Business, Governance, and Professional Ethics

Abstract

Since the debacle of the crisis, economist and policymakers have given much belated attention to institutional development and, in particular, the issue of good governance. This paper argues that in governance reform, basic ethics must be agreed upon as norms of behavior before rules of behavior (i.e. institution) can be established and enforced. Good behavior applies generally only if it is enforced by informal group sanctions. The crisis of professionalism and ethics and the alienation of the SinoIndonesian business elite after the May 1998 riots were contributing to the meltdown of the modern business sector. This paper argues that these two massive problems are potentially soluble. A national debate about professionalism and business ethics would be a means not only to lay foundations for good governance within business and between business and govern.- merit but also to renegotiate the social contract between pri and non-pri Indonesians. This paper sets up the problem by briefly reviewing the nature and cause of the present \u27strike by capital\u27 in Indonesia, making comparison with the capital strike of the 1950s and 1960s, then examines the impact in terms of de-globalization, and discusses the opportunity cost of the exodus of Sino-Indonesian