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[Music]
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Bita thank you so much for joining us
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today thank you happy to be here well I
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wonder if we could start by talking a
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little bit about the Indonesian economy
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uh you know when people think about
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global Investments Asia the countries
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that tend to come to mind are the giants
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like China and India and to some degree
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also Korea uh Vietnam and so forth when
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you think of the emerging markets in
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this kind of a global environment how do
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you position a country like Indonesia as
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a destination for international
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investors and how do you use that to
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drive your
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strategy that's that's an interesting
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question uh the the way to do it is is
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is to project Indonesia with
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positivities in
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realism uh we don't want to be swinging
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the pendulum uh too much uh you know
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from one to the other um I think we have
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suffered uh you know from not many
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people knowing about
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Indonesia uh not many people in the
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right
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places uh knowing about Indonesia so
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that's I think the most fundamental area
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that we've got to work on in terms of
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our having to elevate the level of
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awareness with respect to Indonesia that
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we're doing we're basically going out uh
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you know reaching out to different parts
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of the world uh you know to the US to
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Europe and many parts in Asia Pacific
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just to let everybody know that
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Indonesia is actually a $650 billion
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economy this year in
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2010 that it has 140 million people the
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third largest democracy a Muslim
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modernity the largest Muslim country in
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the world which I know a lot of people
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in Oklahoma don't know about uh that I
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think is being remedied as we grow now
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beyond that I
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think we would like to basically
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socialize and educate uh you know the
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internet ational Community with respect
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to you know some of the other
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positivities of Indonesia I think not
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many people also know uh you know the
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Fantastic demographic dividend uh or
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bonus that Indonesia entails I mean 60%
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of the population is you know 39 years
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old or younger 50% of the population is
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29 years old or younger that I think
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contrast with you know the situation and
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countries like Japan and China and as as
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you all know I mean we have a
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pretty competitive uh you know economic
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uh environment which I think uh is to be
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reckoned with uh let's not forget we've
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been able to
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show you know stability from a political
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standpoint macropolitical standpoint and
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also from a macroeconomic standpoint uh
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years ago 11 or 12 years ago I think
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you've if you had talked to me about
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Indonesia it would have been tough for
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us to actually be projecting Indonesia
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in a positive way uh you know in a
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realistic manner uh now I think we've
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got those two elements the macroeconomic
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stability and the macropolitical
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stability uh from an economic standpoint
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we've been able to show fiscal
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sustainability we've been able to show
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monetary stability for years you know
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the last five 6 years uh and there's no
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you know apparent uh
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inflationary pressure you know coming in
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uh in ways that we had seen you know a
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few years ago uh and our ability to
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balance our budget uh has been I think
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recognized by the International
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Community particularly the ratings
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agencies um and you know our ability to
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trim down our debt uh to to a mere 28%
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debt to GDP ratio I think that's
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commendable uh especially if you put
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that in the context of what some of the
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the other economies in the world are
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going through today so you've got I
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think the macroeconomic stability story
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uh to to tell right and then the
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political stability uh we've gone
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through you know a rather
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difficult
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democratization earlier on but I think
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we've been able to show to the rest of
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the world that we have democratized in a
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good way uh and you know there's no
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apparent centrifugal force now that
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could rip you know the country apart
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like you know many people thought uh 11
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or 12 years ago so you've you can take
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off those boxes on the politics and the
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the economy beyond that I think uh one
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needs to take into account Indonesia's
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ability to
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you know remedy its mistakes uh I think
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Indonesia needs to stop being known as a
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country of tsunamis
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earthquakes and floods and all the
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negativities that have been portrayed in
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many you know International you know
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media uh but I think the world needs to
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understand Indonesia in a different way
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it has been more misunderstood than it
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deserved uh and that's what we are
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trying to Remedy by going out to sit
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down with you know think tank
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organizations and people within the
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Academia uh and people within you know
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executive decision-making bodies uh and
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I would prefer to spend more time with
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people within the Academia then and also
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the think tank as opposed to speaking uh
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in front of you know you know hundreds
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of businessmen who at the end of the day
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would have to rely on opinions you know
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being shaped and formed by people who
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actually understand or at least are
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willing to understand Indonesia better
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yeah now since we're talking about uh
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macroeconomic uh stability and the
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picture uh let's talk a little bit about
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some of the headlines that we see these
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days in the news and uh I'd love to know
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from you what your senses of their
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impact on the Indonesian economy uh for
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example these days there's a lot of
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discussion about what's likely to be uh
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happening with Europe uh the the the US
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part of the recession you know went on
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for a while but uh who knows when the
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you know the second shoe will drop in
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Europe uh what What's the impact on
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Indonesia likely to be do you get a lot
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of her FDI from there could be could
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that be impacted well you know I I'm I
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think many have have recognized that you
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know the the recovery that we're seeing
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in in the US and also in Japan is
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rather
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broad-based uh and that I think we take
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comfort in uh but what's happening with
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Europe uh I think is is not only
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concerning to the Europeans but I think
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it could concern many in the rest of the
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world
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uh fortunately uh you know
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our linkage with the European Union
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countries from a trade standpoint uh you
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know are EXP Port uh propensity to
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Europe uh the European Union countries
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and also uh the bank claims ratio in
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terms of banks that could claim back
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their uh you know exposure with you know
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papers that are being issued by the
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Indonesian government or Indonesian
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corporates is
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not significant as for us to to to be
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too concerned but I do believe this
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though uh I think we have an exposure
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that is
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quite you know large with other
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countries outside Europe that have I
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think quite a significant exposure with
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the European Union countries so in an
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indirect manner I think we have to be
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cautious you know in terms of how we you
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know go forward how is all this going to
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impact uh you know investment flows
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coming from Europe uh I think uh it
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could have a a pretty serious impact but
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uh you know we have to you know
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underline the point that you know a good
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chunk of the investment coming into
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Indonesia has thus far been coming from
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Asian countries you know these Southeast
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Asian countries and the Japans of the
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world and koreas and increasingly Taiwan
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and Mainland China um although we're
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seeing an increasing amount coming from
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the US you know in in the last quarter
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or so uh so uh we've got to be cautious
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but I think we've got to basically
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continue deepening our communication uh
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with some of the members some of the you
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know uh countries that have been
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uh loyal and contributing to the
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investment uh map in
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Indonesia the the other major news
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development recently of course is
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China's decision to let its currency
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appreciate uh perhaps in preparation for
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the G20 corre uh discussions uh in
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Canada uh what impact you see that
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having on indones Expos I I think it's
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uh it's potentially enormous because of
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two accounts number one if you take a
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look at the economic structure
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of China and that of Indonesia I think
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there's a great degree of
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complimentarity China for the last 20
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years has been driven by
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Investments and Indonesia has been
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driven for the last 15 years by domestic
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consumptions and China is trying to move
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the pendulum from an investment Centric
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economy to more of the human capital
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development and more of the domestic
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consumption stuff uh whereas Indonesia
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needs to move its Reliance on you know
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domestic cons assumption for the economy
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to a more investment Centric uh Behavior
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so that complimentarity I think will
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play out nicely if we get Iraq together
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uh in terms of boosting investments in
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terms of you know inviting and
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encouraging Chinese investors to come to
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Indonesia and second uh is the increased
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strength of of the Yuan or the rimi
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which will I think uh solidify the
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Chinese position to even be shopping for
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more goods and services and also
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hopefully for more Investments uh abroad
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uh in Indonesia and we have seen you
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know a significant expression of
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Interest by many Chinese companies uh
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the numbers in terms of realization have
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not been as staggering as the expression
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of interest but you know there's always
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a lack between expression of interest
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and actualization of you know the
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investment uh but we have made a couple
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of trips to China in the last few months
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and we have been visited by throngs of
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you know Chinese companies who have
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expressed you know their interest in
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building the infrastructure building you
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know uh
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the power generation capabilities Road
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and bridges on the back of you know
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their you know Keen interest in getting
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you know natural resources from
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Indonesia such as coal boide nickel iron
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ore and all that so I think we've got to
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be cognizant
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of ensuring that there is value
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optimization uh you know not that we you
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know we don't want to just be selling
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coal and natural resources but I think
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we've got to attract whoever including
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the Chinese in terms of helping us
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create more of a value added to the
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value chain you know speaking of uh
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human capital development uh you know as
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as you correctly said you know
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Indonesian economy has been based to
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some degree on domestic consumption but
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also to some degree on the successful
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use of Natural Resources right uh how do
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you envisage moving from that to a a
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knowledge based economy and do you have
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a sort of strategic vision for how how
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Indonesia could go there we do I mean if
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you take a look at
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our investment road map I think uh the
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first
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phase obviously involves the quick wins
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right the quick wins unfortunately or
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fortunately involve some of the more
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natural resource Centric investment
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thesis but we're trying to go to the
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second phase of basically creating INF
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structure soft and hard not just
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building roads and power generation
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capabilities but the soft part which is
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really creating more capacity building
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uh so that we can weed out policies
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which are
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confusing policies which are you know a
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little too ad hoc uh with a view that we
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can go forward more in a strategic
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manner as opposed to Tactical um and I
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think the investments into the
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infrastructure soft and hard will entail
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you know our ability to go to the third
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phase of the large scale you know
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industrialization which we need because
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we need to ensure that there is you know
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vertical
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integration uh in the value chain uh and
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we've got to move away from just natural
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resource we've got to ensure that you
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know we go to the downstream side of it
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it we don't just sell boide but we've
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got to build smelters we don't just sell
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cocoa but we've got to build the
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chocolate factories we don't just sell
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palm oil we've got to build a Refinery
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similarly with the oil and gas uh that
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will I think add value and also create
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jobs our president is hugely committed
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about the the three-prong strategy Pro
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job PR growth prop poor and without the
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vertical integration and the value added
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we're not going to achieve the pro
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growth and pro job uh and surely the
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proor uh
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now is that likely to happen soon you
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know the large scale
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industrialization I think it could if we
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do not only take the non-fiscal view but
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we've got to take a fiscal view of
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things I think we've got to be able to
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basically not just map out but you know
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take a view on certain industries which
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we want to support
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that would create a lot of value but
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we've got to be able to provide the
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necessary fiscal structure and space
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whether that involves giving fiscal
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incentives or what have you that I think
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we've got to really you know make a
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decision on uh soon now if we can get
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that done I think you can see
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Indonesia's ability to manufacture goods
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and services in a big way which I think
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can allow us us to position ourselves as
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a knowledge-based economy which is our
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last phase of the you know investment
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road map that's I think a 10 to 15 year
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view of the Indonesian uh you know
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investment road map now I I do take
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comfort in this because you know again
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you know we've got the demographic bonus
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right and then let's you know let's not
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forget you know the government's
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commitment in terms of educating the
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society uh now the government is
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allocating 20% of its budget indirectly
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and directly for purposes of Education
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that's a larger number than whatever we
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saw you know six or seven years ago
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which was on a single digit basis um now
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I think with that kind of a commitment
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in terms of
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infusing soft power and software into
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the society I think we've got a good
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chance great well uh with that
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background about the economy let's let's
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turn to the some of the specific things
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that you are doing at bkpm to advance
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this uh Mission forward uh the very
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first question that struck me was uh
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what the elevation of the uh of of of
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the office to a Ministry meant in terms
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of your ability to tackle some of the
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challenges that that might lay ahead uh
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any any thoughts on that I think it
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mattered
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but I don't think it mattered as much as
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people think
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okay uh because I think a lot
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of what we have done I think is is
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mainly out of you know the institution's
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own initiatives as opposed to the fact
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that it is ministerial you know in terms
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of levels
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uh one
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classic uh example that I can point out
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is our ability
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to create this One-Stop shop right which
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came into implementation in February
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this year this was a delegation of
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authority from 15 different
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ministers and you know one may think
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that it's tough to get one signature
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from one Minister we were able to get
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those you know in relatively a short
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period of time mhm and with that we were
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able to simplify investment decision
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making process in Jakarta now we can
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issue a license in 5 hours okay unlike
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how people might have thought or unlike
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the reality long time ago or not too
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long time ago at the longest 7 Days okay
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now we can give you you know immigration
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permits labor permits and all that
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without you're having to go to all the
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different Ministries even the fiscal
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incentives for certain industries
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now the challenge is to actually roll
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this
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out to all the 33 provinces all the 500
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kabu patents or regencies that's that's
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a monster in itself and we have set a
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Target to basically roll it out in seven
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provincial capitals by the end of June
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of
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2010 and by the end of the year in all
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33 provincial capitals including seven
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that we would have implemented by the
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end of June and 40 kabu patents the
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capitals of you know 40
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regencies I think if we can get this
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done which I believe we
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can we will see a significant value
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unlocking yeah what what kind of uh
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barriers do you
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anticipate uh or or do you anticipate
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any barriers or resistance on the part
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of the provinces uh simply in terms of
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the execution of rules and regulations
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realistically yes we've got to
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anticipate that so how do you overcome
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those we have visited 28 provinces in
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the last what 3 months or so uh we sat
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down with the governor and in many cases
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with many of the Battis the Regency
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heads and we told them look we're
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not we don't have a lot of jur
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jurisdiction we're not bringing
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jurisdiction but we're bringing money
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yeah we're bringing Investments and
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Investments do create
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jobs and that
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song you know turned out okay you know
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with respect to the ears of
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many and we have concocted this Regional
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Championship notion uh which involves
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seven provinces so we have basically
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anointed seven provinces as Regional
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Champions and this was kind of cute
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because it balled up all the other
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provincial
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leaders and because of the special
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attention that we're giving to the
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provincial leaders of these seven
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provinces and we we we mean business I
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mean we sit down with these seven we go
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out of Indonesia we promote and we've
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been able to
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actualize really big Investments you
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know in some of these and now the
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governors are
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talking now the remaining 26 Governors
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are telling me how come we're not
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selected as a champion right you know
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and it's good this positive
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discrimination I think has worked out
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nicely in the sense that you know I tell
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them back you know that you know I'd
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like to make all 33 of you as Regional
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Champions as Regional
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champions in a shorter period of time
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but you know we can only start with
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seven and let's try to standardize you
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know our our thinking and our you know
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practice uh in terms of attracting
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Investments to these provinces and I'm
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quite
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comfortable that by by virtue of you
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know sitting down and rubbing shoulders
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with these guys we would be able to
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achieve a pretty significant Target and
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and the mission let's be very clear is
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not just to promote Java the mission is
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to promote investments into you know the
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outer Java or outside Java regions
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because particularly in the eastern part
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of Indonesia that's an area which I
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think right
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needs you know development more than the
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other parts of Indonesia right you know
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there's also a certain about amount of
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confusion about you know what has come
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to be called the negative investment
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list uh especially on the part of uh
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International investors right uh could
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you tell me a little bit about the
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history of this list and you know
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sometimes in other places uh uh such
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restrictions are meant to protect
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domestic industry uh from International
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competition right uh was that the case
00:23:45
here and and I understand that there are
00:23:47
some plans to liberalize certain areas
00:23:51
yeah could you tell us you're thinking
00:23:53
about these things the the negative list
00:23:55
is actually a list that tells the whole
00:23:58
world including domestic
00:24:01
investors what sectors they can or
00:24:04
cannot invest in and the extent to which
00:24:07
they can invest
00:24:09
in you know any particular sector so
00:24:13
it's as as much as it has that negative
00:24:16
connotation it should have been called a
00:24:18
positive list yeah uh because it talks
00:24:21
about not only the sectors that you can
00:24:24
invest in but the extent to which and we
00:24:27
have actually taken a view to liberalize
00:24:29
some sectors and this is starkly
00:24:32
different from how we crafted it you
00:24:36
know five four or five years ago uh in
00:24:39
2006 and
00:24:41
7 this takes a purely sectoral
00:24:44
approach uh you know for any particular
00:24:48
sector the extent to which you can
00:24:50
invest we've decided to basically
00:24:53
liberalize up to 40 sectors uh unlike
00:24:57
how it was in the past
00:24:59
and this is
00:25:01
clearcut uh and yes we have not decided
00:25:06
to open up some sectors which I know
00:25:10
foreign investors would have I think
00:25:13
loved uh but we which ones are you not
00:25:16
opening up uh the one that we have
00:25:18
decided to
00:25:19
close clearly is the Telco Towers the
00:25:22
telecommunication Towers uh and
00:25:27
that we had advocated for the opening up
00:25:31
but I think collectively the government
00:25:33
has decided to keep it closed for now
00:25:35
but I think the the word of
00:25:38
encouragement is that we have taken out
00:25:42
the language within this presidential
00:25:44
decree which was issued and signed on
00:25:47
the 25th of May this
00:25:50
year we've taken out the language that
00:25:53
this negative list could only be
00:25:56
reviewed every 3 years so there is an
00:25:59
open-mindedness you know in terms of
00:26:02
spirit and I have always basically told
00:26:06
everybody in Indonesia and outside
00:26:08
Indonesia that to the extent you've got
00:26:10
a view on a certain sector you know in
00:26:13
terms of how it ought to be closed or
00:26:15
opened up you know there's a mechanism
00:26:17
with which we go forward with this and
00:26:19
that mechanism involves the cost benefit
00:26:21
analysis of any particular sector being
00:26:24
opened up or
00:26:25
closed and we have also asserted the
00:26:29
language of hierarchy yeah in the past
00:26:33
we did not have Clarity on this you
00:26:36
would have a presidential decree you
00:26:37
would have a ministerial decree you
00:26:39
would have a collective ministerial
00:26:40
decree you would have a durgen decree
00:26:42
and all that uh on an ad hoc basis those
00:26:46
were slightly confusing we've taken that
00:26:49
I mean into consideration and put a
00:26:52
language on the hierarchy of law and the
00:26:55
presidential decree surely you know
00:26:58
super seeds uh ministerial decree or any
00:27:00
other you know uh decree lower than the
00:27:05
ministry uh so this is a progress and a
00:27:10
process uh is it perfect is it ideal
00:27:14
perhaps not but if we take a portrait of
00:27:18
this and compare it with how the
00:27:19
portrait would look like in the past uh
00:27:21
I certainly think this is a lot better
00:27:24
than how it looked uh previously and and
00:27:27
we have We have basically sat down with
00:27:31
the foreign Chambers uh and many of the
00:27:34
you know local Chamber of Commerce uh
00:27:37
members and I think net net they're
00:27:39
quite happy with it so it sounds like
00:27:42
you're doing quite a few things to move
00:27:44
in a positive direction you're creating
00:27:46
greater transparency about different
00:27:48
sectors and the amount of investment
00:27:50
that's possible uh you're opening up 40
00:27:53
sectors for investment now let's assume
00:27:56
that International Capital response and
00:27:58
and you start you know an influx of
00:28:00
capital coming into these areas what
00:28:03
kinds of returns can International
00:28:06
investors expect to earn uh in these
00:28:09
sectors and how would they compare to
00:28:12
earn returns that they might exp get in
00:28:14
similar investments in countes in other
00:28:17
countries save the brick
00:28:19
countries well that's that's a longer
00:28:22
conversation but uh I I I'll give you my
00:28:24
two cents worth I I think you've got to
00:28:27
take into to
00:28:29
account the trajectory of Indonesia
00:28:32
right I think if one takes a 5 to 10
00:28:34
year view of
00:28:35
Indonesia I think it looks pretty good
00:28:37
yeah you know as an investment thesis uh
00:28:41
and at the rate that we're significantly
00:28:44
underhyped yeah compared to some of the
00:28:46
other countries and you know you've been
00:28:51
to you know Vietnam you've seen the
00:28:53
infrastructure out there I think we've
00:28:56
got a pretty good infrastructure in
00:28:58
Jakarta and many other cities in
00:29:00
Indonesia uh let's not forget you
00:29:04
know fit and standard and porters have
00:29:08
upgraded us recently you know we're
00:29:11
rated doubleb plus by fit when do you
00:29:14
expect to get to investment grade I I do
00:29:16
expect that in the next 12 to 18 months
00:29:20
realistically uh I do think that with
00:29:22
the continuation of the fiscal
00:29:26
discipline and the fiscal
00:29:29
decentralization that's being done as we
00:29:31
speak and the Improvement that we're
00:29:33
making in terms of the investment
00:29:36
climate uh and on the monetary side uh
00:29:40
you know with what we've talked about
00:29:42
earlier I do think there's no reason for
00:29:44
us not to be an investment great country
00:29:46
in the next 12 to 18 months and that's
00:29:48
going to reduce Capital right and that's
00:29:50
going to improve your irr uh calculation
00:29:53
at the rate that we are committing $50
00:29:57
billion
00:29:59
from a budgetary standpoint for the
00:30:02
development of the infrastructure for
00:30:04
the next 5 years and that's part and
00:30:06
Parcels of the whole $150 billion
00:30:09
infrastructure development program that
00:30:11
we're going to launch that we're
00:30:12
launching actually that's going to
00:30:14
entail the development of 20,000 km of
00:30:17
Roads 15,000 megaw of power
00:30:21
generation that's going to create a much
00:30:24
higher degree of
00:30:26
connectivity than whatever we have today
00:30:29
and that's also going to reduce Capital
00:30:31
mhm I mean cost of capital so if you
00:30:34
take those two things into account and
00:30:38
take into account the fact that we're
00:30:39
underhyped
00:30:40
right and take into account some of the
00:30:43
other stuff that I've mentioned the
00:30:44
natural resource the demographic bonus
00:30:46
and political stability and all
00:30:48
that I think this presents an enormous
00:30:51
opportunity for anybody right actually
00:30:54
you brought up a point that I found very
00:30:55
interesting that is why why is it that
00:30:58
the cost of capital in Indonesia tends
00:31:01
to be higher uh than in other places
00:31:04
well I think you know if you take into
00:31:06
account
00:31:07
the the swap or the credit you know
00:31:14
default uh
00:31:17
swap it is reflective of the
00:31:21
perceived risk right right right and I
00:31:25
do believe that as more and more people
00:31:29
do not misunderstand Indonesia as much
00:31:31
as before that perception of risk will
00:31:37
lessen and that I think will reduce the
00:31:42
premium and that I think will surely you
00:31:46
know reduce the cost of capital for
00:31:48
Indonesia to borrow in US Dollars and
00:31:53
with a declining you know swap rate
00:31:56
you're going to see I think A continuing
00:31:59
declination in terms of the cost of
00:32:01
capital in
00:32:02
rupia and I think the government is
00:32:04
aware of this and is also in the process
00:32:07
of basically trying to figure out a way
00:32:10
to elongate the
00:32:13
instrumentation for debt so that that
00:32:16
can be channeled to support the
00:32:18
infrastructure development which has not
00:32:21
taken place yet but to the extent that
00:32:23
takes place I think we're not going to
00:32:25
see as much liquidity trap as we have
00:32:28
seen thus far and that I think will help
00:32:31
reduce the cost you know structure for
00:32:33
Indonesia yeah I'll come back in a
00:32:35
little bit to the the risk uh aspect but
00:32:39
uh since you refer to the fact a couple
00:32:41
of times that Indonesia is so underhyped
00:32:44
let's let can you give me a
00:32:47
realistic view of an FDI uh investment
00:32:51
in Indonesia that really worked in a
00:32:54
realistic sense for the country for the
00:32:57
economy and for the investor in terms of
00:32:59
amounts or of of of see some FDI
00:33:02
investor investment that was made by a
00:33:05
company uh uh just to Let's Tell the the
00:33:10
positive story sure uh well first of all
00:33:13
in in in the first quarter FDI went up
00:33:16
by
00:33:17
41% okay uh and from what we're
00:33:21
detecting in the second quarter I think
00:33:23
that momentum is likely to continue
00:33:25
overall
00:33:28
investment has spiked up by 25% in the
00:33:31
first quarter so there is a declination
00:33:33
from from a domestic standpoint but
00:33:35
domestic has been a much smaller
00:33:37
component of the the whole investment
00:33:39
flow now in terms of cases uh we've been
00:33:44
able to attract a large you know Middle
00:33:47
Eastern player uh from razal CIA to
00:33:50
build you know this integrated
00:33:53
infrastructure project in East cimon to
00:33:56
build a Port 139
00:33:59
km uh rail track uh and
00:34:05
,300 megawatt power generation
00:34:09
capability and a 500,000 ton capacity of
00:34:14
smelter uh and a coal mine which they
00:34:17
bought also they've
00:34:19
started they have poured you know quite
00:34:22
a significant amount of money this is
00:34:23
all going to Total to about 5.2 billion
00:34:26
US uh they have basically been able to
00:34:28
clear most of the land on which they'll
00:34:31
build the rail
00:34:33
track and where're we've
00:34:37
also you know been able to convince uh H
00:34:41
shim from Switzerland to do a massive
00:34:44
expansion you know uh for their cement
00:34:48
uh
00:34:48
capabilities and we're also uh in talks
00:34:52
with you know a large or one of the
00:34:55
largest uh in the world you know
00:34:57
electronic
00:34:58
uh uh
00:35:01
manufacturing uh firm in Asia uh to
00:35:07
basically relocate their manufacturing
00:35:10
capability for Southeast Asia purposes
00:35:12
to
00:35:13
Indonesia all these are tangible results
00:35:16
that we've been able to produce uh in
00:35:18
the last few months and this is a result
00:35:20
of what has been done before also uh and
00:35:24
I do believe as more and more people
00:35:26
understand that the cost competitiveness
00:35:28
of Indonesia particularly from a labor
00:35:30
standpoint mhm uh and with the
00:35:33
declination of cost of capital like we
00:35:35
talked about earlier M uh and hyping
00:35:39
Indonesia a little bit more that it
00:35:43
is a country with
00:35:46
positivities uh I do believe more and
00:35:49
more will come the end game is quite
00:35:52
simple the end game
00:35:54
is to be able to convince somebody from
00:35:57
om Maha
00:35:58
Nebraska to put a dollar in
00:36:01
Indonesia and I do believe if I can do
00:36:04
that the billions will
00:36:06
come and we've been able to do that with
00:36:10
some of the large players in Asia in the
00:36:12
Middle East and all that but as we do
00:36:14
more and more and we prove to the world
00:36:17
that we can actually Remedy our mistakes
00:36:19
and you know these guys take a 5 to
00:36:21
10year view of a country uh I do believe
00:36:24
we can make something happen what what's
00:36:27
your view of uh the potential for
00:36:29
private equity in Indonesia and and how
00:36:32
does that compare to uh private equities
00:36:36
prospects in other parts of Asia oh I I
00:36:39
think it's enormous uh look let's take a
00:36:43
look at the the market cap of the
00:36:45
Indonesian stock market it hovers around
00:36:47
220 billion US right I think the amount
00:36:49
of private Equity
00:36:51
Funds uh that have been invested or
00:36:54
managed with respect to Indonesia
00:36:58
it's very
00:36:59
small in absolute value we're not
00:37:02
talking about no more than 2 billion US
00:37:05
Dollars and as a as a as a ratio to the
00:37:08
whole market cap uh of the Indonesian
00:37:11
Stock Exchange or stock market it's it's
00:37:13
a small
00:37:15
percentage now if you put that in the
00:37:17
context of the economy I mean the
00:37:20
economy is a is a staggering $650
00:37:23
billion economy it's the largest in aan
00:37:26
I mean the second largest is that of
00:37:28
Thailand at what 280 billion and then
00:37:31
Malaysia at 220 and Singapore at 170
00:37:34
give and
00:37:35
take we're now the largest uh you know
00:37:38
economy in aan we're a member of the G20
00:37:40
and that economy of 650 billion us is
00:37:44
going to grow in
00:37:46
2014 to around1 trillion
00:37:50
us so looking at how small the private
00:37:54
Equity Funds that are being managed for
00:37:57
for Indonesia in terms of around 2 to 3
00:38:00
billion US put that in the context of
00:38:02
the market cap and the economy I think
00:38:05
it's uh it presents an enormous
00:38:08
opportunity for many to take a look at
00:38:12
Indonesia that's great and you you you
00:38:15
also refer to the fact that Indonesia
00:38:17
has a very young uh population and you
00:38:20
refer to the Democratic the the
00:38:22
demographic dividend uh what kind of
00:38:26
efforts are you making to to encourage
00:38:28
entrepreneurship and Innovation uh to
00:38:31
create new jobs through venture capital
00:38:33
for example uh uh are you making any
00:38:36
efforts in that direction
00:38:38
yes but
00:38:40
not substantially
00:38:43
yet I think uh we need to take a view on
00:38:47
how we can cultivate the small medium uh
00:38:51
entrepreneurship and if you take a look
00:38:55
at the bulk of the investment flows into
00:38:59
Indonesia from within and from
00:39:01
without a lot of them actually relate to
00:39:04
small medium you know
00:39:06
Enterprises and that I think involves
00:39:09
entrepreneurship uh you know in a big
00:39:12
way uh I think we need to think about
00:39:17
how to number one
00:39:19
promote these in a bigger way and number
00:39:22
two how to how to lead them to a more
00:39:26
innovative
00:39:28
thought
00:39:29
processes whether that includes you know
00:39:32
the thinking of going to the capital
00:39:35
markets
00:39:36
model uh after a few years uh for exit
00:39:41
mechanism purposes or for Value
00:39:45
crystallization purposes or value
00:39:46
maximization
00:39:48
purposes uh this is still in a thought
00:39:53
you know
00:39:53
stage uh
00:39:57
I think this is a homework that we've
00:39:59
got to you know do uh in the next
00:40:02
hopefully couple to three years but
00:40:05
we've also got to sit down with the
00:40:07
other relevant uh Ministries uh the
00:40:09
ministry of
00:40:11
cooperatives uh and the ministry of
00:40:14
state owned Enterprises and the Ministry
00:40:15
of Finance because you know if we refer
00:40:18
back to the old days of you know 15
00:40:22
years ago there was a subsidy mechanism
00:40:24
MH you know from the banking system m in
00:40:28
terms of interest rate subsidies for
00:40:30
small medium
00:40:32
Enterprises uh that system was abolished
00:40:36
yeah I'm not suggesting that we should
00:40:37
re-implement that but I think we need to
00:40:40
identify and come up with a mechanism
00:40:43
that would catalyze you know small
00:40:46
medium entrepreneurship uh in in a
00:40:49
bigger way because that I think is what
00:40:51
will sustain economic
00:40:54
growth what does music mean to you
00:40:58
music is everything to me and and and
00:41:00
what how has it been a source of
00:41:02
personal growth it's uh tremendously I
00:41:06
mean it's um you know I went to the US
00:41:08
on a music scholarship I know that and I
00:41:12
unfortunately or fortunately I had to
00:41:13
switch major to accounting because you
00:41:15
know my parents were not too thrilled
00:41:18
but it has been a source of creativity
00:41:21
and Dynam dynamism and whatever I've
00:41:24
been doing thus far and it has I think
00:41:26
shown up little bit and and and and some
00:41:28
of the stuff we're doing at bkpm
