After studying the sixth session topic entitled monopoly and also read the additional material, please give your own opinion regarding the following issue. PT. PLN is the company that provides electricity in Indonesia. It can be said that PT. PLN monopolizes the electricity industry. Why does PT PLN have the monopoly? Explain your reason.
Answer:
PT. PLN, or Perusahaan Listrik Negara, holds a monopoly in the electricity industry in Indonesia for several reasons.
Firstly, PT. PLN was established as a state-owned enterprise tasked with providing electricity to the entire nation.
This initial mandate gave PT. PLN the exclusive authority to generate, transmit, and distribute electricity across Indonesia.
Secondly, establishing and maintaining an extensive electricity infrastructure requires significant investment and expertise, which PT. PLN has developed over decades.
The scale of infrastructure needed, combined with regulatory barriers, makes it challenging for new competitors to enter the market.
Additionally, ensuring nationwide electricity coverage involves complex coordination and planning, further consolidating PT. PLN’s position as the primary provider.
While monopolies can sometimes lead to inefficiencies or lack of innovation, in the case of PT. PLN, its monopoly status has been crucial in achieving the overarching goal of providing reliable electricity access to all Indonesians, especially in remote areas where market forces alone might not suffice to ensure coverage.
However, it’s essential for PT. PLN to operate transparently, efficiently, and be subject to appropriate regulatory oversight to mitigate the potential drawbacks of monopolistic control.
