Competition Policy in Indonesia and the New Anti-Monopoly and Fair Competition Law

This paper explores the role of competition policy in shaping a business environment that will encourage firms to improve their efficiency and competitiveness. After discussing the scope and objectives of competition policy, and whether a liberal trade and investment regime can substitute for, or should complement, a competition law, the paper offers an assessment of Indonesia's new competition law. Its shortcomings include a serious lack of clarity about objectives and a confusion between objectives and the means to achieve them; a failure to distinguish between various kinds of monopoly; a tendency to prohibit certain activities and agreements between firms without a clear analysis of the underlying economics involved; unnecessary and counterproductive exemptions from the provisions of the law; and failure to confront the reality that the principal obstacle to competition in the past has been unwarranted government intervention in markets.