In Jakarta

IT'S mind-boggling why Indonesia would issue a rule to make it compulsory for foreign drug companies to set up a production factory in Indonesia or leave the country. The new rule gives those who sell drugs but don't make their products here two years to comply. 

At stake are the life-saving and life-extending drugs that patients suffering (from cancer for example) must have when they need them. So, clearly the ones who stand to lose are the patients, not the government or the global drug companies. (Well, except for the companies' Indonesian sales figures - which probably only form a small part of their global sales anyway). 

Besides, now is simply a bad time to expect foreign companies to allocate investments into building factories amid a global liquidity squeeze that is expected to continue for an indefinite length of time.

There is also the likely scenario that the 13 drug companies which have been selling these high-tech drugs but don't produce them here, cannot afford to set up production factories in Indonesia and choose to quit the country.

Besides, Indonesia's drug consumption per capita is only about US$10 (S$15), compared with Singapore's which is at least 20 times higher, according to International Pharmaceutical Manufacturers Group (IPMG). 

But, Indonesia's 220 million population, the world's fourth largest, makes the market still attractive to foreign companies and drug companies may be reluctant to leave the market just yet, financial crisis or otherwise.