Locked in

By webadmin on 08:03 pm Jul 31, 2011
Category Archive

Farid Harianto

The live concert of Michael Buble on March 9 this year in the indoor stadium in Singapore tells a lot of stories. The concert itself was artfully crafted through a combination of perfect stagecraft and familiar songs performed by the captivating, smooth young Canadian. The concert proved to have an oddly anesthetic quality of temporary relief from depressing urban life.

Judging by the sold-out crowd, Bubble seems to appeal to every demographic group of the audience, albeit one dominated by women. More remarkable was the mix of nationalities in the audience. One unofficial headcount indicated that about 70% of the crowd was Indonesian.

One may wonder whether Indonesians have become avid consumers of the sophisticated global music entertainment industry or whether something is amiss in Jakarta that propels one to go abroad simply to fulfill a lust for artistic enjoyment.

The recent tax controversy regarding imported Hollywood movies is telling. The Motion Picture Association (MPA) of the US has stopped exporting films to Indonesia since February because of the hullabaloo. The unintended result is that many Indonesians now are also flocking to Singapore simply to watch the latest Hollywood blockbusters.

Live concerts and movie-going are the last of the long list of things that Indonesians are better off going abroad for rather than doing them at home. Indonesians have long invested in real estate in Singapore, Kuala Lumpur and Australia, particularly after the bloody race riots of 1998.

The financial markets have also witnessed capital movement from Indonesia. Many large companies have moved their headquarters to Singapore or Hong Kong for better quality of life and friendly tax and financial regimes. Likewise, many coal-exporting and other natural resources companies use their foreign-established affiliates – notably in Singapore and Hong Kong — to exploit the potency of transfer pricing.

Super-rich Indonesians have also been known for placing and investing their discretionary savings in large amounts in Singapore, Hong Kong and other friendly places.  One estimate indicates that about 80,000 Indonesians have deposited their money abroad, with a minimum saving of $1 million. In total, such offshore deposits could reach about $80-120 billion, or about a half of the Singaporean GDP.

Shooting our own foot

We Indonesians are very good at shooting our own foot. Every year, about a million Indonesians go abroad for medical treatment, 600,000 of them to Malaysia and Singapore, spending billions of dollars.

At home, many hospitals are substandard. Only about 43% of the 1,523 hospitals in the country can pass the government certification standards. The number of medical doctors is simply inadequate to meet local demand, particularly in rural areas.

The horror stories of medical malpractice, as portrayed in the recently released documentary film Conspiracy of Silence, are rampant in the country, and they pass almost without check.

In the meantime, foreign or foreign-trained doctors can hardly practice in Indonesia. Even worse, native doctors from Jakarta are not allowed to practice in, say, Medan or Semarang. No wonder Indonesians are increasingly going abroad for quality healthcare services.

At the moment, our politicians are simmering in antagonism against anything foreign. They see being foreign — be it multinational companies, retailers, imports, expatriates or doctors – as a convenient scapegoat for our economic woes, accusing them of misconduct that includes stealing our resources, economic imperialism and so on.

What is very revealing is the fact that every time there is trouble in Jakarta—from terrorism, riots, infrastructure bottlenecks such as seaport jams, healthcare horrors, the MPA boycott through to corruption — Singapore seems to become the default beneficiary of such miseries. This is not to support the silly conspiracy theory that Singapore is very much involved in these problems of Indonesia. Rather, we should realize that they are of our own doing.

As if it is a never-ending quest to stand above the fray, Indonesians are yet again pushing themselves right out the back of the locomotive of globalization. Everybody is cognizant that a key driver for future wealth is investment in infrastructure, be it physical or social.  Yet, after so many summits, road shows, and MoUs with partner countries, the problems seem to be getting worse, as evidenced by the worsening traffic jams in Jakarta. The government seems impotent to solve these issues.

In the central government budget for 2011, the allocation for fuel subsidies is earmarked at about Rp200 trillion, compared to about Rp100 trillion for infrastructure and Rp50 trillion for poverty alleviation programs.

Without a fuel price hike, the fuel subsidy will balloon at the expense of infrastructure investment and poverty alleviation programs. Yet, the government of President SBY seems to believe that the political cost of increasing the fuel price is very high, and that the government can find ways to avoid the problems without raising fuel prices.

If anything, then, it all boils down to how good we are in pulling the tie too tight around our own neck.

In all fairness, there has been a lot of progress and achievements under the government of SBY. Indonesia has been highly regarded by international agencies and investment communities as another upcoming star from Asia. Rating agencies are mulling raising Indonesia’s debt rating to investment grade. The World Economic Forum recently upgraded Indonesia’s competitive ranking by 10 notches, the best improvement among our peers.

Yet, many problems and much homework remains. Jakarta traffic is about to explode. The Cengkareng airport, Tanjung Priok port, the Merak-Bakauheni ferries are just like time bombs that will detonate anytime soon. Congestion and accidents are bound to happen due to overload and inadequate investment and maintenance.

Amid the impending gridlock at Jakarta’s airport, the Ministry of Transport recently issued a new regulation to supposedly improve security measures. This new regulation was made without warning and, as a result, created another backlog of freight and parcel inspection at the airport.

Even worse, the Commission for Fair Competition smells something rotten in the granting of licenses for the three new regulated agencies, suspected of being owned by cronies of the ministry. There is no doubt we are the masters of shooting our own foot.

Precious silence

Indonesian politicians are on the brink of falling yet again. They seem to suffer a locked-in syndrome, in which they are neurologically paralyzed in all parts of the body. The ruling party is currently also in paralysis due to allegations of corruption involving key party officials.

When the chief patron of the party lambasted the press over the party’s mess, a circus of blame game emerged without touching upon the real problems that the country has to endure.

The damage of doing nothing is simply mind-boggling. At the physical level, the inability to build transportation infrastructure in Jakarta has incurred significant congestion cost to the public. At a more abstract level, the conspiracy of silence on the part of the government with regard to religious violence against minority groups (including Ahmadiyah) threatens the very idea of national unity.

Today, there is no credible signal that the government is taking a strong stance against many ills, be they threats to national unity, corruption or simply the silent conspiracy of medical doctors. If anything, there are notable discrepancies between what is espoused and the actual policies in use. The latest corruption case involving ruling party cadres is symptomatic.

Pretending that we can continue paying fuel subsidies without hurting much-needed spending on social and physical infrastructure is also poisonous. Similarly with the poor performance of many members of the current cabinet: tolerating such incompetence is very costly indeed.

This gives the illusion that it is ok to be silent and to maintain the status quo. In reality, we are shooting our own foot again as we succumb to myopic well-being, regardless of how pretentious it is, at the expense of future welfare.

In reality, we have many – even too many — ideas where to go and what to do to bring prosperity to the country. There are dozens of studies and proposals on how to cure Jakarta’s traffic woes. Likewise, many ideas have been floated to improve the performance and quality of our national logistics. This last relates to another big idea, economic corridors (read: growth centers). Yet, execution remains in the air, and ideas remain ideas.

At this juncture, we do not need new ideas or another novel approach to dealing with our problems.  We do not even need A+ ideas that remain ideas; we are better off having a B+ idea which can be executed effectively rather than an ineffectual A+.

To that effect, we need strong consensus and leadership that will make the whole bureaucratic apparatus move in the same direction.
Action and execution: those are the two mantras that we need very badly in order to escape from this locked-in syndrome.

We can learn something from Michael Bubble. There was almost nothing new about his songs; he ensembled his material from the library of well-known crooners. Yet, he presented them in a smooth and tightly orchestrated performance.

He confidently walked through the audience, raised them from their seats, and led them to act obediently like faithful lambs touched by their evangelistic preacher. And all clapped their hands with approval and enjoyment.  It was an act of perfect execution.