people only imagine the huge potential of
China as a market with more than a billion consumers making it very attractive to retail and
manufacturing companies of the world. Later, China is not only attractive and growing as a market,
but also as a production base for supplying a variety of manufactured products the global market.
China earlier this 21st century as the British and the 19th century.
China does not stop here. If in the early 1990s were seen as attractive locations for production base
of simple labor-intensive products, today's China also prove competitive in a range of technologically
advanced industries. China's entry in the membership of the World Trade Organization (WTO) is
increasingly clear the way for the Bamboo Curtain country is to become an increasingly difficult to
surpass the power in the global market.
In labor-intensive sectors, such as textiles and apparel, an end to the quota regime in the developed
countries make Chinese exports flooding the world market and make a lot of textile and apparel
industries in some developing countries have close competitors. The share of clothing exports from
China is expected to soar from about 17 percent of total world exports today to 45 percent in the
second half of this decade.
Something similar occurs in high-tech products. How China invaded and flooded global markets with
its products, by displacing competitor countries, the WTO can be seen from the following data.
China's electronics market share in the U.S. increased from 9.5 percent (in 1992) to 21.8 percent
(1999). While at the same time, Singapore's share fell from 21.8 percent to 13.4 percent. Chinese
contribution to world production of personal computers rose from 4 percent (1996) to 21 percent
(2000), while the contribution of ASEAN as a whole at the same time shrunk from 17 percent to 6
percent.
China's share of total world production of hard disk also rose from 1 percent (1996) to 6 percent
(2000), while the share of ASEAN fell from 83 percent to 77 percent. The share of China for the
production of the keyboard up from 18 percent (1996) to 38 percent (2000), while the share of
ASEAN eroded from 57 percent to 42 percent.
All the picture clearly shows China continues to go up a class, make a big jump from time to time,
and at the same time continue to expand its market and product diversification. Movement
sweeping China in a wide range of industries-from technology intensity is very simple to the intensity
of technology and high added-value is emphasized China's position as the world's factory into the
21st century.
While at the same time, neighboring countries experienced a hollowing out in high-tech
manufacturing industries quickly. In low technology-intensity industries that tend to labor-intensive,
China is pressing countries such as Vietnam and Indonesia are still narrow industrial base, the
technology that is not too complicated and low value added.
While the intensity of high-tech industries, China is increasingly becoming a threat not only to
countries such as Taiwan and South Korea, but also U.S. and Japan. China is not just flood the world
with garments, shoes, and toys, but also computer products, cameras, televisions, and so on.
China supplies 50 percent more production of the world's cameras, 30 percent of air conditioning
(air conditioners / AC), 30 percent television, 25 percent of washing machines, refrigerators 20
percent, and much more.
Innovation
How China can do it all? There are several factors. First, foreign technology companies, according to
Deloitte Research, is now scrambling to get investment in China, among others, in order to take
advantage of market access to China's very large and growing rapidly. Second, local companies
attract capital from overseas Chinese investors (especially Taiwan) also produces more skilled high-
tech goods.
Not static in labor-intensive industries that rely on cheap labor, China is now beginning to be more
selective investment leads to an industry that produces high end products and capital intensive. This
is partly to reduce dependency on cheap labor which began to decrease its availability.
Third, colleges in China are able to print a new line of engineers in large numbers every year, with
wages of relatively inexpensive compared to when hiring foreign engineers. Every year, the country
is producing 2 million-2, 5 million graduates, with 60 percent of the department of technology
(engineers). For comparison, in Indonesia majoring in technology graduates only 18 percent, U.S. 25
percent, and India 50 percent.
To support the growth of high-tech industry capital-intensive produce high end products, the
Chinese government is also aggressively pushing the various activities of research and development
(R & D), in line with its ambition to be The Fastest Growing Innovation Centre of the World, with
stages, strategies, and implementation very clear to get there.
Almost in each provincial capital there are R & D center it. Positioning strategy indicates China began
to enter the second round in its economic development.
Third, these countries have relatively excellent infrastructure to transport supplies and goods from
outside and also across the country. China, with 1.3 billion population, has 88,775 kilometers of
arterial roads and 100,000 kilometers of toll roads, or the ratio of the length of road per million
inhabitants 1384 kilometers.
In comparison, Indonesia with 220 million new residents have arterial roads and 26,000 kilometers
of toll road 620 kilometers (121 kilometers per million inhabitants). That, too, mostly in poor
condition. Ports in China has been able to serve a fifth of the world's container volume and this
country continues to build toll roads and new ports.
Fourth, a very supportive government policies, including the licensing of investment, taxation, and
customs. Fifth, the development of special economic zones (20 zones) as an engine of economic
growth so that economic development can be more focused and more efficient infrastructure
development as well.
The result, in 2004 China attracted foreign direct investment 60.6 billion U.S. dollars and 500 of the
world's largest companies invested almost entirely there. How competitive China can be seen in the
table. China is already here seem to take into account all aspects can compete and win the 21st
century in his grasp.
Something similar happened in India are experiencing rapid growth since the liberalization program
to dismantle the "License raj" in the era of the Finance Minister Manmohan Singh in 1991. India has
now entered the second stage of economic development strategies by using information technology
(IT) as the basis for economic development.
Almost the entire cast of the IT business world has opened its business in India, especially in
Bangalore. In 2006, revenue from IT India reached 36 billion U.S. dollars. Malaysia, Thailand and the
Philippines also moved into the products that have a more complex level of technology and high
added value. Singapore and South Korea lead the information technology and product design.
Pragmatism
What about Indonesia? The principle of globalization is the division of labor to achieve efficiency.
The indication that Indonesia with abundant labor and low wage industries simply goto the "sweat"
(sweatshops) such as apparel and footwear in the chain of global production, proved largely true.
China, India, and Malaysia also started with a sweatshop, but is then able to upgrade its industry
quickly. This is not the case in Indonesia. Indonesia faces its own policy of globalization far more
based on the attitude of pragmatism.
Executive Director of the Center for Strategic & International Studies (CSIS) Soesastro (Globalization:
Challenge for Indonesia) said the government policy to globalization is not based on ideological
considerations, but rather on an objective assessment of what can be achieved East Asian countries
another.
Moreover, at that time among the countries in Asia alone there is competition, racing to liberalize its
economy to make it more attractive for global investment. This momentum is driven more by the
emergence of regional economic cooperation agreements such as AFTA and APEC.
The Government believes through liberalization of markets, industries and companies in Indonesia
will be able to be competitive internationally. Since the mid-1980s, Indonesia has begun to liberalize
their trade regimes and menderegulasikan and investments.
During the period 1986-1990, no fewer than 20 packages of trade and investment liberalization
policy launched. Indonesia is the only country in East Asia are starting a program of economic
liberalization with liberalization of foreign exchange regime.
However, in many cases, the government adopted a package of measures to encourage the private
sector at that time tended to be reactive and not coherent and discriminatory because often times
do not include a group or specific sector of the deregulation program. So, do not encourage healthy
competition.
Entrepreneurs grow and menggurita not because he was efficient and competitive, but because he
managed to control assets and economic resources, because of the privileges or corruption by the
ruling.
Indonesia now seems increasingly giddy face of globalization, especially in the midst of pressure on
the domestic nationalist sentiment. On the government itself, because it considers has been
successfully implementing the first stage of liberalization (first-order adjustment) economies,
governments tend to think of trivial challenges that wait in front of the eye.
This is reflected in the attitude taken for granted and tend to think short. In fact, the challenge will
be heavier and more complex in line with the deepening international integration. Not yet clear how
the economy and the nation is facing greater competition that can no longer containable.
If China is the world's factory and India is now a paradise world of IT outsourcing scramble into the
world center of innovation, manufacturing hub, or other dreams, Indonesia has yet dared to declare
to be anything or take any role in the future. If Indonesia was able to empower themselves and help
themselves and let themselves run over the flow of globalization, this nation will only ever be a
seamstress and labor.
According to one panelist, who needed Indonesia today is visioning, repositioning strategy, and
leadership. Without it all, we will never move from the transformation that continues to spin. With a
clear vision, the stages are also apparent, and the commitment of all parties and strong leadership to
achieve that, the year 2030 is not impossible that Indonesia could also revive the nation a more
dignified and empowered as winners in globalization.
source : http://www.kompas.com