Interview with Ginandjar Kartasasmita
Yanto Soegiarto | April 26, 2011

Veteran politician Ginandjar Kartasasmita is back in the spotlight after a long absence from the stage. He was summoned by the president to work on Indonesian assistance to a disaster-stricken Japan. He talks to Globe Asia about Indonesia, Japan and how to make Indonesia a more successful economy.  Fit-looking, 70-year-old Ginandjar Kartasasmita is well known to Japanese politicians and businessmen are years in office under former president Suharto.

A West Java native, Ginandjar held various important and strategic positions in public office, including terms as the coordinating economic minister and the trade, industry and energy portfolios as well as chairman of the Investment Coordinating Board (BKPM) and the Development Planning Board (Bappenas), to name a few. Ginandjar, who speaks fluent English and Japanese, was also chairman of the House of Regional Representatives (DPD) and a Vice Chairman of the People’s Consultative Assembly (MPR). Given Ginandjar’s vast experience, he was a natural choice for President Susilo Bambang Yudhoyono to appoint him as a member of his advisory council.

The retired air marshal and Dan II Kempo black belt is the recipient of 18 prestigious awards and medals, among them the Grand Cordon of the Order of the Rising Sun, awarded by Japan in 2008, and Indonesia’s highest medal of honor, the Republic of Indonesia Star, usually awarded only to presidents and vice presidents. Ginandjar holds degrees in chemical engineering and public administration from Bandung’s Institute of Technology and doctorates from Tokyo’s Takushoku University, Boston’s Northeastern University, Gajah Mada in Yogyakarta, and Tokyo Noko University.

He is a professor of Public Administration of Brawijaya University in Malang and also a visiting professor at Waseda University, Tokyo. If that’s not enough, he also attended the Weatherhead Center for International Affairs at Harvard as a visiting scholar. “After leaving public service, my plan was to devote my remaining active years to education. Besides teaching, I wanted to give more time to a school that we — a group of friends — established in the early 1990s. It is a model prep-school, a boarding school with international standards. “SMA (high school) Dwiwarna is a co-ed school located in Parung near Bogor, south of Jakarta. We try to attract bright students from poor families, from all parts of Indonesia and find scholarships for them whenever necessary,” Ginandjar tells GlobeAsia.

A 14-handicap golfer and avid reader, Ginandjar has written two books and is working on several others including one with his colleagues at Harvard on the 1997/1998 economic crisis that brought about the political reforms in Indonesia. Together with Prof. Takeshi Shiraishi, an internationally renowned scholar from Kyoto University and now president of the Institute of Graduate Policy Studies (GRIPS) in Tokyo, Ginandjar is working on an oral history project. “I am also consolidating my teaching materials for a text book on public administration and development, and there are a few other ideas,” he adds.

Ginandjar says he likes to excel in everything he does, which is not always a good thing in a conformist society. “Teaching is something that I really enjoy. My father was a teacher, as was his father. My mother was also a teacher, and so was her father. So my family tree is composed of people who dedicated their active lives to teaching, people who valued education above anything,” he says. To relax, Ginandjar says he likes watching movies, listening to music, practicing martial arts and sport in general. “Having been in a boys-only school for six years, I often found it difficult to avoid getting myself involved in fights. In high school I learned a little about pencak silat as well as western-style boxing.

During my time as a student in Japan, it was compulsory to take sport. “I took kendo, the traditional Japanese sword-fighting art, but out of school I was continuously looking for the most suitable martial arts to practice. I tried judo and karate for about six months each. Then I moved on to aikido and practiced it for longer. Finally I was introduced to shorinji kempo and decided to stay with it, until I got the black belt,” he says. When he returned home from Japan, Ginandjar started teaching kempo and founded the Perkemi, Shorinji Kempo Brotherhood of Indonesia which now has about one million kenshis across the country.

“We have our own dojo and we are participating in the national sports competition or PON and we will also take part in the next Southeast Asian Games to be held in Palembang,” he says. These days Ginandjar has shifted to more leisurely and less vigorous sports such as tennis, scuba diving and golf.  “Whenever there is a chance I go diving. I have visited many famous diving spots in Indonesia. Now that age is catching up with me my favorite pastime is golf,” he laughs.

The full-length Q & A

How do we shape our relations with Japan after the earthquake and tsunami?
Japan is Indonesia’s main trading partner, its biggest source of FDI (foreign direct investment) and its largest contributor of ODA (overseas development aid). On the other hand, Indonesia is also the main supplier of energy to Japan. In difficult times when the supply of oil has been tight, Indonesia has continued to honor its commitment to supply energy to Japan. So the two countries are benefiting mutually from this relationship. I think the catastrophe that befell Japan will not change the nature of this relationship. In fact it may even strengthen it.

What is the stance of Keidanren and other Japanese institutions toward Indonesia now?
Although the disaster has caused severe hardship to the Japanese people and economy, Japan is the country most prepared to face a national disaster such as an earthquake and a tsunami. Off course nuclear radiation is a new threat, but I think Japanese society is strong and resilient. It will soon recover, and may even rebound stronger than before. Look at post-World War Japan. In 1945 Japan was in ruins, but by the 1960s its economy was roaring again. Although Japanese industries will rely on the recovery of its domestic market, Japanese business will continue to be outward-looking, probably even more so. So they will continue to place Indonesia as a priority partner.

Will Indonesia still get the assistance Japan has pledged in the past?
Although some projects may have to be delayed, I am sure any commitment made before the calamity will be honored, because the Japanese economy largely remains intact. The cost of recovery from the calamity will probably be quite high, around $200 to $300 billion, adding weight to the already heavy debt overhang, but Japan is a rich country and its economy is very resilient.

Are we in the position now to ask Japan to relocate some of its industries to Indonesia?
Yes. Even before the disaster, I made this suggestion many times to Japanese friends from both the public and private sectors. With the aging population and high domestic cost of production, it makes sense to relocate their industry abroad, and Indonesia is the most logical choice, with our large and growing market, young and productive work force, natural resources, business-friendly environment and stable political condition.

How important is Indonesia’s relationship with Japan given the emergence of China as the second-largest economy in the world?
Japan’s interest in Indonesia is to invest, not only to take advantage of Indonesia’s domestic market but also as a base for their exports. Most Japanese investments are in the manufacturing sector and infrastructure. On the other hand, the Chinese are more interested in Indonesia as a market. Their main objective is to sell things. With Japan we are not competing, our economies are complementary, while with China we are competing even in our own domestic market. We value our relationship with China, which is growing in importance, but I think Japan will continue to be our main source of FDI, technology, knowledge, tourism and employment.

How do you see the development of the private sector and business in Indonesia?
It is quite dynamic. Our private sector is getting more robust. I see there is a process of decoupling between private sector growth and the political situation, even during the turbulent years. Even without the support of government policies our private sector continues to grow. You can imagine how much faster it would grow if it was supported by smart public intervention.

In your view, how do we get infrastructure development moving faster? Why was infrastructure development successful during the New Order period?
The shortage of infrastructure capacity is the main bottleneck to higher growth such as that achieved by other large developing economics such as China, India or Brazil, and which we in Indonesia were accustomed to in the past. We have to recognize that it is a different ball game now. In the old days, the economy was easier to manage because of the strong government role. It was made possible because power was monopolized by the government. It is not unlike China now. Now with democracy and local autonomy there are multiple power centers. Decisions cannot be made as fast and executed as promptly as before. As a result, most of the infrastructure that we are using now was constructed during the New Order. There are of course some that have been built recently, but most was actually on the drawing board or on the verge of being implemented during the New Order, but were stopped by the severe financial crisis of 1997/1998.

What is the main source of bottlenecks in infrastructure development?
One of the most difficult problems in infrastructure development is land acquisition. In the past, though probably undemocratic and in violations of some human rights, there was a mechanism to get the consent of land owners to sell their land. If consensus was not reached, the government did not hesitate to use force. With a vigilant civil society and the watchful eyes of the media that method is no longer possible or desirable. The government has actually acted to break through this impasse and issued new regulations on land acquisition for development purposes, but it remains to be seen how it works in the field.

Are you suggesting that the government has failed in developing economic infrastructure?
No, I did not and would not say that. There have been a lot of efforts to accelerate infrastructure development. There have been many ideas and policies enacted and several infrastructure summits have been organized. Most recently the government adopted the concept of development corridors, originally designed by Japanese experts to help us in our infrastructure planning. Let us see how the concepts evolve and how effective and quickly they can be implemented, because time is of the essence here.

What about developing the eastern regions of Indonesia?
We still have problems. Enigmatically, we are too land-oriented. We always talk about rice, meat imports and milk. Why aren’t we maritime-oriented instead? I think we have to design an incentive system, fiscal, monetary. We should follow the examples of China, Brazil and Russia. China expands to Xinjiang, Brazil to the Amazon, Russia to Siberia. If they can, why can’t we? We need the pioneering spirit.

How do you see bureaucracy reforms developing in Indonesia?

If you asked me what is the most persistent of our problems, my answer would be our bureaucratic institutions, which include the legal institutions. I am not saying that there has been no improvement, but the bottom line remains that they are not functioning as effectively and as well as they are supposed to. Now there is a new approach – remuneration. I am sure better pay will help alleviate some of the problems, but I think that alone will not guarantee the transformation of our bureaucracy to a modern and smoothly functioning public organization. There needs to be bolder and more innovative efforts.

In your view, do we have the right oil and gas, energy policies? What must be corrected?
I am sure the government has issued some rules and regulations that could be seen as a body of policy, but frankly I cannot explain it too fluently.  Let me pinpoint one thing just as an example. I am often asked why Indonesia keeps on importing so many oil products, knowing that it has a huge population and a growing economy and is endowed with oil and gas resources. It is difficult to answer because the last refineries we built were 20 years ago, such as the Balongan oil refinery which was built from scratch as a green-field project. Since then there has been no more development of new refineries despite the fact that Indonesia’s economy has doubled in size. I saw an article in the media the other day alluding to the influence of a strong lobby of oil traders who are enjoying a lucrative oil import business. We should do something about it. We need to refocus our efforts in improving our oil and gas regime to optimize production and recalibrate our industrial policy with an emphasis on processing our national resources, including oil and gas, domestically.

In your view, has regional autonomy delivered, given the many problems we see now?
Decentralization is expected, aside from keeping the country together, to improve governance. Unfortunately, there is little evidence this has happened. Indeed there is evidence that the multiple layers of government have raised the cost of politics and of doing business in the provinces, both for Indonesian investors as well as for foreign investors. Many studies have shown the new autonomous regions are not economically viable, they continue to need financial support from the central government. In many regions there are just not enough qualified people to man the newly established local governments. As a result public services are getting worse and the social and economic condition of the local people is not improving but deteriorating.

How do you see political developments in Indonesia?
Looking at what happened in the Middle East, I am proud of the democratization process taking place in Indonesia. It was homegrown and relatively peaceful, although not altogether without pain. Now we are one of the largest democracies in the world, but I think we should not to be too complacent because I am not sure whether democracy has really been consolidated in Indonesia. The institutionalization of democratic norms is an important task in democratic consolidation. In our society the norms have yet to become cultural values. We need good, strong and credible leadership at all level of society to bring about those changes. However, the experience of the past few years shows that inept leadership has led to more failures of policy than successes, more instability and wasted energy in political conflict than peaceful progress and coherence. As such, not only should reforms install an effective and transparent set of rules-based institutions, they should also evolve rules-based mechanisms by which the best of each generation is brought into the political leadership. Put in simplistic terms, a good system is nothing without good people to run it.

What is your view on the coalition joint secretariat? Is it effective?
Usually when one talks about a coalition of parties to govern it is in a parliamentary setting, although I would not say that it cannot be practiced in a presidential system. I think our problem is the large political swing from one extreme to the other. In the past we had a strong executive power, but now the pendulum has swung to the legislative branch of government, making the government more or less at the mercy of parliament. Actually, we need the pendulum to swing gently somewhere into the middle where both the executive and legislative branches of government share power without one dominating the other. To use a more fashionable term, a true system of checks and balances. If we agree to that basic principle, extra-formal institutions such as Setgab should be seen as a transitional mechanism needed to uphold political stability and allow the government to function effectively. But to be effective the coalition should be based on mutual respect and trust.

Are there too many political parties?
Ideally Indonesia should have two or three political parties only but not the like of the New Order. It should be like the American system of people’s choice and functioning democracy.

Do you see a role for the military in politics? Observers of politics in Indonesia have paid much attention to the role of the military in post-New Order politics and how the military perceives its role in democracy. Events surrounding the fall of Suharto showed that the military was supportive of political change. Its role was crucial in the peaceful transition from an authoritarian regime to real democracy. The military showed its commitment to democracy when it accepted the consensus of the polity that it should no longer take an active role in politics and therefore no longer hold seats in the elective political institutions. Under Abdurrahman Wahid, the military was steadfast in refusing to be used as an instrument to subvert the constitution and resisted the pressure to revert to authoritarianism. Therefore it is safe to say that the military is not a threat to Indonesia’s democracy in any foreseeable future.

How do you rate our national policies overall?
I think the president is sincerely committed to reformasi and democracy. He also has given the right direction to the path of development that his government is undertaking, the so called four-track strategy: Pro-growth, pro-poor, pro-job, pro-environment. Not so much different than the Trilogy of Development of the old days. However, I have heard people complain about the pace of policy implementation. Many say that the attitude of the street-level bureaucrats does not reflect the sense of urgency and intensity of this purpose. It is not rare to hear people questioning the competence and integrity of those who are responsible for carrying out the president’s vision. And in this era of party-dominated politics, many question the loyalty of the president’s men; is it to the government or to the political party which nominated them in the first place?

What are the tasks and your achievements as a member of the Advisory Council of the President?
I really enjoy being out of politics. I really am tired of the political infighting, of the broken promises, of betrayal and of mediocrity that I had to endure in the past. I am looking at a future of quality time with my family, of reading and hopefully writing books. But when I was offered a position on the Advisory Council of the President, I was flattered and gladly accepted it. It is an honorable position, very suitable for a person of my age, for someone who has no more ambition for himself. By giving him advice, I try to do my best to be of some help to the president, to make his government a success for the sake of the people. Honestly speaking he has the credentials to become a good president. But still he has to work hard to put his footprint in history, leaving a legacy that will be remembered and appreciated long after he leaves office.

How do you see the situation in the Middle East? Will rising oil prices hurt Indonesia? What do you recommend? 
Although we should applaud the progress toward democracy, unfortunately, I think political situation in that region will become more uncertain and unstable. It is like opening the Pandora box. All sort of things may come out. To make matter worse, the situation in the Palestine, in Iraq and in Afghanistan are not too encouraging either. I think we have to brace ourselves for more turbulent years to come. The tension in the Middle East will affect oil prices, of course, and higher oil price will take heavy toll on the Indonesian economy, especially because of rising subsidy. Thus reducing subsidy may not be avoidable, but the government needs to garner support of the public and the political elites. It is very important to find ways to increasing domestic oil prices that is bearable to the economically vulnerable, and to show that the policy is just and fair. And the government has to conduct intensive dialogues with the parliament, civil society, political elites and community leaders to secure as broad support as possible.

You were involved in the constitutional amendment that gave birth to DPD. You should know that it is a weak institution, a legislative body with no legislative power on its own. Why did your run for it in the first place?
I genuinely believe in the need of a second house in our parliament. Indonesia is a vast country, geographically, demographically, ethnically and culturally. You cannot govern Indonesia without understanding this unique character. We have learned the hard way how bad a centralized system of government was. We need to decentralize, and this does not mean only giving administrative power to autonomous local government, but also the representation of the people in the exercise of political power, which in a democracy is reflected in the parliament. A unicameral system of parliament would mean that Java where two third of the population live will always be dominant. So alongside the house of parliament that represents equally the population according to the numbers, which is of course a feature of any democracy that adhere to one man one vote principle, you need to balance it with another house that represent equally the interest of regions or people in regions irrespective of their numbers. In short, in a democracy the interest of both the majority and minority should be guaranteed and protected. With that idealism, in 2004, I ran for a seat in the DPD representing West Java.

As a former chairman of the DPD, do you see the original idealism of a bicameral institution being implemented as you have visioned?
When I entered DPD, I had high hopes that we could amend again the constitution and complete the democratization process, by rectifying the shortcomings. So the main agenda of DPD in 2004 to 2009 period was to initiate the fifth amendment. The problem is, to be able to initiate an amendment to the constitution we need to have the signed support of at least one third of all members of MPR. And because the membership of DPD from the onset was designed to be less than one third of the members of DPR, to be able to move the amendment process DPD needs to muster the support of more than 100 MPR members from DPR. At one time we already reached that number but some members of DPR at the last minute withdrew their support at the behest of their respective parties. Even if we managed to keep the one third requirement it is clear that we would not be able to reach the necessary quorum of two third of the MPR members for a special session to deliberate on any change to the constitution. So we decided to fight it another day.

So you gave up on DPD?
No, at that stage I did not. That was the reason why I ran again in 2009. I ran on the platform of the empowerment of DPD, to make it equivalent to the Senates in other countries. So in my campaign I told the audience, “if your agree with my idea to strengthen DPD, to make it a real legislative body, then vote for me. If not just forget it.” And I won with an even larger majority than 2004. In 2009 I got more than 3 million votes, an increase of more than 50 percent compared to 2004. I had 1 million more votes than the second highest vote of all DPD candidates nationwide. If I was a political party, with the votes of more than 3% of the national votes, I would have already passed the 2,5% parliamentary threshold. I mentioned the number not to boast but to show you that the people in the grassroots are supporting the idea of a functioning bicameral parliament.

But you left DPD to become an advisor to the President. How come?
Let me continue. In my campaign I also told my constituents that I had no intention to just getting elected to DPD, I was not even going to run again as Chairman of DPD. I recognized how important the position of the leadership of MPR to carry out the DPD agenda. In the 2004-2009 periods the leadership of MPR was not sympathetic to DPD.   So, with that experience in mind I also told my constituents that if I were elected again to DPD I would fight for the chairmanship of MPR. I know it was an uphill battle but to be able to realize my ideal vision of a bicameral parliament, I had to try it anyway. But when the political parties decided to support Taufiq Kiemas to be the Chairman of MPR, I realized it was over. The battle for the empowerment of DPD was lost even before it started. I decided that my presence in DPD was no longer effective. I would just waste my time and energy by continuing to stay there. I could not stand another five years of frustration and disappointment. So I decided to quit from DPD.            

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