Monday, December 08, 2008

The Political Economy of Iedul Adha

I am currently reading a couple of Ha-Joon Chang's books. The Korean-born and lecturer at Cambridge has fascinating analysis of globalization today and how we got to it; not by free market but selective industrial policy and protectionism.

In East Asia Development Experience. he cited import restriction of luxurious goods in South Korea as strenghtening national unity and work ethics. The rich and powerful are not seen as splurging with expensive imported goods while the worker is working his ass. The common practice is to used locally produce car as official car of government head (Proton in Malaysia, Toyota in Japan and Hyundai in Korea).

So what Iedul Adha has to do with all the above?

Ramadhan and Iedul adha is an amazing pair. In the first, all eligible population (rich or poor) is going through thirst and hunger together. While on the second, the richer population is getting the poor population some good and meaty meal; it even forbidden to fast on Iedul Adha. How is that for solidarity.

Maybe Indonesia should consider to restrict import of >1 billion car and >10 millions handbags in the spirit of Iedul Adha


embun said...

If I assumed that your suggestion on import restriction is in the form of quota, I prefer to raise tax for luxurious goods for two 'expected' good reasons:

1. To get more revenue for government in order to increase direct support (read: subsidy) to the poor. In this case, I hope that we could eradicate poverty not only during two holy months but also for the rest of the months all over the year

2. To increase the competitiveness of our domestic products. If expensive goods getting more expensive, there will substitution to other non-luxurious products. It will increase revenue within the industry and - finger cross - increase the potential employment absorption.

Happy Iedul Adha...

Berly said...

He..he..I dont expect the first comment will be on the type of restriction.

But on general tarif barier is better than non tarif barrier, so I support your point.

Yup..lets put >100 % tariff on that show-off luxurious goods

fajar said...

salam kenal