Do We Really Cause Earthquakes?

It has been over two weeks since the great West Sumatran earthquake.  Bricks, stones and mortars are piling up the ghosts of roads and streets; official death toll is closing in a thousand.   As aids are rushing into the region and rescue workers are still working around the clock, whispers, text messages and sermons are spreading that somehow we—and “we” can mean all Indonesians, West Sumatrans, Padangese, or even just the president, depending on which version you subscribe to—are to blame for the natural disaster.

An understandably grief-stricken and confused chicken-feed factory worker in Padang believed that the quake occurred because many Padangese youths had been engaging in sinful activities by the beach during Ramadan.  A less grief-stricken yet apparently equally confused senior member of a prominent political party blamed the president for being born on his ominous birth date, which “invited” natural disasters.  Chain text messages imply that the disaster was a demonstration of the wrath of a vengeful God.  Chairman of the North Sumatran Indonesian Council of Ulemmas (MUI) declared that the earthquake was a divine warning for the government to eradicate immorality.

It wouldn’t take long for a relatively reasonable person to point out that Indonesia has arguably become more religiously conservative than in the past, or that in the last few years some of the deadliest earthquakes occurred in religiously pious areas, like the 2003 earthquake in the Iranian city of Bam and the 2004 big one off the coast of Aceh, while “places of sin and immorality” like Las Vegas, the island of Ibiza, and even Jakarta, have been spared from any major natural catastrophe.  So either we’ve been misrepresenting God’s warnings, or—here’s a crazy idea—we’re not the reason the earth’s crust trembles.

However, we’re really looking at this the wrong way.  We may not be the reason the earth shook in West Sumatra, but we did cause the disaster.  Bear with me; it’s really not that confusing.

The very term “natural disaster” is truly anthropocentric—it is an entirely human-centered notion.  For hundreds of millions of years this planet has gone through literally countless earthquakes, hurricanes, tornados, meteor impacts, lightning storms, and massive volcanic eruptions.  For hundreds of millions of years, nobody ever called them “natural disaster;” they were simply “natural events.”  It was always business as usual for Mother Nature.

Then enter modern humans.  Upon seeing how natural events might occasionally destroy our homes and take away our lives, we began to see said events as disastrous.  As time passed by, self-centered creatures as humans are, we started to believe that a powerful entity—either nature or an even more powerful being—was deliberately causing disasters because of us.  As such, throughout history we’ve been trying hard to decipher the divine warning and appease whoever causes the disaster appropriately: slaughter a pig, sacrifice a virgin, stop playing at the beach, or elect a president with a better birth date.

Yet the cold hard truth is that were there no humans, there would be no disaster.  The flipside of this truth is that while we may not be able to stop an earthquake, we can take measures to prevent a disaster.  In December 2003, both California and southern Iran were hit by 6.5 Richter-scale earthquakes, separated by only a week.  The death toll in California was 3; in Iran, it was 30,000.  Some might thus conclude that Californians were more pious and God-fearing than the Iranians.  A likelier explanation is the worlds of difference in building codes and constructions in the two areas.

What we do to our environment also matters significantly.  The roots of large trees can strengthen the ground’s structure, decreasing its likelihood to slide even during earthquake.  Take those trees away, and nothing holds back the earth from crumbling down the slope.

Earthquakes are not the only natural event we should be concerned about.  Climate change has led to higher concentrated rainfall in a shorter period of time in Indonesia.  Yet we’re still clogging our rivers with garbage and destroy large patches of our forest.  60 percent of the forest area in Mt. Muria, Central Java, is destroyed.  That’s a disaster waiting to happen; just don’t blame God or Mother Nature when it does.  While we’re at it, let’s keep an eye on those volcanic mountains in our backyard.

So at the end of the day, our actions do matter, but not the way some people like the North Sumatran MUI’s chairman would like to believe.  It has got more to do with our vigilance, preparedness and planning, rather than a certain set of moral virtues.  It’s more pressing for district administrations to impose better building codes than to close down pubs and lounges.  Lawmakers need to extend the role, build the capacity, and provide more funding for the national disaster response agency, instead of wasting public funds on legislating morality.  And it’s more important for parents to teach their children to protect the environment than to forbid them from having fun at the beach.

This is Indonesia.  The meeting point of the mighty tectonic plates.  A proud member of the ring of fire.  Depository of the monsoon rain.  Our earth, mountains and seas can be as deadly as they are life-giving.  We’ve known this for millennia; yet we, as had our ancestors, have chosen to live here and call this place home.  Unfortunately, we often forget that as we reap the bounty of this land, we must also be weary of its occasional fury.  Our land demands—and deserves—our respect.  We can’t control nature, but we can choose, through the actions we take and the decisions we make, how nature impacts us.  But to say that we cause the earth to move is not only delusional, it is utter and complete arrogance.

And edited version of this article is featured in Jakarta Globe, 20 October 2009

 

The Root Cause of Terrorism? Not Poverty or Lack of Education

Special thanks to my best friend, Sherria Ayuandini, who gave me some great insights on the issue and provided one of the major arguments for this piece.

When it comes to identifying the root cause of terrorism, many are compelled to point fingers on poverty and lack of education.  The argument, in a nutshell, goes somewhat as follows: Poor, uneducated people are easily lured to promises of heaven and blowing other people up to attain them.

However, such theory does not stand its ground when confronted with facts.  Marc Sageman of Foreign Policy Research Institute compiled the background data of around 400 Al-Qaeda members and discovered that three quarters of his sample belonged to the middle or upper class.  He further noted that, “[T]he vast majority –90 percent—came from caring, intact families.  Sixty-three percent had gone to college, as compared with the 5-6 percent that’s usual for the third world.  These are the best and brightest of their societies in many ways.”

Economists Efraim Benmelech of Harvard University and Claude Berrebi of RAND Corporation also came to the same conclusion when they gathered data on Palestinian suicide bombers in Israel from 2000 to 2005.  They discovered that education is very much valued in the “terrorism market.”  Better educated individuals are more likely to be successful in carrying out large-scale terrorist attacks and have lower chances of getting caught.

It should also be noted that the alleged leader of the 9/11 attack, Mohammed Atta, had a graduate degree, while both Azahari and Noordin Top, masterminds of the major terrorist attacks in the last decade in Indonesia, were skilled engineers and scientists.  None of them were poor; all three came from affluent families.

Obviously, the majority of terrorists in the world don’t fit the poor and uneducated profile.  As such, simply expanding education and eradicating poverty would unlikely affect terrorist recruitment.  We need to look deeper.  In that light, there are at least three issues that are often overlooked, each bearing a consequence in how public policies should be shaped and how we as the community should act in countering the seeds of terrorism.

First, it’s not a coincidence that many terrorist masterminds come from countries with repressive government, like the Arab states and, arguably, Malaysia.  Repressive governments tend to bar legal venues of voicing dissent, thus making extreme demonstration of opposition more attractive.  When the cost of legal dissent increases—due to threat of legal repercussions—the relative cost of illegal dissent is lowered.  Hence terrorism becomes a viable venue.

Therefore, it’s within our interest to allow dissent.  Specifically for Indonesia, we need to allow organizations like Hizbut Tahrir and the Islamic Defenders Front to exist.  It doesn’t mean we should let them do whatever they want.  They still have to be legally accountable for their actions; if and when they employ violence or thuggery, they have to pay for their actions to the fullest extent of the law.  We should also continue voicing opposition to their radical stances and gospel of hatred.  However, their right to association and voicing dissent should be recognized and upheld.  Perhaps it’s worth to remind ourselves that virtually none of the major Indonesian terrorists are affiliated to these legal organizations.

Second, acts of terrorism and suicide bombing require the breaking of the fear of the pain involved in the act and the reservation of hurting other people.  An effective way of doing this is by psychological enforcement, most notably by an authority or peers.  A common trait shared by terrorists is that they have a figure of authority that they fully and unquestionably respect. It’s also very common for prospective terrorists to join a perverse cause through preexisting social bonds with people who are already terrorists or had decided to join.

So here’s what we need to understand: An education system that puts a very high premium on respect for authority and discourage freethinking would produce individuals that are highly susceptible to psychological enforcement.  So while simply more education may not be effective in countering the roots of terrorism, how we educate matters significantly.  We need to push, not discourage, our children to question the authorities—their teachers and parents—and the majority—their friends.  We need to make them comfortable to be different and to disagree.  This will make them significantly less vulnerable to “brainwashing” by radicalism.

Lastly, we should heed the statistics found by Mr. Sageman in his research: An overwhelming majority of the educated individuals in his sample of Al-Qaeda members are engineers, architects, civil engineers, and scientists.  People with backgrounds in humanities are grossly underrepresented.  Is there anything in humanities that make its students less susceptible to radical, narrow-minded, chauvinistic ideas?  In short, the answer is yes.

Students of humanities make a conscious effort to learn different cultures, religions, and values.  This leads them to respect people of all walks of life, even if they don’t necessarily agree with the values those other people hold.  It’s this spirit of humanities that should be integrated in our education system.  Indonesian youth needs to learn, and perhaps even experience, different values.  The many live-in programs already conducted by various local NGOs, bringing in students of different religious and cultural backgrounds to stay with families in Aceh, Lombok and Papua, should be expanded.  It’s high time for us to not only tolerate diversity, but embrace it.

At the end of the day, it’s really more complex than simply poverty and lack of education.  If we’re really serious about addressing the root of terrorism, we need to uphold civil liberty, teach our children that it’s alright to question the authority, and expose them to different values.  That’s going to be a challenge not only for the government, but for all of us—parents, teachers, and the community.  But nobody ever said addressing the roots of terrorism is easy.

An edited version of this article (with some colorful comments, I might add) is available at Jakarta Globe.

 

How Giving Alms to Beggars Can Harm the Poor

This is the second in a series of articles on the economics of Ramadan.  The other two focus on Ramadan-induced inflation and the externalities of Ied exodus.

Begging on the street is haram—forbidden by divine sanction—and beggars will be cracked down by the authority.  At least that is what’s going to happen if the Indonesian Council of Ulemmas (MUI) and the Indonesian government can have it their way.

It appears that only several days into the holy month of Ramadan, major cities all over Indonesia are already flooded with seasonal beggars.  Seemingly as a response to that, the government announced that they endorsed all efforts to take beggars off the streets, including MUI’s move to declare begging haram.

I’m quite certain there will be people who would highlight how the MUI and government are misguided with their plans.  So allow me to focus instead on what I believe to be one of the main reasons—although most certainly not the only one—why we have the whole problem with beggars, especially the seasonal ones, in the first place: ourselves and our perverse sense of charity.

Let’s start from the beginning and make one thing clear: begging is a job.  Beggars may be officially referred to as the unemployed, but by all economic definitions, they are service providers.  Begging requires capital, time, and hard labor.  If you don’t believe me, try waiting on the side of the street for eight to ten hours a day in the baking sun, inhaling toxic fumes, while soliciting potential “clients.”  It also provides service; beggars supply us with a venue to delude ourselves that we’re helping the poor, compensate our sense of guilt for not helping enough, and—this is my personal favorite—help us secure a nice spot in heaven.  Ramadan allegedly doubles that last benefit; this perception, as we’ll soon see, pushes behavior with some unintended consequences.

Individuals choose jobs based on their personal cost-benefit analysis.  Beggars choose begging because it’s the “best” job for them; the job provides them with the highest return per unit time, taking into account the condition of the job market, the resources available to them, and the skills that they have.  The higher the return gets, the higher the attractiveness of begging as a job.  And many of us have done plenty to make that return really high.

While academic research is lacking, various journalistic investigations indicate that begging can bring up to Rp. 100,000 in one day. That’s about Rp. 2,500 per 15 minutes for a ten-hour day of work, which is quite a reasonable figure.  That income generation can increase dramatically during Ramadan, in which somehow a lot of people believe their alms are more valuable than in the rest of the months in the lunar calendar.  As a comparison, a car mechanic earns about Rp. 50,000 in average per working day.  Even if a person has other employable skills, begging would still be a very lucrative job.  So you can stop wondering why we have hordes of beggars, seasonal or otherwise; you might very well contribute to the phenomenon.

If that’s all there is to it, there should be no problem.  If begging is a legitimate job, let beggars beg.  But there are at least two serious consequences of seasonal begging.  First, they crowd out the urban poorest, who unlike the seasonal beggars have absolutely no alternative but begging.  Second, there is an increased use of children, either as beggars or as props, thus denying them of time for education and exposing them to extremely hazardous condition.  Many people’s tendency to give more alms to children and baby-carrying beggars is certainly not helping either.  Your alms during Ramadan, even if they really do increase your chance of going to heaven, end up depriving the poorest of the poor and endangering children back here on earth.

At this point I wish to make a disclaimer that I’m not making a case against giving.  Rather, I’m making a case against giving incorrectly.  My real contention is that it’s almost always better to channel your alms through respectable charity organizations than to give the same amount of money directly to beggars—at least if your intention is to really help the poor.

Charity organizations that channel alms can do so more effectively than individual alms-givers.  The pooled alms that they manage are significantly large that they can use them to fund well-planned programs, both short and long-term, that are more sustainable.  Most of such organizations do more than simply help the poor survive day by day; they also have an eye on the horizon, providing financial assistance for education and even capital to start small businesses.

If you still prefer giving directly to beggars because they’d get all your money without having to pay the service of a middle man, think again.  Like any underground economic sector, seasonal beggars are organized.  And they have to pay a fee for the “organizers.”  Under such arrangement, a beggar would typically get a meager 30 percent of what they earn.  An accountable charity organization would spend most of your alms on their targeted beneficiaries; and they would show you their financial report to prove it if you asked for it.  Give directly to beggars and you’d most likely give less.

At the end of the day, perhaps the best litmus test is your own conscience.  So the next time you feel the impulse of giving small change to street beggars instead of giving the same amount of money to a respectable charity organization, ask yourself, “Am I doing this because I really want to help them and I’m certain that my petty coins would bring a significant impact to them, or am I doing this simply to make me feel good about myself and perhaps increase the probability of securing a nice place in the afterlife?”

Then again, if MUI and the government push forward with their respective plans, we might not have the opportunity to ask that question at all.

An edited version of this article is featured in Jakarta Globe

 

Oppenheimer’s Second Chance and ITB’s Big Mistake

In 1925, while studying as a postgraduate student at Cambridge, J. Robert Oppenheimer, the great physicist and one of the most brilliant minds in history, attempted to poison his tutor. 

The motive behind this exceptionally alarming action was in fact quite trivial.  Oppenheimer’s forte and passion was in theoretical physics; conversely, he was virtually inept in experimental physics.  His tutor, who happened to be the future Nobel laureate Patrick Blackett, was apparently oblivious to this and kept assigning him to laboratory works.  Out of frustration, Oppenheimer laced an apple with poison and left it on his tutor’s desk.  Fortunately, Blackett did not eat it.  The university authorities were aghast nonetheless.

A hearing was commenced.  Attempting to poison someone was surely more than a simple misdemeanor; it was a serious crime.  Sanction was to be given to young Oppenheimer, and no doubt expulsion was considered.  However, in the end, all he received was probation and a compulsory consultation with a psychiatrist.  Malcolm Gladwell attributed Oppenheimer’s escape from a murder rap to his “practical intelligence”—the savvy to know what to say to whom at what time.  Some historians claimed it was his father who pulled the string.  Regardless, Cambridge decided to give Oppenheimer a second chance.

Oppenheimer went on to become a leader in quantum mechanics and helped pave the way for the advancement of theoretical physics. In 1942 he was assigned as the scientific director of the Manhattan Project, which discovered the way to harness energy from the very building blocks of matter and subsequently built the world’s first atomic bomb.  That bomb triggered a series of events: the end of World War II, the downfall of the Nazi, the unconditional surrender of Japan, and subsequently, the independence of Indonesia.

Fast forward over six decades later and we see that very same Indonesia finding its leading university in science and technology in a precarious situation.  The Bandung Institute of Technology (ITB) discovered that at least 14 of its students were involved in “jockeying”—getting paid to help prospective university students cheat during the national enrollment test or take the test in their stead.  The news brought tremendous shame to the university.

Like Cambridge, ITB now have to deal with their students’ serious offense.  Unlike Cambridge, however, ITB seems to be bent on ensuring that the students get no second chance.

At the time of this article’s writing, ITB’s Student’s Code of Ethics Commission has come up with a recommendation to expel 11 of the 14 students; it is almost a certainty that the recommendation will be carried out.  An ITB official claimed that “expulsion was the only option.”  Deputy Rector Widyo Nugroho went even further as to suggest that the students be blacklisted from all Indonesian universities, effectively denying them access to higher education in the country.

Is all that really necessary?  Nobody is denying that the students committed a serious mistake and that a sanction is in place.  But the sanction that ITB concocted is grossly disproportionate—it’s something that should be reserved for students who, say, attempted to poison someone.  And while the fact that most of the students were poor and hence found it hard to resist the lure of big cash cannot justify their actions, it should be taken into consideration in determining their sanction.  At the end of the day, these young people are not criminals and they do not deserve to be treated as such.  They do not deserve to have their entire future taken away.

And it’s not like Indonesians are alien to the concept of giving second chances; at times we even went overboard.  We looked pass the alleged involvement of former military officials in past human rights violations, focused on their leadership quality, and allowed them to join the presidential race.  We were willing to pardon a dictator’s regime of fear and silence, highlighted his good deeds, and considered making him a national hero.  We released a religious hatemonger from jail, downplayed his involvement in past terrorist attacks on the country, and made him an acceptable religious figure.  But when a bunch of young people helped others cheat a test, we rain down hell on them.

“Expulsion is the only option”?  How about temporary suspension and probationary period?  How about 1,000 hours of community service, say, tutoring high school students?  How about assigning the students to schools in the local area to work as teacher assistants until they graduate college?  Any of these sanctions—and more, if one is willing to be creative and employ common sense—would be proportionate to the students’ misconduct and be a sufficient deterrence for others.  And nobody’s future needs to be destroyed.  But no; somehow it had to be expulsion.

Whereas Cambridge gave Oppenheimer a second chance, ITB is giving its students none.

History notes that after the annihilation of Hiroshima and Nagasaki, Oppenheimer became a staunch detractor of the weapon he helped built and refused to support the development of the even more powerful hydrogen bomb.  He paid dearly for his decision.  A McCarthy-ist witch hunt was launched at Oppenheimer, humiliating and stripping him of his security clearance.  Thus, one of America’s most brilliant scientists, one who had dedicated his life to public service, was branded as a traitor by his own country based on evidence amounted to hearsay. 

That second chance for Oppenheimer given by Cambridge in 1925 was indeed a gift to the world, for we were given the opportunity to learn from him not only of quantum mechanics, but also of human compassion and bravery, as the great physicist chose to be publicly humiliated than to support the application of science in mass murder. The man who tried to poison his tutor in college put back mankind’s faith in science.

As for the eleven brilliant young minds facing expulsion from ITB, we can only wonder what contributions they could in the future give to their families, their communities, their country, and even perhaps the world if they were to be given a second change.  But that would be the tragedy, wouldn’t it?  If we could only wonder.

An edited version of this article was featured in The Jakarta Globe

 

It’s Time to End Indonesia’s Resource Curse

During the last general election campaigns and debates, the presidential hopefuls often echoed the laments of many Indonesians: As a country endowed with an abundance of natural resources, it is sadly ironic that we are still unable to provide high level of welfare for our people.

Such sentiment is understandable.  After all, common sense dictates that if a country has a wealth of natural resources, all it needs to do is exploit the resources and spread the wealth around.  However, perhaps it’s time for Indonesians to realize that the irony of abundant natural resources and low level of welfare does not make Indonesia the exception; it makes us the rule.

The fact of the matter is economists have long been baffled by a very counter-intuitive observation: Economies with abundant natural resources always tend to perform far worse than those with limited resources.  There are facts abound.  As early as the seventeenth century, history notes that resource-poor Netherlands outshined Spain, which at the time had massive sources of gold and silver from its colonies in the Americas.  In the nineteenth and twentieth centuries, resource-abundant Russia fell far behind resource-poor Japan and Switzerland.  And in the past four decades, it’s the resource-poor industrialized countries of East Asia—Taiwan, Hong Kong, Korea, Singapore—that become the world’s highest performing economies, while resource-abundant countries like Indonesia are falling behind, and oil-rich Mexico, Nigeria and Venezuela have pretty much gone bankrupt.  Economists even have a name for this phenomenon; they call it the “resource curse” or the “paradox of plenty.”

There are several theories offered to explain the resource curse—and some of them hit home quite hard in Indonesia’s case.  One theory suggests that resource-abundant economies promote de-industrialization by sucking capital and labor out of manufacturing, and into primary natural-resource production and non-traded sectors such as construction, public works, and government services.

This shift of capital and labor in itself may not be bad thing; however, unlike the manufacturing sector, primary natural-resource production and non-traded sector does not encourage technological innovations and accumulation of knowledge.

Thus, while Indonesia focused on easy extraction of oil and minerals in the 1970s, Korea was forced to invest in innovations in manufacturing and digital technologies that were their only sources of revenue.  At the same time, while hordes of young Indonesians marched to join the civil service right after they graduated high school, their Taiwanese counterparts worked hard to attain higher education in order to survive their country’s highly competitive labor market.

As time progress, manufacture-oriented Korea and Taiwan fueled innovation, increased competitiveness, and accumulated massive human capital, which further fueled innovation, completing the virtuous cycle. The exact opposite happened with Indonesia.

It is worth to note that prior to 1970s, Indonesia had one of the strongest education systems in the region, with hordes of Malaysian and Singaporean students coming to the country to learn.  Then came the oil boom.  Almost suddenly, capital and labor were sucked into the oil and mining industries; the civil service and non-traded sector expanded massively; and lo and behold, innovations were stifled, investment in education waned, and Indonesia was the center of human capital development no more. Indonesia’s resource curse took its grip.

In retrospect, it’s a good thing that Indonesia did not profit from the oil price hike of 2007-2008—nor of years to come.  Without the windfall profit, we are still well on our way reforming our trade sector, improving our administration to make it easy for people to set up businesses, and increasing investment in education.  As a comparison, Russia’s revenue jolt from their oil has virtually halted any effort of reform in their economy and public services.  How’s that for irony?

So what can we learn from all of this? Certainly, completely abandoning mining, oil and forest industries is not the way to go.  What we really need to do is to reinvest the revenues generated from primary resource production in research and development in the traditional manufacturing and high-tech industries.  And while this may sound counter-intuitive, the government may need to intervene to ensure that the primary resource production and non-traded sectors do not expand too massively by shifting tax burden from manufacturing to those sectors; this would ensure enough capital and labor in manufacturing, allowing us to reap the externalities of human capital development.  As for the extraction industry itself, policies that ensure sustainability should take precedent over industrial growth.

But perhaps the most important lesson we have to learn is that we need to stop considering our abundant natural resources as a remedy and start seeing it as part of a challenge that we need to overcome.

The change of paradigm may prove to be extremely important for Indonesians.  Clinging to the idea that our abundant natural resources should have provided us with the riches of the world and yet are not would very likely drive us to keep exploiting it to the brink of disaster in the hope of fulfilling a false prophecy.  On the other hand, accepting that abundant natural resources may in fact be more of a bane than a blessing—as has been indicated by empirical data from around the world—would empower us to display self-restraint in extracting our natural resources, give more attention in the investment of our human resources, and enact policies that encourage innovations.

This change of mindset and strategy would certainly be difficult.  The grip of the resource curse is indeed strong.  However, it’s not impossible to break away from that grip, if we are committed to take the less traveled way.  At the end of the day, perhaps Indonesians would come to the realization that the key to this nation’s prosperity may lie not within our ability to exhaustively exploit our abundant natural resources, but rather within our choice not to.

An edited version of this article is featured in The Jakarta Globe

 

Omni Tangerang Hospital: a Story of Public Relations Suicide

This article is written by a guest writer, Sherria Ayuandini.  She graduated cum laude from ITB’s Electrical Engineering but then decided to be an anthropologist, taking her master degree at Universitas Indonesia.

Exactly this month four years ago, a man named Jeff Jarvis lamented on his blog of his discontent towards Dell Computers. He colorfully outlined his frustration on both the quality of the product and the customer service he received from the company. To Jarvis’ surprise, and later Dell’s, that one comment spiraled into one of the biggest customer relations nightmare ever recorded. A swarm of other disgruntled customers came forward and a new jargon was born: Dell Hell.

Without question, Dell’s carefully-built reputation was severely compromised. In fact, the impact was extremely colossal; it took Dell more than two years to put out the Hell’s fire.

But on the bright side, there was a lot to be learned from the debacle. Plenty new insights were gained especially with regards to how customer relations have now evolved thanks to a relatively novel but very powerful and unstoppable ally: the internet. Angry customers tell 3,000? Try 300 thousands. This revelation sent new shock wave to companies and service providers around the world. Hence the endless seminars held and countless numbers of books published to illuminate this latest learning for the benefit of the business actors.

Today, ventures and service suppliers of Indonesia might have the chance to learn first-handedly of this new knowledge due to what Omni International Hospital Tangerang decided to resort to in dealing with its disgruntled customer, Prita Mulyasari. Prita is now being detained for almost a month at Tangerang’s women penitentiary after she was found guilty of defaming the hospital and is now facing criminal charges. Her defamation took a form of a personal email narrating her unpleasant experience when looking for medical assistance at Omni.  This email ended up in mailing lists and blogs and later became a public affair—an abomination that Omni saw to be worth the effort of bringing the case and the new mother to court.

Let us first give credit where it’s due, even so to only later have the right to censure as necessary. Omni Tangerang obviously understood that negative sentiment spiraling in the worldwide web is in more ways than one bad for business. Thus it took action to try to put a stop on it. A right decision, so far. It decided to respond to Prita’s complaint through the mailing list and even used mass media to express its side of the story. So far so good. Then, feeling that all these measures were still not enough, it decided to sue Prita. Ouch, for the hospital.

Everyone knows the first rule to controlling bad press—which also not surprisingly applies to gossip, rumors and the like—is to avoid making it even a bigger story than it already is. Downplay the effect, paint non-credibility of the accuser and give it time to blow over are some the tactics to minimize the harm. The surest way to do the exact opposite? Bringing the case to court, which was exactly what Omni decided to do.

Suddenly, the case took a hype it did not possess before. More and more people started to forward Prita’s email and if they couldn’t get their hands on the original letter, they summarized or forwarded news article about it. What was once a mere electronic letter plenty would just consider a chain-mail with questionable reliability is now considered to be the hidden truth simply because Omni Tangerang tried to stifle it. People see this as a confirmation that there is credibility to Prita’s story.

Omni should have done its homework before taking the legal action. They could try typing ‘bad hospital Indonesia’ in Google for instance. Omni Tangerang’s name does not even come up in the first 3 pages of the search result, nor in pages and pages after that. But now, after the legal action, more than 14,000 people in Facebook have joined a cause to support Prita. By suing Prita, Omni had done what it desperately tried to avoid: giving her a bigger voice.

Now, not only that Omni has violated the first rule of controlling bad press, it has also violated the first rule of controlling online bashing: treat complainers as human. Plenty of books and speakers dwelling on the issue of the new media of customer relations—the internet—noted that one of the most important things to do is to remember that even though the outlook is electronic or an avatar, companies are still dealing with a person, so they should act like one too. Hence being humble and conversational is highly recommended in painting a response to the critics.

Yet, Omni once again did exactly the opposite. Resorting to legal action sent the message that Omni is the cold almighty private industry and Prita is the human victim. The hospital’s case is worsen further since, maybe this is just rotten luck, its adversary happened to be a new mother who is now unable to breastfeed and cuddle her newborn baby because she is behind bars. Imagine the sympathy Prita gained by the painting of this image alone. Who would now want to go to a hospital that does not care for human suffering? Omni should start counting the numbers of customer still willing to go through its front door as its blessing.

It is public relation suicide 101 what Omni Tangerang just committed. But damage control can still be done.  Omni can opt to waive the verdict of the civil court and not press for Prita to pay the damages or make the public apology as ordered by the court.  It is also in the interest of the hospital that Prita does not get sent to jail by, for instance, providing more supporting accounts if and when they are asked to take the witness’ stand.  But if Omni is still bent on suing its defamers, it should start preparing a lawsuit against itself.

An edited version of this article is featured in The Jakarta Post.

 

Disenchanting Subsidy for Higher Education

The Indonesian government’s decision to grant more autonomy to universities and reduce subsidy for higher education has been under fire ever since the policy was introduced. The majority of the public, further fueled by mainstream media, seems to be enchanted with the notion of subsidized universities, believing it would bring equality to a segregated community and increase overall welfare. Perhaps it is time to disenchant this seemingly noble idea of higher education subsidy and try to analyze the impact of such policy objectively.

Proponents of a blanket subsidy for higher education hinge their arguments on erroneous conventional wisdoms: that there are hordes of poor students that do not enter college because they cannot afford the tuition fee; and that putting more and more individuals through college will increase overall public welfare. As most conventional wisdoms, these ideas are appealing and popular but are not necessarily correct. Let’s take a closer look.

First, evidence shows that there is only a very small fraction of the poor that graduate high school and thus is eligible to enter college. The number of poor people going to school decreases significantly as the level of education increases. In Indonesia today, there are nearly 90 percent of children coming from the two poorest income quintiles graduate from primary school, but only approximately 60 percent of the same group continues to junior secondary school. The number keeps decreasing until only about one out of ten young people age 16 to 18 years old from the two poorest quintiles graduate from senior high school and is eligible to enter college. Of this number, probably only half would decide to continue to college.

Now unlike what most people would like to believe, the main reason the number of poor people decreases with level of education is not because they cannot afford the tuition fee, but rather because the poor cannot afford the opportunity cost of education. Going to school means forfeiting income; and for poor households, this is a big deal. Six years of primary school means six years of lost income—twelve years of basic education means twelve years of lost income. That is the main reason why only a small fraction of the poor would decide to go to college, even if we make the fees exceptionally low.

It doesn’t take a mathematical genius to figure out that a blanket subsidy for higher education would benefit mostly students from well-off families. The very poor don’t go to college; the middle and upper classes do. Subsidizing higher education won’t make universities become less exclusive; it will only make the exclusive pay less.

Furthermore, the idea that massive expansion of higher education would lead to higher level of general welfare also needs to be re-examined. True that the private benefit of higher education is significantly large; on average, a college graduate makes about twice as much as their high school graduate counterparts over a lifetime. It does not follow, however, that having more and more individuals going to college leads to higher level of welfare for all.

What we need to understand is that education is a “positional good”—one whose value depends on whether you have more of it than other people—and is not just about acquiring knowledge and skills in absolute terms per se. The reward you reap from your education does not solely come from the skills and knowledge you receive, but also depends greatly on whether you’re somewhere “at the top.” The catch is, it’s impossible to have everyone at the top.

To put it simply, an ambitious expansion of tertiary education would lead to a decrease in value of a college diploma. We’re already beginning to see the signs today. Some occupations that only required high school diploma just a couple of decades ago—security, sales promotion, taxi drivers—are now beginning to require some college degree. In the worst case scenario of tertiary education expansion, one can only hope to get a job, any job, if they had gone to college. This would not help the poor; indeed it would suffocate them for then they would have no choice but to forfeit income and spend even more money to go through college if they expect to get any decent job at all.

We should all pause for a moment before blindly demanding the state to heavily subsidize higher education. Such policy is indeed a “feel good” policy—one that gives us the illusion that we’ve done something good when in fact we would only be giving money to the middle and upper class families, and would very likely hurt the poor in the long run.

A better—though perhaps less politically appealing—policy is to focus on basic, including preschool, education. Participation in quality early childhood education has been strongly correlated to higher level of success in adult life, while the opportunity cost borne on poor families is very low (since toddlers can’t work for money anyway). Meanwhile, we are still falling behind in terms of primary education quality and secondary education participation.

With regards tertiary education, yes we should still strive to attain capable and willing individuals from the lower economic brackets to continue to higher education, but a blanket subsidy is not the way to do it. Instead, we should expand targeted subsidies through scholarships, financial aids and establishing affirmative action in universities for individuals from lower socio-economic background.

Public policies are supposed to benefit the society as a whole and provide the most assistance to its most vulnerable members. A large subsidy on higher education is neither a prudent public policy nor a good spending of public funding. It is imperative that the Indonesian public understands this lest we end up pressuring the government to spend our own tax money to help rich children get richer and add more burden to the poor in the long run.

* An edited version of this article was featured in The Jakarta Post