Wayne in Indonesia

I have been in Indonesia for the last 10 days and its been exciting from start to finish. I ended up in Jogjakarta as Mt. Merapi volcano began its current eruption and airports closed. A bumpy 17 hour ride in the back of a jeep allowed me to see the Indonesia few foreign visitors see. Jakarta has been a whirlwind of meetings, conferences, dinners and great opportunities to see members and old friends. I got a sudden invitation to attend the state dinner for President Obama.

Follow the link below to see an interview a local social networking site did and hear a few other stories:

http://www.youtube.com/watch?v=ARVz3-0Q_68&feature=player_embedded

Rising Intolerance

Indonesia’s President, SBY, has asked President Obama to do something about intolerant acts against Muslims and Islam in the United States. But, perhaps now is the time for Obama to ask the same of SBY on behalf of Christians. SBY protested the possible burning of a Koran by a Florida pastor and the many US candidates running against the Islamic cultural center planned for New York (near ground zero) are just part of the growing Islamaphobia in the US. Although it does not appear to be at the level of France and Holland, a continuing high unemployment continues to feed the scapegoating impulse: when 30% of Americans believe Obama is Muslim, we have a problem. Indonesia observers are concerned about the growing number of violent attacks on Christians and Muslim subgroups such as Ahmadiyah. In certain communities in Jakarta, Christians have been attacked en route to a place of worship and the police have stood by. The respected Indonesian Survey Research Institute (LSI) found that 30% of Indonesians supported violent actions against Ahmadiyah, a group that believes Muhammad was not the last Islamic prophet. More shocking to those of us that often tout Indonesia’s marvelous tolerance is that 57.8 percent said they were against the construction of churches and other non-Muslim places of worship – the highest level recorded since 2001. Just this week, a group of youths calling themselves “Laskar Jihad” broke up a traditional Javanese shadow puppet performance (wayang). Perhaps its “Islam” is not pure enough or some spectators were imbibing. Non Muslim leaders are disturbed because the new National Police Chief is reported to have ties to the vigilante group Islamic Defenders Front (FPI), a group that has ransacked bars, attacked peaceful demonstrations, and broken up meetings of gay rights groups. More recently, pressured by hard liners, Indonesia’s Supreme Court upheld the indecency conviction of the founder of Indonesia’s Playboy although the magazine had no nudity. Indonesia’s President has spoken out against the violence and provided a reasonable analysis of why there has been more of it: “In a large-scale transformation, there might be disorientation and resistance,” he said. “It often causes uncomfortable feelings [and leads to different groups] blaming each other. It happens because the old values have been abandoned while the new values have not been properly established.” VP Boediono went a little further in remarks at a recent conference when he said “our state ideology tells us to respect people holding different religious beliefs. If we deviate from or contradict our basic ideology, the nation will come to ruin." It may be time for Indonesia to launch a more vigorous counterattack and for Obama to encourage him to do more to protect the rights of other religions. A start would be to ban incendiary groups like FPI and to more actively facilitate the construction of churches.

A New Era in US-Indonesia Relations Begins

September has brought with it much needed cooler weather, but regarding US-Indonesia relations, things are definitely heating up. The Comprehensive Partnership between the two countries, first announced in 2008, is in the process of being fleshed out: working groups focusing on education, climate change, trade and investment, science and technology, and security met on September 17 in Washington in an event called the US-Indonesian Joint Commission, chaired by Secretary of State Hillary Clinton and Foreign Minister Marty Natalegawa. The Commission has plenty of work ahead of it and will need to somehow rally those outside its halls to fully implement its vision. AICC looks forward to channeling its input.

President Obama finally announced he will visit Indonesia in November, sandwiched between visits to India and Korea. Even though it will be short, the visit will help solidify the important diplomatic progress that has been made since his election in 2008 and President Yudhoyono’s in 2009. Yudhoyono’s absence at the historic US-ASEAN Summit in NY could have been avoided if Obama had fulfilled his earlier commitment to visit Indonesia, but VP Boediono filled in ably and US audiences got to hear him discuss the economy, always a good thing. Traveling with Boediono was Gita Wirjawan, Chairman of the Investment Board as well as Kuntoro Mangkusubroto, head of the Presidential Working Group on government performance. These three symbolize President Yudhoyono’s transformative leadership; they are efficient, strong communicators, practical, modern, and professional. They represent the best of Indonesia. Their challenge is to overcome the anti-reform elements within the bureaucracy and Parliament.

In Dino Djalal,(pictured above) President SBY has chosen a veteran diplomat and Presidential speechwriter who has actually changed the language of Indonesian diplomacy. We have noticed that since 2004 the President’s speechs are devoid of past artifices and circumlocutions, and cut to the core of issues quickly. Having lived in the United States as an adolescent, the new Ambassador is fluent in English as well as America’s diverse culture. His own story here, where he lived with a NY family, is compelling, and will help him in his efforts to present a democratized Indonesia that few Americans really comprehend. For as long as anyone can remember, Indonesia has not had an Ambassador with this level of closeness with the country’s President. AICC looks forward to meeting with Dino next month and to a new era in US-Indonesia relations.

OBAMA TO VISIT INDONESIA IN NOVEMBER

It looks like the real thing this time !

President Obama made a clear statement of his intention to visit Indonesia in November during his speech Thursday at the UN. In my follow-up conversations with senior US State Department officials, its likely that Obama will visit for only 24 hours, following his visit to India, which should occur soon after the November US elections. However, a more extended visit is being planned for 2011 when Obama is expected to attend the East Asia Summit. I applaud this move. Much better to get a visit in now--even if its a short one-- than keep Indonesia and its patient President, Susilo Bambang Yudhoyono, waiting.

Bali-Wood: “Eat, Pray, Love”

The new Julia Roberts vehicle showcases her shining presence and gives Bali a real Hollywood live star turn for the first time. This is no Hope/Crosby “Road To Bali” flick made in a studio; the scenes of the island of the Gods are real and the island looks gorgeous. I kept an open mind, not expecting very much. I hoped Bali would come through as more than a caricature of what it really is. I am not sure that it did. The movie predictably reinforces Bali's image as a place for spiritual renewal but equally clear is its location as a place for well-to-do expats to party and fool around. There's no link to Bali's place within Indonesia; in fact, I am not sure the word Indonesia is mentioned. You don't hear any of its music or see its wonderful performing and visual arts or great temples. Hardly any crafts. What you do see is the creativity of its paddy landscapes. In other words, great tracking shots. The soundtrack for the Bali section is primarily samba, the leit motif of its main character's Brazilian love interest.

I have heard that there has been an uptick in travelers because of the book and I imagine the same with the movie. That's a good thing I suppose.

The Indonesian actors are quite strong (the great Christine Hakim and the wonderful Hadi Subiyanto ) In fact, they steal some of the scenes they have with Julia Roberts. Indonesia can be proud of its performers transcending their locale.

What you learn about Bali is superficial but perhaps it will encourage stronger story lines. Now Hollywood has proven that Indonesia can support a big budget location shoot. To me the movie is a fairly prosaic ode to single womanhood and single motherhood. It has heart and accurately represents expats who find “balance” in their chaotic lives from a time in Bali. But those tracking shots mirror the sense of someone merely passing through, which is exactly what its main character does.

Rupiah May Go on a Diet

The rupiah as we know it may be history in ten years. What, you say, how can that be. Don’t panic; no need to liquidate positions. There is no drastic devaluation coming. Just gaze wistfully at those many zeroes on bank notes and prepare to say goodbye. If a Bank Indonesia plan is adopted (and I emphasize the word if) we will all be making new, simpler calculations. You guessed it: the rupiah is being prepared for a “re-denomination”. After a 10 year phase-in period currency notes would not have the zeroes.

"Re-denomination shall be in no way detrimental to the public as it differs from previous currency reforms that reduced the exchange value of the currency. Redenomination does not affect the value of money against goods (purchase power), several zeros are simply omitted from the current denominations," clarified the new Governor of BI, Darmin Nasution.

Unlike the two other times in Indonesia’s history when the currency was redenominated to cope with high inflation this one would reflect the growing strength and stability of Indonesia’s economy and would simplify transactions. Bank Indonesia spokesmen indicated that another aim is to help in the preparation of an ASEAN Economic Community. So far local businesses and economists have had a positive reaction to the announcement even though they acknowledge there will be be costs. Several leading business leaders speculated that the change (basically shifting the decimal place) will create a more positive perception of value. However, the markets and some members of the public had an initial negative reaction. One group that will immediately cheer this move is the tourist, usually bewildered at money changing windows and the cash register.

A Rising Yuan: Good for Indonesia

China’s recent decision to allow its currency to float upward against the US dollar should be good news for Indonesia. Of course, the technical aspects of the exchange rate flexibility remain to be seen but if a measurable appreciation occurs, Indonesia stands to benefit. The cost of Chinese goods –already affected by rising labor costs—should theoretically rise, making Indonesian products more competitive. Companies that already had a diversified approach to sourcing in Asia now see the wisdom of their strategy and those that have not should be giving Indonesia a very close look, especially its export processing zones.

A rising yuan (even if done gradually) will also boost Chinese purchasing power, making it easier for Indonesia to export commodities and other goods to China.

Indonesia can capitalize on this development by reducing its many hidden costs and barriers to doing business, liberalizing its investment and regulatory climate, professionalizing its commercial legal system and bureaucracy, and engaging in focused promotion efforts.

Now Srikandi Can Laugh

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Indonesia’s departing Finance Minister, Sri Mulyani, has been speaking at gatherings held in her honor. As usual she does not speak indirectly, a style preferred by many of her countrymen. As the Jakarta Post reported: “During her general lecture on public policy and ethics in Jakarta on Tuesday, Mulyani, who is known for never addressing politics in her speeches, said a ‘political marriage’ (alluding to the President and Golkar Chairman, Aburizal Bakrie) had cost her the finance minister position. She said she could no longer exist in a political system in which ethics had become an exotic virtue. She said she was no longer wanted.”

Curiously, some members of the Golkar , many of whom directly accused her of illegally presiding over a bank bailout, complained that she should have been more grateful, diplomatic, and “less angry”. After all, in the words of one of them, she had been “allowed a soft landing”. (as opposed to a criminal prosecution ?) This not-so-subtle form of intimidation characterized Golkar’s approach during the administration of President Suharto.

"Corruption is everywhere and it depends on the (leaders') response to eradicate it," Indrawati said in a speech to university students Wednesday. "If the leaders are clean, others will follow."

Another party, PDI-P, applauded Sri’s statement and hoped for more to be revealed about her exit.

The Post also reported that at the University of Indonesia alumni event, Mulyani’s friend Rhenald Kasali, the MC at the event, invited Hariono, a fellow alumni, to tell the tale of Wayang Orang, a traditional Javanese play. Hariono told a story about a war in which Srikandi, a female warrior, was forced to withdraw from battle. “Where? To Washington,” Hariono said.

Bidding farewell to fellow alumni at the University of Indonesia’s Faculty of Economics, where she obtained her undergraduate degree, Mulyani said “Today is perhaps the first day in six years that I have been able to laugh full heartily,” she said.

Sri Mulyani Resigns

Indonesia's Finance Minister, Sri Mulyani, has resigned to take up a post at the World Bank as a Managing Director, June 1. A successor has yet to be named. Certainly, this able economist/reformer has many reasons to leave Indonesia's government, given the unending political efforts to blame the Bank Century debacle on her as well as the "push back" from her campaign to reform her corruption laden customs and tax offices. I suppose there are sighs of relief in many companies and within certain government offices but I hope the President appoints someone who will keep up the pressure. It would be natural to expect international investors to pause in their zeal for Indonesia debt or equity. We will all be waiting to see how President Yudhoyono plays his next move. Meanwhile, we have to acknowledge the courage and fortitude of one of Indonesia's most able public servants and wish her well in her new life here in the US. Mulyani will be part of World Bank President Robert Zoellick's inner circle.

Accepting the appointment Ms. Indrawati said: “It is a great honor for me and also for my country to have this opportunity to contribute to the very important mission of the Bank in changing the world."

“Ms. Indrawati brings a unique set of skills and experience to the World Bank Group, from the vantage point of an advancing Middle-Income country that still faces significant challenges of poverty. She has received global recognition for her success in combating corruption and strengthening good governance,” noted Mr. Zoellick. “She has been a leader in the developing world on climate change, and active in the international arena through the G-20, APEC, ASEAN and other groups.”

Investing in Indonesia: The Time is Now

Cameron Hume, US Ambassador to Indonesia, recently wrote what I consider to be one of the most bullish Op-Ed pieces on investment in Indonesia by a senior US official in the last 12 years. Hume lists a diverse set of positive indicators including:

• OECD’s recent upgrade of Indonesia’s risk rating now allows US EX-IM Bank to reduce lending costs 20-25%
• The OPIC agreement recently signed with Indonesia makes $1.4 billion available for risk insurance and investment
• Geothermal and other clean energy deals are at the top of the list for investment and trade; Indonesia is streamlining its regulatory framework
• Hollywood is no longer avoiding Indonesia’s as a site location- Julia Roberts’ next film was shot in Bali and “Survivor” may shoot in Indonesia next year.
• The government is offering up to a 2/3 stake in $140 billion of key infrastructure projects to the private sector
  

We know that many impediments in key sectors still hamper US direct investment but the Ambassador (who is close to much of the action) senses that real change is underway and he doesn’t want US firms to miss the train. The op-ed, direct in its appeal, can be downloaded at http://www.aiccusa.org/humeoped.pdf. Something to show those “naysayers”.

Return of the Big Emerging Market and Tied Aid ?

In 1990 George H. Bush’s Administration provided mixed credit support to A T & T’s bid on the second digital switch for Jakarta, beating out Siemens’ heavily subsidized bid. The US finally did what it had refused to do during most of its history and especially during the laissez faire, no tied-aid Reagan years: mix government grants and loans to support a private company trying to do business in a foreign country. Surveys by AICC and AMCHAM had determined that not only were US companies shut out of the state-dominated Indonesian telecom market, they wouldn’t even bid. Because the US has no state-owned telecoms and utilities (unlike Europe, Japan and Indonesia ) to rally around getting our technology to be competitive in Indonesia has been a major challenge. In the 1990‘s President Clinton’s Commerce Secretary, Ron Brown, tapped Indonesia as a BEM (big emerging market) and developed more of a mixed credit approach to supporting US exports. A “war chest” and a Trade Promotion Coordinating Council (TPCC, still in existence) was created to package grants and low interest Ex-Im Bank loans to support US bids government tenders.

I was in Washington last week and learned that the US intends to plan a series of trade missions to Indonesia in the months ahead, starting with a clean energy business development mission to Indonesia and China led by Secretary of Commerce, Gary Locke. I had a very productive meeting with an informal interagency group organized by the US Trade Representative’s office. Not only is Indonesia in President Obama’s vision because of his upcoming June trip, but also his National Export Initiative, whose ambitious goal is to double exports within 5 years. President Obama’s March 11 executive order on exports looks very much like a re-statement of the BEM program, but with an emphasis on small and medium sized companies. All well and good but in Indonesia its often big projects done by big firms.

Just last week, China announced an offer of $2 billion of aid to Indonesia to support infrastructure projects tied to the purchase of Chinese goods, a clear shot across the US bow. To even come close to Obama’s goal in a country such as Indonesia will require a strong evaluation of the competitive position of US companies and, I would submit, a judicious use of grants and loans to large as well as small and medium firms. Yes, we do have a low interest environment that helps in financing but Indonesia may want terms such as it used in the 1990’s, 5 year grace periods and 25 year loans, terms that would be very difficult for most commercial lenders. So, its great to organize trade missions but do we have enough arrows in our quiver ?

Return of the Big Emerging Market and Tied Aid ?

In 1990 George H. Bush’s Administration provided mixed credit support to A T & T’s bid on the second digital switch for Jakarta, beating out Siemens’ heavily subsidized bid. The US finally did what it had refused to do during most of its history and especially during the laissez faire, no tied-aid Reagan years: mix government grants and loans to support a private company trying to do business in a foreign country. Surveys by AICC and AMCHAM had determined that not only were US companies shut out of the state-dominated Indonesian telecom market, they wouldn’t even bid. Because the US has no state-owned telecoms and utilities (unlike Europe, Japan and Indonesia ) to rally around getting our technology to be competitive in Indonesia has been a major challenge. In the 1990‘s President Clinton’s Commerce Secretary, Ron Brown, tapped Indonesia as a BEM (big emerging market) and developed more of a mixed credit approach to supporting US exports. A “war chest” and a Trade Promotion Coordinating Council (TPCC, still in existence) was created to package grants and low interest Ex-Im Bank loans to support US bids government tenders.

I was in Washington last week and learned that the US intends to plan a series of trade missions to Indonesia in the months ahead, starting with a clean energy business development mission to Indonesia and China led by Secretary of Commerce, Gary Locke. I had a very productive meeting with an informal interagency group organized by the US Trade Representative’s office. Not only is Indonesia in President Obama’s vision because of his upcoming June trip, but also his National Export Initiative, whose ambitious goal is to double exports within 5 years. President Obama’s March 11 executive order on exports looks very much like a re-statement of the BEM program, but with an emphasis on small and medium sized companies. All well and good but in Indonesia its often big projects done by big firms.

Just last week, China announced an offer of $2 billion of aid to Indonesia to support infrastructure projects tied to the purchase of Chinese goods, a clear shot across the US bow. To even come close to Obama’s goal in a country such as Indonesia will require a strong evaluation of the competitive position of US companies and, I would submit, a judicious use of grants and loans to large as well as small and medium firms. Yes, we do have a low interest environment that helps in financing but Indonesia may want terms such as it used in the 1990’s, 5 year grace periods and 25 year loans, terms that would be very difficult for most commercial lenders. So, its great to organize trade missions but do we have enough arrows in our quiver ?

Indonesia (Bali) In Theaters Soon

Indonesia will soon be coming to a theater near you. Julia Roberts will be taking a good part of the United States to Bali in August 2010.

Click Here to See a Trailer for "Eat, Love, Pray"

Obama Delays Trip

This seemed inevitable but regrettable.


WASHINGTON, March 18 (Reuters) - President Barack Obama on
Thursday scrapped his trip to Indonesia and Australia scheduled
for next week to focus on the final push for a U.S. healthcare
overhaul, the White House said.

"The president regrets the delay," White House spokesman Robert
Gibbs told reporters, saying the Indonesia visit would be reset
for June. He said Obama, who had been due to leave on Sunday for
the South Pacific, had called Indonesian President Susilo
Bambang Yudhoyono and planned to phone Australian Prime Minister
Kevin Rudd.

Obama's Trip/ S & P Upgrade

As has been previously been reported, President Obama was scheduled to visit Indonesia March 20-22 where he would be a state guest of Indonesia’s President, Susilo Bambang Yudhoyono. White House Press Spokesman, Robert Gibbs, announced this morning that Obama would delay his trip by 3 days so he can remain to support his health care legislation. I am impressed that he didn't cancel his trip altogether or postpone it indefinitely. This should help continue this Administration's strong moves to put southeast Asia and Indonesia much more on par with other regions vis a vis US diplomacy. Although the Bush administration maintained good connections in the region and with Indonesia, US preoccupations with Iraq and Afghanistan prevented the full range of diplomatic contact that the region and country deserves.

During the upcoming visit, President Obama is expected to sign a “comprehensive partnership” agreement, a document that will lay out a structure for a more intensive government to government relationship on a broad range of topics: climate change/environment, food security, education, trade and investment, security cooperation. His other activities are yet to fully emerge and its regrettable that his delay prevents him from taking his wife and daughters. Obama, clearly could make a much stronger impression in family-oriented Indonesia with them. Indonesia's are very excited to receive someone whom they claim is part of their family and its clear Obama relished the opportunity to show his family his old school, neighborhood and foods. Hopefully he will get a second chance to do this.

While the impetus for the comprehensive partnership agreement was clearly from Indonesia—which has signed similar agreements recently with China, India, South Korea, and Japan—the US has embraced the process. Combined with other actions and activities such as signing the ASEAN Treaty of Amity and Cooperation and establishing an ambassador for ASEAN, US diplomacy with Southeast Asia has been significantly rebalanced.

It is not clear yet what the “takeaways” for US business will be in the agreement, given that it is not a binding document such as a treaty and does not supersede existing law in either country. US and Indonesia businesses, however, did express their suggestions for the partnership through several forums and the agreement should --at a minimum-- increase the chance of freeing existing bottlenecks that inhibit more trade and investment .

S & P Upgrades Indonesia’s Rating

S & P has upgraded Indonesia’s sovereign foreign currency rating to BB from BB- with positive outlook, the first upgrade in 4 years and highest since 1998. This puts Indonesia’s rating on par with Turkey and one notch below investment grade. Indonesia’s Finance Minister, Sri Mulyani has made this her goal for 2010. The hard work of Indonesia, to put its financial house in order, is paying off. Indonesia's cost of borrowing will drop, increasing the chances that job creating investment can come to the country. Why on earth did its Parliament spend months and months trying to get rid of one of the officials most responsible for making this great development happen ?

FOXNews.com - Obama Delays Trip to Indonesia to Work on Health Care

FOXNews.com - Obama Delays Trip to Indonesia to Work on Health Care

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President backs Boediono and Sri Mulyani

The Bank Century scandal has festered for many months as a special Parliamentary committee investigated the controversial bailout that occurred in November 2008. Each political faction of the committee made a conclusion based on their interpretation of the information they uncovered. Some factions named VP Boediono and Finance Minister Sri Mulyani as responsible for illegal losses to the state with the implication that they should resign or be impeached. Other factions backed them. The full Parliament is slated to hear and vote on the report in a matter of days. The vote has no direct legal bearing on the status of either official. It was heartening for those who believe that the bailout was made in good faith that the President took ultimate responsibility in his announcement yesterday:

"Although it was the finance minister who made the decision, I
say the decision is correct. And I am responsible for it and I
did not give any direction," Yudhoyono told bankers at the State
Palace in Jakarta on Monday.

"The policy is a choice of existing options. It was made with
authority, undertaken with good intention. From the situation,
he or she was forced to make a decision and it should be quick,"
the President added.

An ongoing investigation has found --and will probably continue to find-- evidence of criminal irregularities in how the bailout was administered. But with the President providing cover for Boediono and Sri Mulyani, it seems for now at least, that the government and (Boediono and Mulyani) can continue their reform work in earnest without this distraction.

Autophagy

You may have heard of the octopus that will eat one of its arms under stress. Well, Indonesia could be doing the same thing. I read the following words from a recent Jakarta Post article with chagrin: "He [Vice President Boediono] confirmed his commitment to serving the country, no matter if he had to lose his job," said organizational affairs chairman of the Indonesian Young Entrepreneurs Association (HIPMI) Kamrussamad, who sat with the beleaguered economist recently.

I am astonished that impeachment talk is still heavy in the air in Jakarta, even after months of inquiry by a House special committee and no evidence of criminal wrongdoing by the President, Vice President or other Ministers. And if impeachment isn't the ultimate goal of the political infighters, they apparently hope to settle for the resignation of some of the nation's best and brightest.

Jakarta media is rife with reports of "deal-making" to prevent the impeachment of the President and/or Vice President, with Finance Minister Sri Mulyani or other top officials as sacrificial lambs. Members just returning from Jakarta report that this is the hot topic of discussion. I suppose its akin to the calls for the resignation of Treasury Secretary Tim Geithner, as earnest and dedicated a public servant as you will find, or the "Cornhusker Kickback", the deal made to gain Nebraska senator Ben Nelson's vote on healthcare.

But, the stakes in a developing country with high levels of poverty and unemployment are very high. For the first time in several years Indonesia's economic future looks so much brighter. The government has made a good effort through its 100 day program to lay the groundwork for more foreign investment, especially in infrastructure, as well as reforms in environmental safety, education, healthcare, and agribusiness. Sovereign credit ratings have improved and prospects for increased foreign investment and trade are strong. It would be a shame to see all this stalled, a real danger since although the House committee is close to ending its investigation the Corruption Eradication Commission is just beginning theirs. Who knows what other revelations will be revealed? We can expect them, but doubtful they directly implicate SBY, Boediono, or Sri Mulyani. Meanwhile, they need to govern without facing a perpetual guillotine.

I suppose it was too much to expect that the coalition formed after the reelection of President SBY would "hang together" for the good of the country. Could it be that the democracy that Indonesia adopted after the fall of the Suharto regime is that of 1950-57, when Parliamentary coalitions were highly fragile, the Cabinet/Prime Minister changed ten times, the bureaucracy atrophied, and little was accomplished? Lets hope not.

Outlook for 2010: A Compromised Political Environment for Change

The world is such an interconnected place that the Presidents of both Indonesia and the US – two of the world’s largest democracies--are suffering deep political challenges resulting from the global recession. The 2010 story line will be the same in both countries: how to accomplish needed reforms and grow jobs in a compromised political environment. Elected by strong majorities in 2008 and 2009, President Obama and President SBY came in with what many thought was strong momentum. But each has seen their popularity drop and reforms challenged by an angry electorate and legislature unhappy with seeing big financial bailouts and little job creation. In Indonesia’s case, a scandal surrounding the bailout of a small bank, Bank Century, is diverting the government’s effort to build needed infrastructure and undertake judicial reform, and continues to threaten the career of one of the most competent and credible officials in the government: Finance Minister Sri Mulyani. US legislation to reform its healthcare and financial system is further not closer to passage following the special Massachusetts Senate election where voters continually raised the issue of big bonuses to Wall Street and little to Main Street. Should politics force out Sri Mulyani, the effect on investor sentiment would be negative even as Indonesia’s fundamentals remain positive. However, recent statements by SBY indicate that he will continue to back her. If SBY can successful navigate through difficult political shoals, a resurgent Asia and a recovering US and Europe will bring a better economy this year, advancing Indonesia closer to its target GDP for full employment of 7%.

to Read the complete outlook: Click Here

It’s a Matter of Time

When I first traveled to Indonesia I was introduced to the Indonesian concept of jam karet (rubber time). Appointments times were only a rough estimate and if someone said they were going to visit you tomorrow, it could be in two days or a week. Beginning in the 1980’s, as Indonesia engaged more seriously with the wider global community, jam karet began taking some serious hits. I once showed up for an appointment with a senior government official who was a bit angry at my tardiness, “Not all Indonesians expect to be late, some of us believe in doing a job according to a schedule”. In the 90’s businesses ran in-house training programs on time management, and stories began appearing in newspapers and journals on the topic. Clearly, attempts to change the relaxed attitude towards time were underway.

Now, 10 years after the new millennium, Indonesians, citizens of the world, answer email promptly, and are on social networking sites such as Facebook, Twitter, and MySpace. They get back to their friends immediately.

And so the country can be proud of the singular achievement of its flagship airport, Sukarno-Hatta, which is now ranked 2nd in the world for punctuality, behind two Japanese airports. Using data from FlightStats, the news portal forbesttraveler.com reports (noted by Bruce Gale in the Straits Times) that the airport for Jakarta has a 84.2% on-time arrival rate and 89.2% for departures. Travelers may still complain about customs, airport restaurants, dirty toilets and the traffic bottlenecks between the airport and the city, but in terms of arrivals and departures: no jam karet here !