Arsip Kategori: pricing

A Smile at Prices of Hot Spices

Indonesia is a unique country, for I cannot say it is impossible to live in. I still have to use a positive sentence to start the year.  We are still celebrating new year, and we passed Idul Fitri and Idul Adha, two most sacred days for moslems. Over the two latter, prices of hot spices–you might call it chillis and we called it “cabe”–was hotter than mercurius. We usually cook special food to celebrate Idul Fitri (hot “ketupat rendang” or “ketupat opor” added with ground chillis and onions). We also cook “kare kambing” or “lamb curry” after we sacrifice the lamb in the morning. Curry, as we know it, needs spices mostly chillis.

So what happened when it’s Christmas time? Do we cook spicey food? Not too many. New year’s eve? We cook spaghetti with is tomato sauce, and chillis if required–not a must. We serve pudding and other sweeties to close the year. Why on earth the price of chillis per kilogram went from IDR 50,000 to IDR 100,000 overnight on the first week of  2011? This is amazingly outrageous or outrageously amazing…!

Blame it on the extreme weather? Awww, come on… the sun is still there at certain times of the day. We have reached the highest level of bioengineering for food production for the last decades. Why don’t we do something out of it? In Indonesia, again as a unique country, priority of doing the right things is upside down, inside out of whatsoever. Our president was best seen sitting graciously near a soccer field instead of chopping the grass in the middle of paddy field. Our local government is too busy doing knick-knacks instead of encouraging the people to produce and distribute more efficient farming or fishery goods. Public officers concern more on renovating their official houses and buying more expensive official sedans to suit their ranking of bureaucratic system. (click here for one of the news)

We, the Indonesians, are likely to face a very hotter year in the future if the prices of 9 staff and staple (“sembilan bahan pokok” or “sembako”) are crazily skyrocketting.  There were no significant government’s actions last year, and we are not hoping more this year. However, we are the still the kindest and the most forgiving species on earth. We Indonesians always handle things with smile, for better or worse.



To Mock A Media Merger

by Amelia Day

Media merger, especially free-to-air television, in Indonesia is pretty much impossible to remedy–if not considered painstakingly and unbearably possible. The calculation of divestiture, remedies to restrict vertical behaviour, and remedies to control outcomes cannot be executed if at the state executive level there are insignificant penalty power nor legal tools.

Even so, for a start, there are steps to overcome this deficiency. I am pretty much concerned about steps that a regulator shall consider. The principle concerns of, for instance, specifically in relation to divestiture remedies. The regulator needs to be clear about the constituents of the divestiture package and ensure that it is maintained until the divestiture is complete. It is also important that thorough assessment of potential purchasers, and the importance of including provision for sale of the package by divestiture trustees at no minimum price.

The cases of past mergers like Global TV/RCTI/TPI (under Media Citra Nusantara’s banner) and Trans TV and TV7 (under Trans Corp’s banner), or the upcoming SCTV and Indosiar (under Surya Citra Media’s banner), the polarization is pretty clear. To cover the legal base, all TV entities remain intact but the transaction goes up one level to their holding companies. This is also to blur the market power they tend to conceal.

For this kind of polarization, I am suggesting evidence-based approach to the development of policy and practice, a methodology based on case studies to use. There are possible ways like to allow meaningful research on their success but sufficiently recent to ensure that they were relevant; to cover a cross-section of different types of remedy and to be focused on those type of remedy most frequently used by KPPU; to include examples of remedies that were thought to have been successful and examples of remedies that were thought to have been unsuccessful; and to include examples of relatively straightforward cases and relatively complex cases.

KPPU must be invested heavily on the effort of the merger control. Today, cases like Temasek in telcos shall be considered further for media merger remedies. This is also to anticipate digital convergence (of platforms, services, devices, and industries). If there are horizontal or vertical or unilateral concerns taking place, the type of remedy shall include restricting behaviour to end-customers, restricting vertical behaviour, and controlling outcomes (price control). KPPU must also forward a detailed learning points, which are grouped thematically: interim remedies; choice and design of final remedies (divestitures and behavioural remedies); negotiation of final undertakings; and ongoing compliance and monitoring. Incentives and penalty for the parties involved in the merger or acquisition must be outlined and be informed to public.

The public participation must also be considered well due to the Indonesian Law of Rulemaking 2004 (UU 10/2004). With rigid and open procedure, KPPU shall also include the participation in a transparent and analytical way.

Last of all, the effectiveness of a remedy depends on action by a third party that is not subject to the remedy; there is a risk that the remedy will not be effective. To anticipate this, political will at the executive level shall be deemed and calculated.