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Indonesia Report
Marcopolis presents Indonesia Report focused on topics such as investments, doing business, economy and regional integration, featuring interviews with Indonesia's leaders. The sectors under review in this issue are agriculture, banking, energy, industry, telecom, IT, tourism, logistics and many more.
VideosSeptember 20, 2016
Three main challenges in Indonesia: prices of basic foods, job creation and corruption
- Written by Peter Matay
- Published: September 20, 2016
Djayadi earned his Ph.D. from the Department of Political Science, Ohio State University, USA.He obtained his MA degree from Ohio University, Athens-Ohio, US. He has been a research fellow at the Kennedy School, Harvard University, director of research at the University of Paramadina, and program officer at the National Democratic Institute (NDI), Jakarta. Besides often invited as a speaker at various seminars and mass media, he wrote several articles for journals and national newspapers.
Djayadi Hanan, CEO of Saifulmujani talks about the main challenges for Indonesia and the economy.
What does your company do?
There are three main concerns of Indonesian people based on Saifulmujani's research. Number one is how to control the price of the basic goods. There are nine basic goods in Indonesia, including rice, cooking oil, and transportation costs. Number two is job creation and property reduction. The third one is corruption eradications. The findings of our research have been consistent over time. When you look at what Jokowi is doing, he is basically trying to relate directly to those three problems. In terms of job creation, he knows that the people need jobs. He needs a program that can create jobs immediately, but at the same time, can fix the economy. One choice is like the Marshall Plan in the U.S., because you do not have very good economic environment locally or internationally. People need to be put to work, and making sure that infrastructure projects are really underway is one of the good things. That is something that can be seen directly by the people and makes them happy.
At the same time, Jokowi needs to provide more investment for that. It is very controversial among Indonesian public, especially to one that is not educated enough. It could be a massive political liability for the president, because he can be accused of betraying his own people. HIs campaign runs on the promise that he is in favor of the people. How could you be in favour of the people when you are giving tax amnesty to the rich? Only a very strong leader with a strong and long-term vision, and also with the clear priority agenda on his head, can focus on that issue without being obstructed by controversial issues related to short-term problems.
What makes Indonesia attractive?
Number one, Indonesia is in the process of having a massive infrastructure project which not only requires investment, but also allows the middle and long-term projects to have a longer term contract.
Number two, Indonesia has 254 million people and 17,000 islands. Indonesia needs these massive infrastructures, and then from then on, it will move very fast. Even in the current poor international economic situation, Indonesia still manages to grow on the level of 4.5 until five percent. That shows that investment in Indonesia is not only very beneficial and very profitable in the short-term, but also in the long-term.
One possibly worry of the international investor could be the security and safety in Indonesia. With Jokowi as president, the president's approval rating in terms of managing the security of the country has always been around 80 percent-plus. Indonesia has the political stability especially now that the president has been able to garner support from the majority of the political powers in Indonesia, including from the so-called opposition. If you look at the three opposing political parties, two of them have declared that they are loyal opposition, which means that they are ready to cooperate with the government whenever it is in line with their political platform. This shows that even with the political parties in the opposition, Jokowi has the potential to make gain cooperation.
