The President PostT H E S P I R I T O F I N D O N E S I A

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VIEWPOINT THE WORLD CULTURE EDUCATION

Dreaming with IndonesiaAfter becoming one of the East Asian Economic Miracles, Indonesia went through a long and dark tunnel as a result of the Asian crisis.

PAGE 6

Towards Harmony Among CivilazationsSBY giving speech at Harvard University as President of the country with the world’s largest moslem population.

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Cultural Heritage, Tourism, and National Identity The outrage that erupted in Indonesia recently over the inclusion of the Balinese “pendet dance” in the “Visit Malaysia” feature on Discovery Channel

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Pro-Education PresidentWith 20 percent of the state budget going to the sector of education as of 2009, the President is optimistic about reaching the goals of his success story plan called 3M

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As he prepares to be sworn-in for the second (and last) time as presi-dent. SBY, as he is fond-

ly referred to, couldn’t have asked for more.

Aburizal “Ical” Bakrie has clinched the chairmanship of Golkar Party for the next five years, and is now expected to steer the party into the presi-dent’s fold.

The addition of Golkar to the Democrat Party’s (PD) coali-tion translates into more than 70 percent of the total seats in the House of Representatives aligned with the government.

In the meantime, the House is

chaired by a PD senior official, Marzuki Alie, who will make sure SBY faces little problems as he had in the past despite hav-ing Jusuf Kalla from Golkar as his VP.

It is also helpful to have Tau-fiq Kiemas (from the Indone-sian Democratic-Party-Strug-gle/PDIP) as the chairman of the People’s Consultative Assembly (MPR), who owes his position to PD’s support.

Though Kiemas’ position as MPR chief cuts no ice, as a senior PDIP official he is in a position to exert pressure on his people at the House in ways that would be beneficial to SBY.

Although the overwhelming, 70 percent plus position of SBY

CARRY ONSBY to be sworn-in for the second time as president. Courtesy of wikipedia.org

Excerpts:

How large is SOEs’ contri-bution to the State Budget?

Total dividends from State Owned Enterprises (SOEs) in-creased almost three-fold, from Rp 9.8 trillion in 2004 to Rp 29 trillion in 2008.

What is the status of efforts to consolidate SOEs?

The ministry has a mandate to reduce the number of SOEs from

138 to 89 by the end of this year by, among others, forming hold-ing companies.

The establishment of holding companies will enable state en-terprises to synchronize strategies in their respective sectors and to specialize in specific areas to in-crease overall profitability.

President Susilo Bambang Yudhoyono’s re-election campaign tagline, “Lanjutkan (“Carry On”), proved to be self-fulfilling prophecy.

By Taufik Darusman

at the House means a weakening of a critical opposition, analsysts see this as a positive development as sound government programs stand a higher chance of becom-ing a reality and bills readily rat-ified.

“Even the best democrats in the world wouldn’t mind hav-ing a hold on power the way SBY does now,” Taufik Darus-man, the deputy chairman of the New Indonesian Struggle Party (PPIB), told The President Post

“SOEs Should be State’s Engine of Growth”

here last week.PPIB is one of the first parties

that supported SBY’s re-election bid.

Analysts also say Bakrie is set to focus his time and energy in rebuilding beleaguered Golkar.

The President Post recently interviewed State Minister of State-owned Enterprises Sofyan Djalil at his office.

“Ical has set his sights on 2014, when SBY can no longer be re-elected. By putting his weight behind SBY now, Bakrie hopes to see the president back him as presidential candidate five years from now,” says a Golkar senior official who perefers not to be identified.

As such, it is unlikely that Bak-rie would be in the new cabinet though he will make sure that at least four of his proteges are in it.

Former Commission I chair-man Theo Sambuaga is expected to be in the cabinet, and so is for-mer House Speaker Agung Lak-sono.

One day after SBY and Boe-diono are sworn in, the former is expected to announce the new

cabinet along with their first 100 days program.

“None of the candidates for the new Cabinet have been sum-moned. Two to three days prior to my swearing-in on the 20th I will hold a fit and proper test on them,” the president said Mon-day.

“They will also be required to undergo medical and psycholog-ical tests.”

Even after they have gone through the multiple stages, that does not mean the candidate will for certain become a Cabinet minister.

“If they happen to have le-gal problems or other problems, things can always change,” he said.

A holding company for state fertil-izer produc-ers would be the easi-est to form. The hold-ing compa-ny, called PT Agro Kimia Nusantara, will include several big state fertiliz-

er companies such as PT Pupuk Sriwidjaja, PT Pupuk Kalim-antan Timur, PT Pupuk Iskan-dar Muda and PT Petrokimia Gresik.

Due to lack of coordination between ministries and depart-ments and taxation problems, the program will be continued by the

next administration.

Former Coordinating Minis-ter of Economics Prof Dr Dor-odjatun Kuntjoro Jakti says the State has to have a larger role in the economy through SOEs such as in Vietnam and Brazil. Comments?

I agree, SOEs should be the en-gine of growth for economic de-velopment.

How do you enhance SOE corporate leaders to bcome world-class captains of indus-try?

We send the best executives for management leadership program overseas as well as in the country, such as by attending the ECGL-Rotterdam School of Manage-ment Advanced Leadership Pro-gram in Jakarta and Bali.

IDR 10,000

State Minister of State Owned Enterprises, Sofyan Djalil

ViewpointThe President Post www.thepresidentpost.comFriday, October 16, 20092

Towards Harmony Among CivilizationsBy DR. Susilo Bambang Yudhoyono

President Obama deliv-ered his speech at Al Azhar University, one of the oldest and best Uni-

versities in the Islamic world. I speak today at Harvard, the old-est and most prestigious Universi-ty in America. But our objective is the same: to take a hard look at relations between the West and the Islamic worlds, and to chart a new course forward.

It is fitting that I come here after the G-20 Summit in Pitts-burgh. For to me, the G-20 is one manifestation of the change tak-ing place in global politics. The G-20 grouping, comprising some 85 per cent of the world’s GNP and 80 per cent of world trade, is not just an economic powerhouse -- it is also a civilizational power-house.

The G-20 for the first time ac-commodates all the major civili-zations -- not just Western coun-tries, but also China, South Korea, India, South Africa, and others, including significantly, three countries with large Mus-lim populations: Saudi Arabia, Turkey and Indonesia. The G-7, the G-8, or even the United Na-tions Security Council, does not boast this distinction. The G-20 is representative of a multi-civili-zational global community.

Perhaps this is why the G-20 has been successful in arresting a global meltdown. The swift and coordinated actions of G-20 economies have started the stabi-lization of our financial systems and restored confidence, prompt-ing today’s early signs of modest economic recovery.

We are very pleased that at the close of Pittsburgh, the G-20 has been institutionalized, and looks set to be the premier forum for international economic coopera-tion. This comes not a moment too soon, for the world’s civili-zations should be properly rep-resented in one defining forum. Civilizations: they at once define us, and divide us. Is harmony be-tween our civilizations truly elu-sive, so out of reach? can we just not get along?

Sixteen years ago, the late Sam-uel Huntington, a son of this uni-versity, published an essay pro-posing that after the Cold War, civilizations, religions and cul-tures would become the defining feature of international relations and would constitute the prima-ry cause of conflicts between and within nations.

To me, the term “clash of civi-lizations” itself is counter-produc-tive. If they hear it often enough, some people may think that the world is such and accept it as re-ality. I don’t believe that civiliza-tions are inherently incompatible and prone to conflict when they interact. This is what I saw first-hand at the G20, where nations of diverse cultural backgrounds joined hands to address a com-mon challenge. We spoke differ-ent languages through our head-phones, but we understood one another.

Huntington sought to under-stand post-Cold-War fault lines and warned us of potential tur-bulence. This is not a trivial re-minder. Civilizational issues are rife in modern politics. As policy-makers, our job is to prevent such prognosis from becoming reality.

Indeed, Huntington’s warning has been relevant to Indonesia’s experience. In the roller coast-er years following independence, Indonesia has suffered separatist threats, ethnic and religious con-flicts, and Islamic insurgencies.

But we overcame these chal-lenges. We adapted. And instead of failing, we have thrived. Today we are not a hotbed of communal violence; we are by and large an

ic civilization was the most so-phisticated in the world because it had an enormous and indiscrimi-nate thirst for knowledge and sci-ence, learning from all corners of the world. And this body of sci-entific knowledge from the Mus-lim world was later utilized by the Western Renaissance. Civili-zations have built on each other’s knowledge and become enriched by them.

We have done the same in In-donesia, where we have built on our exposure to Eastern, Islamic, and Western influences, culmi-nating in the open, pluralistic and tolerant society that we are today. In short, the cross-fertilization of cultures can produce something wonderful, something good. The more we exchange cultures and share ideas, the more we learn from one another, the more we cooperate and spread goodwill, the more we project soft power and place it right at the heart of international relations, the closer we are to world peace.

Experience has taught me that soft power is an effective weap-on against conflict. Just ask the people of Aceh, Indonesia. For 30 years, Aceh was rife with vi-olence. Successive Indonesian governments opted for a rigid military solution, because a set-tlement seemed so elusive.

When I assumed the Presiden-cy, I pursued a new approach, one defined by goodwill and trust-building. I offered the separat-ists a win-win formula, prom-ising them peace with dignity. Remarkably, we reached a per-manent peace settlement in just five short rounds of negotiations. The peace agreement was fully in line with my objective to de-fend our sovereignty and terri-torial integrity but in a civilized and democratic way. That was when my faith in soft power mul-tiplied, and why I believe it holds the key to resolving many glob-al problems.

THE SECOND ImPERATIVE is to intensify the process of dialogue and outreach that now seems to be proliferating. We have seen many good initiatives. In 2001, the United Nations began the Dialogue among Civilizations. Spain and Turkey later launched the Alliance of Civilizations. The Asia Europe Meeting (ASEM) also took-up Inter-faith Dialogue. Recently, Saudi Arabia convened the Interfaith Conference at the UN. Indonesia and Norway also launched, since 2006, the Global Inter-Media Dialogue in the af-termath of the cartoon crisis. All this represents a fresh approach to link civilizations and religions.

We must deepen the quality of these dialogues, so that they pro-duce specific actions that, as UN Secretary-General Ban Ki-moon points out, “change what people see, what they say and ultimately how they act”.

These initiatives should not al-ways be a meeting of like-minded moderates, although surely this is also important. They should also include disbelievers, for a di-alogue should not be a reaffirma-tion, but an honest attempt to understand the concerns of the other side. The point is to listen, and not just talk.

A true dialogue must address age-old grievances and confront false stereotypes, without pre-sumptions and preconditions. In-deed, the best dialogues are often respectful and honest, open-end-ed and constructive, intense, and solution-oriented. These were the quality of dialogues held in In-donesia between Muslims and Christians in conflict-zones in Poso and Maluku, which culmi-nated in a commitment to peace-ful reconciliation.

THE THIRD ImPERATIVE is the need to find a solution to burn-ing political conflicts that have driven a wide wedge, specifical-ly between the western and Mus-lim worlds.

Today, some two out of three Muslim countries are in conflict or face a significant threat of con-flict. In contrast, only one out of four non-Muslim countries face similar challenges. But despite these very complex conflict sit-uations, Muslims must be able to differentiate between a con-flict involving Muslims, and a “war against Islam”. I do not be-lieve that any of the civilizations – Western, Hindu, Buddhist, Japanese - are systematically and simplistically engaged in a “war

against Islam”.Of all the world’s conflicts,

none has captured the passion of Muslims more than the plight of the Palestinians. But this is not a religious issue – there are Chris-tians and Jews in Palestine, and Muslims and Christians in Is-rael. Nonetheless, the establish-ment of the much-awaited Pales-tinian state, in the framework of a two-state solution where Pales-tine and Israel live side by side in peace, would be widely hailed by Muslims worldwide. It would re-move a major mental barrier in their perception of the West, es-pecially of the United States.

Currently, many Muslims fail to notice the constructive role of the West in producing peace in Bosnia, and in Kosovo, but they would sure notice, and rejoice in, the resolution of the Palestine di-lemma.

But the Palestinians too have a moral and political responsibility. It is difficult to attain and sustain statehood unless there is unity among the Palestinian factions. In my meeting with Palestinian leaders, I always told them very clearly that Indonesian freedom fighters would have never won the war for independence if they had not united in spirit. The bot-tom line is : we desperately need to end the vicious cycle of con-flict and violence.

The timely withdrawal of Western forces from Iraq and Af-ghanistan would also alleviate Muslim fears of a Western hege-mony. And all these political so-lutions would help reduce terror-ism, as a crime that deviates from the true teaching of Islam as a re-ligion of peace. It would also turn the feelings of fear and humilia-tion among some Muslims into hope and self-esteem.

THE fOURTH ImPERATIVE is to strengthen the voice of modera-tion in our communities.

By nature, moderates are open-minded, flexible and prone to an inclusive approach through out-reach and partnership. In con-trast, extremists are driven by xenophobic fear, and bent on con-frontation and exclusion. Because both moderation and extremism will grow in the 21st century, we must make sure the moderates are empowered, and take cen-ter stage in society. The moder-ates should no longer be a silent majority. They must speak up and defend their mainstream val-ues in the face of opposition from the louder and more media-gen-ic extremists. In this vein, I find it very encouraging that Western media have unanimously refused to show the very offensive film Fitna by provocative Dutch pol-itician Geert Wilders. This shows the media’s improved sensitivity towards Islam.

The moderates also have to be more proactive and less reactive. And they must show, with reason and results, that being a moder-ate brings real success, peace and progress. Extremists will always capitalize on hopelessness and desperation. We must present a better alternative.

THE fIfTH ImPERATIVE is mul-ticulturalism and tolerance. The most welcome trend in the 21st century is multiculturalism and tolerance. You can not say this of America and many Western na-tions several decades ago. But to-day, racism is in serious decline, apartheid is gone, inter-racial marriages are common, and the market place picks talents with-out regard for color, religion or ethnicity. Even the family por-trait of President Barack Obama reflects this healthy multicultur-alism, with his Kenyan and Indo-nesian roots.

We must all work together to ensure that multiculturalism and tolerance become a truly global norm. And when we speak tol-erance, it should be more than just to “tolerate” others. Toler-ance implies a deeper meaning. Tolerance means a full respect for others, sincerely accepting their differences, and thriving on our mutual diversity. Only this type of tolerance can heal deeply seat-ed hatred and resentment.

THE SIxTH ImPERATIVE is to make globalization work for all.

I do not accept the precept that, as a rule, globalization pro-duces winners and losers. Like peace, like development, global-ization can be harnessed to make winners for all. Let us be clear on

this. There can be no genuine harmony among civilizations as long as the majority of the world’s 1,3 billion Muslims feel left out, marginalized and insecure about their place in the world. They are part of the 2.7 billion people worldwide who live under two dollars a day.

These are the sad, hard facts. Out of 57 Muslim populated countries, 25 are classified as low-income countries, 18 lower mid-dle-income, and 14 as upper mid-dle income or high income. And even though 1 out of every 4 peo-ple in the world are Muslims, their economies constitute one tenth of the world economy. One in four people in Muslim coun-tries live in extreme poverty. Al-most 300 million Muslims aged 15 and above are illiterate.

These statistics are, of course, unacceptable.

Muslims must take ownership in their destiny. Many Muslims reminisce too much about the glory days of centuries past, when Islam was on top of the world: politically, militarily, scientifical-ly, economically. Muslims today must be convinced that Islam’s best years are ahead of us, not be-hind us.

The 21st Century CAN be the era of the second Islamic renais-sance. A confident, empowered and resurgent Muslim world can partner with the West and oth-er civilizations in building sus-tainable peace and prosperity. But to do this, Muslims must change their mind-set. Like the remarkable 13th century Mus-lims before them, they must be open-minded, innovative, and take risks. There are inspirational Muslims everywhere: Nobel lau-reate Muhammad Yunus, Orhan Pamuk, Muhammad Ali, Zi-dane, Hakeem Olajuwon, Fareed Zakaria and rapper Akon. Coun-tries like United Arab Emirates and Qatar have shown that with good governance, self-esteem and a progressive world view, they can change their nation’s fortune in one generation. And Indonesia has shown that Islam, modernity and democracy – plus economic growth and national unity - can be a powerful partnership.

In short, the world’s citizens, and children of all civilizations, must be equal partners and bene-factors of globalization.

A recent survey in The Econo-mist found that, for the first time, more than half of the world pop-ulation can be loosely consid-ered middle-class. If this is true, then we have a reasonable chance to reach “zero poverty” world-wide by the end of this century. With the emerging economic or-der that is now unfolding, getting from here to there would require intense inter-cultural and inter-religious harmony. This should be the shared goal of all our na-tions.

THE SEVENTH ImPERATIVE is to reform global governance.

Earlier, I talked about how the G20 Summit is more representa-tive of today’s global dynamics. Unfortunately, this is the excep-tion rather than the rule. For ex-ample, the UN Security Council today still reflects the power bal-ance of 1945 rather than 2009, with exclusive veto powers re-served for four Western nations and China. It is unfortunate that recent efforts to reform the UN Security Council have not been successful. This situation is un-sustainable. The UN Security Council will need to be restruc-

tured to keep up with 21st centu-ry geopolitical realities.

The eighth imperative is edu-

cation. Politicians often overlook ed-

ucational opportunities in both our homes and our classrooms. But the answers to the world’s problems are there, for it is also there that hatred and prejudice breeds. These are the real battle-grounds for the hearts and minds of future generations.It is at these places that we must turn igno-rance into compassion, and in-tolerance into respect. The foot soldiers here are parents, teach-ers and community leaders. We must inculcate in our school cur-riculum the culture of modera-tion, tolerance, and peace. We must help our children and our students develop a sense of com-mon humanity which allows them to see a world of amity, not a world of enmity.

In Indonesia, elementary stu-dents are taught about respecting religious traditions. Exam ques-tions ask Muslim students what they should do if their Chris-tian neighbors invite them to cel-ebrate Christmas. We are proba-bly the only country in the world where each religious holidays – Islamic, Catholic, Protestant, Hindu, Buddhist - are designated as national holidays, even though Hindus and Buddhists account only 2.4% of our population. Through education, we have sought to ensure that tolerance and respect for religious freedom becomes part of our trans-gener-ational DNA.

Finally, THE NINTH ImPERA-TIVE: global conscience.

It is not easy to describe this, but this is what I saw in Aceh during the tsunami tragedy. On 26 December 2004, giant tsuna-mi waves crashed Aceh and Nias, and 200,000 people perished in half an hour. The whole nation was in grief.

But in this tragedy, we also found humanity. The whole world wept, and offered helping hands. Americans, Australians, Singaporeans, Chinese, Mexi-cans, Indians, Turks and other international volunteers worked hand in hand to help the Aceh-nese. I realized then there exists a “powerful global conscience”.

One would think, that the enormous pain of World War II would usher in a new dawn of world peace. That is why the United Nations was formed. But the human race ended up with many more wars.

One would think the threat of the nuclear holocaust was enough to trigger nuclear disarmament, but the world saw more coun-tries developing nuclear weapons. The question now is whether cli-mate change would be able to fos-ter a new global conscience. We are still not sure that it will. But a “global conscience” could well help transcend whatever civili-zation, religious and cultural di-vides that has faced humanity.

So these are my nine impera-tives for harmony among civili-zations that I offer to you today. They will require a great deal of hard work. It will take the work of generations and decades. And it will require patience, perse-verance, partnership and lots of thinking outside the box.

Eighteen years after the end of the Cold War, ten years into the 21st Century, we find ourselves at a crucial crossroads. In front of us may be the most progressive cen-

tury mankind has ever known, a century where, as Fareed Zakar-ia says, more things will change in the next 10 years than in the past 100 years. It can be the cen-tury of possibility and opportu-nity. President Barack Obama spoke in Cairo of a “new begin-ning” between America and the Muslim world. Today, I say that we can “REINVENT A NEW WORLD”. It will be a world not of conquest, but of connectivity. It will be a world defined not by a clash of civilizations, but by the confluence of civilizations. It will be a world marked by plenty, not by poverty. And it will be a vast empire of global minds breaking down centuries of civilizational collisions and hostilities.

America, with all the econom-ic, social and technological re-sources at her disposal, has much to contribute to this new world. America’s role in helping to re-form the international system, spread prosperity, empower the world’s poor, resolve conflicts, and share knowledge is a criti-cal asset to a transforming world. Now is a golden opportunity for America to inundate the world with her soft power, not hard power. America should not wor-ry about retaining its superpow-er status. America can help make the world anew -- what could be more powerful and definitive than that?

Indonesia too has a signifi-cant role to play. We can bridge between the Islamic and the western worlds. We can proj-ect the virtue of moderate Islam throughout the Muslim world. We can be the bastion of free-dom, tolerance and harmony. We can be a powerful example that Islam, democracy and moderni-ty can go hand in hand. And we will continue to advance Indone-sia’s transformation through de-mocracy, development and har-mony. This is why Indonesia and America are now evolving a stra-tegic partnership. The world’s second and the third largest de-mocracies. The most powerful Western country and the country with the largest Muslim popula-tion. Calibrated for the challeng-es of the 21st century, this part-nership can strengthen regional stability, inter-civilizational unity and world peace.

In the final analysis, vast oceans separate our countries but our common search unites. We are both trying to redefine our place in the world. President Obama insists the 21st century can still be the American Centu-ry. I am convinced that this could well be Asia’s Century.

Then I thought, why can’t it be everybody’s century? It can be the American Century. It can be the Asian Century. It can be the European Century. It can be the African Century. And it can be the Islamic Century. This can be an amazing century where hope prevails over fear, where broth-erhood of man reigns supreme, where human progress conquers ignorance.

It can be a Century that not only brings us into a new millen-nium, but also elevates the bonds of humanity to greater heights.

In this Century, no one loses. And everybody wins.

Insya Allah!

This is an edited speech by President Susilo Bambang Yudhoyono at the John F. Kennedy School of Govern-ment, Harvard University, Boston, US, on September 29, 2009

“Several months ago, President Barack

Obama made a historic speech in Cairo, seeking to

redefine relations between America and

the Muslim world. As President of the

country with the world’s largest Moslem population, I would like today to respond to that

speech”

President SBY delivers his speech at Harvard University Courtesy of presidensby.info

archipelago of peace. Today we are not at the brink

of ‘Balkanization’; we have in-stead fortified our national iden-tity through three successful, peaceful national elections.

Today we are not a victim of past authoritarian, centralized governments, but a model of de-mocracy and decentralization. Today we are not paralyzed by fi-nancial crisis but forging ahead with sweeping reforms of our fi-nancial and industrial structure. And Indonesia today is a dynam-ic emerging economy, enjoying one of the highest growth rates in Asia after China and India. Thus, no matter how deep and seeming-ly divisive the civilizational forces facing Indonesia -- the ethnic dif-ferences and religious conflicts -- we overcame them. This is de-spite the enormous challenges of democracy and development that still confront us.

I am aware of the painful re-alities of our world. I am aware of the 4000 years of painful re-lations between Judaism, Islam and Christianity. I am aware of a traumatic collective memory that is not easy to erase.When deal-ing with matters of faith, we face basic human emotions that pre-dated modern states. These emo-tions are complicated, stubborn, and will likely become more problematic as religiosity intensi-fies worldwide.

According to some estimates, Islam will be the world’s largest religion by 2025, accounting for some 30% of the world popula-tion, and indeed Islam is current-ly the fastest growing religion in the United States.

As religiosity increases, so will the politics of identity. And aid-ed by globalization and technol-ogy, extremism and radicalism can only grow. As we transition from G8 to G20 and perhaps be-yond, mutual exposure between civilizations will become the most intense humanity has ever seen. Perhaps we will even see the emergence of a “global civiliza-tion”.

Democracy has gained im-mense ground, spreading in the Islamic world, including in In-donesia. There were only a hand-ful of democracies at the turn of the 20th century. At the turn of the 21st century, there are some 89 full democracies. Even the Organization of Islamic Confer-ence (OIC) has adopted the his-toric Mecca Charter commit-ting its members to the principles of democracy, human rights and governance. Indeed, more people now live under open pluralist so-cieties, and under religious free-dom, than at any other time in history. This trend can have only a positive impact on the global community. It may be naive to expect that the world can be rid of conflict and hatred. But I be-lieve that we can fundamentally change and evolve the way civili-zations, religions and cultures in-teract.

This is not utopia. It is a prag-matic vision. I have seen it work in Indonesia. I have seen it work in many countries. The question is: can we make it work globally? As Robert F. Kennedy once said, quoting George Bernard Shaw, ‘I dream of things that never were and ask, why not?” To highlight how I think this can possibly be achieved, let me outline nine im-peratives to achieve harmony among civilizations.

THE fIRST ImPERATIVE is to make the 21st century the cen-tury of soft power. Remember: The 20th century was the cen-tury of hard power. We saw two World Wars, several major wars and proxy wars, and a long Cold War which risked nuclear holo-caust. One estimate suggests that some 180 million people died in the wars and conflicts of the last century. It is no wonder that the 20th century has been called the “age of conflict”. It has been the bloodiest Century in memory.

In contrast, the 21st century should and must be the century of soft power.

But there exists a large of “soft power deficit” that the world’s civilizations must fill. I believe that this ‘clash of civilizations’ is actually a clash of ignorance. We are weakest when we are alone. We are strongest when we join forces with one another. There are many examples of this power of exchange and connectivity.

In the 13th century, the Islam-

The President Postwww.thepresidentpost.com Friday, October 16, 2009 3

Opinion

Bung Hatta and his Thoughts on Defense and Security MattersLittle or nothing is known about Bung Hatta’s thoughts and principles concerning national defense and security matters.

The following notes, by a retired three-star Army general who was present at the creation of the Republic, shed light on one of Indonesia’s prime statesmen’s insights and on that issue.

By Purbo S. Suwondo

There are different opin-ions and interpreta-tions among scholars concerning the leader-

ship and caliber of the ‘’national movement for the independence of Indonesia’’ during the Japanese occupation in 1942 up to 1945. A noteworthy conclusion is reached by a Japanese historian, Aiko Shi-raiishi, based on the concept of the independence movement, as one continuous activity start-ing from “National Resurgence” (1908), “Youth Oath” (1928) to the period of “rule by force/use of force” (in Dutch: “machtsaan-wending”) (1945-1950) up to rec-ognition of sovereignty of the Federal Republic of Indonesia on December 27th 1949.

Shiraaishi’s conclusion is as fol-lows:

“…therefore, the most impor-tant impact to Indonesia’s (na-tional) history, as a consequence of Japan’s idea of mobilizing In-donesia’s youth, was clearly seen in Indonesia’s success in acceler-ating the process to achieve in-dependence (which ironically is completely unforeseen by the Japanese!). Though there is opin-ion that considers Japanese occu-pation as the phase that ushered Indonesia towards independence, it is important to understand that the notion of independence did not emerge from Japan’s wish to liberate Asia, but it occurred be-cause of the astuteness of Indone-sia’s leaders who seized upon this golden opportunity to achieve their goal.”

Faced with the idea of mobiliz-ing Indonesia’s youth, Indonesian leaders expressed their willing-ness to build a military defense force in the form of a national-ist volunteer army composed of Indonesian youth to be trained by Japanese military instructors with combat experiences in Asia and Southeast Asia.

This army was known as the Voluntary Army PETA – ‘Pem-bela Tanah Air’ (Defender of the Fatherland). By mid 1945, PETA has grown to a military force of 66 infantry battalions, three groups of special guerilla units (Yugekitai) stationed in Java and Madura, three infantry bat-talions in Bali and 55 infantry companies Giyu-gun in Sumatra comprising of able and trained privates, non-commissioned of-ficers, and commissioned officers – all Indonesians. In response to the Indonesian’s government ap-peal on August 23rd 1945, these young men simultaneously and spontaneously formed the core that spearheaded the formation of BKR – ‘Badan Keamanan Rakyat’ (People’s Security Body) in their respective homelands. Forty-eight years later, BKR was officially recognized by the In-donesian government as the nu-cleus of TNI – ‘Tentara Nasional Indonesia’ (Indonesia’s Nation-al Army). On October 5th, 1945, BKR transformed into TKR – ‘Tentara Keamanan Rakyat’ (People’s Security Army) which then changed to TRI and final-ly into TNI.

While the first Cabinet of the Republic of Indonesia (RI) did not announce any program, the second Cabinet (November 14th 1945–March 12th 1946), formu-lated four programs, one of which was directly linked to national se-curity. The program was “to co-ordinate all citizens in the effort to develop the Republic of Indo-nesia as well as to build its soci-ety based on justice and human-itarianism.”

In the meantime, the Allied forces (British) being the win-ning side and who had been giv-en the responsibility of defense and security in Southeast Asia (except in the Philippines) arrived on September 29th 1945. Some fighting erupted in Sumatra and Java as the Allied forces were con-fronted by BKR/TKR, which had already been deployed, orga-nized and ready to fight.

In the third Cabinet (March 12th until October 2nd 1946), five programs were drawn up, which were:

“Negotiations based on the rec-

ognition of a 100% independent and sovereign Republic of Indo-nesia and to prepare all citizens of the Republic in politics, mili-tary, economics and social fields to defend the sovereignty of the Republic of Indonesia.”

On July 10th 1946, the British army withdrew from areas it con-trolled and handed them over to the Dutch army, paving the way for the Dutch to rule Indone-sia again (formerly of the Dutch East Indies) and to restore ‘’secu-rity and order (rust en orde)” with force.

The fourth Cabinet (October 2nd 1946–June 27th 1947) did not formulate any new program but continued with programs from the previous cabinet.

On January 23rd 1948, the fifth Cabinet headed by Amir Syarif-fudin as prime minister collapsed because of the withdrawal of its main supporter Masyumi – ‘Ma-jlis Syuro Muslimin Indonesia’ (Majlis of Indonesian Muslims).

The sixth cabinet (November 11 1947-January 29 1948) with Amir Syariffudin as prime min-ister did not formulate any new program.

The seventh Cabinet was led by Moh. Hatta as prime minis-ter, who served concurrently as Minister of Defense. Its first day of cabinet session was on January 29th 1948 (and went on until Au-gust 4th 1949) and it carried out the following programs:

To negotiate based on agree-

ments of the ‘Renville’ treaty. To accelerate the formation of •the Federal Republic of Indo-nesia.To implement rationalization •(reduction in the number of military forces).To start on nation building.•

In serving both as prime min-ister and minister of defense, Bung Hatta was thus tested on his statesmanship as vice presi-dent and the highest government official during a most difficult revolutionary period.

Bung Hatta continued to re-spect the standpoint of TNI as a vital component in the struggle against the Dutch even though the cabinet he led included pro-grams such as “based on agree-ments of Renville treaty,” “Fed-eral Republic of Indonesia” and “rationalization of military forc-es.”

Throughout ‘Linggarjati’ and ‘Renville’ negotiations, the Dutch government, especial-ly KNIL commander, Gener-al S.H. Spoor, never failed to in-clude the plan to dissolve TNI by forming a ‘’Federal Army” (for the Federal Republic of Indone-sia) or ‘Gendarmerie’ which had to be established, planned and at least in the beginning, composed and led by the Dutch. Gener-al Spoor believed that it was the Dutch, not Indonesia that was capable to provide a modern and efficient army.

DR. J.A. de Moor (of Leiden University) wrote in his book that KNIL was tasked to be the cor-nerstone of the “Federal Army”:

“In the Federal Republic of In-donesia, plans were drawn up to create a national armed force which at the beginning would be composed of Dutch troops, whereas Indonesian troops would be recruited from each of the states. Through rigorous selec-tion and training, Indonesian troops would gradually be given a bigger role in the ‘’Federal Army.’’ Both the Dutch and the Indone-sian troops would be placed un-der the operational command of a Dutch officer. A State staff would coordinate all activities, accompanied by a Commissar-iat of Military Affairs (attached

to the High Commissioner of the Netherlands to Indonesia) as well as a Defense Council for Indone-sia to discuss all defense and mil-itary matters….”

Though the ‘Linggarjati’ trea-ty was signed on April 25th 1947, all efforts in reaching a compro-mise failed and on July 1947. The Dutch invaded Republic-con-trolled areas with the goal of forc-ing the Republic to accept the Dutch’s version of the said treaty. From a political standpoint, the Dutch considered the first Ag-gression to be a failure.

On January 17th 1948, with the involvement of the U.N. Security Council, the Dutch and the Re-public of Indonesia finally agreed and signed the ‘Renville’ treaty. The main points were similar to the political issues of ‘Linggarjati’ agreements, such as a federation type of government, Union with the Dutch, Republic of Indone-

radio broadcast, he called on ev-eryone to continue with the struggle for independence. In the meantime, he made serious ef-forts and has successfully ended internal disorganization within TNI (which has triggered an of-ficial announcement of TNI be-ing the national army on June 3rd 1947). In 1948, he succeeded in ending his long-running oppo-sition towards the political lead-ership of the Republic where he came out as being justified in his point of view.”

“On March 1948, he sent a let-ter to Hatta which explicitly elab-orated the views and desires of the military. In the event that Hat-ta, during his negotiations with the Dutch, plans to give certain concessions in the matter of the status of the Republic and in re-gards to TNI’s stance, Sudirman felt the need to convey the follow-ing points:

jects being positioned under the Dutch or any other foreign power.TNI desires that any military •association/alliance between the Republic and other nations to be based on both parties having equal position.Oath taken by the armed forc-•es must be based on the Inde-pendence Proclamation of Au-gust 17th 1945.At the end of the letter, Com-

mander in Chief General Sudirman wrote that he wished to learn the point of view of the Indonesian government.

DR. J.A. de Moor writes in his book:

“The reply arrived quickly. On March 17th, the Cabinet of RI decided that TNI would be the nucleus of the federal army of the Federal Republic of Indone-sia. To quickly set up a delibera-tive body whereby the Republic’s

changing Spoor’s stance. How-ever, in that year, Spoor dropped all demands in dissolving TNI and instead he formulated a ‘’ad-justment/integration plan’’ (in Dutch: “inpassingsplan”). Former TNI members may be ‘adapted/integrated’ into the federal army after having been purified, re-trained, reschooled and trained carefully. The number of mem-bers from the Republic’s side may not exceed 10.000 @ 20.000 men and they are prohibited from be-ing stationed in a state outside of their homeland. The Indonesian side dismissed any discussion of this plan, and so the ‘’adjustment/integration plan’’ was canceled.”

“During negotiations in Ka-liurang, the issue of military matters was the center of dis-cussion. Dutch negotiators even-tually understood that dissolving TNI would never happen, even though Stikker was earnestly ap-pealing to Hatta to send TNI home. Don’t they need to start work again on their paddy fields, Stikker argued.”

“At the end of November, Hat-ta wrote to Stikker: “…How is it possible for us to blithely dissolve such a patriotic army like TNI which was born from the strug-gle for independence and self-de-termination of the nation, a goal which we yet have to achieve?”

“On early December 1948, Dutch negotiators realized that there was no longer the possibil-ity of solving the military issue as TNI kept a grip on negotiation process. The direction then was turning heavily towards the op-tion of Spoor’s planned invasion to occupy Yogyakarta. The Sec-ond Military Aggression was now ready to be launched.”

On December 19th 1948, the Dutch invaded all areas that were still controlled by RI and Yogya-karta was seized and occupied. RI’s top leadership was captured, but TNI persevered with its gue-rilla war.

Such was the case of the devel-opment of RI’s diplomatic strug-gle against the Dutch. Under the leadership of Moh. Hatta as prime minister, the Indonesian government demonstrated its ab-solute support of TNI’s stand-point and policy vis-à-vis KNIL.

The combination of TNI’s guerrilla struggle alongside he-roic common people from vil-lages and cities in Java and Su-matera and aggressive diplomatic efforts at the UN have propelled the ‘Round Table Conference’ to-wards the recognition of the sov-ereignty of the Federal Republic of Indonesia on December 27th 1949.

All of General Spoor’s ma-neuvers to “create” APRIS that centered on KNIL and to dis-solve TNI” have failed. General Spoor passed away on early 1949, and slowly but surely, the Royal Netherlands Army was shipped back to the Netherlands.

Some of the members of KNIL joined the Royal Netherlands Army, some members of the Corps of Special Forces (KST) retired and ‘’transmigrated’’ to the Netherlands and hundreds others KNIL members who had been recruited from the local population, were transferred and accepted in the army, the navy and the air force of TNI.

The implementation and the completion of the formation of APRIS have been carried out ac-cording to the “Six Principles” of Commander in Chief, General Sudirman.

On July 1950, KNIL was offi-cially dissolved by the Dutch gov-ernment and thereby ended its role as the main pillar of defense of the Dutch colonial rule on In-donesian soil. Its history in Indo-nesia, which went back to 1830, is displayed in the KNIL muse-um in Bronbeek in the Nether-lands.

On August 17th 1950, RIS changed to Republic of Indonesia, while Irian remained as a “pend-ing matter” up through1962

In serving both as prime minister and minister of defense,

Bung Hatta was thus tested on his

statesmanship as vice president and the

highest government official during a most difficult revolutionary

period

Mohamad Hatta giving a speech in Madiun (Circa 1946) Courtesy of life.com/John Florea

sia as part of the Netherlands and January 17th 1949 as the date of recognition of sovereignty.

On April 26th 1948, in negoti-ations held by the Political Com-mittee (sub committee 3, cooper-ation in defense and international relations), the Dutch considered defense matters as ‘’obscure/in the dark.’’ During the sub committee sessions of April 29th up to May 17th 1948, the Dutch’s stance be-came clear, which was that “all of TNI must be dissolved and to put an end to its existence.” Ac-cordingly, the Republic’s foreign relations must also be suspended because of the discord with the Dutch’s sovereignty.

DR. J.A. De Moor writes:“General Spoor’s unwaver-

ing stance on his efforts to dis-solve TNI from the face of the earth was matched by General Sudirman’s relentless determina-tion for TNI to be victorious…”

“…For General Sudirman, when it comes to the matter of na-tional independence, giving in is not an option. He considers mil-itary cooperation with the Dutch as absurd. His single overarching goal, above anything else, is to achieve political independence. Should there be an agreement reached in the future concerning military assistance or cooperation to improve the quality of Indone-sian troops, the matter would be dealt subsequently.”

“It can be said that in the strug-gle for Indonesia’s independence, Sudirman was as unwavering and steadfast as Spoor was in his struggle to maintain the Dutch’s military supremacy as well as his attempts in dissolving TNI.”

“From 1946 to 1947, Sudirman was not in favor of ‘diplomacy.’ On June 1946, he (was falsely ac-cused) of protecting those who had kidnapped Syahrir. On De-cember 1946, he strongly reject-ed the Republic’s acceptance of ‘Linggarjati’ treaty. In a famous

“TNI refuses categorically the •formation of a federal army under the Dutch’s command, as well as the Dutch’s involve-ment in the matter of defense of Indonesia.”“TNI is an Indonesian army •that is self-determined and in-dependent.”“If a federal army were to be •established, TNI must be its ‘backbone.’ The highest com-manding officer must be held by an Indonesian.”“A military alliance can be ac-•cepted if both sides have equal roles and responsibilities.”“The organization must be •based on the Soldier’s Oath as stated in the August 17th 1945 Independence Proclamation.”“In all circumstances, the •Army will continue with the struggle for self-determina-tion until 100% independence is achieved and the Army will never be willing to compro-mise with the Dutch.”“The content of this letter is

now known as “Sudirman’s Six Principles.” In closing, he wrote that he would like to ascertain the views of the Government.”

In “Keesings Historisch Archief 1946-1948 7685C, “Sudirman’s Six Principles” were announced one month afterwards, and they were written as follows:

TNI has no objection in being •part of RIS (Federal Republic of Indonesia) under the Feder-al government, with the stipu-lation that the leadership is an Indonesian.TNI is ready to be the armed •forces of RIS, with the stipu-lation that there would be no Dutch or foreign troops with-in APRIS (the Armed Forces of RIS).TNI must be formed as the •nucleus of APRIS.TNI, being the army of a sov-•ereign and independent RI (Republic of Indonesia), re-

top military and political leader-ship, would together participate as members. This body is named the ‘Defense Council’ of the Re-public of Indonesia, established on April 28th 1948. This was a tri-umphant moment for Sudirman. Hereafter, the views of the army would be heard at the highest po-litical level. Without the cooper-ation of the military, no political decision concerning the future of Indonesia would be taken.”

“This viewpoint is further elaborated in consequent meet-ings. During transitional period from the Dutch to Indonesian government, TNI must not be dissolved.”

“The demands of the Dutch (of dissolving TNI) ‘’categori-cally is not accepted.’’ Indonesia is of the opinion that TNI is the ‘’principal component’’ (in Dutch “hoofd component’”) within the federal army.’’

“So, important decisions were made on March and April 1948.”

“The idea of dissolving TNI as demanded by the Dutch was never considered by the Repub-lic’s leadership.”

On September 18th 1948, Hat-ta’s Cabinet was again tested by the insurrection of Indonesia’s Communist Party (PKI) in Ma-diun. After TNI successfully quelled the revolt without any as-sistance from foreign nations, the West (especially the U.S.) con-cluded that TNI was the founda-tion on which Indonesia be built.

DR. J.A. de Moor notes that:“In 1948, the issue of a fed-

eral army and TNI’s role with-in the army was impossible to solve. This issue has become a ‘’stumbling block’’ in negotia-tions carried out throughout the last semester of 1948. As the Re-public’s politicians did not want to or were not able to dissuade Sudirman, the Dutch’s diplo-mats were not successful either in

Opinion

The President Post www.thepresidentpost.comFriday, October 16, 20094

As the President made clear his strong resolve to see the military rid itself from doing busi-

ness, a practice which enabled it to complement its meager bud-get, he also said that “to enhance the TNI’s credible posture, the government has increased the budget for defense in 2010 quite significantly, by 30%.”

“In the future the defense bud-get will continue to rise to ful-fill our needs, to modernize our weaponry, to upgrade the edu-cation, training and readiness as well as the welfare of soldiers,” said the retired four-star Army general.

Flashback: In the aftermath of the downfall in May 1998 of Suharto, a retired Army general and the nation’s leader for more than three decades, the military establishment’s pendulum was forced to swing the other way. In no time at all, civilians began to regain supremacy, as the police force was taken out of the mili-tary fold and placed directly un-der the president. Although the military was down, it was far from out, even as the writing kept appearing on the wall. For start-ers, military personnel were no longer appointed to the House of Representatives by presidential decree — at the time, 100 of 450 seats in the House were for the military — while the number of generals in cabinet positions was also restricted.

If those decisions were not enough to make clear what ci-vilians thought of the mili-tary’s presence in their midst, in 2004 the House passed Law No. 34/2004. The law, which came somewhat late given the strong spirit of reform that permeated the nation post-Suharto, called for the military to divest all its business interests to the civilian-run Indonesian Military Business Management Body.

Defense Minister Juwono Su-darsono stated the obvious when he said a budget-deficit military involved in business would have trouble effectively carrying out its duties.

It is estimated that only about half of the military’s expenditures are covered by the state budget. The balance is provided by inde-pendent operations like military-owned enterprises and “informal alliances” with private companies to whom the military often pro-vides services.

Daniel Lev, the late Indone-sia expert at the University of Washington, Seattle, was more direct on the subject, telling the IPS news agency: “If your budget provides about one-third or one-half of what you need, you’re go-ing to steal the rest of it.

“One of the ways you resolve it is to reduce the size of the Army. But if you try to do that, they’ll

TNI: Getting out of Business

put up a terrific fight because they’ll immediately lose money.”

It is estimated that the mil-itary, formally known as Ten-tara Nasional Indonesia (TNI), runs thousands of business enti-ties involved in everything from aviation, finance and logging to plantations, shopping malls and travel. Thanks to these commer-cial entities the military has been able to maintain a semblance of continuity.

The Sudirman Central Busi-ness District (SCBD) in Cen-tral Jakarta covers about 40 hect-ares of land and houses about 25 high-rise buildings used for among others the bourse, shop-ping malls, office buildings, a ho-tel and apartments. It is owned by PT Danayasa Arthatama, whose shares are partly held by the Army-run Kartika Eka Paksi Fondation(YKEP), which in turn owns Bank Artha Graha joint-ly with prominent businessman Tommy Winata.

To its credit, however, YKEP built over 13.000 houses for Army pesonnel, as well as the Ahmad Yani University and an academy for medical personnel in Cimahi, West Java, and a com-puter and management academy in Yogyakarta, Central Java.

Meanwhile, the Air Force

manages the Adi Upaya Foun-dation (Yasau), which has stakes in about 25 business units, one of which manages a golf course in Halim.

It is not clear as yet if the in-creased budget will be able to offset the revenue the TNI nor-mally earns from its business op-erations, which will soon come to an end. To ascertain that would require transparency in the move-ment of funds, which for obvious reasons has been missing all this time and, as such, has come un-der strong criticism from West-ern governments and NGOs.

It is by all standards unac-ceptable for a country’s military to engage in business operations and at the same time to have a government that allows this to happen. But all this is a logical progression in a nation like Indo-nesia, whose history of indepen-dence from a colonial power is entwined with the role of a peo-ple’s army.

The “dual function” doctrine that evolved within the mili-tary establishment from 1965 af-firmed that the TNI functioned both as a military force and as a “sociopolitical force.”

At the time, Sukarno was pres-ident and keen to have the mil-

The Indonesian armed forces Courtesy of matanews.com

“I instruct the TNI to resume and to conclude its internal reform agenda, including putting an end to its business operations as stipulated by the law. In due time, all TNI business operations will hence be regulated by the government by way of Presidential Regulations.”President Susilo Bambang Yudhoyono, during the ceremony marking the 64th anniversary of the Indonesian Defence Forces (TNI) at Cilangkap, East Jakarta, October 5, 2009

By Taufik Darusman

itary close by his side to balance the communists’ ever-growing influence in the nation’s scheme of things. By extension, the doc-trine allowed military officers to have prominent positions in the cabinet, the legislature, the bu-reaucracy and regional adminis-trations.

The worst part of the whole sit-uation was not the mere fact that the military’s business operations were firmly entrenched in the sys-tem, but that they were allowed to perpetuate unobstructed — at least until reform came about al-most as an accident of history in May 1998.

The inescapable conclusion as to why the scheme had such a long lease on life is that it also worked to improve the welfare of the top brass beyond reasonable limits.

As Defense Minister Juwono once wrote: “From the outset, the Indonesian Defence Force has never had a decent budget. … Since the mid-1950s, no Indo-nesian government has been able to provide the police and the de-fense force with an adequate bud-get.”

As chief of the military’s ter-ritorial affairs, SBY, then still a three-star Army general, said in an interview that “the military is

only in business to supplement its budget deficit.

‘’Our defence budget is about 1,8% of our GNP (gross national product), which by all measures is very low,” he said.

In other countries, he noted, the norm is 3-5%, even up to 10% if they happen to face exter-nal threats.

Indonesia ranks 50th in the world in terms of military ex-penditure, according to the CIA’s World Factbook.

In the immediate, post-Viet-nam War era, Indonesia faces no threat from its neighbors. But this will not prevent the government from purchasing new equipment to replace its antiquated weapon system and allocating a substan-tial budget for maintenance.

Chief of Staff of TNI Gen. Djoko Santoso said recently that the military had already drafted a plan to buy new equipment and is set to ground such aircraft as the Air Force’s 1960s-era OV-10 Bronco.

The plan also called for the purchase of Sukhoi jet fighters, MI-17 and MI-35 military he-licopters from Russia and a cor-vette naval warship from the Netherlands.

Meanwhile, Navy Chief Adm. Tedjo Edhy Purdijatno said the

military plans to use Chinese-made C802 and C795 missiles for the patrol ships.

Indonesia, the world’s largest archipelagic country, has more than 100 warships, but most are antiquated and are hardly war-ready. Most of the warships were imported from Europe, including Germany and the Netherlands.

Indonesia bought 39 warships from Germany in 1993, and just recently purchased four missile launchers from the Netherlands.

Echoing his military col-leagues, a senior Air Force offi-cial said it soon plans to purchase Oerlikom Kontraves 35-millime-ter ground-to-air missile launch-ers from Switzerland.

Harry Budiono, command-er of the Air Force’s special unit, said the launchers would be used to secure strategic air bases.

The Air Force currently uses the PSU triple gun, manufac-tured in the 1950s, to do the job.

“We need new weapons to re-place the old ones,” Harry told state-run Antara news agency, adding that the Air Force also plans to purchase an OW-3 anti-missile radar system from China, which would be used to detect at-tacks on air bases in Jakarta and Madiun, East Java.

The President Postwww.thepresidentpost.com Friday, October 16, 2009 5

Interview

Excerpts:Can you articulate your no-

tion of social capital?I like to refer to my book “Lead

To Togetherness, which basically explains the importance of social capital. Social Capital is basical-ly people participation, the feel-ing of togetherness and the feel-ing of happiness. You will only obtain those feelings if you live in prosperity, improved knowl-edge and live healthy, physically and mentally.

In the book you also dis-cussed leadership.

Social Capital can only be built if initiated by leaders. We have in our nation’s history of leadership what is known as feudalism, hi-erarchies and bureaucracy. We need leaders with integrity and capacity to reform Indonesia.

What do you think President Susilo Bambang Yudhoyono (SBY) should pay close atten-tion to in the context of the global economy?

Global economy means that in terms of trade, relationships, there are no borders.

Now who will benefit from the absence of borders? The stronger economies, of course, and they will benefit at the expense of de-veloping countries. In the case of the US, they will benefit from services, banking, investments in natural resources etc. In terms of productions and products, Chi-na and India are in very good po-sition to become leaders in those areas.

If that should be the case, how then can Indonesia benefit from the global economy? By mak-ing priorities on how to bring in investments in areas where we can be competitive against oth-er countries. For example infra-structure projects, give them the means for them to invest in In-

“SBY ShouldFocus onBuilding

Prosperity”

donesia in terms of pricing, lower cost and easier operations.

What other aspects are wor-

thy of the President’s atten-tion?

Another aspect in global econ-omy is how we can benefit from exports, as in some areas it is still profitable.

We have to remember that the global economy will always ben-efit the more advanced nations and as such we have to be care-ful. As such, I believe that it is more important that we build lo-cal economy, which is basically making sure that the economy is stable and that we maintain high discipline in managing mone-tary and fiscal policies. Stability is very important even for multi-nationals, joint ventures, big and small industries.

We have to have stable infla-tion, sound balance of payments and state budgets. Key is how to manage economic growth. Cap-italize from investments that are already in place, but I believe that economic growth can also come from the development of social capital, prosperity, knowledge and health.

So why is social capital very important?

We very much rely on the pro-ductivity of the small and me-dium income group. We have many of them but not all can rely on labor. The bulk of the people that are down below are in the agriculture, fishery and SME sec-tors.

So what do you do to make them potential, to empower them so that they can also be part of the economy? By improving their potential to spend; if they have income and have the money to spend, then they are potential to build markets.

What are your other major interests in the context of so-cial capital?

We have to develop free educa-tion at least from primary school up to senior high school because the students are the future of our country.

We have to build a generation through education. Believe me, it is much easier to manage a soci-ety that is well educated than that which is not because uneducated people always feel that they have their backs against the wall.

Educated people often have al-ternative ways of thinking. It is very important that people find alternatives in life. A new genera-tion is a generation that is educat-ed and understands how to live in the right kind of democracy.

What is your general impres-sion of President SBY?

He is man of vision and has integrity. It is important that he builds up capacity based on the integrity he believes in. Most books written about that capacity says that it can only be obtained if you work with the right kind of people.

What do you think should be President SBY’s priorities?

I believe SBY should focus on prosperity, education and health. It should become a reality. It is not merely the integrity of the vi-sion but also the capacity to make this vision work.

How should he go about im-plementing them?

He has to have the best people as ministers of trade, agriculture, fishery and labor. He also has to have an able person managing our tourism. All those depart-ments have much to do with the development of social capital.

How do you think President

SBY should build prosperity? If the President wants to build

prosperity he should spend a great part of the state budget in agriculture by increasing produc-tivity, new areas in agriculture through water systems, technol-ogy and others.

Currently, many farmers work from hand to mouth. This is not fair because they work very hard. It is the government’s role to help in the area of developing prosper-ity.

In building the economy, the market can take care of that and we don’t have to be involved. But in building prosperity in agri-culture, fishery, SMEs and oth-ers, this is where the government should come in. The govern-ment should get involved by pro-viding sufficient capital through the state budget to help the peo-ple and make sure that the funds from the state budget are well dis-tributed.

Can you further elaborate on this?

When we talk about develop-ing an economy, we talk about developing regions and crerat-ing a good relationship between the central and regional govern-ments.

So, we have to come up with very strong programs and that everybody should be committed to these programs. It is also im-portant that the banking system, through the state budget, sup-portts microbusinesses.

How do you see the role of banks?

The banking system is fully responsible for what they’re do-ing, but the government should help. Officials shouldn’t just rely on banks and say they want them to spend 20-30% of their portfo-lio to develop small-holders. The government should also help in

funding. The government should channel funds through the bank-ing system. It is more efficient and you have a grip on the banks. This has been my experience as a banker.

If people don’t spend, there is no market because a market is about buying and selling. Not only foreigners but also locals will invest if they know that whatever they invest they can sell. That is why social capital is very impor-tant.

You are well-known as a professional who has turned around major companies such as Bank Mandiri and Garuda. How would you turn around the nation?

Turning around of the country can be done by taking advantage of the global economy and mak-ing yourself competitive among nations. But you can also do it by developing its social economy, and this is where the government plays an important role.

Past presidents have focused on getting out of the crisis that was caused by the Old Order. What I expect SBY to do is to build a new generation with new para-digms where people’s participa-tion is very important. But if you want people to participate, they must have the capacity, which is basically education, health and prosperity.

It is important that SBY prior-itizes on building prosperity and education so that the function of social capital works.

Indonesia is basically an ag-riculture-based country. How can we improve the lot of our farmers?

To improve farmers is very simple: through irrigation, fertil-izers and pricing of products. You also have to increase yield, mar-ket that are useful to the farmers

Robby Djohan is a former career banker (Citibank, Bank Niaga and Bank Mandiri) and

at one time managed the country’s flag carrier, Garuda

Indonesia.

In the past few years he has released three books, namely Lead to Togetherness, The Art

of Turnaround and Leading in Crisis, all of which have

enjoyed moderate suceess.

Nowadays Robby divides his time between Jakarta and Bali (he is the co-owner of

The Legian and the BIFA flight school in Buleleng). He also chairs the Board of Trustees

of Jakarta-based Al Azhar University.

He also devotes much of his time speaking in seminars and in limited discussions on social capital, which he articulates at

length inhis books.

The President Post recently caught up with him in

Jakarta and discussed several pertinent issues.

“I believe SBY should focus on prosperity, education and health. It should become a reality. It is not merely the integrity of the vision but also the capacity to make this vision work”

and the small holders .

Do you think Indonesia is still attractive to foreign inves-tors?

People will always come to In-donesia to invest because we are a potential market. Investors will not come to Indonesia because of tax policy, infrastructure; they’ll come here because they know that whatever they produce here can be sold. So, we have two things: a developing market and a society that is prosperous.

We don’t have to worry, be-cause a prosperous society has very strong social capital capabil-ities. We were successful during Soeharto’s time, and we should improve this by being more inde-pendent, having less conflicts and focus more on social capital.

What would you do if you were the president of Indone-sia?

I am too old to be president, but I believe that 50% of the state budget should be allocated to build the people’s economy, and that we must work with the best people committed to make Indo-nesia a country we can be proud of.

The WorldThe President Post www.thepresidentpost.comFriday, October 16, 20096

October 2003 was not a quiet month for Goldman Sachs, one of the largest in-

vestment banks in the Unit-ed States. On that month, the bank launched a study that lat-er became a best seller: ”Dream-ing with the BRIC: The Path to 2050”.

BRIC is an acronym of Bra-zil, Russia, India and China, the four populous emerging econo-mies predicted to overtake G-6 members in 2050. In recent times, overseas interest in those countries has risen, with money pouring in to be invested in var-ious opportunities within those emerging economies. Thus the self-fulfilling prophecy worked effectively.

The prediction shortly became almost a reality. If during that time the four countries were pre-dicted to join the league of the top ten economies in the world, just five years later, in 2008, three of them were already in the top ten countries list. China is on third, while Brazil already eighth and Russia ninth among the top ten largest economies. Mean-while, India is inching closer to that league as the twelfth largest economy.

Thus, this article is written under the same spirit. President Susilo Bambang Yudhoyono, popularly known as SBY, has un-veiled his vision for the Indone-sian economy in 2025. The con-cept is still very broad, which envisions Indonesia becoming an advanced country in 2025. How-ever, this vision has promised to be the driving force of the Indo-nesian economy in the next two decades.THE mACROECONOmICfOUNDATION

I believe there are no small numbers of people who are skep-tical about this long term vision. However, I could share what I be-lieve to be the basis of such opti-mism. Indonesia in the past de-cade has been able to transform itself from a near bankrupt coun-try to become one of the stron-gest economies during the glob-al recession time.

After becoming one of the East Asian Economic Miracles, Indonesia went through a long

OECD countries may even slip to a ratio of over 100 percent in the coming years. In addition, the management of the Govern-ment Debt has been done in a in-creasingly professional way in the past decade.

THE SHORT AND mEDIUm TERm PROSPECTS

At the time when most large economies suffered recession in the past few quarters, Indonesia stood out as one of the three big countries that continue to post a positive growth. This perfor-mance has enhanced the income of the entire population. The In-donesian GDP in 2008 is reg-istered at $ 514 billion, higher than $462 billion in the preced-ing year. That GDP has result-ed in the betterment of income per capita, from $1,946 in 2007 to $2,271, an increase of $325 in just one year’s time. In real terms, the Indonesian economic growth in 2008 was 6.1 percent, slight-ly lower than in the previous year but relatively better than other countries’ in the region.

In the first quarter of 2009, the Indonesian economy grew by 4.5 percent, a performance that was repeated in the second quarter at 4.1 percent. Many believe that the country’s economy will per-form better in the second half of 2009. Such optimism is univer-sally shared by many economists. It is predicted that a rate of growth between 4.5 and 5 per cent will be likely for the entire year of 2009. At the same time the Nominal GDP growth may reach around 13 to 15 per cent, which may re-sult in a Nominal GDP of Rp. 5,700 trillion or roughly around $ 570 billion. GDP per capita in 2009 may range between $ 2,500 and $ 2,600.

What will be the prospects for 2010?

If US$570 billion of GDP can be achieved in 2009, that will pave the way for a higher lev-el of growth in 2010. The Gov-ernment has revised its prediction for the growth in 2010 to 5.5 per-cent. I truly believe that this level of growth can be easily achieved.

In nominal terms, the GDP may reach Rp. 6.500 trillion in 2010, which can be translated to around US$680 billion at the ex-change rate of slightly above Rp. 9.500 for each US dollar. The GDP per capita will range be-tween $2,800 and $3000, a very interesting level as that will bring around 23 million people to have an average income of around $8,400 to $9,000. At the same time, another 23 million peo-ple will earn around $4,200 to $4,500.

To give a better comparison, by 2010 around 27 million peo-ple, roughly the same as Malay-sia’s, will have an average income of around $7,800, higher than the average income of all Malay-

sians. In the mean time, 69 mil-lion Indonesian people, slightly larger than the entire Thailand population, will earn an average of $5,400, definitely higher than the average income of the entire population of Thailand.

In the medium term, the rise of the Indonesian middle class will pave the way for the improve-ment in the consumption ex-penditure, in which higher value products will increase in its im-portance. This can be easily seen by the significant increase of car sales, property, ice cream and yo-gurt, skin care products such as Ponds, Citra and other products. In the medium term, the size of the Indonesian middle class will double to around 60 million peo-ple, and increase by a significant size. This new demand will fi-nally result in further increase of the domestic demand leading to the betterment of the people’s in-come.

In 2015, the combination of re-newed export activities as well as improved domestic demand will allow the Indonesian economy to continue producing an aver-age income per capita of around $5,000. That means during the course of five years, the nominal GDP may increase to the tune of 15 percent annually. Such an in-crease will move the entire econ-omy forward, so much so that the people’s income may reach a level closer to the average income of the Thais.

In that period, Indonesia will become a significant player in the regional trade. As such, the ASEAN Economic Communi-ty should not be seen as an in-surmountable challenge, but as wide opportunities as well. Now-adays, automotive products and consumer products, including from the pharmaceutical indus-try, have made significant head-way in the ASEAN market.

mAjOR AGENDA TOWARD 2025

With such a broad vision that needs to be realized, what will be the major agenda that can spear-head major developments in the next 15 years? While there are many that have been in store, the major focus will certainly be in the areas of infrastructure, agri-culture, manufacturing and in-novation.

In the area of infrastructure, many initiatives can be made. In the development of transporta-tion infrastructure, major initia-tives will certainly include the de-velopment of bridges or tunnels that will connect Java and Bali with Sumatra as well as Suma-tra and Singapore with Malay-sia. The highway system should be developed along the plan that connects Bali with Singapore or Malaysia and eventually connect to the Trans Asia Pacific High-way System. In addition, a rail-

way system, including a high speed train system, will need to be developed along the way to connect with the Trans Asia Pa-cific Railway System.

In the development of the highway system, many can also be done to support that. If a toll highway system can be developed with the private sector, includ-ing foreign investors, the Gov-ernment owned highway system can also come under a si9milar scheme. For example, the current Pantura Highway can be easily converted into a non-toll express way system by building many flyovers, underpasses or tunnels so that the traffic can flow quick-ly between major cities in Java. This development is within the capacity of current Government finances--there is no reason not to do it.

In addition, an expansion of a system such as the South Java Highway can similarly be devel-oped. The two or more major ar-teries will support the function of the Toll Highway System, and this will help speed up the traffic flows of passengers and goods.

In the short and medium plan, the availability of mass rapid transport must be ensured. The subway system in Metropolitan Jakarta has to be ambitiously de-veloped. Without waiting for the completion of the North-South Corridor, the Jakarta Metropol-itan Government, fully support-ed by the Central government, should also start the development of the complete master plan to-gether with the development of the subsequent lines such as East–West Corridor (connecting Pluit and Bekasi) as well as the Cor-ridor which connect Tangerang and Jakarta Kota. At the same time, the Jakarta Metropolitan railway system has to be strength-ened to connect with the Busway system as well as the MRT. The

monorail system can also be com-pleted with the full support of the Central Government. Most of these activities can be financed even as we speak now.

Another area of infrastructural development will include the rap-id development of power genera-tion and transmission to catch up with the ever growing demand for electricity. The first batch of expansion (10,000 megawatt) is now almost completed. This will be followed up quickly by the sec-ond batch of crash program. The Government should continue further with such programs and also diversify the energy sourc-es which should include geother-mal, solar as well as hydrogen generated energy resources.

In the agricultural area, infra-structural development should be a priority. The development of integrated infrastructure such as dams, hydro power genera-tion plants, irrigation system as well as development of water res-ervoirs will strengthen the cur-rent system that has been used for many years. The Southeast-ern Anatolia Project in Turkey that developed the Euphrates and Tigris River into 21 dams, 19 hy-dropower plants with total capac-ity of over 7,000 mw can be used as a reference point. Similar proj-ects that can be used as reference include the Tennessee Valley Au-thority in the US. In the mean-time, fertilizer producers have al-ready the capability to develop themselves into major produc-ers of urea, NPK, ZA, superphos and even organic fertilizers.

Indonesia has also seen the rap-id progress of seed development, both by the Government as well as private research companies. PT. Bisi International, a subsid-iary company of Charoen Pock-phand Group, has been able to develop corn seed that can pro-

Dreaming with Indonesia: The Path to 2025President Susilo

Bambang Yudhoyono, popularly known as

SBY, has unveiled the vision for the

Indonesian economy in 2025

By Cyrillus Harinowo Hadiwerdoyo

Economic Observer

and dark tunnel as a result of the Asian crisis. Even though the In-donesian economic fundamentals before the crisis were considered strong, Indonesia yet suffered the most during the crisis. There-fore, whatever praise one wishes to shower on Indonesia, it is al-ways with some caution. How-ever, it is not an exaggeration to say that the transformation in In-donesia took place almost just as miraculously.

fIRST, the private sector has transformed itself to be more prudent in their mindset. If in the past the private sector was very sloppy in their investment activities, in which many projects were significantly marked up to obtain bigger bank loans, nowa-days they have been very efficient in managing capital so that many new projects are financed by in-ternal cash flows. Interesting-ly, many state-owned enterpris-es have also adapted well to the new environment. The adoption of good corporate governance practices by those companies has enabled them to produce better outcome comparable to that of private companies. In the airline industry, for example, Garuda Indonesia has succeeded in set-ting a higher benchmark for oth-er Indonesian private airline com-panies to follow.

SECOND, the adoption of a bet-ter risk management in the bank-ing industry has enabled banks to perform more prudently, in the end reducing the risk for whole-sale losses. In fact, Indonesia has become a very interesting place for foreign investment since the level of profitability is one of the best in the region. A large number of acquisitions has taken place at very attractive prices, sometimes more than four times of the book value. In brief, the Indonesian banking system has become very solid as proven by the recent glob-al financial turmoil.

THIRD, Government finance has also become one of the strong pillars in the economic equa-tion. The Government budget has been kept at a low deficit. In fact, during the global turbulence in 2008 a token fiscal stimulus allowed the Government Bud-get to remain largely balanced. At the same time Government debts have been managed in ways that allow it -- every year in the past decade – to experience a sig-nificant decline in its ratio to the GDP. From nearly 100 percent in 2000, the Indonesian Debt to GDP ratio has gone significant-ly down to around 30 percent in 2008. In fact, if we net out the Government Debt from Govern-ment Bonds kept by Bank Indo-nesia, we may see a ratio of Debt to GDP of around 25 percent. As a comparison, Japan has a ratio of over 200 percent, while other

duce 14 tons per hectare, com-pared to Madurese local seeds that only yield 2 tons per hectare. These activities have to be recog-nized and fully supported so that the players are effectively engaged in food production development. All these activities will strength-en Indonesia’s position as a food producing country in the medi-um term.

In the area of manufactur-ing, Indonesia continues to be selected as the regional produc-tion base for various manufactur-ing activities. Cars, motorcycles, electronics as well as consum-er products have been developed in Indonesia due to its scale (big market) as well as its manufactur-ing capability of the population. These activities can be expanded to include textiles and garments, chemicals, and pharmaceutical industries etc. The Government can support the development by way of facilitating as well as en-abling the environment for such activities (including hard and soft infrastructures).

The engineering capabilities of Indonesians have been acknowl-edged by foreign parties. The de-velopment of aircraft, big ships, trains, geothermal power plants (at costs much lower than that offered by foreign contractors), LNG factories, fertilizers and ce-ment factories is an area which we have many years of experience.

The big agenda toward 2025 is certainly in the area of advanced manufacturing, IT industry as well as the state of the art of new technology and other new inno-vations. The Government should prepare themselves in develop-ing this area. The increasing size of the state budget will enable us to develop these capabilities fast-er than we can ever think.

Dreaming with Indonesia for the year 2025? I am sure we can realize them faster.

Construction workers on the mega project Suramadu Bridge Courtesy of skyscrapercity.com

THE WORLD

The President Postwww.thepresidentpost.com Friday, October 16, 2009 7

THE GLOBAL ECONOmY

The world economic out-look has stabilized and the global economy is beginning to pull out

of recession. The IMF project-ed that world economic growth during 2009-2010 to be slightly higher than expected. The world community, however, has been warned that for caution.

Stabilization is uneven while recovery is expected to be slug-gish. Meanwhile, unemployment problems continue to be a big threat. Many advanced countries are not out of the woods yet, par-ticularly with regard to the prob-lem of jobs losses and consumers’ confidence.

The current expectation is that advanced countries led by the United States will not be able to lead the world to global recovery and economic growth. As stated by TIME (in an article by Mi-chael Schuman on September 03, 2009), the downturn is hav-ing a fundamental impact on the globe’s economic future. The world after the Great Recession won’t be the world that existed before. As further stated, perhaps most importantly, the recession has altered the role of the U.S. in the world economy. For decades, the U.S. has been the primary driver of global growth—the sit-uation will now be different.

A wider forum is needed to assume world economic leader-ship. The right forum would be the G-20 which is composed of the US, United Kingdom, Ger-many, France, Italy, Canada, Ja-pan, Australia, EU and Russia, plus South Africa, China, Bra-zil, Argentina, India, Indonesia, Mexico, Saudi Arabia, South Ko-rea and Turkey. In this wider fo-rum emerging countries are well represented.

The G20 has shown that it was able to assume global leadership, to save the world from possible catastrophe when global finance and banking came to a free-fall. Admittedly, the right policy rec-ommendations were made at the Washington Summit, attend-ed for the first time by the pres-ident of Indonesia, followed by the London and the recent Pitts-burgh meeting.

One of the key recommenda-

The Global Economy and IndonesiaAsia has now become the major power to pull the global economy out of

recession. In fact, Asia is expected to become the engine of change.

By Atmono Suryo

tions was to take counter-cyclical policies, to adopt fiscal stimulus packages and to reduce interest rates to stimulate domestic econ-omies. This recommendation is to be implemented immediate-ly and requires trillions of dollars not only from members of G20 but also other countries.

Immense coordinated efforts are not needed in the area of the stimulus programs and their im-plementation, but also in the complex areas of finance and banking, and safeguard measures to prevent a possible return of a financial crisis.

At the Pittsburgh Summit a 100-point communiqué was is-sued, one of which is to strength-en the role of the G20 by making it a forum to conduct dialogues on global policy, and a coordinat-ing body. The G20 is to replace the G8, which is composed only of advanced western countries plus Japan.

The Pittsburgh meeting was also able to stipulate concrete and specific details on programs of action to achieve sustainable and balanced global econom-ic growth. Strong pledges have been made to enforce tighter fi-nancial and banking regulations, internationally as well as domes-tically.

THE UPCOmING ASIA

In the changing global struc-ture, Asia’s role would increasing-ly become pre-eminent. In fact, the center of gravity is moving towards Asia. This move, which started in the 80’s, was suspended for a couple of years on account of the Asian Financial crisis of 1997/98.

The general view is that the emergent recovery will have to be spearheaded by the economic players from Asia, primarily Chi-na, with its enormous reserves, and India. These are countries

with large domestic economies. In this era of recovery and eco-nomic growth large domestic economies serve as engines of growth.

Throughout the recession the three largest countries of Asia -- China, India and Indonesia – have remained buoyant largely on account of their domestic de-mand. The spending power of Asia has stimulated the begin-nings of a recovery throughout Asia, which has now become the major power to pull the global economy out of recession. In fact, Asia is expected to become the engine of change.

The Economist (September 12) issued a 14-page special re-port on Indonesia titled A Golden Chance. Meanwhile, the World Bank came up with its econom-ic quarterly, Clearing Skies, while CLSA presented a special report called Chindonesia.

The special report of CLSA refers to the role of three Asian countries, China, India and In-donesia. What may be interesting to note is that right at the begin-ning of the report CLSA stated that “China and India are fre-quently labeled as engines of fu-ture global growth and it’s time to add Indonesia to their rank”.

According to World Bank in its report “Clearing Skies”, Indo-nesia’s recovery gained steam in the wake of the early 2009 tur-bulence. The external environ-ment has improved and domes-tic consumption has contributed to growth. Robust domestic con-sumption has supported the ser-vices sector.

An important point to note is that exports are recovering and are set to become a driving force of growth, in addition to con-sumption and investment. All ex-port categories have gained posi-

The G20 Summit 2009 in Pittsburgh, United States

tive growth, in particular mining and mineral exports, and oil and gas exports.

The following points show In-donesia’s comparative advantag-es:

Indonesia is a low-cost supplier •of a large number of resources (natural and human resources)It is expected that resources-•based economies will boom; Indonesia has a particular stra-tegic advantage in palm oil, thermal coal and key com-modities used in food and en-ergyIndonesia is a globally signif-•icant producer of soft com-modities (cocoa, coffee, tea, rice, spices, rubber etc)In time of a global food short-•age Indonesia could become a significant supplier of tropical food productsIndonesia has a total landmass •

Courtesy of notibaires.com.com

of 182 million ha (combined land area of Cambodia, Thai-land, Malaysia, Vietnam, the Philippines and Laos) It has a youthful and fast-•growing populationWith its rich resources, Indo-•nesia has the potential to de-velop a strong resource-based economyEconomically, Indonesia’s

growth through the crisis has been among the most robust in the region. The structure of the economy and the economic fun-damentals are considered solid in weathering the storm. It has a large domestic market, while consumer confidence is reaching record highs.

The Economist has noted that Indonesia has shown remark-able powers of recovery. It could become a model of democratic change, Muslim tolerance, pov-erty reduction and rapid econom-ic development, according to the London-based magazine.

At the same time it is well-known that Indonesia has a large number of weaker points such as corruption, ineffective bureaucra-cy poor law and order.

THE CHALLENGES AHEAD Indonesia is highly regarded by

the international world. Accord-ing to the World Bank Indonesia (16th) belongs to the 20 largest economies in the world. Indo-nesia has been chosen as a mem-ber of the G-20. Furthermore, the OECD has elevated Indone-sia into the BRIC group (Brazil, Russia, India and China). Lead-ers around the world are anxious to have closer relations with Indo-nesia.

With Indonesia’s good stand-ing in the global economy, Indo-nesia will be called upon to give its share in the management of world affairs, among others as a member of the G20 and WTO,

and also in regional organiza-tions such as ASEAN, ASEAN plus Three, APEC, the East Asia Summit and others.

Indonesia’s increased activi-ties in world affairs will present the country with new challeng-es and opportunities. Indonesia’s strengthened relationship with the world, especially Asia, will help to bolster its domestic econ-omy not only in the area of trade but also in such areas as greater inflow of capital, technology and services.

Domestically, the government will be hard-pressed to give its special attention to cope with im-pending problems, which have socio-political ramifications, in particular with regard to unem-ployment and poverty. Although improvements have been made during the last few years, the in-creasing problem of non-equita-ble growth, the widening gap be-tween the rich and poor magnify shortcomings in the economy.

Of paramount importance to-day is the development of the business sector, which is urgent-ly needed. The services indus-try seems to be on the right track (with 8.9% growth in 2008), as exports begin to recover. Indus-try represents the largest sec-tor in the economy, in terms of GDP. Although it is beginning to move, it lags far behind. There is even the fear that a de-industri-alization process is already tak-ing place.

The time has now come to boost and strengthen the indus-trial sector to the optimum by not only creating jobs but also coping with severe international compe-tition. In this era of globalization the question of competitiveness is of prime importance. It would be a highly unacceptable and intol-erable situation to let the indus-trial sector taper off and become a marginal sector in the nation-al economy.

A big shake-up and a very big push will be needed to reduce the existing impediments and to im-prove the business climate, partic-ularly the industrial area, which has been in a limbo for too long. To beef up the private sector in its totality will be one of the big challenges the country will face in the coming years.

Human CapitalThe President Post www.thepresidentpost.comFriday, October 16, 20098

Globalization Puts New Demands OnIndonesian HR Organizations

to western organizations seeking benefits from lo-cating operations on the sub-continent.

But note that neither India nor China have sat back and allowed them-selves to be overrun by avaricious overseas cor-porations: they have not become simple providers of low cost workers.

Rather each has used incoming expertise and money to build power-ful indigenous businesses that have then gone out to compete in western mar-kets. Indeed 29 of 100 best performing Global Servic-es IT and Business Pro-cess Outsourcing Compa-nies in the 2008 rankings came from India. No oth-er country performed so well. Tata Consultancy Services was rated num-ber one among the top 10 best performing IT ser-vice providers. As an in-dicator of India’s success, in 2007 the USA (which boasts the world’s third largest population) pur-chased some $1.55 trillion in IT/BPO goods and ser-vices, of which two-thirds came from India.

And if the performance of India is impressive, con-sider China’s equally stun-ning upward curve. In the 2008 Financial Times Global Index, three of the 20 biggest companies in the world according to market capitalization were from China. PetroChina is ranked second with a value of about $424 billion, Indl and Coml Bank of China was sixth at $277 billion and China Construction Group was number 20 at $176 billion.

Whereas there were plenty of representatives from the world’s three biggest countries by popu-lation, Indonesia (the next in line) could muster just one en-try - Telekomunikasi Indonesia, which came in at number 439 with a market capitalization of about $21 billion.

The poor performance of In-donesia is proof positive that a pressing challenge for the nation’s corporate leaders is to figure how they too can build the fast grow-ing companies that have emerged out of Indian and China as a di-rect consequence of globaliza-tion. They must work out how to take the inflow of capabilities and money and turn this to their ad-vantage: they must create organi-zations that can go out and com-pete on a global stage and with the world’s best.

But this will likely be an uphill task, as our research finds that most HR organizations are fail-ing to provide the services and expertise that their enterprise re-quires to compete on a local or re-gional, never mind global, stage.

For instance, just 15% of busi-ness leaders are satisfied with the performance of their human re-source function (figure 2). Fur-thermore, less than half of respon-dents believe that going forward HR houses the competence to develop the organization’s people and create the right environment for performance.

If business leaders are unhap-py with their own HR functions, they also dissatisfied with the performance of HR across the nation. For instance, less than 4% of business leader believe that HR in Indonesia is concerned with managing talent (figure 3). This is particularly worrying as a battle for the best employees rag-es across the globe. Although the ferocity of the battle might less-en for a while as a result of the global economic downturn mak-ing more talent available, the war will intensify in the coming years as an aging population leaves the workforce and, due to de-

Globalization has be-come a hot manage-ment topic in recent years, as a conse-

quence of deregulation, market liberalization and, most notably, the breathtaking advancements in communications technology. Today, an employee in an office in Jakarta can send a mission-critical message simultaneous-ly to colleagues in all five conti-nents – at the speed of light and with a click of a button.

To secure the mouthwater-ing benefits available from glo-balization, top-performing orga-nizations throughout the world have been busily reshaping their structures and strategies to mi-grate from being largely local or regional players to being tru-ly global. Moreover, the present economic downturn is reenergiz-ing their already aggressive glo-balization strategies, as recession and market contraction force or-ganizations to seek new markets to penetrate.

Within the most success-ful organizations, the HR func-tion shapes the people strategies required to successfully deliv-er the overall globalization strat-egy. The management teams of these firms realize that success on a global stage will not be achieved without an enthused, committed and well-prepared employee base – and that it is largely the respon-

companies will increasingly be forced to fight a defensive cam-paign to protect local markets against increasingly nimble and powerful competitors from over-seas.

Defense minded organization-al leaders might take comfort in the fact that Indonesia is a noto-riously difficult country for over-seas companies to enter and do business. As a powerful illustra-tion, the 2008 Doing Business Report by the World Bank found that Indonesia ranks number 123 out of 178 countries in the overall ease of doing business – the best in the world is Singapore.

Those Indonesian business leaders who believe that this study means that the nation is large-ly immune from serious overseas competition – and therefore does not need to worry about global-ization- should consider this find-ing. Ranked 120th, and so just three places above Indonesia in the global ease of doing business ranking, is India. Yet, alongside China (the most populous nation in the world) India (the second largest population) has become the world’s most popular desti-nation for western organization looking to secure the benefits of globalization: both from labor ar-bitrage and new market develop-ment perspectives. Simply put, the challenges of doing business in India have not proven a barrier

sibility of their HR departments to make this happen.

Unfortunately, the evidence from a major research program by the Jakarta-based manage-ment consultancy OTI suggests that the HR functions of Indo-nesian companies are generally not helping their organizations globalize. Just 7.18% of Indone-sian business leaders believe that helping the enterprise to com-pete globally is an important role of their HR function (Figure 1). Worryingly, this small percent-age of organizations was drawn mainly from the country-based operations of multinational cor-porations rather than from indig-enous Indonesian firms.

This is not in itself an indict-ment of Indonesia’s HR organiza-tions. Rather, globalization is not an agenda item for the manage-ment team’s of Indonesian firms. How to compete locally – and at best regionally – is still their core concern.

This lack of preparedness for global competition puts Indone-sian companies specifically, and the nation generally, in a severe-ly vulnerable position. Being the world’s fourth largest population, Indonesia represents a potential-ly massive consumer base and is therefore being eyed with increas-ing interest by growth-starved western businesses. Indigenous

This article is extracted from the book:Managing Human Capital in Indonesia: Best Practices in Aligning

People with Strategic Goals (Azkia, Indonesia, 2009)Naresh makhijani Krishnan Rajendran james Creelman

mographic trends, cannot be re-placed by younger employees.

And note that talent-starved countries are beginning to poach workers from overseas –offering superior financial and other in-ducements to entice them away from their homelands. This too will gradually drain talent from developing nations such as Indo-nesia as developed countries re-plenish their dwindling stock of talent.

To help to develop truly glob-al organizations, our research finds that there is a clear require-ment for a significant upskilling of many HR professionals and for the refocusing and restruc-turing of their functions. Those that work in the HR organiza-tion must become at least com-petent but more preferably mas-ters of the HR interventions that are being deployed by leading or-ganizations worldwide in their campaigns to conquer global markets.

Most notably, Indonesian HR organization must fully under-stand the strategies of the organi-zation so to shape the appropri-ate people strategies that support these goals.

HR must then ensure that the workforce (from the executive suite to the front-line or shop-floor) are equipped with the ca-pabilities required by their glob-ally focused people strategies: delivered through talent manage-ment; competency, training and coaching; advanced performance appraisal systems and other solu-tions. And HR must possess the expertise to identify and develop a cadre of global leaders that are able to drive Indonesian organi-zations forward on a truly glob-al stage.

With globalization pressures certain to intensify over the com-ing years, getting the HR func-tion and its practices in shape is fast becoming nothing short of a matter of national importance.

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Those that work in the HR organization must become at least competent but more preferably masters of the HR interventions that are being deployed by leading organizations worldwide in their campaigns to conquer global markets.

The President Postwww.thepresidentpost.com Friday, October 16, 2009 9

Women

Women: The New Emerging Power

Women have often been perceived as weak human be-ings who have lim-

ited ability to play an important role in society, politics and econo-my. This is because they are mere-ly seen as the second sex. This perception is gradually shifting as more and more women take on bigger role and responsibility. Women are in fact a productive working group, who in many cas-es in Indonesia, serve as the eco-nomic backbone for their families and to a larger extent the driving force of the country’s economy. This is evident given the large number of Indonesian wom-en migrant workers in Malaysia, Hong Kong and Saudi Arabia. Their number account for about 80% of the total Indonesian mi-grant workers with most of them working in the non formal sec-tors, thus making them prone to violence, exploitation and dis-crimination.

Female’s capability to earn in-come and at the same time han-dle domestic works make them a good money manager as they tend to spend their incomes on improving the welfare of their family, according to a Goldman Sachs research. Economists and studies around the globe are pro-jecting that female worker group will become the new emerg-ing market with a very power-ful force to fuel the economic growth. This shift is attributed to the narrowing gap in access to education, health care, employ-ment and most importantly the narrowing income gap between

female and male workers.Indonesia’s gross domes-

tic product per capita in 2008 reached 1,972, while women’s earnings as a share of men’s earn-ings was at (¢/$) 45.

In Indonesia, women have en-joyed better education access and quality. The ratio of female to male enrollment in primary and secondary education was 93.3 in 1991 and rose to 97.9 in 2006-2007. Data from the National Socio-economic Survey showed that female participation rate in education for those aged between 7 and 12 years old reached 97.7% in 2006. However, illiteracy rate in women aged above 15 years old reached 11.61% compared to only 5.44% in male.

Human capital is a crucial factor in development and eco-nomic growth. High quality hu-man capital is believed to make the economic performance bet-ter. The quality should be reflect-ed from the education and health level and other indicators. That is why human development is a key factor to propel the econom-ic growth.

Improved gender equality in Indonesia has contributed to wid-er female access and participation in the country’s development as reflected in the Gender-related Development Index (GDI) and Gender Empowerment Measure-ment (GEM). Human Develop-ment Report (HDR) 2007-2008 put Indonesia’s GDI at 0.721, up slightly from 0.704 in 2006. The figure indicates better female ac-cess in development, especially

in education, health and econo-my. Despite the improvement, the achievement is still pale com-pared other countries in South-east Asia. Indonesia’s position is only slightly higher than Myan-mar and Cambodia.

Data from the Ministry of Women Empowerment and BPS showed that Indonesia’s GEM in 2006 was 0.618, a figure that still showed a gap between men and women on access to education, political activities, labor and in-come.

Women’s role in the econom-ic sector has much improved al-though still lower than men. Fe-male labor participation rate slightly increased from 48.6% in February 2006 to 49.5% in Feb-ruary 2007 and to 51.3% in Feb-ruary 2008, while the male labor participation rate reached 84.7% in 2006, 83.7% in 2007 and 83.6% in 2008. According to sta-tistics, 60% of the 85.4 million workforces in the small and me-dium business sectors are wom-en.

With bigger earnings, wom-en also have stronger purchasing power. According to a Goldman Sachs research, women’s spend-ing priorities differ from men’s as they are more likely to buy goods and services to improve their fam-ily welfare. Sectors that are likely to benefit from women’s buying power include food, healthcare, education, childcare, apparel, consumer durables and financial services, the research unveiled.

It also added that over the next five years, to 2015, the middle

class story is set to play out most vividly in a handful of countries. Growth rates of the middle-class share will be highest in India and Vietnam, averaging nearly 20% per year, and in Indonesia, aver-aging about 10%. In these three countries, rapid growth would be from an extremely low starting point: less than 10% of the pop-

ulation in both India and Viet-nam, and less than 20% in Indo-nesia, is considered “middle class” today

After 2025, the growth of the higher-income category ($30,000 and above) will be the principal story for three of the four BRICs (except India) and several of the N-11 countries (namely Turkey,

By Vidya Dahlan

Mexico, Iran and Korea). But the middle class story will continue to play out elsewhere. By 2040, the middle class share should peak at 80%-90% of the popula-tion in India, Indonesia, Vietnam and Egypt and at 70% in Philip-pines.

During this challenging time, many women have developed in-dependent business, both small and big scale, in formal and non-formal sectors to support their families. Many of them also were proven successful in their busi-ness. Today, many women are holding strategic positions in companies, positions that once belong only to the male species. Seeing a woman at the top brass is no longer unusual.

In the meantime, the num-ber of female participation rate in politics had also increased. In 2001, Indonesia witnessed the rise of Megawati Sukarnoputri as the country’s first female presi-dent. Female opportunity in pol-itics and in the government is also wide opened. In his 2004-2009 United Indonesia Cabinet, Presi-dent Susilo Bambang Yudhoyono picked four of Indonesia’s finest females as his ministers, Finance Minister Sri Mulyani Indrawati, Trade Minister Mari Elka Pang-estu, Health Minister Siti Fadi-lah Supari, and Women Empow-erment Minister Meutia Hatta Swasono. Female share, seats in parliament in 1990 was 12% but fell to 11.6% in 2008. Last year, Indonesia had one female gover-nor, one deputy governor, seven regents/mayors, four deputy re-gents/mayors.

Trace of female power has long been seen as history showed that Queen Victoria of England is the world’s most influential wom-an in history. She is described as a woman with an iron fist with great influence, not only in her kingdom but also worldwide. She was the driving force behind Brit-ain’s colonialism across the world, making Great Britain the coun-try with the most colonies in the 19th century.

Growing female influence is

not only seen in the Western countries but also in Indonesia. Sri Mulyani Indrawati, for ex-ample, not only made her mark in the national economic scene but also in the international community. She was named the best Asian Finance Minister by Emerging Markets in 2006. She was also the first Indonesian fe-male to hold the executive direc-tor position at the International Monetary Fund in 2001.

In the meantime, Health Min-ister Siti Fadilah Supari was ap-pointed as deputy chairperson of the World Health Ministers Council. She made headlines when she strongly rejected the World Health Organization’s re-quest for bird flu virus samples. She said that the health body was siding with industrialized nations to make the antidotes for devel-oping countries.

The law has provided all citi-zens with an equal political right, enabling women to run as candi-dates in the legislative body and even for presidency. The 1945 Constitution, article 28D, 3 stip-ulated that every citizen is enti-tled to an equal opportunity in the government. This paves the way for balanced human resourc-es allocation for men and women to enjoy gender equality.

Nevertheless, the number of fe-male civil servants in echelon I-V remains low at only 20.2% (State Employee Board, 2007) and only 11.6% women are in the legisla-tive council and 19.8% in DPD.

Female participation rate in the judicial sector is also still low with only 20% judges, 18% supreme judges, and 27% attorneys. The low female participation rate in political development is part-ly due to the cultural value that has long considered the domestic field as the female areas and also due to low education level and training on politics for women. However, this will soon change as more and more women have en-joyed higher education level up to university while at the same time awareness for equal opportuni-ty in every field is also growing.

Women are in fact a productive working group, who in many cases in Indonesia, serve as the economic backbone for their families and to a larger extent the driving force of the country’s economy.

Finance Minister, Sri Mulyani Courtesy of presidenri.go.id

CultureThe President Post www.thepresidentpost.comFriday, October 16, 200910

For why else could some-thing seemingly so triv-ial evoke such emotions within a people’s sense of

national identity?Tourism today is no longer just

about traveling for recreation or leisure. It has become the world’s top foreign currency earner for corporations, airlines and coun-tries. The UN World Tourism Organization (UNWTO) esti-mates that last year 924 million people traveled across nation-al borders, time zones and cul-tures. No less than 10% of those employed are in the tourism in-dustry. Countries like Thailand have made tourism the number one foreign currency earner and the showcase of the country and culture.

In its study “Tourism 2020 Vi-

Cultural Heritage, Tourismand National Identity

sion”, UNWTO predicts that at a 4.3% annual increase, by 2020 there will be a phenomenal 1.6 billion tourists globally, not counting domestic tourists.

Last year some 6.4 million vis-itors or 10.26% of ASEAN ar-rivals came to Indonesia, gener-ating US$7.4 billion in revenue. Tourism is the third top earn-er after oil and gas, and palm oil, contributing 4.3% to the coun-try’s GDP, with 6.7 million peo-ple directly employed in tourism, according to the Department of Culture and Tourism.

Domestically, some 225 mil-lion traveled across the is-lands, spending Rp.123 trillion, strengthening local economies. The Bali Climate Change Con-ference in December 2008 and the World Ocean Conference in Manado were each attended by over 10,000 delegates and have made Indonesia a focal point in in finding solutions to global is-sues through high profile interna-tional conventions.

By 2014 Indonesia plans to double international arrivals to 12 million, earning US$8.2 billion, and Rp.120 trillion from domes-tic tourism. Tourism is expected to provide at least 9 million jobs, contributing 6% to GDP.

The outrage that erupted in Indonesia recently over the inclusion of the Balinese “pendet dance” - an Indonesian cultural and tourist icon - in the “Visit Malaysia” feature on Discovery Channel, highlights the close interconnection between cultural heritage, tourism and national identity in today’s global world.

Meanwhile, the CNN TASK Group discovered that even in to-day’s global economic crisis, peo-ple’s desire to travel has not di-minished; only their motivation has shifted. For tourists now need to escape daily stresses, seeking physical and emotional reinvigo-ration through visits to beautiful and new destinations, meet new people and new cultures, seeking solutions to problems in this fast changing world.

On the receiving end, host communities at destinations vis-ited are impacted by development of tourism infrastructure, facili-ties and services. Besides enjoying economic benefits, communities are revitalized by the genuine ap-preciation that foreigners show in their culture, dances, handi-

By Wuryastuti Sunario

Former Executive Director of theIndonesia Tourism Promotion Board

crafts, traditions and way of life. This revives local interest in their own culture, restoring a people’s dignity and pride in their pre-cious heritage. Socially, commu-nities now rally around traditions that, through tourism promo-tion, have become internation-ally recognizable icons, making each a dream destination, unique and distinct from other parts of the world.

As a result, the meaning of tourism goes beyond economic benefits, and “culture” goes be-yond monuments, artifacts and artistic expressions. The Ency-clopedia of the Future defines culture and society as “the way people behave as communities, sharing a set of ideas, values, and beliefs about the world and prac-ticing customs and social behav-iors that help bind them as dis-tinct groups within societies.”

Stretching across the equator comprising 17,504 islands, In-donesia, - once called the Dutch East Indies - is the largest archi-pelagic nation in the world. This is “home” to 225 million people comprising 200 ethnic groups, each possessing their own distinct culture and language – yet united in the one nation called Indone-sia under the slogan “Bhinneka

Tunggal Ika” - we are many but we are one - speaking one lan-guage: Bahasa Indonesia.

Her history stretches from pre-historic Java man, to the mag-nificent 9th century temples of Borobudur and Prambanan, to the country’s modern hero-ic struggle for independence and democracy.

Indonesia is also home of the Dayaks in the rainforests of the Indonesian part of Borneo, as are the tribes of Papua, or the Nias, living bearers of a megalithic cul-ture, the Bugis plying the seas in majestic schooners and the vi-brant culture of Balinese. But Indonesia is also busy metropol-itan Jakarta, a plethora of high rise buildings, center of nation-al power, finance and commerce, as are the throngs of people ek-ing a living.

Today, through 64 years of in-dependence, Indonesians have forged themselves into one cohe-sive nation, aware of the rich di-versity in cultural background yet conscious of national unity and proud of collective national heritage.

Therefore, the pendet dance or the batik cloth are for Indone-sians no longer mere branding of a tourist destination or even tan-gible cultural expressions steeped in local knowledge and wisdom. These are icons of precious na-tional common heritage that has been handed down by our ances-tors, enhancing the identity of this distinct nation called Indo-nesia.

The Borobudur Temple: EVERLASTING AND ENDURING

Following the Anglo-Dutch Java War, Java was under British administra-tion from 1811 to 1816.

The appointed governor was Lieutenant Governor-General Thomas Stamford Raffles, who took great interest in the history of Java. He collected Javanese an-tiques and made notes through contacts with local inhabitants during his tour throughout the island.

On an inspection tour to Se-marang in 1814, he was informed about a big monument deep in a jungle near the village of Bumise-goro.He was not able to make the discovery himself and sent H.C. Cornelius, a Dutch engineer, to investigate.

In two months, Cornelius and his 200 men cut down trees, burned down vegetation and dug away the earth to reveal the mon-ument. He reported his find-ings to Raffles including various drawings. Although the discov-ery is only mentioned by a few sentences, Raffles has been cred-ited with the monument’s recov-ery, as one who had brought it to the world’s attention.

Hartmann, a Dutch adminis-trator of the Kedu region, contin-ued Cornelius’ work and in 1835 the whole complex was finally

unearthed. The Dutch East Indies govern-

ment then commissioned F.C. Wilsen, a Dutch engineering of-ficial, who studied the monu-ment and drew hundreds of relief sketches. J.F.G. Brumund was also appointed to make a detailed study of the monument, which was completed in 1859.

Appreciation of the site de-veloped slowly, and it served for some time largely as a source of souvenirs and income for “sou-venir hunters” and thieves. In 1882, the chief inspector of cul-tural artifacts recommended that Borobudur be entirely disassem-bled with the relocation of reliefs into museums due to the unsta-ble condition of the monument.

To refresh one’s memory:

Borobudur is a ninth-century Mahayana Buddhist Monument in Magelang, Central Java, Indo-nesia. The monument compris-es six square platforms topped by three circular platforms, and is decorated with 2,672 relief panels and 504 Buddha statues.A main dome, located at the center of the top platform, is surrounded by 72 Buddha statues seated inside per-forated stupa.

The monument is both a shrine to the Lord Buddha and

a place for Buddhist pilgrim-age. The journey for pilgrims be-gins at the base of the monument and follows a path circumambu-lating the monument while as-cending to the top through the three levels of Buddhist cosmol-ogy, namely Kamadhatu (the world of desire), Rupadhatu (the world of forms) and Arupadhatu (the world of formlessness). Dur-ing 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 Borobu-dur was abandoned following the fourteenth century decline of Buddhist and Hindu kingdoms in Java, and the Javanese conver-sion to Islam.

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 cor-respond to the modern Javanese word Buda (‘ancient’) – i.e., ‘an-cient Boro’.However, another ar-chaeologist suggests the second component of the name (‘Bu-

dur’) comes from Javanese term bhudhara (or mountain).

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.

The three temples (Borobu-dur–Pawon–Mendut) have sim-ilar architecture and ornamenta-tion derived from the same time period, which suggests that ritu-al relationship between the three temples, in order to have formed a sacred unity, must have exist-ed, although exact ritual process is yet unknown.

Borobudur is built as a sin-gle large stupa, and when viewed from above takes the form of a gi-ant tantric Buddhist mandala, si-multaneously representing the Buddhist cosmology and the na-ture of mind.

The foundation is a square, approximately 118 meters (387 ft) on each side. It has nine plat-forms, of which the lower six are square and the upper three are circular. The upper platform fea-tures seventy-two small stupas surrounding one large central stu-pa. Each stupa is bell-shaped and pierced by numerous decorative openings. Statues of the Buddha

sit inside the pierced enclosures. Approximately 55,000 cubic me-tres (72,000 cu yd) of stones were taken from neighbouring riv-ers to build the monument.The stone was cut to size, transport-ed to the site and laid without mortar. Knobs, indentations and dovetails were used to form joints between stones. Reliefs were cre-ated in-situ after the building had been completed. The monument is equipped with a good drainage system to cater for the area’s high stormwater run-off.

Borobudur attracted atten-tion in 1885, when Yzerman, the Chairman of the Archaeological Society in Yogyakarta, made a discovery about the hidden foot.The discovery led the Dutch East Indies government to take steps to safeguard the monument. In 1900, the government set up a commission consisting of three officials to assess the monument.

In 1902, the commission sub-mitted a threefold plan of pro-posal to the government. First, the immediate dangers should be avoided by resetting the corners, removing stones that endangered the adjacent parts, strengthening the first balustrades and restor-ing several niches, archways, stu-pas and the main dome. Second, fencing off the courtyards, pro-viding proper maintenance and improving drainage by restor-ing floors and spouts. Third, all loose stones should be removed, the monument cleared up to the first balustrades, disfigured stones removed and the main dome restored. The total cost was estimated at that time around 48,800 Dutch guilders.

The Borobudur Temple is a world heritage

The restoration then was car-ried out between 1907 and 1911, using the principles of anastylosis and led by Theodor van Erp.

The first seven months of his restoration was occupied with ex-cavating the grounds around the monument to find missing Bud-dha heads and panel stones. Van Erp dismantled and rebuilt the upper three circular platforms and stupas. Along the way, Van Erp discovered more things he could do to improve the monu-ment; he submitted another pro-posal that was approved with the additional cost of 34,600 guil-ders.

Due to the limited budget, the restoration had been primarily fo-cused on cleaning the sculptures. Within fifteen years, the gallery walls were sagging and the reliefs showed signs of new cracks and deterioration.

Small restorations have been performed since then, but not

sufficient for complete protec-tion.

In the late 1960s, the govern-ment requested from the interna-tional community a major reno-vation to protect the monument, but it was not until 1973 that a master plan to restore Borobudur was created.

The government and UNES-CO then undertook the complete overhaul of the monument in a big restoration project between 1975–1982. The foundation was stabilized and all 1,460 panels were cleaned. The restoration in-volved the dismantling of the five square platforms and improved the drainage by embedding wa-ter channels into the monument. Both impermeable and filter lay-ers were added. This colossal project involved around 600 peo-ple to restore the monument and cost a total of US$6,901,243.

After the renovation was fin-ished, UNESCO listed Borobu-dur as a World Heritage Site in 1991.

On 28 August 2006 the Trail of Civilizations symposium was held in Borobudur under the aus-pices of the governor of Central Java and the Ministry of Culture and Tourism. Also present were the representatives from UNES-CO and predominantly Buddhist nations of Southeast Asia, such as Thailand, Myanmar, Laos, Viet-nam and Cambodia.

The climax of the event was the “Mahakarya Borobudur” ballet performance at Borobudur, choreographed to feature tradi-tional Javanese dancing, music and costumes, and tell the histo-ry about the construction of the Borobudur.

On 27 May 2006, an earth-quake of 6.2 magnitude on the Richter scale struck the south coast of Central Java. The event had caused severe damage around the region and casualties to the nearby city of Yogyakarta, but Borobudur remained intact, con-firming the belief that the tem-ple is an everlasting and enduring testimony to mankind.Source: Wikipaedia

A bird’s eye view of the Borobudur Temple

As a result, the meaning of tourism

goes beyond economic benefits, and

“culture” goes beyond monuments, artifacts

and artistic expressions

Courtesy of PT. Taman Wisata Candi

Courtesy of PT. Taman Wisata Candi

The President Postwww.thepresidentpost.com Friday, October 16, 2009 11

Media

Over the next few thou-sand years,democracy faced folks who vied for ultimate author-

ity—kings,dictators,the main-stream media—for they wanted the right to make and implement decisions about wha tpeople should do or think.

Fast-forward to the middle of the 20th century, when another little idea with big implications was born. It was called cybernet-ics, and it proposed that adding noise or feedback into a system enabled change. In many way s , i t

By Ardi Sutedja K.

acted as the philosophical foun-dation ofthe Internet.

Now take these ideas, add a government experiment called ARPANET, and mix in a bit of high-speed access. Voila, you get Web 2.0, and with it, an even-greater distribution of that much cherished authority.

What was set off years ago with the birth of the Internet—and what has become increasing-ly evident over the past year—is exactly this shift in authority.

Those sources once deemed authorita-tive are now shar-ing authority with the average person.

The au-thority of our

friends and family is not new; it’s just that our inner circle of trust-ed advisors has been digitized. The dialogue that is exchanged at play-dates and cocktail par-ties is now occurring online as well—and it is this shift in how we interact with each other that has enabled the shift in authori-ty. The Internet—specifically so-cial media such as blogs, reviews, and social networking sites—has enhanced the voice of the average person and allowed us to connect with one another more often, more conveniently, and in a dig-ital environment where we can take immediate action based on our advisor’s feedback.

We can see this in a number of areas. Take newspapers, where bloggers have effectively changed the landscape of who is deemed authoritative enough to report the news. The citizen journal-ist is now often deemed credi-ble, and therefore given authority. Need proof? Look at MSNBC’s Citizen Journalist Report, which shifts the authority of news re-porting to its users, or Digg, which surfaces news by popular-ity. Or, ohmynews.com, which TIME magazine called “the peo-ple news source.”

In the world of education, on-line educators are gaining ground against traditional models as well. As online universities see their enrollments rising, organi-zations such as Wikibooks (from-Wikipedia) are developing a li-brary of free, searchable, editable textbooks.

Revenue creation has experi-enced an authority shift as well. Consider sites such Epinions,

WHAT EVER HAPPEN TO THECONVENTIONAL MEDIA?

where reviewers earn money for their contributions, or Revver, which shares revenue with its content creators. In these cases and more, the authority of who gets paid is decided by the site’s users. While the “authority shift” from mainstream media to citi-zen and social media may seem daunting to advertisers accus-tomed to the traditional media dynamics, it actually presents an opportunity

These radical shifts in the me-dia landscape took on a differ-ent cast back in 2006 as major

media advertisers struggled with how to allocate budgets in the face of shifting consumer behav-ior, declining confidence in tra-ditional media, and a seemingly endless proliferation of new-me-dia channels available for deliver-ing messages and reaching con-sumers. The rise of YouTube to a mass-media level, and its sub-sequent acquisition by Google, became yet another sign of a sig-nificant reprioritization by both consumers and content produc-ers as to how, when, and where they are consuming media, and

what infact they are engaged in consuming.

Across all media channels, mar-keters face the difficult challenge of “breaking through the clut-ter” as the scale of media immer-sion in daily life exceeds all prior benchmarks. The sheer volume, variety, and availability of media channels have resulted in cultur-al change. So, too, have consum-er behaviors.

“Time-shifting,” a behavior brought on by technologies like Video on Demand (VOD), Dig-ital Video Recorders (DVRs) in-cluding TiVo, and the intro-duction of video capabilities for portable media devices such as iPods and the BlackBerrys, has separated the consumer experi-ence of video media from a spe-cific time of day, and even from the television itself.

The increasing availability of high-quality, desirable media be-ing made available specifically on devices and locations OTH-ER than the living-room TV has come to be known as “place-shifting.” Consumers have em-braced place-shifting, by watch-ing videos and TV programs on their PCs, iPods, and Sony PSPs.

Image courtesy of newmediachatter.com

Afew thousand years ago,in a coastal land bordering the Aegean Sea, a little idea with big implications was born. It was called democracy, and with it came a distribution of authority.

Perhaps the most striking shifting

behavior occurring among all media

channels is the shifting of authority from typical control points to some

rather unexpected ones.

The introduction of products like Slingbox promises to accelerate this trend.

Perhaps the most striking shift-ing behavior occurring among all media channels is the shifting of authority from typical control points to some rather unexpect-ed ones.

As a result, the combination of time- and place-shifting behavior decides what is and is not worthy of audiences’ attention, shifting away from mass-media platforms and squarely into the hands of in-dividual consumers. Often dis-cussed as the phenomenon of “consumer control,” authority-shifting is perhaps the most star-tling upshot brought about by the extreme democratization of media creation, distribution, and consumption.

Several factors have led to this democratization. Enabling cre-ation technologies such as Ap-ple iLife and other consumer-ori-ented content creation suites has made Web publishing of audio, video, and text relatively easy, risk free, and inexpensive compared with recent years. The recent availability of low- or no-cost dis-tribution platforms ranging from

the more amateur-focused You-Tube (which serves an estimated 100 million video views a day in the U.S.) to the more profession-ally minded Brightcove (which enables the professional content creator to monetize their content through advertising via narrow broadcast channels online) has completed the picture for con-sumers who want to control the media they consume, and gives others the ability to interact with the media they themselves are creating.

Knowing that all media are shifting in nature, that new channels and technologies seem to spring up daily, and that emerging channels are radical-ly disrupting the traditional me-dia mix, how should we approach differentiating, qualifying, and ultimately determining over-all viability for emerging media channels? It may require us to al-ter the way we think about and define conventional measures to account for new behaviors.

So don’t be wary of distribut-ed authority. Welcome the shift. Embrace it with open arms.

And know that in the end, It just makes good business sense.

TechnologyThe President Post www.thepresidentpost.comFriday, October 16, 200912

KEY fINDINGS

Economists have long rec-ognized the important role information tech-nology (IT) can play in

a country’s development. As the IT sector helps lead us out of the worst global recession in more than 50 years, that role will be even more important.

To quantify the direct benefits of IT on local economies as we head toward recovery, IDC has studied the relationship between IT, software, the Microsoft eco-system and the economies of 52 countries, including Indonesia.

Key findings for Indonesia:IT spending in 2009 will be

72,225 billion IDR ($7.5 billion). From the end of 2008 to the end of 2013, IT spending will grow 7.9% a year, compared to GDP growth of 3.9% a year.

IT-related activities will gener-ate 7,052 billion IDR ($728 mil-lion) in taxes in 2009. Over the next four years that means more

than 8,756 billion IDR ($904 mil-lion)

i n ag-

Source: IDC Economic Impact Study, 2009

IT PROfILE AND fORECAST: INDONESIAgregate net new taxes. That spending growth means

that employment in the IT in-dustry and of IT professionals in IT-using organizations will rise by 119,000 jobs in the four years from the end of 2009 to the end of 2013, up from a 2009 base of 241,000.

That represents growth of 9.6% a year from now through 2013, which is more than six times fast-er than the growth of total em-ployment.

Software drives activity in the services and distribution sectors, as well as in IT-using organiza-tions, which means that while spending on packaged software will be only 4% of total IT spend-ing in 2009, 13% of IT employ-ment will be software-related.

The IT market will drive the creation of more than 1,000 new businesses between now and the end of 2013. Most of these com-panies will be small and locally owned organizations.

For more information on the global IDC study, see Aid to Re-covery: The Economic Impact of

IT, Software, and the Micro-soft Ecosystem on the Global Economy, October 2009. For details about methodology and definitions, see Economic Im-pact Study Methodology and Definitions, October 2009.

THE mICROSOfT ECOSYSTEm The Microsoft ecosystem

in Indonesia includes those companies that sell PCs, servers, storage, and smart

handheld devices running Microsoft software; software

vendors that write applications that run on Microsoft platforms; resellers that sell and distribute these products; and service firms

The Economic Impact Of IT, Software,And The Microsoft Ecosystem On The Economy

AID TORECOVERY

that install and manage Micro-soft-based solutions, train con-sumers and businesses on Mi-crosoft products, and service customers for their own applica-tions. It also includes companies that do combinations of these functions. Note these additional findings:

As a group, companies in the Microsoft ecosystem in Indonesia will generate more than 22,574 billion IDR ($2.3 billion) in rev-enues for themselves in 2009. For every IDR Microsoft will make in Indonesia in 2009, companies in the local ecosystem will make 23.54 IDR.

To generate those revenues, companies in the local ecosystem will drive nearly 6,899 billion IDR ($712 million) of invest-ment, most of it in the country.

Companies in the Microsoft ecosystem employ 11,000 peo-ple; IT-using organizations em-

ploy another 65,000 IT profes-sionals who work with Microsoft software or the products and ser-vices based on it.

Together, these employees will account for 31% of IT-related employment in 2009 and 34% of IT-related taxes in the country.

GROWTH THROUGH INNOVATION

Seven years after the third ma-jor high tech crash in the last 50 years, the industry is flush with new technology, from new serv-ers and client devices and new storage and networking technol-ogies, to new software architec-tures and delivery models.

Together, these new technolo-gies are ushering in what may be a new paradigm of computing, known variously as cloud com-puting, cloud services, or dynam-ic IT. Microsoft calls it Software plus Services.

The promise of this new way of computing, which involves the use of Internet-based services and intelligent clients and devices, is that businesses, governments, and educational institutions will be able to lower the capital costs of IT and increase the amount of their IT budgets that can be de-voted to innovation, rather than to the maintenance of legacy ap-plications and infrastructure.

This new type of computing is in its infancy – while IDC es-timates that this year it will ac-count for a little less than 1% of IT spending in Indonesia, that percentage may triple over the next four years. Despite that small footprint, the economic benefits can be significant. If that amount of IT spending is applied to in-novation more effectively than it is today, IDC estimates that cloud services could add more

2008 2009 2010 2011 2012 2013 08-13 CAGR

Spending (Million LOCAL)

IT Hardware 61,969,021 65,210,082 69,860,403 75,297,925 80,304,004 86,344,265 6.90%

Software 2,800,414 2,761,588 2,845,583 2,999,478 3,200,685 3,495,878 4.50%

IT Services 3,672,237 4,253,391 5,380,432 6,795,810 8,497,794 10,323,237 23.00%

Total IT 68,441,672 72,225,061 78,086,418 85,093,213 92,002,482 100,163,380 7.90%

IT Contribution

IT/GDP (%) 1.40% 1.40% 1.50% 1.60% 1.60% 1.70%

IT Tax Revenues (Million LOCAL) 6,541,768 7,052,827 7,831,251 8,726,866 9,681,541 10,728,018 10.40%

Total Number of IT Companies 6,660 6,793 7,040 7,314 7,591 7,875 3.40%

IT Employment

Total Number of Employees 227,513 240,652 265,762 294,944 326,347 359,498 9.60%

Total Software-Related Employees 32,294 32,144 34,282 37,328 41,419 46,399 7.50%

Cloud plus Clients

Net New Business Revenues (Million LOCAL) 9,991,330 24,298,236 43,933,586 70,387,863

than 148,611 billion IDR ($15.4 billion) in net new business rev-enues to Indonesia’s economy be-tween the end of 2009 and the end of 2013.

SUmmARY AND OUTLOOK The IDC research reinforc-

es the conclusions drawn in ac-ademic research – namely, that IT is good for local economies. The economic benefits quanti-fied in this study will help Indo-nesia grow, create new jobs, im-prove the efficiency of its labor force, and support the formation of new companies. The econom-ic benefits not quantified in this study but referenced in the aca-demic research help drive produc-tivity improvements throughout a country, increase competitive-ness, and foster local innovation.

The table below summarizes some of the key IT industry met-rics covered in the study.

The President Postwww.thepresidentpost.com Friday, October 16, 2009 13

Education

With 20 percent of the state budget going to the sec-tor of education as

of 2009, the President is optimis-tic about reaching the goals of his success story plan called 3M (mutu, murah, merata) which stands for quality, affordabili-ty, and equal opportunities for all citizens to enjoy better educa-tion.

The government has launched pilot projects in several regencies where elementary students are exempted from school fees. For-mer rector of the Unversity of In-donesia, Prof. Dr. Usman Chatib Warsa, when asked of his com-ments, is in support of the Pres-ident’s concept.

SBY believes that Indonesia ac-tually has the ability to provide quality education at an afford-able level so that even children from poor segments of society may enjoy it.

Therefore, the government has, as of this year, increased to 20 percent the budget allocation for education, hoping that this will provide more opportunities for the younger generation from all walks of life to have good ed-ucation as prerequisite for leading a better life.

The President believes that there are six main issues gripping the sector of education. First is the issue of education financing. He says every citizen must have access to education, regardless of his or her economic background. Therefore affordable education is very important.

The second issue is about qual-ity and welfare of the teachers and

Pro-Education President: Another Chapter of Success StoriesPresident Susilo Bambang Yudhoyono (SBY) will form his second democratic Cabinet later this month to further develop education at all levels.

By maya A. Siregar

lecturers. “How can we expect to have high quality graduates when teachers and lecturers are of low quality,” the President asks. This has been one of his preoccupa-tions since he took office in Oc-tober 2004.

His high level of attention to the sector of education has led many education observers to re-gard him as Indonesia’s “pro-ed-ucation president.” And on many occasions, SBY has always reit-erated the need of having high quality teachers to strengthen schools and universities.

The third issue on SBY’s edu-cation agenda is the standard of competence which he says must be at par with educational quality standards of advanced nations.

In this regard his government is working hard to increase the employability level of universi-ty graduates so that they may be able to stand tough labor mar-ket competition in this global-ized era.

The fourth issue on the Presi-dent’s agenda is the relevance be-tween the output of education and the need of the labor mar-ket.

For decades before SBY took office, Indonesia’s education had been going on without a clear vi-sion and direction on graduates’ employability issue.

Many university graduates have difficulty finding a job, simply because what they have learned is not compatible with the actu-al needs in the market.

In another front, universities are not responding properly to the needs of their immediate en-vironments, because there is a

tragic gap between the policy of developing natural resources and that of empowering human re-sources.

For example, universities locat-ed in natural resource-rich prov-inces do not have schools special-izing in the study of such natural resources.

“Therefore it is very impor-tant for governors and regents to know that the output of educa-tion must have correlation to the need of all sectors of industry and the market at large,” SBY once said in an address to Indonesia’s provincial leaders.

“There must be a synergy in-volving the government, educa-tional institutions, and the mar-ket at large, because it is the market that will eventually ab-sorb the graduates. Because of that, there must be efforts to de-velop both general and vocation-al education.”

The fifth issue on the Presi-

dent’s table is the need to nur-ture university graduates who are mature in behavior, who are law-abiding people, and who can con-tribute positively to further devel-opment of the nation.

“It is true that freedom is high-ly important, but one should not use his freedom to destroy pub-lic infrastructure and systems,” SBY said. He added that educa-

tion must lead to graduates be-coming tolerant citizens who are sensitive to the need of maintain-ing a peaceful society.

The sixth issue on SBY’s agen-da is the responsibility over exe-cution of educational plans that involve the central and regional governments.

The President emphasizes the need of budget sharing responsi-bility in that part of the burden of financing educational programs is shared by regional govern-ments, and the rest by the central government.

As of 2001 when Indonesia in-tensified the implementation of its decentralization plan, the re-gional governments have taken up part of the financing respon-sibility in the sense they act as extension of the central govern-ment’s hand in channeling out assistance to schools all over the country while beefing up their own coffers.

Therefore, the responsibility for financing of educational ac-tivities from elementary to high school levels is now on the shoul-ders of the governors and regen-cy heads.

Apart from those six major is-sues, there are a myriad other problems affecting educational endeavors in Indonesia. They in-clude the issue of affordability of books, school fees, lack of school infrastructure, lack of interest in reading and declining reading habit among the so-called “click generation,” poor level of wag-es for teaches, and a lack of good quality curriculum with interna-tional orientation.

In order to overcome the sit-uation, the President has called on relevant ministers and oth-er high ranking officials to pro-mote vocational as well as entre-preneurial education, “so that one day there won’t be any more sto-ry of jobseekers having difficul-ty getting a job. And Make sure that schools will produce gradu-

ates that are needed by the mar-ket in the places those schools are situated,” SBY said.

The President has also prom-ised to improve the welfare lev-els of teachers, university lectur-ers, and professors, arguing that they play a pivotal role in devel-oping human resource capacity in Indonesia.

In 2004 before SBY took of-fice, for instance, the lowest-paid teachers in Indonesia received Rp842,600 a month. Today they receive Rp1,854,000 a month.

An academic qualification pro-gram is also underway to upgrade the quality of teachers and lectur-ers at all levels. The purpose is to increase their teaching capacity and in rhythm with it their com-pensation.

The total budget for education has also increased markedly, ris-ing from Rp78.5 trillion in 2005 to Rp154.2 trillion in 2008. And as of 2009 the government had committed to allocating 20 per-cent of national budget for edu-

President Susilo Bambang Yudhoyono with elementary students Courtesy of presidenri.go.id

Prof. Dr. Usman Chatib Warsa

cation even amidst pressures gen-erated by global economic crises. Consequently, the government had to accept the painful reali-ty that budget deficit soared by Rp20 trillion or 1.9 percent of the gross domestic product (GDP).

The sharp budget increase is meant to finance rehabilitation of schools as well as provide tens of thousands of classroom facil-ities in a huge number of new schools.

The budget will also go for the financing of educational pro-grams for physically disabled and mentally disturbed children in all the provinces across the archi-pelago, according to stipulations of Law Number 20/2003 on na-tional education system. The same provisions will be accord-ed to citizens in remote areas, no matter how poor they may be.

For the year 2010, the govern-ment intends to increase educa-tional budget by Rp46.1 trillion. So, if that additional amount is added to 20 percent of the to-

tal state spending next year of Rp1,122.2 trillion, or as much as Rp178,9 trillion, then next year’s allocation for education should stand at Rp224 trillion. This has been confirmed by Finance Min-ister Dr. Sri Mulyani Indrawati.

Nevertheless, developing a na-tion’s education is not merely a matter of having sufficient funds. Equally important is the issue of policy consistency and over-all human resource development strategy of a nation that is rush-ing against time to empower its people amidst tough global com-petition right here at home.

Therefore, President Yud-hoyono’s policies and leadership in enhancing the quality of ed-ucation at all levels must be sup-ported by all forces in society.

This is because Indonesia can no longer afford to stay way be-hind other nations in education, science, and technology—which are the driving forces for elevat-ing the nation’s economy, ana-lysts say.

Beyond the Issue of 20% Budget:

Ministerial Position Is CrucialOver the past few years, Indonesia’s education commentators have focused primarily on the issue of the 20 percent state budget allocation for education, as if the quality of education would suddenly soar when the stipulation is fully realized.

By maya A. Siregar

Such perception repre-sents an insult to the true meaning of education, be-cause in reality education

covers the whole range of human process of learning and cannot be reduced to a matter of financing alone.

Holistic educators believe that while financing is important, more so is the need to have a clear vision and direction in order to upgrade the output quality of ed-ucational endeavors.

This is the biggest homework for President Susilo Bambang Yudhoyono’s next Cabinet that will be revealed on October 20. The first thing to see is wheth-er he picks the right person to sit in the chair of minister of educa-tion.

This position has for decades become a highly political issue. So it’s time to ask whether it is still relevant for a minister of ed-ucation to appear more like a pol-itician than a chief educator, an-alysts say.

In other words, will the Presi-dent appoint the next minister of education because of the minis-ter’s ability to act as the chief ed-ucator, or will he appoint one be-cause of political bargaining with opposition parties and pressure groups?

Here is a quick and safe an-swer. If President SBY has picked Prof. Dr. Boediono, a profession-al economist—in stead of a polit-ical party leader—to be the Vice President, it is almost certain that he will also assign professionals to run the show in as many sectors of public service as possible.

With that theory in mind, ed-ucation observers are hoping that the next minister of education will come from university cir-

cles—perhaps one of the rectors who are often highlighted by the mass media.

According to a noted foreign educator based in Jakarta, the next minister of education “must be an educational expert, not simply a managing politician, a person prepared to research edu-cational principles and practices from around the world and mar-ry them to the country’s unique culture and educational needs.”

He adds that the minister “must be passionate about edu-cational development and enthu-siastic about what young people can achieve when provided with a high quality education.”

The trouble with Indone-sia’s development strategy is that while education is a life-long pro-cess of learning and teaching, which therefore requires a clear vision and consistent long-term strategy, education policymakers come and go every five years.

Ever since the reform era be-gan in Indonesia in 1998, only President Susilo Bambang Yud-hoyono has remained consistent with educational policies for five years, and he is likely to do so for five more years.

His predecessors were not as predictable due to the fact that every one of them served for less

than five years. So, in a way, SBY has actually

laid the right foundation and al-together precedent of policymak-ing tradition that will hopefully be maintained and enriched by anyone who will succeed him in October 2014.

Holistic educators are saying that the biggest task of this na-tion is to find ways to cement the good tradition of leadership and policy decision making that has been put in place by SBY, so that whenever he is no longer in of-fice, those good features will re-main.

This is a process of public ed-ucation in itself and therefore it must be enhanced in order to usher in a more mature society.

But first, what is it that is be-ing defined as education in Indo-nesia? From what we have seen so far, education is generally defined as schooling, and nothing more than that.

Even as early as 1945 when In-donesia became a republic, Ki Hadjar Dewantara—the first minister in charge of educa-tion—was not called ‘minister of education’ but was called ‘minis-ter of teaching’.

The consequence of this ap-proach is visible in society even to date. Education is being nar-rowed down to the issue of im-parting knowledge or developing only the cognitive skills.

Rote memorization then be-comes the favorite choice whereas in today’s context, learners actu-ally don’t need to memorize facts and figures, but solve real prob-lems they encounter every day.

A further consequence of such an approach to education is that parents are generally unaware that they are the primary edu-cators of the children. This is why many parents are preaching about the things they themselves

are not doing.One can easily see in Jakar-

ta, for instance, a heavy-smok-er father becoming frustrated at his son who is a smoker, because the boy can’t see a role model at home. In teaching his son to quit smoking, the father is not educat-ing him with a credible lifestyle.

To cite but another common practice in Jakarta, one would easily say that in sending chil-dren to school, parents generally leave to teachers the responsibili-ty to educate their children.

But whenever something goes wrong, the parents would put the blame on the teachers, argu-ing that their kids should get the equivalent of the worth of money paid to the school.

In general, parents do not have the awareness that they actually have the primary responsibility to educate children even before the latter come into contact with the teachers at school.

What is needed today is not just education for children, but for the parents as well, because even though children attend high quality schools, they will surely fail living in an unhelpful envi-ronment at home.

Holistic educators say that the basic and most crucial stages of education actually take place at home. So if families break apart, children will have difficulty finding the right role models at home.

In a broader context, according to Prof. Komaruddin Hidayat, rector of State Islamic Universi-ty (UIN), the government needs to put greater emphasis on devel-oping education henceforth if In-donesia is to occupy a respectable place in the community of na-tions.

He theorizes that South Korea, the People’s Republic of China, Singapore, and Malaysia have all made significant economic prog-ress because of their consistency in developing education

The clearest sign of a country’s seriousness in education is usual-ly reflected in the choice of its ed-ucation minister. He or she must be a highly capable educator and manager with a high level of in-tegrity.

He must also be a highly trained professional who knows what to do and who can pull write realistic plans to pull the nation out of backwardness, an-alysts say.

In society today here are op-posing views on what is being perceived as pro-liberalism poli-cy tendencies which include the privatizing of the sector of edu-

cation. The next minister of ed-ucation is expected to provide the right answers to such tendencies.

Nobel laureate Amartya Ku-mar Sen said in 1998 that im-provement of education leads to improvement in standards of living, especially in developing countries.

This theory was proven true in 2005 by economist Jeffry Sachs who concluded that the higher the level of a society’s education, the greater the number of innova-tive and creative works will be to enhance people’s welfare.

By the same token, says Prof. Komaruddin, it is important for the next government of SBY to focus on empowerment of educa-tion practitioners, enabling them to produce a higher quality of high school and university grad-uates who in turn will bolster the economy.

So, beyond the issue of state budget allocation there remains

a plethora of problems the next government needs to handle comprehensively.

Above all, education according to Prof. Dr. Ermaya Suradinata, former Governor of the Defence Institute (Lemhanas) and Rector of the President University, must be a strategic road map for devel-opment of education way into the future, regardless of whoever sits in the chair of Indonesia’s presi-dent.

Such a road map for education cannot be drawn solely by the minister of education. He needs the involvement the economic, social affairs, and other relevant agencies.

Given the fact that parliament will now become friendlier to President SBY than the situation he faced over the past five years, there is optimism along Jakarta’s political corridors that the presi-dent will pick many more profes-sionals to sit on the Cabinet than he did last time. One of them should be the minister of educa-tion!

“Education must be a strategic road map for development education way into the future, regardless of whoever sits in the chair of Indonesia’s President”

Prof. Dr. Ermaya Suradinata

Prof. Dr. Komarudin Hidayat

InvestmentThe President Post www.thepresidentpost.comFriday, October 16, 200914

The Wealth-Generating Regions of the World

September 2008 saw the col-lision of two countervail-ing currents in the world economy: Consumption

was growing and emerging econ-omies were developing productive capacity to meet that rising con-sumption, resulting in an unprec-edented boom in commodities. The stronger current, however, turned out to be the overheat-ing of the finance sector and im-balances in the risk allocation for capital under the management of Wall Street institutions.

As corporate strategists we real-ize the importance of perceiving as early as possible the new direc-tions which will emerge from this collision. Our analysis led us to identify six trends which will as-sert themselves in the post-credit crisis environment:

A CRUSHING BLOW TO WALL STREET VALUES

Since the start of my career in the early 1980’s, Wall Street has been a symbol of elite pow-er. The foolhardiness of the sub-prime mortgage investment strat-egy was perceived intuitively by many, but they were shouted down by the proponents of Mod-ern Portfolio Theory and the Ef-ficient Market Hypothesis. It is now widely expressed that Wall Street breached the trust of its in-vestors.

There will be a backlash against both the glamor of Wall Street and its theoretical under-pinnings. The influence of major Wall Street and London-based fi-nancial institutions will decline. Some financial investors will come to view non-capital mar-kets assets as an essential part of

By Thomas W. Shreve a diversified portfolio. Capital markets-based exit strategies will become less important compared to maximizing value by develop-ing hard assets. Complex finan-cial engineering will be less popu-lar, and compartmentalization of risk using techniques such as lim-ited recourse project financing will become less stylish.

These changes will help emerg-ing markets, as the race for higher yields will lead investors to places where risk actually exists and does not need to be manufactured by financial engineers. The best ex-posure to hard asset plays will be found in infrastructure and natu-ral resources projects in develop-ing economies.

THE BEGINNING Of THE END Of BRETTON WOODS

The cost imposed by the credit crunch could not have come at a worse time for the US dollar. Af-ter 35 years of relative stability, the size of the US national debt ballooned from US$1 trillion in 1981 to US$9 trillion in 2007. Ironically, the crash strengthened the position of the dollar, but it also added to the burden the dol-lar must carry. The increase in the US national debt was about US$2 trillion in 2008.

Meanwhile, the Fed has dou-bled the size of the base mon-ey supply, using a tactic known euphemistically as “quantitative easing.” When credit resumes its flow, and the multiplier effect of changes in the base money supply returns to a substantial propor-tion of its pre-crisis value, this is a genie that will not go back into the bottle. The dollar will fall as inflation becomes unavoidable.

High US dollar interest rates either will precede the decline of the dollar, as the US Government

is forced to bid up the coupon on US dollar-denominated debt, or will follow the decline, as lend-ers require compensation for in-flation. Local currencies will be-come more popular in investment transactions, because they will be seen as relatively more stable than before, and will also offer lower long-term interest rates.

But don’t expect the emergence of a new world currency. At the time of the Bretton Woods treaty which recognized the hegemony of the US dollar, 70% of all the gold reserves in the world were held by the US Government in Fort Knox. Today, China as the largest holder of foreign exchange reserves controls only 20% of the worldwide total.

GEOPOLITICALLY DRIVEN INVES-TOR BASE

The strength of investors from any given country, as a group, can be inferred from the cur-rent account surplus (or defi-cit) of that country. Simplistical-ly put, a current account surplus means that a country’s econo-my, as a whole, is making a prof-it and generating new capital for investment overseas. A current account deficit can only be sus-tained by attracting net new in-vestment. Attracting new invest-ment to cover current losses is a strategy recently popularized by Bernie Madoff.

Before the credit crisis, the commodities boom was bringing large profits to emerging market economies, especially in East Asia and the Middle East. The trend began in 1998 and 1999, when 20 countries around the world turned their long-term current account trends from deficit to surplus. From the beginning of 1998 until the end of 2008, the

countries of East Asia and the Middle East generated almost US$6 trillion of surpluses, which by definition must be invested overseas.

Investors from these coun-tries, with China, Japan and Sau-di Arabia topping the list, will define the nature of cross-bor-der investment for many years to come. They will be more geo-politically driven than investors of the recent past: They will set out to control the resources their countries lack, and to build in-fluence in worldwide markets in which their countries lack influ-ence.

The market crash of 2008 did not wipe out these investors. Chi-na Investment Corp., for exam-ple, lost 2% of its US$300 billion

The New Realities of Cross-Border Investment

portfolio value in 2008. What the crash did, was make them less interested – on the margin, at least – in capital markets, com-plex structured financial prod-ucts, Wall Street fund managers, and US Government debt. Even a small adjustment in this US$6 trillion portfolio could flood emerging markets with capital.

SOCIAL AND ENVIRONmENTAL fOCUS

Projects which neglect sustain-ability issues will have difficulty attracting capital, and if they do their proponents and fund man-agers may be liable for the con-sequences. Whether the profit motive and the dilemma of the commons will overwhelm higher inclinations remains to be seen,

These six trends will dramatically change the face of cross-border investment over both the short and the long term

Source: IMF, World Economic Outlook Database, April 2009

but initial signs are promising.

SyarIah-ComPlIaNt FINaNCINg TECHNIqUES

Most investors from Moslem countries are extremely pragmat-ic, and will not insist upon a strict interpretation of the prohibitions on interest and certain derivative instruments. Nonetheless, their increasing role will drive an in-creasing supply of Islamic finan-cial instruments.

SHORTAGES Of ExPERTISE AND SKILLED WORKERS

Increasing investment in in-frastructure and natural resourc-es worldwide will quickly exhaust the available supply of expertise and skilled workers. Education infrastructure will take years to

respond to increasing demand, and we will be facing serious is-sues for at least the next 20 years.

These six trends will dramat-ically change the face of cross-border investment over both the short and the long term. Invest-ment strategies, portfolio man-agement techniques and the evaluation of investment oppor-tunities will all be changed dra-matically and in ways we are only beginning to understand.

Thomas W. Shreve is President Director of PT Glendale Partners, a Jakarta-based consulting and project development firm. The firm’s website,www.glendalepartners.com, con-tains additional information about the subject of this article.

The President Postwww.thepresidentpost.com Friday, October 16, 2009 15

Mining

Indonesia is the world’s larg-est exporter of thermal coal, and ranks second in the world in tin production,

fourth in copper, fifth in nickel, and seventh in gold. The country hosts world class mines that are backed by a well trained labour force and a long established aca-demic community that produces highly qualified geologists, engi-neers, and management.

Indonesia’s mining industry makes a significant contribution to the country’s economic and social fabric. Although the indus-try accounts for only about 5% of GDP, nevertheless the industry contributed $4.8 billion in tax-es to government coffers in 2007, directly employed 38,500 people – mostly in high paying jobs – and generated 20% of the coun-try’s export revenues. Even before applying a conservative “econom-ic multiplier” of 3:1 to its role in the economy, the importance of mining is clearly evident.

Mining players maintain that the industry can do even better than this. The benefits that In-donesians enjoy today from the mining sector arise mostly from mines that were brought into pro-duction during Indonesia’s “gold-en years” of mining – 1967 to 1997. The mining industry pros-pered in this period thanks main-ly to the Contract of Work regu-latory system, and to government policies that created a level play-ing field for foreign investment.

Unfortunately, from 1997 to 2008, there has been minimal investment in the mining sector from new investors, principally because the regional autonomy laws rendered the former mining law obsolete, and the new mining law was not finalized until Febru-ary 2009. Even today, uncertain-ties about the new mining law and its implementing regulations are holding back significant new investment.

In its February 2009 sur-vey of the global mining indus-try, the independent Fraser In-stitute ranked Indonesia 5th out of all countries in terms of min-eral development potential. Now, the challenge for Indonesia is to unlock this potential for the con-tinuing benefit of all Indone-sians. 2010 to 2040 could be the next “golden years” of Indone-sia’s mining industry – but only if government policy makers suc-ceed in creating an international-ly competitive regulatory frame-work.

UNLOCKING mINERAL POTENTIALS

The Indonesian-owned min-ing companies have already shown an interest in investing in overseas projects, and overseas in-vestors have almost 200 countries from which to choose. Indonesia needs to attract these investors if the next “golden years” are to be-come a reality. capital investment required to realize the industry’s potential will be enormous. Min-ing is a capital intensive industry. PT Weda Bay’s nickel project on the island of Halmahera, for ex-ample, is estimated to require an investment exceeding $4 billion. If another “Grasberg” was found,

By Indonesian mining Association

comparable to Freeport’s famous mine, the capital cost could eas-ily be in the realm of $8 billion. Neither Indonesian nor foreign investors will fork over this kind of capital in the absence of a com-petitive regulatory environment. “Capital” is not known for its courage – capital will gravitate to projects that offer a reward that is commensurate with risk.

CHALLENGES TO UNLOCKING POTENTIALS

Realizing Indonesia’s mineral potentials faces a number of sig-nificant challenges, including:

Opposition to mining;•Rising nationalism;•Global economic downturn;•New tax regulations; and•New mining law.•

Opposition to mining This comes from several sourc-

es. For example, some econo-mists subscribe to the economic theory commonly called “Dutch disease”, or “resource curse”. In simple terms, this concept theo-rizes that booming mineral pro-duction in a developing country harms other industries, because mineral exports strengthen the country’s currency to the point that the strong currency disad-vantages other exports such as manufactured goods. The la-bel “Dutch disease” was coined when Holland experienced a de-cline in its manufacturing sector during a period of rapidly rising oil and gas production. Most ex-perts agree that this is an unprov-en concept. In any event, it would be unlikely to apply to a country like Indonesia where the econo-my is highly diversified and min-ing is only about 5% of GDP.

Some environmentalists also represent a source of opposition to mining. It is true that min-ing is disruptive of the environ-ment, but this disruption is both manageable and temporary. The mining industry’s know-how and sense of environmental re-sponsibility is constantly improv-ing. Under state-of-the-art envi-ronmental management, there is rarely a valid “environmental” reason why a project should not proceed. The solution is not to shut down mining, but rather to adopt, enforce, and socialize rea-sonable environmental laws.

Rising nationalismA positive attitude towards for-

eign investment was one of the fundamental underpinnings of Indonesia’s first “golden years” of mining (1967 – 1997). The ma-jority of Indonesia’s world class mines were financed by foreign investors. If Indonesians are to enjoy the benefits of another era of “golden years”, foreign invest-ment will be needed to supple-ment Indonesian investment sim-ply due to the enormous amounts of capital required.

Some misguided nationalists decry foreign investment in min-ing, claiming that the foreign in-vestor reaps most of the benefits from a mining project. Careful analysis shows, though, that this is simply not the case. Figure 1 depicts how the total amount of cash generated by a typical min-

ing project is shared over the life of the project by the project stake-holders. Most of the project cash flow is paid to suppliers such as domestic cement, steel, and fuel companies, and machinery and equipment suppliers. Next are government, employees, and fi-nally the investors. Pricewater-houseCoopers’ independent 2008 survey of Indonesia’s mining in-dustry confirms that the govern-ment’s share of pre-tax cash flow exceeds the investor’s profit. The investor’s share is simply what he needs to earn as a reward on his investment in a high risk project. There is no valid reason to object to foreign investment in the min-ing industry – the regulatory re-gime should create a level playing field for all investors – both do-mestic and foreign.

Albert Einstein is quoted as saying “Nationalism is the mea-sles of all mankind.” There are numerous case studies that prove nationalistic policies can be harmful to an industry and to the host country. Canada is a case in point, where slowly rising nationalism during the 1970’s culminated in a series of laws that discriminated against foreign in-vestment in the country’s natural resource sectors including min-ing. As a consequence of these laws, in the early 1980’s invest-ment in Canada’s mining sector plummeted, exploration dried up, and new projects were can-celled. The industry suffered and Canadians suffered. The govern-ment soon realized its mistakes, and repealed the offending laws. It is hoped that Indonesia will not catch Einstein’s measles.

Global economic downturn Mining is not only a capital

intensive industry, but it is also a high risk industry. One conse-quence of the global economic downturn is that capital has be-come very nervous and is looking at only the safest investments – at least for the time being. For the rest of this year, and probably into 2010, it will be more challenging than ever before to raise risk cap-ital for new mining projects. In this financial environment, it is essential that a country’s regula-

The Next Golden Years of Mining: Hanging in the BalanceBy any standard, Indonesia’s mining industry is a world leader

Coal pile and chute Courtesy of edupic.net

tory regime be supportive of in-vestment – having an interna-tionally competitive regime will serve to reduce investment risk and make it easier to raise badly needed capital.

New tax regulationsIncome tax legislation in most

countries recognizes the unique features of the mining indus-try with tax provisions that ap-ply specifically to this industry. Indonesia’s new income tax law, Income Tax Law No. 36/2008, does not specifically or adequate-ly address the mining industry’s needs with respect to the depreci-ation and amortization of capital costs, carry-forward of tax loss-es, reclamation and restoration funding, mineral property trans-fers, joint ventures, private roy-alties, and other mining-specific tax matters. Previously, the Con-tract of Work dealt satisfactorily with most of these tax issues.

It is understood that the Di-rectorate General of Taxation is currently drafting a new tax reg-ulation for the mining industry. Unfortunately, the mining indus-try itself has not yet been yet been invited to provide input to the draft. Perhaps more surprisingly, the Directorate General of Min-eral, Coal and Geothermal has not yet been invited to participate in the drafting process. Hopeful-ly, this will change.

New mining law Mineral and Coal Mining Law

No. 4/2009 is the new corner-stone of the regulatory regime for Indonesia’s mining industry. It is imperative that this law be inter-nationally competitive if Indone-sia is to experience another era of “golden years” in mining.

Unfortunately, the law is a compromise product of a frac-tious and diverse coalition gov-ernment. Notwithstanding the best efforts of the Ministry of En-ergy and Mineral Resources, the Law contains some significant shortcomings in terms of interna-tional best practices. For exam-ple, contrary to international best practices, the Law:

Provides for permitting based •on a tender process instead of on a “first-come-first-served” basis;

Is not as strong as it could be in •the area of security of title;Requires foreign investors to •commence a divestment pro-cess starting in the sixth year of production;Proposes to mandate enhanced •domestic processing;Fails to provide fiscal stability;•Fails to set out royalty rates; •andImposes production, export, •and price controls.

While the Law itself, at least on the face of it, falls short of inter-national best practices, neverthe-less it can be repaired. The key here is the implementing regu-lations – these regulations must play a key role in moving the Law closer to international best prac-tices. Otherwise, the next thirty “golden years” will remain only a dream.

17%Employees

18%Government

15%Investors

50%Suppliers

The data in this figure is based on a hypothetical gold mine that is characteristic of a typical real-life mine.

fIGURE 1: SHARES Of REVENUES GENERATED BY mINING PROjECT

Mining The President Postwww.thepresidentpost.com

Display until October 29, 2009 // No. 01 16

Indonesia’s Resource Potentials: Mining

In the global economy, Indonesia is rated

among the top emerging countries

with great potentials.By Atmono Suryo

Freeport’s copper mine in Papua

In the global economy, In-donesia is rated among the top emerging countries with great potentials. It is known

to be rich in natural resources: to include agriculture, forestry, fish-ery, oil, gas, mining, maritime and other resources.

One of the promising resourc-es is the mineral potentials which can give economic and social ben-efits to the country as follows:

It provides government reve-•nues (royalties, corporate tax, dividend) to the amount of around $ 4.8 billionEarning large foreign ex-•change income through ex-ports; representing about 20% of exportsImportance of community de-•velopment to accelerate the development in the regionsR&D technology transfer•Serving as economic multiplier•To assist in the creation of •jobs Except in certain areas such as

coal mining, for investors mining in general is a high risk, capital intensive business venture. With very long gestation periods be-fore reaching results.

INDONESIA : mINERALENDOWmENT

According to the Fraser In-stitute’s 2008/2009 Survey, In-donesia is the 5th highest rated country in terms of mineral po-tential.

Indonesia lies on the three •convergence of collided lith-osphere plates that created a new complex geological struc-ture and various types of min-eral deposits.Highly mineralized volcanic •archipelago stretching over 7,000 km.World class porphyry copper-•gold deposits.Large number of epithermal •and porphyry related gold de-posits.Large nickel-cobalt laterite de-•posits.Extensive coal deposits in •Eastern Kalimantan and Southeast Sumatra.A number of major discoveries •have made Indonesia a highly prospective region.

The country is still largely •under-explored and will un-doubtedly produce significant mineral deposits over the up-coming years.Provided some impeding law •and regulations can be amend-ed.Indonesia is the world’s biggest

exporter of thermal coal, the 2nd largest tin producer, ranks 4th in copper, 5th in nickel and 7th in gold production. In terms of GDP, however, mining is present-ly only about 4 to 7% of GDP.

For various reasons includ-ing regulatory weaknesses, the many uncertainties and with the many impediments for the last 10 years mining has remained to be a highly underdeveloped resourc-es area.

A few years ago during a peri-od of about two years the world went through a cycle of com-modity and mining boom and busts. The mining boom lasted for about 4 years (2004-2007). Commodities, especially miner-als such as Iron, copper, nickel and coal as energy had been on the increase pulled by demand from China, India and Russia. Because of some constrains In-donesia was not able to take ad-vantage of the short-lived mining boom.

Mining went down and came to a bust in an instant since ear-ly 2007. With the plunging de-mand, mineral prices went down dramatically. The short-lived mining boom was followed by the hard-hitting mining bust which has brought its adverse im-pacts. This has also affected In-donesia mining.

The financial crisis came short-ly thereafter in 2008 hitting hard-er and with greater speed than anticipated before by most min-ing companies. Many had to slow down or postpone the implemen-tation of their projects. It brought up the liquidity crisis (the severe credit crunch), consequently ex-ternal financing dried up over-night for most companies.

The mining industry was caught by the double squeeze: higher production costs and low-er prices; this double squeeze had its “killing effects” especial-ly for the smaller or new compa-nies. Infrastructure uncertainty became a bigger issue, especial-ly with mines located in remote areas.

At a meeting organized by the Financial Club and ICWA, a mining expert Bob Parson right-ly made the following timeframe of Indonesia’s mineral potential:

1967-1997 : Indonesia’s golden •years of mining1997-2009 : Minimal new in-•vestment, because of the poor investment climate2010-2040 : Next golden years•Such time-frame may come

true for a number of mineral products.

THE CHALLENGESMining is still being considered

as a risky and long-term business. Furthermore, in the world stock markets, mining stocks have un-dergone a rough beating and un-

No. Commodity Unit 2004 2005 2006 2007 2008 2009

1 Copper conct. dmt 2,810,333 3,553,808 2,938,009 2,814,952 2,397,899 1,776,647

2 Copper ton 840,318 1,063,849 817,796 796,899 655,046 520,930

3 Gold kg 92,936 143,205 85,411 117,854 64,390 58,043

4 Silver kg 262,935 32 8,749 261,398 268,967 226,051 159,021

5 Tin conct. ton 73,079 78,404 80,933 66,137 53,228 15,629

6 Tin metal ton 60,697 67,600 65,357 64,127 53,471 22,283

7 Bauxite mt 1,330,827 1,081,739 1,501,937 1,251,147 1,152,322 265,971

8 Conv matte ton 92,056 97,781 92,123 98,914 92,776 41,328

9 Ni+Co in matte ton 73,283 77,471 72,782 77,928 73,356 32,897

10 Nickel ore wmt 4,095,478 2,545,580 4,353,832 7,112,870 6,571,764 1,058,350

11 Ferro nickel mt 39,538 20,036 - - - -

12 Ni In Fe Ni ton 7,945 3,985 14,474 18,532 17,566 3,296

13 Iron sand wmt 89,664 32,203 5,489 - - -

14 Granite ton 3,637,441 4,302,849 5,217,807 1,793,440 - -

15 Diamond crt - 21,606 46,856 22,980 27,688 -

mINEral ProDUCtIoN By CommoDIty 2004-2009

Source: Ministry of Energy and Mineral resources

Courtesy of photography.nationalgeographic.com

certainties remain. While, on the other hand, the

mining industry, particularly in Indonesia is facing anti-mining sentiments. It is also being “over-loaded with new demands” to comply with increasing require-ments in the areas of sustainable development, environmental is-sues, carbon emissions, safety

regulations and the increase of the industries’ community devel-opment projects.

The current biggest problem concerns the New Mining Law and the implementing regula-tions. According to some min-ing experts, the Mining Law fails to embrace some important in-ternational best practices. The identified shortcomings concerns among others:

The licensing system based •on a bidding systemA yet- to-be-determined di-•vestment process Mandatory downstream pro-•cessingThe possibility of production •and export controlsUncertain royalty obligations •Dispute resolution mecha-•nismsIt seems to be unrealistic to

expect the Law to be amend-ed soon. There will be the need to issue soonest the required im-

plementing regulations to make the Law acceptable to the many stakeholders. And to make true the possible golden years starting from the year 2010.

To achieve that goal, of imme-diate importance is that the new Mining Law and the implement-ing regulations would be able to accommodate the legitimate in-terests of the central and local governments but also the busi-ness interests of the mining in-dustry.

The new Mining Law and the implementing regulations will offer more legal certainty. But it is still unclear whether it will be able to attract the credible inves-tors to unlock the country’s po-tentials. During the recent min-ing boom there was a large inflow of irresponsible companies ruin-ing large parts of the country.

In any case of prime impor-tance is the fact that Indone-sia’s economic growth would re-

quire the increased contribution of the country’s natural resourc-es, including mining. Mining should also become the engine of growth for many parts of In-donesia which are rich in miner-al resources. Stretching from Su-matra, Kalimantan, Sulawesi to Papua.

Indonesia is the world’s biggest exporter of thermal coal, the 2nd largest tin producer, ranks 4th in copper, 5th in nickel and 7th in gold production. In terms of GDP, however, mining is presently only about 4 to 7% of GDP.

The President PostOffICEMenara Batavia 25th Fl. Jl. K.H. Mas Mansyur Kav. 126Jakarta 10220, IndonesiaPhone : (021) 572 7337Fax : (021) 572 7338Email : ceo@thepresidentpost.comWeb : www.thepresidentpost.com

PUBLISHED BYYayasan President University

CEO & EDITOR IN CHIEfAli Basyah Suryo

CONTRIBUTORSAtmono SuryoCyrillus Harinowo HadiwerdoyoMaya A. SiregarNaresh MakhijaniTaufik DarusmanThomas W. ShreveWuryastuti Sunario

EDITORIAL & ADVERTISING/CIRCULATION DEPARTmENTSCory Margaretha

LAYOUT & DESIGNMohamad Akmal