Government Banditry
V - Entrepreneurship in Corporate Life: Power of Scarcity
I realise the posting involved issues which people outside the industry may not be familiar with. But the point is not from the technical details, rather on how government's sensibility bears a direct impact to a country's business environment.
Sadly, the Indonesian authorities are doing it again - making it harder for business, airlines in particular. All of a sudden, as if there is no shortage of surprises, and clearly oblivious to the crisis to aviation escalating oil prices are posing, the airport authority decided to start charging parking fees "by hour" for aircraft parking at both the airports at Denpasar and Surabuya - it used to be charged simply on the basis of aircraft type, regardless of the hours of parking - with absolutely no communication, let alone consultation, in advance. More mind-boggling is that the hourly charge is to be applied even for overnight parking, when the whole airport is at complete rest without any operation going on.
Seeing all the extorting tactics here, I couldn't agree more to Tim Hardford's theory of government banditry in "The Undercover Economist". In bigger schemes of things, perhaps all these cunning manoeuvers from the local authorities are signs of desperation for revenue sources, alluding to misplaced allocation of resouces from the federal govenment.
Whatever the causes for rashness, businesses do not readily succumb to leeching whims, as they are in no financial position to do so. But then there is not much they can do other than protesting and lobbying - all effort of unproductive diplomacy. Otherwise, just hope for the best, but build in unproductive costs as additional costs for doing business in the developing world.
I realise the posting involved issues which people outside the industry may not be familiar with. But the point is not from the technical details, rather on how government's sensibility bears a direct impact to a country's business environment.
Sadly, the Indonesian authorities are doing it again - making it harder for business, airlines in particular. All of a sudden, as if there is no shortage of surprises, and clearly oblivious to the crisis to aviation escalating oil prices are posing, the airport authority decided to start charging parking fees "by hour" for aircraft parking at both the airports at Denpasar and Surabuya - it used to be charged simply on the basis of aircraft type, regardless of the hours of parking - with absolutely no communication, let alone consultation, in advance. More mind-boggling is that the hourly charge is to be applied even for overnight parking, when the whole airport is at complete rest without any operation going on.
Seeing all the extorting tactics here, I couldn't agree more to Tim Hardford's theory of government banditry in "The Undercover Economist". In bigger schemes of things, perhaps all these cunning manoeuvers from the local authorities are signs of desperation for revenue sources, alluding to misplaced allocation of resouces from the federal govenment.
Whatever the causes for rashness, businesses do not readily succumb to leeching whims, as they are in no financial position to do so. But then there is not much they can do other than protesting and lobbying - all effort of unproductive diplomacy. Otherwise, just hope for the best, but build in unproductive costs as additional costs for doing business in the developing world.
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