Day: November 1, 2021

What Tommy Boy Teaches Us About Entrepreneurship and the Regulatory State

The go-get-em attitude seen in ‘Tommy Boy’ is just one of the key ingredients to entrepreneurial success.

Regulations attempt to manage and control complex systems according to what has been deemed as appropriate behavior – and therein lies the problem. Complex systems are complex and what is “appropriate” is subjective and tends to be situationally dependent.

For regulatory bodies that are on the outside looking in, data can be misleading and algorithms can be misconstrued, and this was depicted in a recently released policy report by the Consumer Choice Center. Regardless of whether they concern talcum-based baby powder or crop-protecting pesticides, the report explains how blanket bans and one-size fits all approaches overlook the idiosyncrasies present within industries and the long-term implications of imposed restrictions.

Read the full article here

To tackle illicit trade, the Malaysian Government needs to smash taxes

The Malaysian Marine Police seized more than RM220.44 mil of smuggled items between January and June this year. It is almost three-fold compared to RM55.75 mil for the same period last year. More than 70% of the seizures were illegal cigarettes and liquor followed by drugs.  

Back in January, the Malaysian Government has implemented a series of Budget 2021 measures that are aimed to tackle the tobacco black market. 

However, criminals continue to improve their concealment methods. The scope of undetected activities expands further, including using smaller and private jetties instead of large ports or renting out private premises to store their illicit products. 

We should all be concerned about this. Not only do black markets bypass all regulatory oversight, meaning there are no controls for safety or quality. 

In addition, they create an incentive and funding model for other criminal behaviour such as arms or human trafficking while also depriving the government of tax revenue and putting legitimate businesses at a disadvantage. 

There is no silver bullet for solving this enormous challenge, and more innovative anti-illicit trade policies should be implemented. 

But the Government should be beware that many of these black markets evolve as a reaction to over-regulation and over-taxation which is something that the government could – with the right political will – address relatively easily. 

Illicit trade

We know that illicit trade is in many ways a consequence of restrictive policies such as sin taxes which drive criminals to provide consumers with a cheaper alternative. 

Policies such as the 2015 increase of 42.8% in the tobacco excise duty has played to the benefit of smugglers while doing very little to help people quit smoking. 

Suppose the Government aims to reduce smoking. In that case, it could endorse reduced-risk nicotine products like e-cigarettes and vaping through reduced taxation and more accurate public information campaigns on the relative health benefits. 

Not only would this achieve the broader goals put forward by public health regulators as research by the European Policy Information Centre but it could also help discourage the illicit trade of tobacco. 

Of course, the black market exists not only because there are groups willing to risk smuggling products across borders but also because there is demand for overregulated products. In a survey commissioned by Malaysia think tank, DARE, and carried out by its market research partner, The Green Zebras, 53% smokers in Malaysia have said that they will switch to cheaper but illicit alternatives because they cannot afford legal products at current prices. 

High tobacco cost and low wages country like Malaysia is vulnerable to criminal activities. Therefore, while enforcement efforts like the Budget 2021 measures should be extended, the Government should also consider taking decisive steps in the form of tax cuts, or at the very least, abstaining from further tax increases. 

The evidence to support this is compelling. A 2010 study published by CIRANO in Montreal found that each additional dollar in taxes raises the propensity to resort to consuming contraband cigarettes by 5.1% while each additional dollar in tax cuts decreased it by 5%. 

It is clear, therefore, that higher taxes increase the attractiveness of the black market –and the deeper the tax cuts – the higher the likelihood of stopping smuggling. 

The overarching goal behind excise tax increases in Malaysia, regulators claim, is to reduce smoking rates, particularly among adolescents. 

However, while it is true that the cigarette prevalence in Malaysia has improved for the past half-year since the Budget 2021 measures were implemented, this doesn’t mean that if the Government were to cut taxes, the rates would shoot back up. 

The Malaysian Government need only look to Canada. In 1994, the Canadian Government slashed taxes on cigarettes to tackle the booming illicit trade despite alarmist expectations at the time. The prevalence of smoking dropped and continues to fall. Illicit trade has since also significantly decreased. 

In order to piece together a more coherent strategy, the Malaysian Government should continue to target the supply side of the illicit market through enhanced enforcements, but it would be a mistake not to consider significant tax cuts and smarter regulation in the upcoming Budget 2022. 

A multi-pronged approach will be the only way to reduce illicit trade and avoid the problems associated with it. – Oct 29, 2021

Originally published here

New Report From The Consumer Choice Center: The Folly Of One Size Fits All Regulations

The Consumer Choice Center just published a new report explaining the difference between hazard and risk and examines how a hazard based regulatory approach to four areas of manufacturing will result in fewer choices for consumers, lower quality products, and higher prices. 

Do you know the difference between risk and hazard? You should! And so should lawmakers.

Read the full article here

Pentingnya Digitalisasi Pendaftaran Hak Kekayaan Intelektual

Ekonomi kreatif saat ini merupakan salah satu sektor yang berkembang paling maju dan paling pesat di Indonesia. Sektor ini telah mempekerjakan puluhan juta pekerja dan juga memberi sumbangsih yang sangat besar bagi ekonomi Indonesia.

Berdasarkan data dari Kementerian Pariwisata dan Ekonomi Kreatif misalnya, sektor ekonomi kreatif telah menyumbangkan sekitar 1.100 triliun rupiah pada tahun 2020. Hal ini terjadi meskipun di tengah pandemi COVID-19 yang hingga saat ini masih terjadi. Hal ini membuktikan bahwa ekonomi kreatif merupakan salah satu sektor yang paling mampu bertahan di masa pandemi (bisnis.tempo.co, 18/1/2021).

Hal ini tentu merupakan sesuatu yang sangat positif dan harus terus kita dorong. Bila kita mampu untuk semakin meningkatkan ekonomi kreatif di Indonesia, maka masyarakat juga akan mendapatkan manfaat yang sangat besar, dan akan semakin banyak membuka lapangan kerja.

Salah satu upaya yang sangat penting untuk mewujudkan hal tersebut adalah melalui perlindungan hak kekayaan intelektual yang kuat dan komprehensif. Perlindungan hak kekayaan intelektual memang menjadi hal yang tidak bisa dipisahkan dari wacana mengenai sektor ekonomi kreatif.

Inovasi merupakan fondasi dari industri kreatif, dan perlindungan hak kekayaan intelektual adalah hal yang sangat penting untuk meningkatkan inovasi. Dengan adanya perlindungan hak kekayaan intelektual yang baik dan kuat, maka kita akan memberi kepastian kepada para inovator dan pelaku industri kreatif agar karya mereka tidak dicuri dan mereka bisa mendapatkan manfaat ekonomi yang seutuhnya dari karya yang mereka buat.

Tanpa adanya perlindungan terhadap hak kekayaan intelektual, maka orang-orang yang tidak bertanggung jawab bisa dengan sangat mudah membajak dan mencuri hasil karya orang lain. 

Bila hal ini terus terjadi, maka bukan tidak mungkin insentif para pelaku industri kreatif untuk berinovasi akan semakin berkurang, dan para investor juga akan semakin enggan untuk menginvestasikan uang yang mereka miliki di sektor tersebut.

Peran aktif dari aparat penegak hukum untuk menindak mereka yang mealkukan pembajakan merupakan langkah yang sangat penting untuk melindungi hak kekayaan intelektual. 

Tetapi, bila kita ingin memperkuat perlindungan hak kekayaan intelektual, hal tersebut saja tidaklah cukup. Peran aktif dari para pelaku industri kreatif juga menjadi hal yang sangat krusial.

Saat ini, kesadaran para pelaku industri kreatif untuk mendaftarkan karya yang mereka buat di Indonesia masih tergolong rendah (jpnn.com, 14/7/2019). Padahal, peran ini merupakan hal yang sangat penting. Bila mereka tidak mendaftarkan karya yang mereka buat, maka akan mustahil karya tersebut untuk mendapatkan perlindungan dari pembajakan dan pencurian.

Oleh karena itu, sosialisasi mengenai pentingnya bagi para pelaku industri kreatif untuk mendaftarkan karya mereka menjadi hal yang penting untuk meningkatkan eksadaran tersebut. Tetapi, hal tersebut tidaklah cukup. Sosialisasi mengenai pentingnya mendaftarkan karya kreatif juga harus dibarengi dengan kebijakan untuk memudahkan proses pendaftaran tersebut.

Bila sosialisasi mengenai pentingnya pendaftaran hak kekayaan intelektual dilakukan secara gencar, namun para pelaku industri kreatif harus melalui proses yang sangat berbelit untuk mendaftarkan karya mereka, maka hal tersebut menjadi tidak akan ada gunanya. Insentif untuk mendaftarkan kekayaan intelektual oleh para pelaku industri kreatif akan tetap kecil.

Salah satu kebijakan yang sangat penting untuk diambil untuk mempermudah proses pendaftaran tersebut adalah melalui digitalisasi pendaftaran kekayaan intelektual. 

Saat ini, perkembangan teknologi informasi berkembang begitu cepat, dan jumlah pengguna internet di Indonesia sudah sangat tinggi. Berdasarkan data dari Kementerian Komunikasi dan Informatika (Kominfo), pada tahun 2021, tercatat ada 202,6 juta pengguna internet di Indonesia. Angka ini naik 11% dari tahun sebelumnya, yakni 175,4 pengguna (aptika.kominfo.go.id, 12/9/2021).

Angka ini tentu bukan merupakan jumlah yang sedikit. Dengan adanya proses digitalisasi pendaftaran kekayaan intelektual, maka akan semakin mempermudah para pelaku industri kreatif untuk mendaftarkan karya mereka, karena mereka tidak perlu lagi untuk pergi ke kantor pemerintahan dan melalui berbagai proses birokrasi yang berbelit agar karya mereka menjadi karya yang terdaftar sehingga hak kekayaan intelektualnya dapat terlindungi.

Berita baiknya adalah, pemerintah dalam hal ini sudah mengakomodir hal tersebut, agar digitalisasi proses pendaftaran kekayaan bisa diwujudkan. Menteri Hukum dan Hak Asasi Manusia (Menkumham), Yasonna H. Laoly, menekankan bahwa memanfaatkan sistem teknologi informasi dalam rangka pelayanan masyarakat, dalam hal ini untuk mendaftarkan kekayaan intelektual, adalah hal yang penting. 

Hal ini bukan hanya untuk mempermudah para pelaku usaha industri kreatif, khususnya para pemilik usaha kecil dan menengah, namun juga memperkecil peluang korupsi dan pungutan liar yang dilakukan oleh oknum pegawai pemerintahan (hukumonline.com, 18/7/2020).

Pernyataan dari Menkumham tersebut tetu merupakan sesuatu yang sangat positif dan patut kita apresiasi. Dengan semakin mudahnya pendaftaran kekayaan intelektual, diharapkan akan semakin banyak pula para pelaku industri kreatif yang mendaftarkan karya mereka. Dengan demikian, maka perlindungan kekayaan intelektual akan semakin kuat, dan semoga ekonomi kreatif di Indonesia dapat semakin berkembang di tahun-tahun mendatang.

Originally published here

Policy Focus: EU’s Green Agenda: Lessons For The U.S.

What You Should Know

The Farm to Fork (F2F) strategy, published by the European Commission in May 2020, is a centralized attempt to adapt European agriculture to the pressing challenges of the day. Extensively criticized by the U.S., the F2F turns a blind eye to the best interests of European farmers and consumers, and risks doing more harm than good not only at home but also abroad. The F2F serves as a lesson in how not to approach agriculture in the 21st century.

The COVID-19 crisis has shown that the resilience of food systems is pivotal. Future pandemics combined with environmental challenges call for a science-based approach to food production both in the EU and worldwide. Although noble in intent, the Farm to Fork strategy’s bold push for organic farming doesn’t provide viable solutions to pressing climate problems and will only lead to higher consumer prices, more illicit trade, and more food insecurity.

The Farm to Fork strategy assumes that organic farming is more sustainable than conventional farming and should be given every preference. To achieve that, the European Commission proposed to cut the use of pesticides in the EU by 50 percent while increasing organic farming in agricultural production from 7.5 percent to 25 percent. However, such a commitment is neither climate-friendly nor feasible.

Rather than imitate the F2F strategy, the U.S. should strive to preserve its competitive edge in food production and only see the F2F as a reminder of why politics has no place in agriculture.

Read the full report here

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