Monday, April 19, 2010

Long journey for alcoholic beverage in Indonesia

Two sides of the wish.
Circulation of beverages containing ethyl alcohol (alcoholic beverage), such as Beers, Tequila, Vodca, Martell, Johnny Walker, Hennessy, Wine, etc, seems to still be a prolonged debate in Indonesia as the largest Muslim country in the world. MUI (Majelis Ulama Indonesia / English: Indonesian Ulema Council ) as the highest Muslim authority in Indonesia has issued a Fatwa that stated "Haram" (Haraam / forbidden) for these type of drinks. I believe that all religions in Indonesia (Islam, Christian, Buddhist, Hindu) including all good parents do not want their children to be a drunkard. In this case, I think, Muslim community is more extreme against this alcoholic beverage.

On the other hand, Pancasila is the philosophic fundamentals of the state, and the national motto is "Bhinneka Tunggal Ika" (Unity in Diversity). The country need to protect pluralism and diversity in the society under "one umbrella". It's clear that Indonesia is not a religious state, as it has been said by former president Abdurachman Wahid.

Starting point of the journey of alcoholic beverage debate.
I still remember when I lived in Bali in 1994, "AS" together with "EB" through their company namely "AMI" (sorry for just write the initials) were crowded mentioned relates to the circulation of alcoholic beverage (such as Johnny Walker, Martell, Hennessy, Chivas Regal, Tequila, etc) in Bali province for the first time. They run a business that controlling the circulation of alcohol beverage through a mechanism called labelization (labeling). Each manufacturer and distributors of alcohol beverage is subject to levy of Rp.600 and Rp.750 per liter, respectively for beverage containing alcohol between 5% to 55%. At the time, this mechanism is supported by the local government (governor of Bali). From Bali, then these controversy regarding the circulation of alcoholic beverage was sticking on the surface and became a starting point of its long journey, and still debated to this day, that is whether all alcoholic beverage should be banned or controlled (means NOT banned).

In many regions always arises prolonged debate in the Regional Representative Council (Indonesian: DPRD / Dewan Perwakilan Rakyat Daerah) during the process of drafting local regulations on alcoholic beverages and night entertainment business. Nonetheless I believe local governments will think twice to ban the circulation of alcoholic beverages in their respective region because there is no prohibition at central government regulations (top level law). According to the hierarchy, local regulations must not violate to the law on top level. Just a note, there is a case on regional regulation in Banjarmasin city that prohibit alcoholic beverages but then rejected by the central government with the reasons contrary to the rules above.

On the other hand, the spirit of regional autonomy has been delegated some authority to local governments to take policy in accordance with the conditions and dynamics of society life in their respective areas, although not allowed out of the central policy framework. This also affects the policies in each regions against alcoholic beverages and night entertainment business, that is local governments have the authority to decide:
  • The amount of regional tax rates for entertainment business that sells alcoholic beverages (see the strict regulations in this post).
  • The place that allowed to sell alcoholic beverages, whether only in starred hotel or also allowed in pub, discotheque, karaoke, cafe, and nightclubs that are independent (outside the hotel), and whether also allowed in certain supermarket and shop.
  • Limiting the operating hours for night entertainment business. In some regions the operating hours is officially allowed from 21:00 until 00:00 and in other regions is allowed until 01:00 or 02:00.
  • The distance between the outlets that sell alcoholic beverage and the worship places, schools, hospitals and housing. Some regions sets the distance to 200 meters, while on other regions has set to 500 meters. The problem is how to the alcoholic beverage outlets that violate this rule but they had already existed before this rule was made, or how if a new worship place or a new school suddenly built adjacent to the outlets that already exists. There is an idea for zoning (moving all the night entertainment outlets to a special zone). But how much it cost? Not so easy to do that. I think a wise approach should be taken.
Strict regulations for alcoholic beverage and night entertainment business.
Many publicity about the negative impact of alcoholic beverages on various media and the number of pressure / protests from some particular groups to ban its circulation, I think quite influence to the birth of these strict rule. I feel that perhaps this was a middle way for this issue.

According to Undang-Undang Republik Indonesia Nomor 28 Tahun 2009 Tentang Pajak Daerah Dan Retribusi Daerah (English: Law of The Republic of Indonesia number 28 year 2009 concerning The Regional Tax and Regional Retribution), on Article 45 Paragraph (2) mentioned that the tax rates for entertainment business such as fashion show, beauty contest, discotheque, karaoke, nightclub, dexterity game, massage parlors, and steam bath / spa, may be set to a maximum of 75% (seventy five percent). It means the tax rates on each regions (city / district) may be vary and can be set up to 75%. And according to Article 44, the amount of taxes to be paid is XX percent multiplied by the amount of money received or that should be received. It means XX percent from gross revenue (NOT from net profit).

In the field of alcoholic beverage excise tax, starting on 1 April 2010 applied the Peraturan Menteri Keuangan Nomor 62/PMK.011/2010 (English: The Minister of Finance Regulation Number 62/PMK.011/2010) about the excise rate of ethyl alcohol, beverage that containing ethyl alcohol, and concentrate that containing ethyl alcohol. According to this new regulation, in general the excise rates for alcoholic beverages increased by 300 percent. As a comparison please refer to the old rules in 2006, that is Peraturan Menteri Keuangan Nomor 90/PMK.04/2006 (English: The Minister of Finance Regulation Number 90/PMK.04/2006).

With this tax and excise, this means that trading and selling alcoholic beverages was allowed, although a bit burdensome for entrepreneurs and consumers. I think the imposition of high taxes and excise may also trigger the trade of illegal products as its negative impact.

Arguments from the group who is pros and cons.
Often I heard the pros group usually using moderate thinking and objective towards these issue. Their arguments are:
  • If all manufacturers, importers, distributors and outlets of alcoholic beverages is banned then please imagine how many employee who lose their job.
  • Alcoholic beverage industry contributes significantly to the state revenue. Take an example just for beer. National beer industry has become the largest taxpayer, generating approximately Rp. 1.5 trillion of PPNBM tax (value added tax for luxury goods) and excise to the government, said Ipung Nimpuno, spokesperson of Gabungan Industri Minuman Malt Indonesia / GIMMI (English: Malt Beverage Industry Association of Indonesia) on VIVAnews
  • This industry also support the tourism sector. Should foreign tourists can not drink beer in Indonesia. I think an intriguing question for readers of this blog who have a plan for a vacation in Indonesia.
  • Indonesia is not a religious state.
  • If we want to maintain our health, do not smoking. If we do not want to get drunk, do not drink alcoholic beverages. This goes back to yourself.
And below is the arguments from the group who cons:
  • Drinking alcoholic beverage is forbidden by religion.
  • Many acts of violence occurred because triggered by alcohol.
  • Alcohol has ruin the moral of society.
  • Alcohol ruin our health.
Really a polemic that raises the pros and cons. My big question is: "Whether Indonesia should free from alcohol?" End of words, I don't know whether "these journey" will stop or to be continue. If you ask my views then I will just say "I'm a moderate thinker". How with you?

Tuesday, April 6, 2010

A musings about friend and enemy

A story about enemy (an essay).
When the fierce battle between two group of armies was ended, there's someone who still confused and then asking two question to each soldier on both side. Did you know anyone who you kill? The answer is NO. Did all of your victims has wronged to you? Again the answer is NO. So who is your enemy?

A story about friend (true story).
Long time ago I have a friend who is rich and good-doer. I know he have a lot of friends when he still in good condition. But now he was often sickly and most of his wealth has depleted for medical treatment. One day I met him on his house. I felt like he live lonely. Along with our talk, I suggest him to call his friends to gather together with him with the hope he will feel good after that. Did you know his answer for me? He said: "All my friends was in my memory".

A story about friend and enemy from a senile old man (an essay).
One day a senile old man is being asked by someone with a question like this: "Do you still remember all of your friends?". His answer: "Most of them has been disappear from the memory of my brain". And the second question for him: "If so, do you still remember of your enemy?". His answer: "I have no sense like this anymore, probably because my memory continues to decrease along with my age, so they are more quickly disappear from my brain".

And a political anecdote about friend and enemy.
There are no eternal enemies or eternal friends. There are only the eternal interests which is in our brain.

So... who is your real friends or enemies when you become a senile old man? NONE.