Indonesia inputs

General Input

• Indonesians ignore problems – wait them out [Hindu world view about detachment / lack of progress potential]
• Wrong to be seen to stand out – creates jealousies [though shall not covert – God respects the humble – can’t take it with you]
• Many have degrees – of uncertain quality [note Argentina – where unreal expectations that worthy of great things without performance]
• Little commercial capability in Yogja [‘statist’ approach is thus dangerous – don’t trust own judgment until build stronger commercial capabilities in community] – this may be what is behind decentralization – in addition to regional separatist aspirations which can be thus defused – cf NQ New State movement.

George Marantika

• Indonesia is third largest democracy in the world
• Now totally free speech
• 40% unemployment
• people losing interest in education
• informal economy growing
• IMF mistakes – people still want subsidies (on ??? rice ?) – people expect leadership to show contribution
• Taxes high
• Most economists won’t say anything [to protect jobs??]
• Australia easy to defend – Indonesia hard

Nur Achmad Afandi

• Gus Dur Party
• Vice Chairman of Provincial Parliament (equi Governor)
• Economics / Philosophy degrees
• Business
• On Board Chamber of commerce
• Friend of Sultan – will convey ideas to Sultan
• Coordinator of Economic Policy in Parliament
• REQUESTED – info which is analysis of economic problems from Indonesian point of view
  
  Key issue for government is centralization / decentralization –Unique policy involves decentralization – under provincial umbrella. Central government has little influence on social development
• Government wants to map economic potential realistically – and combine with leadership to differentiate economy [there is no real limit to economic potential]
• Yogja is cultural centre – human resources OK – people listen to their leaders [note argentina parallel]
• Weakness in that natural resources are poor [resources curse]
• Pop = 3.2 m – 30% handicraft; 21% farming; 35% services – large informal economy
• Land earns 10m R / ha / annum – average holding ¼ ha thus income 2.5m R/annum. People can’t live on farming 200,000 R/ month ($A40)
• AVERAGE OFFICE WORKER 600,000 R / month ($A 120)
• Potential from southern beach – 110km – fish – but tradition is not as fishermen – only work 4 hr / day
• Handicraft potential OK – but weak access to markets, technology and financing
• Liquidity of banks is weak – traffic 7.6tr R / annum, but 1.7tr R is reinvested
• Budget is limitation – 354bn R / annum – 311 of which is committed to salaries – [this is always so – need not be problem as key initiatives can be inexpensive with high multipliers back to taxes – what is the tax base? – ways to improv resources via accounting for assets – but must be sure that can spend the money well]
• There is a program to 2010 – recovery of people’s economy ; build coop with business (110km of coastline – for agribusiness – where big co (Sam Poerna – cigars) is investing heavily
• Also 147 sub-districts – credit institutions for small enterprises – capital only 12bn R ($2m) – this is one area where Australia could really help [note need for info at same time]
  It is not hard to deal with province [this can be problem – Qld]

Michael Noakes

• no willingness to take responsibility - prefer to discuss and gain consensus. No accountability;
• lack of order (product of multiple cultures) - everyone drives into intersections - gridlock - too 5 hours to clear cars parked at event for 80,000 people
• army imposed order under soeharto - authoritarian way
• everyone has to push for themselves - no one considers others
• Dutch did not leave good legal system, honest PS, good infrastructure

RANDOM

Paul Krugman advanced the hypothesis that countries in SE Asia were growing rapidly by increasing inputs with limited contributions to growth from increasing productivity - and that this pattern (which corresponded to that of the Soviet Union in the 1950s) was unsustainable.

System depends on big men – traditionally highly stratified society – Hinduism – then exploited by Dutch

Indonesia needs to believe in themselves - need assurance rather than uncertainty

note issue of 'why not grow own food'

cities concentrate information and thus people - consider how information access can be de-concentrated.

emphasis in SMEs - do not involve the strongest individuals or firms in developmental efforts - but rather those with some potential who have not 'made it yet'. This will create a broader base of social capital improve equity.

growth will necessarily involve using more energy (as energy consumption tends to parallel GDP growth). Thus clean energy sources are a priority.

consider strategy of differentiating products and services - for higher value added. Also must be market oriented. Development of cluster of functions makes it hard to copy.

trading company options - note role of Japanese trading companies involved 'intelligence gathering and organizing' - if follow Chinese trading strategy of low margins to ensure supply continuity - works through sepcific channels - but not universal - alternative is not rip-off but offering more diverse products. The world can't afford high volume, low value products - too much environmental impact. Need fewer more valued items

the ideal of 'nobility' could be considered - seems to be the concept underpinning Kraton - but don't expect only a few leaders to be perfect. If depend on leaders, their failure is failure of whole society

information into Indonesia matters - and may not be available unless respect IP

Government In Australia GOCs are not OK. Consider China's path out of this problem area

Money is a bad master (and a terrible god) and needs to be made into a servant. This is another issues that can be raised in global order context.

What is the ultimate goal - 'modernism' (with it high living standards) or something else. Obstacles to modernism include:

• Environment - need forms of 'wealth' that do not conflict with environment. Some progress is being made in this respect.
• Managing complexity
• Energy - which is linked. There is no shortage of energy in universe - merely of energy in suitable forms - a problem that may be soluble
• Population
• Ineffectual institutions
• Cultural (and other such as political) constraints on economic performance which results in 'left-behind' peoples