asaki's blog: 2008

Rabu, 08 Oktober 2008

ISU-ISU PERDAGANGAN BEBAS

I PENDAHULUAN

Dalam era globalisasi, kebijakan perdagangan luar negeri (PLN) sangat penting. Kebijakan ini, apalagi untuk nagara yang mempunyai ketergantungan ekonomi tinggi pada luar negeri akan memberikan pengaruh besar pada perekonomian negara tersebut.
Pada saat ini Pemerintah Indonesia tidak bebas lagi dalam kebijakan PLN nya.

Kebijakan pemerintah sangat dipengaruhi oleh kesepakatan-kesepakatan internasional yang dibangun oleh organisasi-organisasi internasional (dimana Indonesia menjadi salah satu anggotanya), seperti WTO, APEC dan AFTA, yang cenderung mengarah kepada perdagangan bebas dunia (Tulus Tambunan, 2006). Dalam sistem perdagangan bebas, secara prinsip pemerintah tidak campur tangan dalam perdagangan internasional. Sistem perdagangan sepenuhnya diserahkan pada mekanisme pasar.

Dalam sistem perdagangan bebas, tingkat persaingan antar pelaku ekonomi akan sangat keras. Pesaing tidak hanya berasal dari pelaku-pelaku ekonomi domestik, tetapi juga dari luar negeri. Para pelaku ekonomi domestik dituntut untuk lebih mandiri dalam meningkatkan daya saing mereka terhadap pelaku-pelaku ekonomi luar negeri. Pemerintah tidak dapat lagi memberikan proteksi pada pelaku-pelaku ekonomi domestik tersebut, misalnya dalam bentuk pengenaan bea masuk atau quota bagi barang-barang luar negeri (Hamdy Hady, 2001). Dalam sistem perdagangan bebas, Pemerintah dituntut untuk memberikan perlakuan sama baik pada pelaku-pelaku ekonomi domestik, maupun pelaku-pelaku ekonomi luar negeri.

Ada dua isu yang berkaitan dengan perdagangan bebas yang akan dibahas dalam makalah ini, yaitu:
1. Komitmen-komitmen Pemerintah Indonesia dengan organisasi-organisasi internasional, yang berkaitan dengan perdagangan bebas.
2. Konsekuensi-kosekuensi yang akan timbul dan perlu diantisipasi dari komitmen-komitmen tersebut.

II KOMITMEN-KOMITMEN PEMERINTAH INDONESIA
DALAM ORGANISASI INTERNSIONAL

Seperti dinyatakan di muka, bahwa saat ini kebijakan-kebijakan perdagangan luar negeri Pemerintah sangat dipengaruhi oleh komitmen-komitmen Pemerintah terhadap organisasi-organisasi internasional seperti World Trade Oranization (WTO), Asia Pasific Economic Cooperation (APEC), Asean Free Trade Area (AFTA), Economic Partnership Agreement (EPA) dan perjanjian-perjanjian bilateral, misalnya perjanjian dengan Singapura dalam membentuk Kawasan Ekonomi Khusus (KEK). Pemerintah Indonesia telah menandatangani sebagian besar dari kesepakatan-kesepakatan baik multilateral maupsun bilateral yang mengarah pada sistem perdagangan bebas.

Beberapa kesepakatan yang yang telah ditandatangai oleh pemerintah adalah kesepakatan tentang perdagangan global dan regional, standarisasi, penentuan sektor-sektor unggulan, kebijakan Pemerintah tentang kenaikan harga komoditi di pasaran dunia, anti dumping dan diplomasi ekonomi. Liberalisasi perdagangan mulai dari era GATT hingga sekarang (WTO) telah mengalami perluasan cakupan, mulai dari Putaran Dillon dan Putaran Kennedy yang hanya mencakup perdagangan barang saja, hingga merambah ke perdagangan dan penanaman modal, dan dalam Konperensi Tingkat Menteri WTO di Singapura telah mengarah ke isu-isu lainnya, seperti tenaga kerja dan lingkungan. Oleh karena itu isu perdagangan bebas pada saat ini, tidak hanya menyangkut perdagangan antar komoditi,tetapi sudah meluas pada aliran modal, tenaga kerja, lingkungan bahkan sistem pemerintahan (Dorojatun dan Omura, 1995).
Hingga saat ini isu besar WTO adalah perundingan Doha yang telah berjalan 6 tahun. Yang dibahas di dalam perundingan tersebut adalah:

(1) pembuatan aturan-aturan yang menyangkut empat hal: (a) tindakan-tindakan pengamanan darurat (misalnya jika ada indikasi pasar jasa domestik akan dibanjiri oleh produk-produk jasa dari luar negeri), (b) perlakuan dari pemerintah (misalnya mengenai pemberian akses pasar dan perlakuan terhadap investasi asing, dan mengenai transparansi), (c) subsidi, dan (d) peraturan domestik, (misalnya mengenai penentuan mana yang bisa dan mana yang tidak bisa disubsidi, persyaratan dan prosedur mendapatkan lisensi dan kualifikasi, dan standar teknis)

(2) akses pasar, dalam hal ini Indonesia mendukung liberalisasi perdagangan sektor jasa secara bertahap.
Dalam kaitan dengan kesepakatan regional dan bilateral, beberapa tahun belakangan ini pemerintah Indonesia berupaya membentuk Kawasan Ekonomi Khusus (KEK) dengan negara-negara yang berbatasan langsung, misalnya dengan Singapura. Tujuan pembentukan KEK ini adalah untuk meningkatkan perdagangan antara kedua negara, dan sekaligus juga mempercepat pertumbuhan ekonomi di wilayah KEK tersebut ( di Indonesia misalnya di Batam, Bintan dan Karimun).

Dalam rangka meningkatkan daya saing ekonomi nasional Indonesia juga semakin gencar membentuk kesepakatan-kesepaktan bilateral dalam bentuk Economic Partnership Agreement (EPA) dengan banyak negara potensial. Misalnya bilateral EPA dengan Korea Selatan yang telah ditandatangani pada bulan Juni 2006, dan EPA dengan Jepang (IJ-EPA), yang ditandatangani pada tanggal 25 Januari 2006 lalu di Tokyo. Tujuan dari dibangunnya EPA ini adalah untuk meningkatkan perdagangan antar kedua negara. Ada tiga pilar penting, yakni peningkatan kapasitas produksi, fasilitas perdagangan, serta liberalisasi yang menghapus sebagian besar tarif bea masuk.

EPA dengan Jepang misalnya, ke kedua negara. akan memfokuskan pada peningkatan kapasitas di 13 sektor penunjang investasi Jepang di Indonesia, yaitu pengerjaan logam, percetakan alat mesin, promosi ekspor dan investasi, usaha kecil dan menegah (UKM), komponen otomotif, elektronik, baja, tekstil, petrokimia/oleokimia, logam non besi, dan makanan dan minuman. Ke 13 sektor itu masuk program pengembangan kapasitas industri melalui Manufacturing Industry Development Centre (MIDEC). MIDEC adalah bagian dari pilar pengembangan kapasitas untuk meningkatkan daya saing produk Indonesia. Kesepakatan ini menyangkut lebih dari 90% dari jumlah pos tarif yang akan dihapuskan atau dikurangi

II KOSEKUESI DARI PERDAGANGAN BEBAS

Dengan Indonesia telah menandatangani kesepakatan-kesepakatan yang menuju pada sistem perdagangan bebas tersebut, berarti indonesia lebih menganut faham liberal pada sistem perdagangan luar negerinya, tidak hanya dalam perdagangan komoditi tetapi juga dalam tenaga kerja dan aliran modal. Dalam sistem ini aliran barang dan jasa, tenaga kerja serta modal diserahkan pada mekanisme pasar. Pemerintah tidak melakukan campurtangan dalam aliran tersebut. Oleh karena itu dampak pertama yang dapat diperkirakan dari kondisi tersebut adalah tingkat persaingan antar pelaku ekonomi akan semakin keras. Pesaing tidak hanya datang dari dalam negeri tetapi juga dari luar negeri.

Dampak keduanya adalah, ekonomi Indonesia akan semakin rentan terhadap gejolak-gejolak internasional. Dengan tidak campurtangannya pemerintah dalam kegiatan-kegiatan perniagaan luar negeri, maka pemerintah tidak dapat lagi melindungi ekonomi domestik terhadap dampak dari gejolak-gejolak eksternal. Setiap gejolak-gejolak ekonomi luar negeri seperti kenaikan harga minyak bumi di pasaran dunia, kasus jatuhnya lembaga keuangan di Amerika ternyata sangat berdampak pada ekonomi nasional.

Dalam sistem perdagangan bebas, setiap pelaku ekonomi dituntut memiliki tingkat kemandirian dan daya saing tinggi agar mereka mampu berkompetisi pada persaingan global. Salah satu caranya adalah dengan selalu berupaya melakukan inovasi-inovasi dalam rangka meningkatkan kualitas, produktivitas dan efisiensi produksi.

Tuntutan sistem pemerintahan yang baik juga merupakan salah satu syarat bagi upaya untuk meningkatkan efisiensi dan daya saing ekonomi nasional. Selama ini Indonesia dikenal akan negara yang mempunyai ekonomi biaya tinggi. Barang dan jasa yang dihasilkan oleh Indonesia relatif lebih mahal dibandingkan dengan barang dan jasa sejenis dari negara-negara lain, sehingga kalah berasing. Salah satu sebab dari ekonomi biaya tinggi tersebut adalah birokrasi yang tidak baik, KKN dan biaya perizinan usaha yang masih mahal dan kepastian hukum yang belum baik. Oleh karena itu upaya untuk memangkas sumber-sumber ekonomi biaya tinggi melalui penciptaan sistem pemerintahan yang baik tersebut harus segera dilakukan apabila Indonesia ingin sukses dalam era persaingan global.

III PENUTUP

Ada dua isu besar yang berkaitan dengan perdagangan bebas, yaitu tentang kesepakatan-kesepakatan internasional yang semakin mengarah pada liberliasi perdagangan, tidak hanya untuk barang, tetapi juga modal, tenaga kerja bahkan masalah lingkungan dan sistem pemerintahan Kedua, tentang konsekuensi-kosekuensi yang akan terjadi dan harus disiapkan dalam rangka mengantisipasi dampak dari kesepakatan-kesepakatan tersebut.

Dengan Indonesia telah ikut menandatangani kesepakatan-kesepakatan tersebut, maka Indonesia telah mempunyai komitmen untuk mengikuti sistem perdagangan bebas. Kebijakan-kebijakan perniagaan luar negeri Indonesia tentu tidak boleh bertentangan dengan kebijakan-kebijakan yang telah disepakati dalam WTO, APEC, AFTA dan EPA. Oleh kerena itu pada masa yang akan datang Pemerintah tidak dapat lagi memberikan perlindungan kepada pelaku-pelaku ekonomi domestik terhadap persaingan dari pelaku-pelaku ekonomi luar negeri. Para pelaku ekonomi dituntut untuk semakin memunyai kemandirian dalam berasing.

Beberapa hal yang harus disiapkan dalam menghadapi era perdagangan ;uar negeri yang semakin bebas adalah:
1. Meningkatkan kemampuan untuk inovasi dalam rangka meningkatkan kualitas dan efisiensi produksi
2. Membangun sistem pemerintahan yang baik.

DAFTAR PUSTAKA
Tulus Tambunan. Pengkajian arah Kebijakan dan Investasi Riil di Indonesia. www.kadin Indonesia.or.id/enmimages/dokumen/Kadin-98-3090-22082008.pdf
Dorojatun Kuntjoro-Jakti, Keiji Omura. 1995. Indonesian Economy in the Changing World. Institute of Developing Economies, Tokyo
Hamdy Hady. 2001. Ekonomi Internasional. Gahlia Indonesia, Jakarta

KEBIJAKAN MONETER INDONESIA

I PENDAHULUAN
Tuliasn ini adalah ringkasan dari Laporan Kebijakan Kebijakan Moneter triwulan II yang diterbitkan oleh Bank Indonesia. Ada beberapa ilustrasi yang disampaikan dalam laporan ini, yaitu:
1. Ilustrasi mengenai perkembangan makroekonomi terkini
2. Ilustrasi tentang perkembangan dan kebijakan moeter triwulan II-2008
3. Outlook perekonomian yang memuat tentang asumsi dan skenario yang digunakan untuk dasar kebijakan, prospek pertumbuhan ekonomi, prakiraan inflasi dan faktor risiko
4. Respon kebijakan moneter triwulan II-2008.

Walaupun menghadapi gejolak eksternal maupun domestik yang sangat besar, perekonomian Indonesia pada triwulan II-2008 diperkirakan masih tumbuh cukup tinggi (6%-yoy) walaupun lebih rendah dari triwulan sebelumnya (6,3%-yoy). Faktor pendorong utama dari pertumbuhan tersebut masih didominasi oleh permintaan domestik.

Neraca Pembayaran Indonesia (NPI) mencatat surplus diiringi dengan cadangan devisa yang meningkat. Kondisi fundamental ekonomi yang positif ini mendorong nilai tukar rupiah bergerak relatif stabil. Namun seiring dengan pertumbuhan ekonomi, impor bahan baku dan barang-barang modal untuk keperluan industri domestik juga mengalami peningkatan.

Dalam tahun 2008 perekonomian Indonesia diperkirakan masih menghadapi berbagai risiko baik yang bersumber dari gejolak eksternal maupun domestik, terutama yang berkaitan dengan kenaikan harga-harga komoditas internasional, seperti harga minyak, bahan pangan dan gejolak dipasar finansial global. Gejolak-gejolak tersebut ditambah dengan kemungkinan pengurangan subsidi BBM yang dilakukan Pemerintah akan semakin memperberat tekanan inflasi.

Dalam kaitan ini, Bank Indonesia akan tetap melaksanakan kebijakan moneter secara terukur dan hati-hati. Prioritas utama adalah untuk menjaga stabilitas perekonomian, sistem keuangan Indonesia, dan prospek pertumbuhan ekonomi. Oleh karena itu Bank Indonesia mengambil kebijakan untuk meningkatkan BI Rate dalam rangka mencegah dampak dari kenaikan harga BBM dan Bahan pangan terhadap kenaikan harga barang-barang lain dan ekspektasi inflasi masyarakat.

II ISI

Perkembangan Makroekonomi terkini. Selama triwulan II-2008 perekonomian Indonesia menghadapi tekanan berat, baik sebagai akibat gejolak eksternal maupun kondisi domestik itu sendiri. Walaupun demikian pertumbuhan ekonomi pada triwulan tersebut masih relatif tinggi, yaitu sekitar 6,0% (yoy), sementara untuk keseluruhan tahun 2008 juga diprakirakan berada pada kisaran 6,3% (yoy). Masih tingginya pertumbuhan tersebut disebabkan oleh masih kuatnya ekspor dan investasi serta masih tingginya konsumsi domestik. Tingginya konsumsi masyarakat sejalan dengan perilaku konsumen yang diperkirakan telah mengantisipasi ekspektasi kenaikan harga serta didukung oleh ketersediaan pembiayaan perbankan.

Volume ekspor pada Januari-Mei 2008 mencatat pertumbuhan yang tinggi mencapai 30,03% dibandingkan dengan periode yang sama tahun 2007. Sementara, kinerja ekspor itu sendiri juga di nilai masih baik seiring dengan tingginya pertumbuhan ekonomi.
Di sisi lain impor bahan baku dan barang modal untuk keperluan ekspor dan investasi menunjukkan peningkatan. Kenaikan nilai impor ini dalam jangka waktu pendek akan mengurangi surplus pada NPI. Namun ke depan, dengan tetap solidnya pertumbuhan ekonomi, perkembangan NPI pada tahun 2008 diharapkan tetap mencatat surplus yang tinggi.

Sementara itu, perkembangan transaksi modal dan finansial diwarnai oleh penerbitan obligasi valas Pemerintah serta tetap terjaganya minat investor asing terhadap aset domestik. Secara keseluruhan, kinerja NPI pada triwulan II-2008 diprakirakan masih surplus. Dengan kinerja NPI tersebut, indikator keretanan eksternal pada triwulan II-2008 membaik dan realisasi cadangan devisa sampai dengan akhir triwulan II-2008 mancapai USD 59,5 miliar atau setara dengan 5,1 bulan impor dan utang luar negeri Pemerintah.

Dari sisi penawaran agregat dilaporkan hampir seluruh sektor ekonomi mengalami penurunan pertumbuhan, kecuali sektor pertambangan. Walaupun demikian, ternyata masih ada beberapa sektor yang mempunyai tingkat pertumbuhan tinggi, yaitu sektor pengangkutan dan komunikasi, sektor listrik, gas dan air bersih dan sektor bangunan.

Perkembangan dan kebijakan moneter triwulan II-2008. Kinerja sektor moneter yang cukup baik tersebut, diiringi oleh upaya BI untuk menjaga pergerakan nilai tukar rupiah mendorong stabilitas nilai tukar rupiah selama triwulan II-2008. Rata-rata nilai tukar rupiah pada triwulan II-2008 mancapai Rp 9.259, relatif stabil dibandingkan rata-rata triwulan I-2008 yang mencapai Rp 9.258. Sejalan dengan pergerakan nilai tukar rupiah yang stabil, volatilitas nilai tukar rupiah juga mengalami perununan, cari 1,42% pada triwulan I-2008 manjadi 0,61% pada triwulan II-2008.

Sementara itu, kenaikan harga BBM pada bulan Mei 2008 dan harga komoditas internasional telah mendorong laju inflasi IHK pada akhir triwulan II-2008 meningkat tajam. Laju inflasi tahunan pada akhir triwulan II-2008 mancapai 11,03% akibat kenaikan administered price dan volatile food. Peningkatan inflasi administered price terutama terkait dengan kenaikan harga BBM dan kelangkaan komoditas energi. Sementara itu, meningkatnya inflasi volatile food terkait dengan dampak kenaikan harga pangan internasional.

Guna meredam tekanan inflasi dan menjaga ekspektasi inflasi, Bank Indonesia mengambil kebijakan untuk menaikan suku bunga BI Rate sebesar 25bp menjadi 8,50% pada triwulan II-2008. Langkah Bank Indonesia ini direspon positif oleh pasar, dimana kenaikan BI Rate ini hanya diikuti oleh kenaikan suku bunga deposito, sementara suku bunga kredit masih menunjukkan penurunan.

Outlook Perekonomian.

Gejolak-gejolak eksternal yang terjadi pada tahun 2008 diperkirakan menimbulkan dua encaman besar bagi perekonomian Indonesia, yaitu peningkatan laja inflasi dan melambatnya pertumbuhan ekonomi nasional. Sumber utama dari inflasi yang terjadi selama tahun 2008 diperkirakan berasal dari imported inflation, administered inflation dan dampak lanjutan dari kenaikan harga BBM bersubsidi. Sedangkan melambatnya pertumbuhan ekonomi nasional terutama disebabkan oleh melambatnya ekonomi dunia (tahun 2008 diperkirakan hanya sekitar 3,7%), sebagai akibat melambatnya konsumsi rumah tangga, jatuhnya keyakinan konsumen, ketatnya pasar tenaga kerja dan persyaratan kredit, serta semakin melambatnya belanja modal yang terjadi di negara-negara maju.

Walaupun Pertumbuhan ekonomi Indonesia 2008 melambat, namun diperkirakan masih cukup tinggi, yaitu sebesar 6%. Pertumbuhan tersebut terutama didorong oleh kinerja ekspor dan investasi, ditengah kemungkinan melambatnya konsumsi swasta sebagai akibat kenaikkan harga BBM bersubsidi pada akhir Mei 2008. Konsumsi Rumah Tangga pada tahun 2008 diperkirakan tumbuh sebesar 5%.

Pencapaian kinerja ekonomi yang positif pada triwulan II-2008 tersebut, diyakini masih akan berlanjut hingga akhir tahun 2008. Konsumsi dan ekspor masih menjadi faktor penggerak pertumbuhan ekonomi. Harga komoditas internasional yang tinggi dan pertumbuhan ekonomi di negara-negara berkembang yang masih cukup kuat diprakirakan menjadi insentif bagi kenaikan ekspor. Prospek ekspor yang cukup cerah ini pada gilirannya akan mendorong kegiatan investasi.

Namun, masih terdapat beberapa ancaman yang perlu dicermati untuk mempertahankan stabilitas ekonomi dan tidak manghambat pertumbuhan perekonomian ke depan. Ancaman tersebut antara lain, belum berakhirnya gejolak di pasar keuangan global dan masih tingginya harga komoditas internasional, terutama harga minyak dan harga pangan. Untuk itu, sinergi kebijakan moneter dan fiskal akan menjadi semakin penting guna mengurangi dampak negatif gejolak eksternal terhadap prospek perekonomian.

Ke depan, Bank Indonesia akan tetap melaksanakan kebijakan moneter yang lebih hati-hati dan terukur, berdasarkan berbagai dinamika yang timbukl dalam perekonomian nasional. Keputusan Bank Indonesia untuk menaikkan BI Rate pada tingkat 8,75% pada awal Juli 2008 didasari atas pertimbangan secara seksama akan risiko dari gejolak-gejolak eksternal terhadap stabilitas perekonomian, sistem keuangan serta prospek pertumbuhan ekonomi. Bank Indonesia juga akan menggunakan instrumen-instrumen kebijakan yang ada secara fleksibel dan terukur untuk mencapai sasaran inflasi tahun 2009 pada kisaran 6,5%-7,5%. Dalam kaitan ini, Bank Indonesia akan berkoordinasi secara intensif dengan Pemerintah untuk meminimalisir dampak gejolak eksternal sehingga momentum pertumbuhan ekonomi dapat terpelihara.

III PENUTUP

Selama triwulan II-2008 perekonomian Indoesia menghadapi tekanan yang sangat kuat, baik yang timbul dari gejolak eksternal, maupun kondisi ekonomi domestik itu sendiri. Gejolak eksternal terutama kenaikan harga-harga komoditi internasional terutama minyak dan bahan pangan, ternyata menimbulkan tekanan inflasi yang cukup besar pada perekonomian Indonesia. Tekanan tersebut diperparah dengan semakin meningkatnya konsumsi BBM dalam negeri dan semakin lemahnya kemampuan Pemerintah untuk memberikan subsidi BBM. Demikian juga beberapa kasus yang terjadi di Amerika Serikat ternyata membawa dampak pada semakin melemahnya kondisi ekonomi dari negara-negara maju. Kondisi ini diperkirakan akan mempengaruhi ekonomi Indonesia. Pertumbuhan ekonomi nasional pada tahun 2008 ini diperkirakan akan cenderung melambat.

Ke depan ekonomi Indonesia masih akan menghadapi risiko tinggi yang berasal dari perkembangan eksternal, terutama kenaikan harga-haraga komoditi dunia dan gejolak pasar finansial global. Risiko eksternal tersebut akan berdampak negatif pada kinerja NPI, kesinambungan fiskal, prospek pertumbuhan ekonomi dan inflasi.
Menghadapi kondisi ini bank Indonesia melakukan kebijakan moneter yang cenderung hati-hati. Kebijakan tersebut di samping diarahkan untuk menjaga stabilitas ekonomi, juga untuk mendorong pertumbuhan ekonomi nasional. Pada awal bulan Juli 2008 Bank Indonesia telah meningkatkan BI Rate menjadi 8,75 persen, dalam rangka mengerem peningkatan laju inflasi sebagai akibat kenaikan harga BBM dan komoditi-komoditi internasional yang lain. Kebijakan meningkatkan BI Rate juga diarahkan untuk menjaga stabilitas nilai Rupiah dan menahan pelemahan Rupiah terhadap mata uang asing, khususnya US Dollar.

Tekanan inflasi, pelemahan pertumbuhan ekonomi nasional dan nilai tukar Rupiah tidak hanya dapat ditanggulangi oleh kebjakan moneter saja. Diperlukan sinergi antara kebijakan moneter dan kebijakan fiskal. Oleh karena itu koordinasi intensif antara Bank Indonesia dengan Departemen Keuangan sangat diperlukan untuk dapat menghasilkan kebijakan-kebijakan yang sinergis tersebut.

Jumat, 02 Mei 2008

Interest Rate

Abstract (Summary)

"I fear this overemphasis on deflation is going to ultimately lead to excess in inflation. Therefore, we seem to be borrowing from the future to benefit the present with this extremely low interest rate," said [Robert Dauffenbach], associate dean for research at OU's Michael F. Price College of Business.

Public comments from Fed officials have prompted the markets to anticipate the effect of the expected rate drop into stock prices, [Jeff Blumenthal] said. And another drop in the already low benchmark rate likely will have little effect on consumer or business spending, the driving forces behind a robust economy, Blumenthal said.

In a USA Today survey of 67 economists published Monday, 92 percent said they think Fed officials will cut their target for short-term interest rates, but 44 percent of the economists said they would vote to keep interest rates unchanged. Like Blumenthal and Dauffenbach, they said the economy is showing signs of improvement and too much stimulus could provoke inflation.

The Daily Oklahoman. Distributed by Knight Ridder/Tribune Business News.
To see more of The Daily Oklahoman, or to subscribe to the newspaper, go to http://www.newsok.com

Jun. 24--Some local financial experts are less than enthusiastic about the U.S. Federal Reserve's anticipated decrease of a key interest rate to its lowest level since the late 1950s.

Fed Chairman Alan Greenspan and other members of the Fed's rate- setting panel have expressed concern the economy could be threatened by deflation -- a widespread decrease in price levels that hasn't been present since the Great Depression.
The interest-rate setting committee meets today and Wednesday, when its new cuts in the federal funds rate are expected.

The Fed's benchmark short-term interest rate is at 1.25 percent, a 41- year low. The panel has cut the rate only once in the past 18 months after 11 rate cuts in 2001.
University of Oklahoma economist Robert Dauffenbach said the Fed's anxieties over potential deflation may be overwrought.

"I fear this overemphasis on deflation is going to ultimately lead to excess in inflation. Therefore, we seem to be borrowing from the future to benefit the present with this extremely low interest rate," said Dauffenbach, associate dean for research at OU's Michael F. Price College of Business.

It is widely expected the Fed will reduce the rate again Wednesday by either one-quarter of a percentage point or perhaps as much as one-half point. At either 1 percent or 0.75 percent, the funds rate would reach a level not seen since 1958.
The Fed theoretically could cut the funds rate to zero. Many analysts believe, however, that 0.5 percent would be as low as this benchmark for short-term interest rates could go without jeopardizing the ability of money-market mutual funds to cover operating expenses and still pay a return to fundholders.

The Fed panel issued an unusual statement at its May 6 meeting that said "the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level."
To financial markets, that statement was a clear signal the central bank was more worried the weak economy could push the country into acute deflation for the first time since the disastrous 1930s.

But Dauffenbach said further rate cuts could spur inflation that could become a problem within two to four years.

"My feeling is they've done enough. The economy just needs time to heal and establish a base for moving forward," he said.

The best way to boost Oklahoma's economy, Dauffenbach said, is to bring about a recovery of the national economy and stabilize business sectors such as airlines and telecommunications that have been hardest hit by the slow-down.

Greenspan's comments about controlling energy prices also seem to be at odds with his concerns about falling prices, Dauffenbach said.

"That to me sounds like inflation, not deflation," he said.

The Federal Open Market Committee, which sets the benchmark interest rate, appears to be reacting to the volatility of the financial markets, Dauffenbach said.
"My feeling is there is too much manipulation going on," he said. "They're potentially creating a moral hazard where financial markets believe the Fed will always come to the rescue."

A local investment expert said he anticipates a muted response from financial markets to Wednesday's announcement.

"I think it will be surprisingly neutral," said Jeff Blumenthal, senior vice president for investments at Prudential Securities in Oklahoma City.

Public comments from Fed officials have prompted the markets to anticipate the effect of the expected rate drop into stock prices, Blumenthal said. And another drop in the already low benchmark rate likely will have little effect on consumer or business spending, the driving forces behind a robust economy, Blumenthal said.

"I think things have already turned the corner and the economy is on the mend," Blumenthal said. "I think that mending cycle will continue, but not because another quarter-percent or half-percent drop in interest rates."

Blumenthal predicted that markets will decline after the rate- setting panel announces its decision Wednesday.

In a USA Today survey of 67 economists published Monday, 92 percent said they think Fed officials will cut their target for short-term interest rates, but 44 percent of the economists said they would vote to keep interest rates unchanged. Like Blumenthal and Dauffenbach, they said the economy is showing signs of improvement and too much stimulus could provoke inflation.

Blumenthal said the historically low rates have prompted some investors to anticipate higher interest rates and avoid putting money into bonds, which yield less as interest rates rise. But that's just the kind of market-timing method that burned many individual investors when the stock market bubble burst at the end of the 1990s, he said.

"To me, the right thing to do is to have an investment plan and stick with it no matter what the stock market does and no matter what interest rates do," he said.

Eyes on BSP interest rates after stock selloff

Abstract (Summary)

In a research note, Philippine Equity Partners Inc. (PEPI) said the Monetary Board is likely to maintain its interest rates and tiering scheme for banks' overnight placements with the BSP, but added that such a steady monetary policy would be due to the improvement in lending growth and a further deceleration of domestic inflation.

"The main factor against a rate cut is the fact that loan growth already started to pick up in late 2006, aggregating that the tiered rate structure may already be doing its job," the report said, referring to a BSP scheme that puts a cap on the amount that lenders can earn from their overnight deposits with the central bank. The scheme is aimed at encouraging banks to lend to the public instead of placing their excess funds with the BSP.

A securities analyst said the BSP may remove the tiering scheme by the second quarter. "It would be crucial in the first half of the year--the BSP may . . . remove the tiering by the second quarter. It will have a big impact in the market if the tiering is removed without the cut in the overnight rates," the analyst said.

The Manila Times, Philippines Distributed byMcClatchy-Tribune Business News. For reprints, emailtmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions GroupInc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

Mar. 5--INVESTORS will train their eyes on the Bangko Sentral ng Pilipinas this week, as its policymaking Monetary Board is scheduled to meet Thursday and decide on whether to keep its key interest rates steady, especially after selling pressure hounded local stocks and the peso on the heels of a sharp correction in many equities markets worldwide.

The margin that BSP overnight rates maintain over comparable United States rates has helped generate investor interest in Philippine financial assets. Huge inflows of foreign money in turn have kept the peso strong vis--vis the dollar.

Last week's global fall in equities markets, including the Philippine Stock Exchange, was triggered by a decline in the Shanghai bourse, considered its biggest drop in a decade. The China bourse's plunge was set off by fears of a slowdown in the United States, the world's largest economy and the mainland's main export market.

In a research note, Philippine Equity Partners Inc. (PEPI) said the Monetary Board is likely to maintain its interest rates and tiering scheme for banks' overnight placements with the BSP, but added that such a steady monetary policy would be due to the improvement in lending growth and a further deceleration of domestic inflation.

The securities firm said price increases are seen to further decelerate to around 3 percent in the second quarter of the year. The BSP earlier said average inflation may edge closer to the lower end of the 4-percent to 5-percent target range this year.

"The main factor against a rate cut is the fact that loan growth already started to pick up in late 2006, aggregating that the tiered rate structure may already be doing its job," the report said, referring to a BSP scheme that puts a cap on the amount that lenders can earn from their overnight deposits with the central bank. The scheme is aimed at encouraging banks to lend to the public instead of placing their excess funds with the BSP.

The central bank pays 7.5 percent on overnight deposits, and charges 9.75 percent for overnight loans.

On the tiering scheme, PEPI said there is less incentive for monetary authorities to remove it due to double-digit loan growth in 2006.

Commercial banks' outstanding loans rose by 10.1 percent in December to reach P1.695 trillion from a 6.8-percent rise in November.

"Although speculation remains strong that monetary authorities will remove [the tiering] scheme in place of a sizable 50 basis points outright rate cut, we are beginning to think that there is less incentive for them to do so. We are now less confident that rates will be cut on March 8 but are encouraged by the thought that loan growth is already improving despite no rate cut," the securities firm said.

BSP Deputy Governor Diwa C. Guinigundo said monetary authorities are waiting for three months to see the impact of the tiering scheme on lending growth before making any changes.
A securities analyst said the BSP may remove the tiering scheme by the second quarter. "It would be crucial in the first half of the year--the BSP may . . . remove the tiering by the second quarter. It will have a big impact in the market if the tiering is removed without the cut in the overnight rates," the analyst said.

Besides boosting the peso, strong foreign currency inflows also fuel a rise in domestic money supply, which if unchecked would spur higher inflation.

Last week the central bank said the high-liquidity growth may be inflationary if it continues for a year. The country has been experiencing double-digit liquidity growth for nine months.
Removing the tiering scheme would keep high liquidity from becoming inflationary and minimize the participation of local players in the domestic stock market, the analyst said. Investors have flooded the domestic stock market given historically low yields for government bonds or IOUs, a traditional source of trading gains.

Francis Lim, PSE president, said local participation at the bourse has been increasing.

Delineating Publicly Listed Family and Nonfamily Controlled Firms: An Approach for Capital Market Research in Australia*

Abstract (Summary)

Recent capital market research evidence suggests that a large proportion of public companies worldwide are characterized by controlling stockholders who are more often families, usually the founder(s) or their descendants. There has been considerable debate on whether "family" firms can indeed be accurately delineated from nonfamily firms given the diversity and abundance of family business definitions in the literature. This paper provides a robust definition of family business for the purposes of capital market research. Using an accounting-based definition of family business, the paper outlines a four-step procedure that provides validation for identifying family controlled companies listed on the Australian Stock Exchange. A significant feature of the research methodology was reliance on data collected from the Australian Securities and Investments Commission. Having access to the corporate regulator's restricted data enabled the researchers to establish important links between directors and their private related entities.

Introduction

Family businesses are difficult to define given the diversity of definitions in the literature, which, no doubt, has a direct impact on the validity of studies. The literature demonstrates the problematic nature of the term "family business," with most definitions constructed to suit the specific needs of the researcher (Wortman 1994). Although there is consensus that a family business is one in which family members have substantial ownership interest and exercise control of an enterprises' operating and financing decisions, Shanker and Astrachan (1996) highlight the need to reach consensus on the definition of family business.

This paper examines definitions of family business in the literature and identifies the difficulties in using "ownership" as a criterion for establishing the existence of family firms. Analogous problems encountered by accountants in using the "ownership" criterion to establish the relationship between a parent company and the companies in which it has an ownership interest (e.g., for determining whether or not a company should be consolidated), are also considered. In addition, this paper explores the manner in which accounting practitioners currently apply the "control" criterion in establishing the existence of a parent/subsidiary relationship, and indeed, the usefulness of adopting this criterion for establishing the existence of a family business. Accordingly, an objective of this paper is to outline a definition of family business sufficiently robust for capital market research purposes.

The paper begins with a review of the family business literature, particularly focusing on definitional issues followed by an examination of agency theory and the development of a theoretical framework for a definition of family business. Procedures for development of the operational definition are also described, followed by implications and recommendations for further research.

Review of the Literature

An increasing interest in the family business literature has focused on the role of family businesses in international economies, and in many instances, evidence suggests that these firms are emerging as substantial contributors to the gross domestic product (GDP) (Smyrnios, Romano, and Tanewski 1997; Shanker and Astrachan 1996; Sharma, Chrisman, and Chua 1996). However, this evidence has been the subject of debate, primarily because inappropriate definitions of family business result in failure to properly delineate these enterprises from nonfamily firms. Thus, the actual contributions made by family businesses are not clearly separated from those of other businesses. It is further argued that many of the sources of statistics quoted in the family business literature are not sourced empirically (Shanker and Astrachan, 1996).

Sharma, Chrisman, and Chua (1996) report no less than 34 different definitions, of which 20 make reference to an element of ownership interest as a factor that determines the existence of a family enterprise, whereas nine definitions make some reference to influence and/ or control as determining factors. The importance of these factors is acknowledged by Astrachan, Klein, and Smyrnios (2002), who argue that an enterprise can be directly or indirectly influenced through a family's power, experience, and culture. However, although these studies make a contribution to the family business literature in the context of proprietary firms, they do not adequately articulate the meaning of their criteria in an operational context for capital market research, which primarily deals with publicly listed companies.

To appreciate the magnitude of the definitional problems confronting family business researchers, Shanker and Astrachan (1996) examine the potential outcomes of applying a range of different definitions. They argue that "based on these definitions, the number of family firms in the US can range from 4.1 million to 20.3 million firms, employ 19.8 million to 77.2 million individuals, and provide 12 percent to 49 percent of the GDP of the US" (p. 4). These statistics serve to illustrate that a generally accepted definition of family business is an essential and much-needed element of empirical research in this area.

The literature identifies three dimensions in which the different definitions of family business can be classified. These three dimensions are briefly outlined.

Degree of Ownership and Management by Family Members

This dimension requires that family members have a minimum level of ownership and be involved in management of the business. A predominant focus on ownership as a key attribute is not unreasonable to expect, given that the literature has identified ownership as a critical variable and an essential part of the production function of the firm (see Gallo and Villaseca 1998; Jensen and Meckling 1976). Major contributors to this dimension include Barnes and Hershon (1976), Lansberg, Perrow, and Rogolsky (1988), and Litz (1995), among many others.
Barnes and Hershon (1976), and Lansberg, Perrow, and Rogolsky's (1988) critical insights into ownership and control are worth noting because of their direct relevance to the current study.

Lansberg, Perrow, and Rogolsky (1988) argue "much of the confusion about the extent of family control derives from the fact that mechanisms used by families to exert their influence over management (voting, trusts, foundations, holding companies) are deliberately designed to keep the identities of shareholders hidden" (p. 3). This point highlights the hazardous problem of using ownership as a sole criterion for defining a family business. As will be outlined later, this problem of ownership led to the development of a concept of "control" in AASB1024-Consolidated Financial Accounts (Australian Accounting Standards Board 1992), a specific Australian accounting standard designed to identify controlling interests in firms.

Although Lansberg, Perrow, and Rogolsky (1988) were concerned with the legal aspects of control, Barnes and Hershon (1976) recognized that dominant individuals are at play in the family business, and these individuals have significant influence in the decision-making process. Indeed without the existence of dominant individuals influencing the dynamics of the family business, the chances of some family businesses surviving are significantly diminished.

Chua, Chrisman, and Sharma (1999) similarly acknowledge that the essence of a family business is a vision developed by a dominant coalition that shapes and pursues the vision in a way that it is "potentially sustainable across generations of the family" (p. 25). Thus, the appearance of dominance by specific individuals is regarded as an important factor associated with firm value. Hence, McConaughy (1994) observes that the identity of the owner-manager is more important than the level of ownership (p. 5), whereas Berglof and von Thadden (1999) maintain that most firms (even listed) in the world have a dominating owner, and in most cases a family or the state holds such a dominant stake.

These views are consistent with evidence provided by 27 accounting practitioners randomly selected to partake in an interview for the purposes of this study. It is observed that most businesses owned by a family or a group of families have at least one dominant individual steering the course of the business. The participation of a dominant individual in the family business is an important aspect of the current study, as the definition of family business is based on "control," which in turn is defined as the capacity to dominate decision making.

The importance of dominance with respect to the performance and success of firms is also acknowledged in the literature. Neun and Santerre (1980) find that the existence of dominant shareholders increases the value of the firm. Similarly, Zeckhauser and Pound (1990) reveal that the existence of dominant shareholders increases the value of the firm because they have a more effective ability to monitor firm performance. These studies indicate that larger shareholders have the propensity to act as monitors and thereby reduce agency costs.

Familial Context

Definitions within this dimension focus on control of the business passing to younger members of the family over time (e.g., Churchill and Hatten 1987; Ward 1987), and authors (e.g., Beckhard and Dyer 1983; Davis 1983) have relied on a systems approach to identify family from nonfamily control. The systems approach primarily makes an attempt to determine the unique characteristics and relations between the family and business systems. Other definitions within this dimension propose that a diverse range of attributes are simultaneously required to define a family business, including ownership, involvement in day-to-day management of the business, generational transfers and links, family influence, and family control.

Listed Family Firms

A limited number of studies have provided definitions of family firms in the context of capital market research. One of the earliest was Burch (1972), who examined the top 300 companies based on the 1965 Fortune 500 list. He found that families controlled more than 47 percent of these top 300 companies. Burch's definition of family business falls within Handler's (1989) classification of "multiple conditions." He used the following two criteria to define a family business: (1) Between 4 percent to 5 percent or more of the voting stock must be held by a family or group of families or one (affluent) individual; and (2) family representation on the board over time.

More recent studies have been conducted by Jetha (1993) and McConaughy (1994). Jetha, who defines a family business where at least one member of the current senior management is linked (at least to second-generation level) to the founding family, found that 37 percent of the largest publicly held companies are family-run operations. Similarly, McConaughy (1994) found that 21 percent of publicly held companies on the Business Week 1000 list were family businesses. He defined a family business as one in which the chief executive officer (CEO), president, or chairman is a descendant of the founding family.

Control was used as the criterion to identify both the ownership and the voting rights of listed firms in a study of the ownership structure of the 250 largest listed firms on the Paris stock exchange (Blondel, Rowell, and Van der Heyden 2002). The researchers found that approximately 57 percent of the 250 largest firms on the Paris bourse were patrimonial companies, representing some 35 percent of the overall market capitalization. Following closely on Blondel, Rowell, and Van der Heyden's (2002) research design, Klein and Blondel (2002) provide similar ownership structure results in Germany. They established that patrimonial firms comprise approximately 51 percent of the 250 largest listed firms in Germany, but only represent 19 percent of the overall market capitalization of listed companies.

Anderson and Reeb (2003) investigated the relationship between founding family ownership and firm performance of the top 500 Standard and Poors (S&P) companies in the United States between 1992 and 1999. They found that approximately 35 percent of the firms on the S&P 500 list were family controlled. Consistent with prior studies, the researchers used fractional equity ownership as a measure of control by the founding family and/or the presence of family members on the board of directors. Additionally, for older firms, that is, where the firm has expanded over time to include relatives several generations after the founder and the family names of such relatives may be different from the founder, Anderson and Reeb (2003) examined corporate histories using several sources of data to resolve decendancy issues. This is of interest to the current study because the collective ownership by family members is critical to understanding the dynamics of family control. Thus, being able to trace family holdings over time is an important operational issue which establishes the presence of a familial link.
This review identifies a number of common themes, which form the basis of a definition of family business for the purposes of capital market research. These themes are as follows:
* ownership of shares by an individual or related individuals, or by another entity in which an individual or related individual has/had an interest (directly or indirectly);
* control of a company by an individual or individuals, exercisabie through various means including share ownership and board membership;
* concentration of ownership restricted to a relatively small group of individuals either directly or indirectly;
* continuity of control by an individual or group of related individuals; and
* dominance of decision-making by an individual.

Toward a Capital Market Definition of Family Business

This study focuses on definitions and concepts that not only have commonality in the literature, but also have the support of authoritative bodies. These include the various bodies representing the accounting profession and corporate regulators, such as CPA Australia, the Institute of Chartered Accountants in Australia, and the Australian Securities and Investments Commission. The rationale for this approach is that a definition of family business based on concepts and definitions that already have independent authoritative support, has the propensity to attract credibility and ultimately general acceptance among scholars and practitioners. In this respect, the definition of control, as embodied in Australian Accounting Standard AASB1024-Consolidated Accounts (hereafter AASB1024, superseded recently by AASB127: Consolidated and Separate Financial Statements), has particular appeal, as it highlights dominance of decision-making by one individual. For instance, AASB1024 defines control as "the capacity of an entity to dominate decision-making directly or indirectly, in relation to the financial and operating decision of another entity." The definition of entity in the standard includes a person, whereas capacity to dominate and the exercise of dominance by an individual in relation to operating and financing decisions is recognized as a critical feature in family firms. More importantly, this capacity to dominate is often required to ensure the survival of the family firm (e.g., Chua, Chrisman, and Sharma 1999; McConaughy 1994).

The issue of dominance by an individual in family firms has also been given considerable support by accounting practitioners, as indicated by the results of a survey of technical (accounting) specialists and practitioners undertaken as part of this study. Results show that the importance of dominance in family firms was rated highly significant by 96 percent of respondents, and almost all respondents rated "ownership," "control," and "management structure" as highly appropriate attributes of family firms.

There are also other potential reasons why use of the "control" criterion in defining a family firm has theoretical appeal. For example, several contributors to the family business literature (for example, Fiegener et al. 1994; Dönckels and Fröhlich 1991; Dreux 1990; Lansberg, Perrow, and Rogolsky 1988; Alcorn 1982) identify "control" as an important element in defining the family firm. There are also parallels in the literature relating to the definition of family firms and the genesis of AASB1024 as an accounting standard. For example, comments by Lansberg, Perrow, and Rogolsky (1988) suggest that difficulties in defining family firms, based on ownership, rests upon the various mechanisms used by families to keep the identities of shareholders hidden (p. 3). This inability to determine the relationship between two entities (parent and subsidiary) based on an ownership test is one of the primary reasons for introducing AASB1024 in Australia. Thus the definitions developed in AASB1024, which provide the framework for identifying controlling interests, can also have application in the family firm context.

Hence there are persuasive arguments for using "control" as one of the important criteria for defining a family firm. In determining the existence of a family business, this study adopts in part, the control criterion promulgated by both AASB1024 and International Accounting Standard IAS27: Consolidated and Separate Financial Statements (hereafter IAS27), for preparing consolidated financial statements of an entity. It also takes cognizance of the evidence in the literature, which indicates that control and ownership of family businesses are nondiffuse and are typically characterized by an ownership structure in which shares are closely held by family members Qensen and Meckling 1976). Thus, a family business is defined as an entity controlled by a private individual, directly or indirecdy, in conjunction with close family members. Moreover, control is broadly defined as the capacity to dominate decision-making. A detailed description of this definition of family business is provided in the following discussion, together with a framework for operationalizing various aspects of the definition for the purposes of capital market research.

Method

An archive-based case study method was selected to support the primary objective of determining whether family and nonfamily firms listed on the Australian Stock Exchange (ASX) can be delineated with the guidance of AASB 1024/ IAS27 and their concomitant definitions of "control," "closely held," and the "capacity to dominate decision-making."

The data gathering and analysis procedures were divided into four steps.

First, an examination of financial statements and other corporate details using various databases was undertaken to determine whether it was possible to access and link information relating the themes of ownership, control, and continuity of control and dominance.

Second, several procedures were undertaken to validate the delineation process.

The third step involved the final compilation of categories of family and nonfamily controlled firms.

The final step (not covered in this paper) involved the application of the definition of family business to all qualifying initial public offerings (IPOs) that listed between January 1987 and December 1999.

The analysis began with a cross-sectional qualitative examination of the population (N = 2,022) of companies registered with the ASX for the period ending June 30, 1998. All publicly available information from the ASX on the population of companies were electronically downloaded and recorded into spreadsheets. The listed companies were categorized into active and delisted, and specific criteria such as ownership concentration, number of shareholders, paid up capital, among other information, were examined.

Where company information was not available from the ASX, a complementary database (i.e., Bloomberg's) was used to complement the initial data source. In addition, Australian Securities and Investments Commission (ASIC) annual financial statement files were also used to validate initial data sources, to examine related party disclosures, to assess continuity of control for a period of two years after the initial year ending June 30, 1998 (thus a total observation period of three years), and to validate the ASX data generally. Figure 1 outlines the procedures used in the initial stages of the study.

As the definition of family business is based on control by an individual (in conjunction with related parties) and continued control, relevant files of listed companies were examined, and information that provided evidence of the following factors was noted: evidence of existing control, history of control, continuity of control (ASIC data), and related party relationships. Table 1 illustrates the specific criteria examined and used to differentiate family from nonfamily controlled firms. In addition to these criteria, only companies that exhibited the following characteristics were categorized within the family controlled group:
* The existence of a dominant shareholder who is identified as a founding member involved in the management of the company and has a direct interest of greater than 20 percent of voting shares;
* The dominant shareholder is the CEO or key member of the board (that is, managing director or chairperson);
* The dominant shareholder continues to be the dominant shareholder and member of the board during the observation period, that is, in 1998 plus two years;
* At least one other related party is a member of the board; and
* The dominant shareholder, in conjunction with other related parties, holds greater than 30 percent of the voting shares in the company directly or indirectly, after the IPO listing.
The initial differentiation revealed that of the 1,214 active companies on the ASX at June 30, 1998, 197 (16.23 percent) were family controlled and 1,017 (83.77 percent) were nonfamily controlled. However, details of companies not falling directly within the dichotomous groups required a further comprehensive analysis for evidence of ownership, control, and dominance. This was undertaken for approximately 60 companies using detailed ASIC data including relevant statutory lodgements where relevant (for example, Form 316, listed within in the regulations of the Corporations Law, which requires companies to annually disclose ownership interests).

This process provided a validation and confirmed that information relating to company ownership, control, and dominance was in fact accessible. That is, if not initially during the first level of searching (via a variety of databases), then almost always after second, third, fourth, etc., level searches using the ASIC database. The validation procedure allowed links to be established between directors, their related interests, and their director-related entities. In this respect the current study was unique given that the authors had access to data that was not publicly available and were thus able to make significant links between directors and their director-related entities.

In order to provide independent verification and validation of the criteria used in determining the definition of family business, a questionnaire was developed and distributed to all 32 members of the Emerging Accounting and Auditing Issues Group (EAAIG), a group comprising technical directors of the major Chartered Accounting firms, and financial and technical specialists from industry and regulatory bodies. The standardized instrument comprised four short questions covering the fundamental attributes of family business viz; control, ownership, and dominance. The intent was to solicit the views of technical specialists who would have in-depth knowledge and experience to comment on a wide variety of issues relating to businesses in general.

A short presentation and discussion (of 20-minute duration) outlining the objectives of the research was given by the first author during a meeting in 2000. 17 members present of the 19, completed and returned their questionnaires during the meeting. The balance of the membership (13 members) was canvassed through various means including telephone calls, mail, e-mail, or facsimile. Eight further responses were received and there were no additional follow-up procedures conducted. In all, 27 replies out of a possible membership of 32 were received.

Results indicate that overwhelmingly, (96 percent) members in the group support the notions of "dominance" (by one or more individuals) as being a highly significant factor in family business. All (100 percent) respondents indicated that "ownership" and "control" were important, whereas 93 percent stated that "management structure" was an important attribute.
Following these procedures, it was established that of the 1,214 active companies listed on the ASX as at June 30, 1998, 211 (17.1 percent) were family controlled and 1,012 (82.9 percent) were nonfamily controlled companies.

Operational Definition of Family Business

A family business is defined as an entity controlled by a private individual in conjunction with close family members with continuity of control evident. The terms "control" and "close family members" are both critical components in operationalizing the definition of family business. Control is defined as the capacity of an entity to dominate decisionmaking, directly or indirectly, in relation to the financial and operating policies of another entity so as to enable that other entity to operate with it in pursuing the objective of the controlling entity (AASB1024). Control is also defined as the power to govern the financial and operating policies of an enterprise (IAS27).
There are several indicators that support the existence of control of an entity. These indicators include: the holding of a majority ownership interest and associated voting rights either singularly or in conjunction with close family members; the capacity to dominate the composition of the board of directors or governing body of another entity; the capacity to appoint or remove all or a majority of the directors or governing members of another entity; and the capacity to control the casting of the majority of the votes cast at a meeting of the board of directors or governing board of another entity (AASB1024, 7[xvi(a) to (e)]). As continuity of control is a significant factor in defining a family firm, the presence of control by individuals was examined over several periods subsequent to the initial delineation date in 1998.

A second important aspect to the definition relates to the meaning of "close family members." In this regard the study relies on definitions from Australian and International Accounting Standards to link family members. For instance, "close family members" means "close family members of the family of an individual... that may be expected to influence or be influenced by, that person in their dealings with the enterprise" (International Accounting Standard IAS24 1995-2001, 3[0.851). In the context of Australian Accounting Standards, close family members are persons included within the definition of "director-related" entities, a defined term in Australian Accounting Standard AASB1017 (Australian Accounting Standards Board 1997) Related Party Disclosures (hereafter AASB1017, and recently superseded by AASB124). Director-related entities are defined in relation to particular directors, as "the spouses of such directors, relatives of such directors or spouses, and any other entity under the joint or several control or significant influence of such directors, spouses or relatives" (AASB1017, 9.1). In addition, the term "relative" was defined in the Australian Corporations Law 1991 (Commonwealth Government of Australia 1991) as "spouse, parent or remoter lineal ancestor, son, daughter or remoter issue, or brother or sister of the person" (S5.1).

Discussion

Against a background of definitional diversity in the literature, this study provides a theoretical and practical basis for developing a definition of family business for capital market research purposes. By combining common themes (within existing definitions), with authoritative definitions and explanations in accounting standards and legislation, an operational definition of family business is derived.

This outcome adds a new dimension to the family business, accounting, and finance literatures and has the potential to contribute significantly to future research in these fields. For instance, it may assist in addressing the urgent need for definitional consensus (Shanker and Astrachan 1996; Wortman 1994) by providing the foundation from which a generally accepted definition of family business can be developed. This outcome may in turn provide valuable information that could assist in validating statistics (Shanker and Astrachan 1996) and other data in existing or future studies that draw comparisons between family and nonfamily businesses.

Perhaps one of the more significant contributions of this paper is the ability to delineate family from nonfamily businesses for the purposes of capital market research. Recent studies (for example, Anderson and Reeb 2003) have shown that family businesses are emerging as significant contributors not only to GDP but also to capital markets generally. It is evident from the literature that ownership and control are significant variables that influence managerial incentives and thus impact firm performance. Jensen and Meckling (1976) and Fama and Jensen (1983) have posited that the dynamics underlying family relationships reduce agency costs and improve efficiency. Extant research (for example, Anderson and Reeb 2003; Ang, Cole, and Lin 2000; McConaughy 1994; McConnell and Servaes 1990; Wruck 1989; Morck, Scleifer, and Vishny 1988) has also found an association between concentrated ownership and control, and firm performance. Given these findings and the evidence that family businesses are typically characterized by higher levels of ownership and control, studies which examine the performance of listed enterprises would expect to find differences in the performance levels of family firms compared to nonfamily firms ceteris paribus. In this regard, the ability to accurately differentiate between family and nonfamily businesses is of importance in further advancing knowledge in this area.

One example of the potential usefulness of an operational definition of family business in capital market studies is the examination and delineation of IPO firms to determine the significance of ownership and control on both underpricing and performance. A study of this nature, which delineates family and nonfamily enterprises in a widely acceptable manner, would be useful in understanding the phenomena, particularly if it can be established that the level of underpricing is different between family and nonfamily groupings. It would also be useful to establish whether factors known to influence the level of underpricing are mediated by family control.

Overall, the main strength of this research is the rigorous process by which family controlled firms have been delineated and validated. The researchers had access to detailed restricted ASIC data, which included relevant statutory lodgements such as Form 316 requiring companies to annually disclose ownership interests, documents related to initial subscriber and substantial interests, correspondence to ASIC from company directors, prospectus documents, and other relevant background information. Over a three-year period, the researchers were able to gather enough evidence from the corporate regulator to validate the delineation of family controlled firms by establishing the nature of control for the overwhelming majority of companies listed on the ASX in 1998,2 by ascertaining the history of each firm's control, by determining the continuity of each firm's control, and by establishing the firm's related party relationships. Thus, through, this process the researchers were able to establish important links between directors and their private related entities.

Rabu, 06 Februari 2008

BOROBUDUR TAMPLE

Borobudur is a ninth century Mahayana Buddhist monument in Magelang, Central Java, Indonesia. The monument comprises six square platforms topped by three circular platforms, and is decorated with 2,672 relief panels and 504 Buddha statues. A main dome is located at the center of the top platform, and is surrounded by seventy-two Buddha statues seated inside perforated stupa.

The monument is both a shrine to the Lord Buddha and a place for Buddhist pilgrimage. The journey for pilgrims begins at the base of the monument and follows a path circumambulating the monument while ascending to the top through the three levels of Buddhist cosmology, namely, Kamadhatu (the world of desire); Rupadhatu (the world of forms); and Arupadhatu (the world of formless). During the journey, the monument guides the pilgrims through a system of stairways and corridors with 1,460 narrative relief panels on the wall and the balustrades.

Evidence suggests Borobudur was abandoned following the fourteenth century decline of Buddhist and Hindu kingdoms in Java, and the Javanese conversion to Islam. It was rediscovered in 1814 by Sir Thomas Raffles, the British ruler of Java. Borobudur has since been preserved through several restorations. The largest restoration project was undertaken between 1975 and 1982 by the Indonesian government and UNESCO, following which the monument was listed as a UNESCO World Heritage Site. Borobudur is still used for pilgrimage, where once a year Buddhists in Indonesia celebrate Vesak at the monument, and Borobudur is Indonesia's single most visited tourist attraction.

Etymology

In Indonesian, temples are known as candi, thus "Borobudur Temple" is locally known as Candi Borobudur. The term candi is also used more loosely to describe any ancient structure, for example, gates and bathing structures. The origins of the name Borobudur however are unclear, although the original names of most ancient Indonesian temples are no longer known. The name 'Borobudur' was first written in the Sir Thomas Raffles book on Java history. Raffles wrote about a monument called borobudur, but there are no older documents suggesting the same name. The only old Javanese manuscript that hints at the monument as a holy Buddhist sanctuary is Nagarakertagama, written by Mpu Prapanca in 1365.

The name 'Bore-Budur', and thus 'BoroBudur', is thought to have been written by Raffles in English grammar to mean the nearby village of Bore; most candi are named after a nearby village. If it followed Javanese language, the monument should have been named 'BudurBoro'. Raffles also suggested that 'Budur' might correspond to the modern Javanese word Buda ('ancient') - i.e., 'ancient Boro'. However, another archaeologist suggests the second component of the name ('Budur') comes from Javanese term bhudhara (or mountain).

Location

Approximately 40 kilometers (25 mi) northwest of Yogyakarta, Borobudur is located in an elevated area between two twin volcanoes, Sundoro-Sumbing and Merbabu-Merapi, and two rivers, the Progo and the Elo. According to local myth, the area known as Kedu Plain is a Javanese 'sacred' place and has been dubbed 'the garden of Java' due to its high agricultural fertility. Besides Borobudur, there are other Buddhist and Hindu temples in the area, including the Prambanan temples compound. During the restoration in the early 1900s, it was discovered that three Buddhist temples in the region, Borobudur, Pawon and Mendut, are lined in one straight line position. It might be accidental, but the temples' alignment is in conjunction with a native folk tale that a long time ago, there was a brick-paved road from Borobudur to Mendut with walls on both sides. The three temples (Borobudur–Pawon–Mendut) have similar architecture and ornamentation derived from the same time period, which suggests that ritual relationship between the three temples, in order to have formed a sacred unity, must have existed, although exact ritual process is yet unknown.

Unlike other temples, which were built on a flat surface, Borobudur was built on a bedrock hill, 265 m (869 ft) above sea level and 15 m (49 ft) above the floor of the dried-out paleolake. The lake's existence was the subject of intense discussion among archaeologists in the twentieth century; Borobudur was thought to have been built on a lake shore or even floated on a lake. In 1931, a Dutch artist and a scholar of Hindu and Buddhist architecture, W.O.J. Nieuwenkamp, developed a theory that Kedu Plain was once a lake and Borobudur initially represented a lotus flower floating on the lake. Lotus flowers are found in almost every Buddhist work of art, often serving as a throne for buddhas and base for stupas. The architecture of Borobudur itself suggests a lotus depiction, in which Buddha postures in Borobudur symbolize the Lotus Sutra, mostly found in many Mahayana Buddhism (a school of Buddhism widely spread in the east Asia region) texts. Three circular platforms on the top are also thought to represent a lotus leaf. Nieuwenkamp's theory, however, was contested by many archaeologists because the natural environment surrounding the monument is a dry land.

Geologists, on the other hand, support Nieuwenkamp's view, pointing out clay sediments found near the site. A study of stratigraphy, sediment and pollen samples conducted in 2000 supports the existence of a paleolake environment near Borobudur, which tends to confirm Nieuwenkamp's theory. The lake area fluctuated with time and the study also proves that Borobudur was near the lake shore circa thirteenth and fourteenth century. River flows and volcanic activities shape the surrounding landscape, including the lake. One of the most active volcanoes in Indonesia, Mount Merapi, is in the direct vicinity of Borobudur and has been very active since the Pleistocene.

Approximately 40 kilometers (25 mi) northwest of Yogyakarta, Borobudur is located in an elevated area between two twin volcanoes, Sundoro-Sumbing and Merbabu-Merapi, and two rivers, the Progo and the Elo. According to local myth, the area known as Kedu Plain is a Javanese 'sacred' place and has been dubbed 'the garden of Java' due to its high agricultural fertility. Besides Borobudur, there are other Buddhist and Hindu temples in the area, including the Prambanan temples compound. During the restoration in the early 1900s, it was discovered that three Buddhist temples in the region, Borobudur, Pawon and Mendut, are lined in one straight line position. It might be accidental, but the temples' alignment is in conjunction with a native folk tale that a long time ago, there was a brick-paved road from Borobudur to Mendut with walls on both sides. The three temples (Borobudur–Pawon–Mendut) have similar architecture and ornamentation derived from the same time period, which suggests that ritual relationship between the three temples, in order to have formed a sacred unity, must have existed, although exact ritual process is yet unknown.

A white mist shrouds the plain and the first birdcalls across the valleys announce the imminent arrival of another dawn. Slowly the mist dissipates in the rising sun to reveal the spires and Buddhas that meditate in bliss and gradually the forms coalesce to unveil a temple that many who have seen it, consider to be the finest example of Buddhist architecture ever raised to the sky by man.

In the period 600 AD to 800 AD there was a golden age of temple construction throughout India, Ceylon and South East Asia. It was a time when Hindu and Buddhist kingdoms flourished and men raised magnificent monuments to heaven in praise of their gods with a burst of frenetic activity of cultural expression and devotion. After their periods of glory they sank into oblivion,

either as a result of military conquest or natural disasters and their monuments were reclaimed by the jungle and lost to mankind for almost a thousand years.

One of the most spectacular of these is the Buddhist temple of Borobudur that lies in Eastern Java on the Kedu Plain. It is surrounded by an idyllic landscape of incomparable beauty of rice-terraced hills and overlooked by four volcanoes. The industrious subjects of the Sailendra dynasty built it over a period of 80 years in the ninth century who transformed a volcanic plug of basalt into a stepped pyramid with a base measuring 120 metres square and a height of 35 metres.

It was built to resemble a microcosm of the universe and its purpose was to provide a visual image of the teachings of the Buddha and show, in a practical manner, the steps through life that each person must follow to achieve enlightenment. The pilgrim to this shrine would first have been led around the base and shown the friezes, which illustrate the consequences of living in the World of Desire. In this realm ruled by Greed, Envy, and Ignorance, man is a slave to earthly desires and suffers from the illusions that are caused by these unfulfilled yearnings, a state regarded as hell by Buddhists. After completing this circuit, the pilgrim was then led in a clockwise fashion through five levels in a gradual ascension of the pyramid. Here he was shown how to conquer desire and attachment by viewing 1300 panelled friezes that illustrate the life of the Buddha and his previous incarnations. These levels were called the World of Form and correspond to the earthly realm in Buddhist symbology. The passages of both of these realms followed the square shape of the pyramid but above these two lay the World of Formlessness where the right-angled, heavily decorated passages gave way to a round unadorned summit where meditating Buddhas and saints sit in supreme bliss contemplating a view of exquisite beauty. In the centre a bell shaped tower, or stupa, points to heaven, a blissful realm beyond form and concept, known as Nirvana.

Encompassing the totality of existence with its representations of heaven, earth, and hell in this metaphor of stone, the monument was abandoned after a severe earthquake and a large eruption of the volcano Merapi in 1006 AD until it was rediscovered by the West during colonial times. One of the miracles, perhaps equalling the miracle of its construction and craftsmanship, is that the monument still exists and can be seen to this day. This area of Java is one of the most earthquake prone regions in the world as well as one of the most volcanic. From the top of the temple, the volcano Merapi is easily visible, still smoking to this day, having erupted on more than a few occasions during the last millennia.

Reliefs depicting the life of the Buddha cover the upper half of the main wall all around the first gallery of the monument, a total of 120 panels. These reliefs were carved to illustrate a text entitled the Lalitavistara, "The Unfolding of the Play." The above relief shows Sakyamuni having left the palace and dismissed his horse and groom, stands at the left beneath a parasol, bidding farewell to the supernatural beings who accompanied him.

The Dutch carried out some piecemeal reconstruction during colonial times but it was left to the Indonesian government to make a complete restoration with help from the United Nations in the seventies and eighties. This huge task has now been completed so that the temple is now in better shape than it has been since the major eruption of Merapi in 1006 AD. This architectural jewel is now conserved for the benefit of future generations and provides a wealth of information on the way of life 1200 years ago as well as preserving its spiritual message. The panels show a sophisticated and elegant society and are a pictorial history of the architecture, means of transport, dress, and customs of a race of people whose culture rose and fell a thousand years ago and who left this astounding monument as a testament to their skill and devotion.

Borobudur can truly be called one of the wonders of the world, one of those rare places where the compassionate, aesthetic beauty of mankind's nature can be glimpsed, a place where that centre of peace and stillness within us all can be felt, and a symbol of the imagination and industriousness of the human race.

asaki's blog

Archives Blog

My Profile