As the Oscars have been approaching, Hollywood has been under fire in the country with the fourth highest theater attendance, according to 'the Economist'. Recently, a law was passed that drastically increased the tax rate on American movies played in Indonesian theaters, and in response, Hollywood and the theaters refused to pay the new rate, effectively creating a ban. I was interested in what both Indonesians and my fellow ex-pats thought of this and worry about the overall effectiveness, and public perception, of this policy.
Governmental rationale for the law was protectionist in nature and, contrary to the Washington Concensus, I think protectionism is a good thing for the main economic sectors of a rapidly growing economy. For example, there was a law passed last summer putting a minimum term of investment on FDI (Foreign Direct Investment), which was strongly opposed by multi-national banks because it restricted the ever important flow of capital. Yet, this was an example of good protectionism because it was aimed at quelling speculation and over-investment. While I'm not arguing that the law was a cure-all, it is an example of enacting a law that may be 'bad for business,' but ultimately is in the best long-term interest of Indonesia.
In contrast, I have issues with the 'Hollywood ban' for two reasons. First of all, while the government is trying to foster the Indonesian film-making industry, this industry is far from being a central component to the overall economy and the domestic unrest at not being able to see Harry Potter #7 Part Two and other internationally anticipated movies in theaters doesn't seem to be worth the political capital. This is especially worrisome because the boot-leggers will still get ahold of the DVDs, thus rendered the ban essentially useless and further encouraging disrepect of intellectual property.
Secondly, I am concerned about the implications of restricting art and speech. The inherent message this law sends may be more dangerous than the law itself. I believe that the most important institutions to a functional democracy are free speech and free expression (and I'm not arguing that we are a shining example back home in America because we might want to question how free speech is that is owned by a small handful of enormous corporate entities)
Overall, I am interested in observing how this plays out, and the situation highlights just one of many issues every country must deal with in an increasingly inter-connected world where boundaries are blurred like never before.