Recession and Traffic

3 ways recession can reduce traffic:
•Cause people who lose their jobs or get pay-cuts to sell their cars
•Encourage people to take public transport
•Encourage people to work from home to save on transport

The Reason Behind Spiritual Politics

In Indonesia, political books that touch on the realm of spirituality occupy substantial floor space in bookstores because there’s a high demand for such books. What’s the main contributor to the high demand? Well, it appears that the level of trust which the common people put on their current political leaders have deteriorated up to a point that they believe the only way to solve their problems is through the spiritual channel.

Setting a Good Example

As I drove along a traffic-heavy road today, I saw an entourage of official cars making use of the Busway lane which should not be used by any vehicles, except as the name suggests, Busway buses. If officials can't even obey rules and regulations, how can they expect the common people to obey them?

Solving Jakarta's Traffic Problem

Traffic jams are daily occurrences in Jakarta. And sadly, the actions taken by relevant authorities to solve this problem have always been nothing more than building more roads and highways. Recently, the authority announced yet another plan to build 6 more highways and its intended objective of easing congestion. Looking at the dire situation, such moves are definitely insufficient.

It is long overdue that the authorities explore various mechanisms to reduce private ownerships of vehicles. It is common to see a family of 5 owning 3-4 vehicles when it isn’t necessary for them to do so. Bidding of plate number, congestion charges and higher taxes are definitely worth implementing rather than superficial methods such as a requirement for 1 vehicle to have at least 3 passengers (which can be easily overcome by the vehicle owners).

Concurrently, the authority should look at overhauling the public transport system so as to encourage existing vehicle owners to switch to public transport. It can also entice potential vehicle buyers to dump altogether their plans.

I believe that exploring these will better solve the congestion than building even more roads and highways.

Pedestrians Walkways that are Wrongly Used in China

One peculiar thing which I noticed as I walked along the streets in China is that vehicles have a high interest in occupying any available openings or should I say gaps, regardless of whether such actions are against the law or not. It is common to see 4 lines of cars squeezing in what is supposed to be a 2-lane road. It is also common to see vehicles going against the traffic flow because the other side of the road is jammed or this particular road provides a more direct route lo your destination.

What really annoy me however is the loud horns of vehicles coming from behind me as I strolled along the pedestrians walkway. China’s pedestrians walkways are wide because they are made to ensure that large number of people can walk comfortably. Unfortunately, the wide walkways have also attracted those vehicles to make use of them. Besides the safety aspect, these vehicles are also health hazards. Imagine the sudden shock one experiences when these vehicles decide to sound their horns.

Some measures must be taken to prevent these vehicles from making use of the walkways. I understand that in certain areas, metallic barriers have been erected to prevent vehicles from entering but some persistent and innovative motorcyclists have been able to cross those barriers. One way to prevent that I believe is to re-design the barriers such that only people can pass through them. Strict rules must be put in place and at the same time enforced to ensure that violators are strongly penalized. Up to now, police officers seem to have turned a blind eye to these violations.

The Difference in Demand for Japanese Cuisine

Finally back after a week worth of break. I thought it would be great to start with something light and at the same time could stimulate your appetite: food. Well, if you live in Singapore, you will realize that almost all the shopping centres have at least 1 Japanese restaurant/café/etc. I like Japanese cuisine so it’s really great to be able to consume such food wherever you are in Singapore. Jakarta, on the other hand, is a stark contrast to Singapore. It’s not easy to stumble upon Japanese restaurants and even if you manage to find a couple from the yellow pages, you will find that most aren’t located in shopping centres (this consequently removes the convenience for consuming them). The scarcity of Japanese restaurants in Jakarta is perhaps due to the low demand for Japanese cuisine there as compared to Singapore.

There are probably 3 main reasons for the difference in demand. Firstly, it is the degree of exposure of the population to external culture. Being well traveled and all, Singaporeans has definitely tried Japanese cuisine at some point of their lives and consider Japanese diet as just one of the many varieties of food they can have for their daily consumption. Indonesians, however, are not as well traveled and thus have a high probability of not trying Japanese cuisine before. When they come across Japanese restaurants, they have a high tendency of walking past these restaurants and selecting others that are deemed as safe choices.

Secondly, it is the difference in preference among the population. Majority of Singaporeans are Chinese and hence find Japanese cuisine which is light palatable. Indonesians on the other hand prefer spicy food and find Japanese cuisine too bland for their tongues.

Thirdly, it is the income level of the population. In Singapore, the income of the working population would not in any way hinder their abilities to consume Japanese cuisine i.e. they are considered affordable by most of the working population. But for a considerable percentage of the working population in Indonesia, consuming Japanese foods is a luxury. For these people, if they forgo Japanese cuisine, they may be able to support their family for another week.

These 3 reasons effectively make the Japanese cuisine market in Indonesia a very niche market, in a sense that it is only sustained by a small number of people. And if the economy of scale remains at current level, I am afraid Japanese cuisine will only become more expensive and that essentially will result in even more people being unable to afford them. As for me, it seems that my dream of consuming authentic Japanese cuisine in Jakarta at affordable price will not turn into reality anytime soon.

Subsidy: a tool to blunt the short-term impact of FTAs

Prior to the current downturn which has prompted many countries to pursue a policy of protectionism, we used to see the word “FTA” all over the media. Each FTA (Free Trade Agreement) is usually signed by two or more countries that have agreed to eliminate tariffs, quotas and preferences on most, if not all goods and services traded between them. A successful FTA is expected to result in an increase in income and subsequently wealth and well-being for everyone in the participating countries due to specialization and division of labour. As an example, A and B each initially produce both milk and beef despite the fact that A is better than B in producing milk while B is better than A in producing beef. With FTA in place, A is expected to eventually produce only milk while B only beef.

Although simple and logical, some FTAs have not been moving in the right direction because of intense lobbying by people who are at risk of losing their jobs once FTAs are in full force. Despite knowing that job loss is nothing but just one of several short-term side effects of FTA implementation that will in time rectify itself, government has to show that it considers the sentiments of the common people and so, has resorted to providing subsidies to the affected industries with the intention of sustaining them. Too much subsidies however create the false impression that a particular industry is more competitive than its counterpart in another country when it should have been otherwise. It also allows the industry receiving subsidy to have the unfair advantage of quoting below the price of its counterparts receiving no subsidy, ultimately causing people who should not have lost their jobs to end up losing theirs.

This very implication of government subsidy has been the main contention point between countries that are engaged in talks to liberalize their market. Countries that are very confident of the ability of their industries to compete globally/regionally without any subsidy have boldly requested that subsidy elimination among participating countries be set as a pre-condition for further talks.

I personally think that fulfilling such a request is dangerous and lacking in foresight. If a country removes government subsidy for a particular industry and yet does not have proper plans in place to absorb the laid-off workers into the non-subsidized industries, it will end up increasing the unemployment rate and its related consequences such as social unrest.

One way a country in such a position could negotiate is to propose that it be allowed to continue subsidizing the industry in the spotlight but at a rate that is just right to sustain the industry and would not in any way affect the competitiveness of its counterpart in other countries. For example, if the cost of producing a liter of milk is $2 in country A and $3 in country B, country B should be allowed to give a subsidy of $1/liter to its milk industry until the industry is able to sustain itself by becoming as competitive as its counterparts if not more or until sound plans are in place to absorb the laid-off workers if the industry begins to cut jobs. Of particular concern is the potential exploitation of the subsidy system by the milk producers, i.e they will not put in any effort to boost its competitiveness and instead live off government subsidy for as long as possible. This can be easily overcome by setting a deadline where subsidy rate will drop to 0% regardless of whether the industry can fend for itself or not.