Indonesia and the Netherlands have been closely linked for centuries. And still, there a numerous political and economic ties that have an impact on Indonesian society and economy. According to the IMF, for example, the Netherlands is the second largest investor in Indonesia.
Furthermore, Indonesia – and other Asian countries – suffer unnecessary revenue losses from Dutch tax treaties. Indonesia’s loss in withholding taxes on interest and dividends alone was more than 50 million EUR in 2011. The total revenue lost through Dutch mailbox companies would be even bigger and Dutch tax treaties are a source of tax base erosion in Indonesia.
SOMO wants to re-examine these links between the Netherlands and Indonesia, and tackle the problems flowing from them. In order to do this, we linked with Indonesian partners Indonesia for Global Justice, Prakarsa, Walhi, JATAM, Sawit Watch, KRuHA, and IHCS to do joint research, exchange knowledge and push for change in Indonesia and the Netherlands.
Our research will maintain a comprehensive focus as well as recognizing a joint political sphere of influence. We will look at the impact of multinational corporations in Indonesia, in the context of the investment framework and with a focus on relations to the Netherlands.read more less
Today’s economic system is a system driven by shareholder value and the interests of large corporations: it maximises their profits, often ignoring the social and environmental costs. The current globalised world does not offer a sustainable level playing field, and as a result, corporations are caught in a race to the bottom.
SOMO wants to contribute to a fair economic system, in which corporations and investors contribute to financing public goods and services, and governments and institutions implement adequate checks and balances, serving social and ecological interests.
Private gain, public loss
SOMO’s research reveals how the current economic and financial system perpetuates economic inequality, and how it exacerbates the power imbalance between the private sector and civil society. Through corporate tax avoidance. Through trade and investment agreements that give companies the right to sue governments for enacting sound social policy. Through a volatile financial system that is increasingly disconnected from the real economy. It is a system of private gain and public loss that leaves ordinary people paying the price.
Our focus is on the social and economic impact of tax treaties and regimes, trade and investment mechanisms and agreements, and the practices and lobby of the financial sector. We pay particular attention to the impact of Dutch and EU policies on low-income countries, examining the degree to which they cohere with sustainable development policies and human rights frameworks.
We work with others in the Netherlands, in Europe, and across the globe, to adapt the economic system, so it serves the public interest and facilitates a more equitable distribution of resources. We want people to be able to control their own economic circumstances, through democratic processes with adequate checks and balances.