Business after the tragedy

The Jakarta Post, Opinion & Editorial, 21 October 2002

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 tragedy”.

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 owners?

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.

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