The President Post 10th

The President PostT H E S P I R I T O F I N D O N E S I A

www.thepresidentpost.comPublished by President University /// Display until April, 2010 /// N0. 10

Trade Minister Mari Pangestu:“We must form a synergy with China, India” Trade Minister Mari Elka Pangestu said Indonesia last year suffered a trade deficit with China but enjoyed a trade surplus with India.

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VIEWPOINT INTERVIEW

Minister Nuh Urges PoliticiansNot to Spoil Education with Political AmbitionsMinister of Education Prof Dr Muhammad Nuh has called on politicians to stop riding on education as a vehicle to realize their personal ambitions.

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EDUCATION

Trade as a Key Component of The Indonesian EconomyFor Indonesia trade it has always been a highly important sector – the blood of the economy that goes back to colonial times when it was monopolized by a powerful conglomerate, the Dutch-run VOC.

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THE ECONOMY

IDR 10,000

Obama and His Cairo PromisesObama is expected to give more concrete substance to his Cairo diplomacy. One good way to do this could be to have frank dialogues with religious and community leaders whom George W. Bush ignored.

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Photo: www.vivanews.com

Anatomy of aCoalition

JAKARTA (PP) – The chief of the state-run statistics body BPS, Rusman Heriawan, this week issued a statement say-ing that the value Of Indone-sian exports in January rose by 58,99% to US$11.57 billion.

He added that Japan re-mained the main destination of Indonesia’s non-oil/gas ex-ports, which rose by US$59 million last month over the month before to US$1.31 bil-lion.

Value of Exports Rise by 59%“The rise comes as Japan’s

economy has improved,” said Heriawan.

China is at second place, re-placing the position normally held by the US.

“This shows that our non-tex-tile items remain competitive against that produced by China,” he added.

“We still have the upper hand when it comes to CPO and min-erals.”

Meanwhile, Coordinating

Minister of the Economy Hatta Rajasa said he is convinced that Indonesia’s exports this are set to fare better this year over 2009.

“We are optimistic that we will perform better this year despite the supposedly adverse impact of the ASEAN-China Free Trade Agreement (ACFTA),” he said.

BPS figures show that the country’s trade balance in Janu-ary is positive at US$2.03 billion, as its imports stood at US$9.54 billion.

JAKARTA (TPP) – One week after the House probe on Centu-ry Bank dealt a severe blow to President Susilo Bambang Yud-hoyono’s cabinet by accusing Vice President Boediono and Finance Minister Sri Mulyani Indrawati of illegally bailing out Bank Cen-tury, speculations are rife over the future of the president’s grand coaltion and the possibility of a cabinet reshuffle.

But a cabinet reshuffle is not likely in the immediate future, political analysts said last week, as President Yudhoyono will not risk appearing to be seeking re-venge so soon after three mem-bers of his Democratic Party (PD)-led coalition voted to seek a criminal investigation into the handling of the 2008 Bank Cen-tury bailout.

“Reshuffling the cabinet would create the image of Yudhoyono being a vindictive person, ” said Burhanuddin Muhtadi, a politi-cal analyst at the Indonesian Sur-vey Institute (LSI).

He said the president’s Thurs-day night speech, in which he cit-ed the remarkable achievements of Boediono and Mulyani, sig-naled an effort to conduct “polit-ical introspection.”

Yudhoyono said Boediono and Mulyani were not guilty of ille-gally bailing out Bank Centu-ry and were instead saviors of the nation.

Burhanuddin also said it would be “too extreme” for Yudhoyono to remove non-Democrat minis-ters in the near future.

“It would only benefit the op-position, particularly in gather-ing support for launching a strike at the government, even via im-peachment procedures, not only against Boediono, but Yud-hoyono,” he said.

Burhanuddin further said the chances of the opposition In-donesian Democratic Party of Struggle (PDIP) joining the government had increased giv-en Yudhoyono’s disappointment with the stances of the Golkar Party and the Prosperous Justice Party (PKS) over the bailout in-vestigation.

The PKS was most in danger of being removed from the gov-ernment as Golkar was guided by more seasoned and crafty politi-cians, he said.

Burhanuddin further said the PDIP could make up the PKS’s numbers and was looking for al-ternative funding sources after being in opposition since 2004, in reference to the financial windfalls associated with being in power.

However, he added, the rela-tionship between former Presi-dent Megawati Sukarnoputri and Yudhoyono was the only obsta-cle to the PDIP joining the co-alition.

Yudhoyono included four PKS members in his cabinet, three from Golkar and two from the

By Lukman Hakim

Muslim-backed United Develop-ment Party (PPP).

But the three parties, together with PDIP, the Great Indonesia Movement Party (Gerindra) and the People’s Conscience Party (Hanura), voted to seek criminal investigations over the bailout.

PD is yet to take a stance on the coalition partners, but one of its chairmen, Andi Mal-larangeng, who is now the minis-ter for sports, said: “We will carry out an evaluation on our coali-tion and look at ourselves inter-nally, about what we have done and what we will do next.”

Some PD officials have mean-while warned that the Gol-kar Party, the PKS and the PPP would be expelled from the coali-tion after last Wednesday’s vote.

The Democratic Party has pre-viously spoken of the possibility of bringing the PDIP into the co-alition, should the time come to replace one of the coalition mem-bers.

year’s legislative elections.“Why don’t we change?” Tau-

fiq said. “If we are not in opposition,

we will receive benefits,” he said, without elaborating.

Taufiq, who is also the chair-man of the People’s Consulta-tive Assembly (MPR), has made no secret of his desire to join the governing coalition, though his wife, Megawati Sukarnoputri, who maintains a firm grip over the PDIP, still harbors deep re-sentment toward Yudhoyono for daring to contest the presidential elections in 2004.

“I think the chance is small,” the noted political researcher Syamsudin Haris told detikcom last week.

On Taufiq’s desire to bring PDIP into the coalition, Syamsu-din said that it has little bezring as it is Megawati who os calling the shots in the party.

“Taufiq may have a wish, but Mega says no then it is finished,” he said.

Megawati is predicted to main-tain PDIP’s stance as the opposi-tion as becoming a member of the coalition would only bene-fit the party’s elite in the form of seats in the cabinet, he added.

“The downside of it is that PDIP will be seen as an inconsis-tent political party,” said Syam-sudin.

PD senior official Marzu-ki Alie, who is also the Speaker of the House of Reprsentatives, said: “We are ready to cooperate with PDIP.”

Marzuki made it is clear that the present coalition is going no-where and is not cohesive in ways that warrant “a re-arrangement” as the coalition agreement calls for.

PD chairman Anas Urbanin-grum said: “We are thinking of forming a lean but healthy coali-tion, which is better than a fat but unhealthy one.”

Golkar Party Priyo Budi San-toso vice-chairman said: ”Our position is that we are a partner of the Dermocratic Party, not a subordinate or whatever. We are equals,” he said.

”Golkar has no plan to leave the coalition, but it all depends on the president,” said Priyo.

Anas, however, gave a positive sign on maintaining the coali-tion, saying that despite the fact that the three parties gave dis-senting votes, PD has yet to de-cide on revamping the coalition.

“We do not wish to see a di-vorce within the coalition,” said Anas last week during a political discussion.

In a related development, Na-tional Mandate Party (PAN) chairman Hatta Rajasa expressed his disappointment over the re-sults of the House plenary ses-sions.

“I am disillusioned, but it s pol-itics. For me, honesty, loyalty, sin-

cerity and truth are the funda-mentals of life,” he said.

In the meantime, the market remained buoyant amidst the political cacophony that has in-undated the nation for the past three months.

This week the Indonesian shares composite index hit the so-called psychological mark by reaching beyond 2600.

Observers say this is a clear in-dication that national and foe-ign investors remain confident in Boediono and Mulyani, both of whom are held in high esteem in business circles for their impecca-ble professionalism and integrity.

As usual, the solution to this prolonged crisis is a political com-promise that should acommo-date the interests of related par-ties, not the least Golkar Party, whose chairman, Aburizal Bak-rie has been beleagured by corpo-rate fiscal problems .

In the past Yudhoyono has demonstrated that he is a mas-ter in resolving complex national issues; analysts expect him to do the same in the future.

President Susilo Bambang Yudhoyono on Tuesday afternoon was awarded an Honorary Companion of the Order of Australia by Australian Commonwealth Governor General Quentin Bryce AC.

The conferment was conducted at the Governor General s official residence at the Government House in Canberra. during a series of courtesy

calls of the President during a three-day state visit to Australia starting Tuesday.

The award was given to President Yudhoyono for his services in fostering the relations between Australia and Indonesia, and in promoting democracy and development in Indonesia.

Megawati is predicted to maintain PDIP’s stance as the opposition as becoming a member of the coalition would only benefit the party’s elite in

the form of seats in the cabinet

In the past Yudhoyono has demonstrated that he is a master

in resolving complex national issues;

analysts expect him to do the same in the

future.

But Hasto Kristianto, the PDIP’s deputy secretary gener-al, said on Sunday: “I think it’s a bit difficult to do. We have dif-ferent ideologies. The Democrats stand by a liberal economic sys-tem while we uphold a pro-peo-ple economy.”

“The way I see it, things will start to become clearer after the PDIP holds their congress in April,” said Burhanuddin.

Stung by three of its coalition partners siding with the opposi-tion in finding the Bank Century bailout was illegal, PD appears to have started courting the PDIP and finding a willing but ham-strung partner in the party’s ad-visory council chairman, Taufiq Kiemas.

Syarif Hasan, deputy secre-tary general of PD, dropped in on Taufiq this week and was lat-er asked by reporters whether the Democrats would ask PDI-P to join the coalition.

Syarif said the party was open to any possibility, as “we think positively all the time.”

Despite no official talks be-tween the two parties, Taufiq re-iterated his desire to team up with Democrats.

The PDIP needed “renewal,” he said, pointing to its landslide defeat to the Democrats in last

President Yudhoyono Receives Australian Government Award

Singapore-based Wil-mar International Ltd, one of the world’s largest produc-ers of crude palm oil (CPO), is set to start the operation of a US$400 million project in Gresik, East Java in the mid-dle of this year.

Construction of the inte-grated industrial complex in-cluding cooking oil refin-ery, packaging, oleochemical, biodiesel and NPK fertilizer factories, began late 2009.

Wilmar is also building sup-porting infrastructure includ-ing a special quay and power plant, Investor Daily reported last week.

Wilmar plans US$400m CPO complex in E. Java

Photo: www.presidenri.go.id

ViewpointThe President Post www.thepresidentpost.comMarch 12, 20102

W hen Barack Obama ar-rives in Jakar-ta later this month, it is

not just the president of the Unit-ed States that comes; it is much more than that. In him there is something none of his predeces-sors possessed—a perfect blend of cultural values and convic-tions from both poles of civiliza-tion that enables him to address the Muslim world and the West alike with great confidence and a high level of acceptability.

None of his predecessors was ever born to an immigrant fam-ily with generations of Muslim background that he had. And none of them had ever lived in Indonesia to get their ears accus-tomed to the call of azaan at the break of dawn and fall of dusk as little Barry Soetoro did more than three decades ago.

None of Obama’s predecessors had worked and mingled so har-moniously with Muslim commu-nities in Chicago and elsewhere in America; none of them had ever recognized openly the global civilization’s debt to Islam.

The 44th president of America is the first Western leader to have openly said that it was Islam that “carried the light of learning” through many centuries, paving the way for Europe’s Renaissance and Enlightenment.

It is Barack Obama that has openly announced to the world that Islam has always been a part of America’s history due to which there are now around 1,200 mosques scattered all over the United States for the interna-tional Muslim communities, in-cluding seven million Muslims of American citizenship.

Obama has made it clear to the world that it was innova-tion in Muslim communities that developed the order of alge-bra, magnetic compass and tools of navigation. He says that it was Muslim innovations throughout history that have initiated human mastery of calligraphy, print-ing, understanding of how dis-ease spreads, and how it can be healed.

Throughout history, Obama believes, Islam has demonstrat-ed religious tolerance and racial equality and these values must be restored at a time when the world seems to have forgotten the reli-gion’s contributions to civiliza-tion.

Obama and His Cairo Promises

By Alci Tamesa

Obama once recalled that in signing the Treaty of Tripoli in 1796 America’s second President John Adams wrote, “The United States has in itself no character of enmity against the laws, religion, or tranquility of Muslims.” This is why Obama believes that Amer-ica’s Muslims are not threats but are assets that have enriched and strengthened his nation to date.

Political observers in Jakar-ta believe that the most strik-ing U-turn in Washington’s at-titude toward Islam was revealed by Obama when he said in Cai-ro last year that “partnership be-tween America and Islam must be based on what Islam is, not what it isn’t. And I consider it part of my responsibility as Presi-dent of the United States to fight against negative stereotypes of Is-lam wherever they appear.”

Unlike in some parts of Europe where Islamic symbols are not al-

lowed in public places, Obama’s America is demonstrating to the world that such a discriminative attitude is not right. And Ameri-ca is lucky to have been led at this juncture of history by a man like Obama.

The US president has prom-ised to the Muslim world that his government will continue to pro-tect the right of Muslim women and girls to wear hijab and any-body trying to erect restrictions will be punished by his adminis-tration.

This month, as he prepares to come to Indonesia, all the nice words he has said about Islam re-wind themselves in the memory of enthusiastic political observ-ers—simply because this is not just the world’s third largest de-mocracy, but also home to the world’s largest Muslim popula-tion.

But because of that, Obama will be challenged to clarify his position on two very crucial and altogether sensitive issues—the Palestinian conflict and extrem-ism with religious overtones.

His host, President Susilo Bambang Yudhoyono, whom he has met several times, favors a two-state solution for Palestine. On this, Washington and Jakarta share the same stance.

Therefore, observers are eager to know whether the two leaders can formulate some concrete ac-tion plan to substantiate Obama’s Cairo speech regarding this is-sue.

Obama said in Cairo on June 4, 2009 that “All of us have a re-sponsibility to work for the day when the mothers of Israelis and Palestinians can see their children grow up without fear; when the Holy Land of three great faiths

is the place of peace that God in-tended it to be; when Jerusalem is a secure and lasting home for Jews and Christians and Mus-lims, and a place for all of the children of Abraham to mingle peacefully together as in the sto-ry of Isra, when Moses, Jesus, and Mohammed joined in prayer.”

As an influential member of the Organization of Islamic Conference (OIC), Indonesia has a golden opportunity to capital-ize on these new intentions of the US president.

Indonesia is in a position to seek assurance from the US lead-er that he will keep his promise to embrace the Muslim world and usher in a new sense of real-ism in American society that be-cause Islam is an integral part of America, it should no longer be seen as going against the nation or the Western world, even as the

US-led campaign against terror-ism intensifies. The dichotomy of the West versus Islam must come to an end.

The second most crucial is-sue—extremism with religious overtones—must be handled extra-carefully and I am sure Obama knows very well what to do.

Indonesia’s own painful expe-rience shows that many innocent people, including Muslims, have fallen victim to terrorist bomb attacks. Terror and such kind of bombing are against Islamic doc-trines. In fact such actions only show their lack of understanding of the religion.

Indonesia has sentenced to death and gunned down many terrorists who exploded bombs in Bali, JW Marriott Hotel and elsewhere, proving that the na-tion is very serious about com-

bating terrorism, regardless of the terrorists’ faith.

Because of that, America—and the West in general—must stop pointing finger at the Mus-lim world as if the religion con-dones terror. Since Muslims here are against terrorism, Indone-sia is good political laboratory to study.

Any opposition in Palestine, Indonesia, and the rest of the Muslim world must be seen as ex-pression of dissatisfaction against injustice and the way in which Washington handles many con-flicts around the globe.

How to neutralize such oppo-sition is a homework President Obama must do to prove that he can match his words with deeds. Visiting Jakarta is therefore a very strategic move the US president will make in his bid to realize his spectacular promise to the Mus-lim world.

So, beyond the usual proto-col of signing bilateral agree-ments with the host government, Obama is expected to give more concrete substance to his Cairo diplomacy. One good way to do this could be to have frank dia-logues with religious and com-munity leaders whom George W. Bush ignored.

If Obama wishes to embrace the Muslim world, it is not just about warmly approaching the governments of Muslim coun-tries, but entering the hearts of religious and community leaders.

The greatest test to Obama’s diplomatic success is whether he can bring peace to the Middle East and thereby pave the way for normalization of Israel’s relations with the Muslim world.

Obama has all the necessary power and political ingredients to achieve this, given his unique background and high level of ac-ceptability.

President SBY, meanwhile, has the right friend in the White House with whom he can talk openly about this issue. And time is ripe for a fresh US-Indo-nesia maneuver to create a break-through on Palestine.

Until this crucial issue is set-tled, the world will continue to suffer the brunt of aggression, in-justice, hatred, enmity, and dis-trust among nations.

May that not be the case at a time the right man is in the right place at the White House to help bridge differences in war-torn parts of the world!

Obama is expected to give more concrete substance to his Cairo diplomacy. One good way to do this could be to have frank dialogues with religious and community leaders whom

George W. Bush ignored.

“All of us have a responsibility to work for the day when the mothers of Israelis and Palestinians can see their children grow up without fear; when the Holy Land of

three great faiths is the place of peace that God intended it to be; when Jerusalem is

a secure and lasting home for Jews and Christians and Muslims, and a place for all of the children of Abraham to mingle

peacefully together as in the story of Isra, when Moses, Jesus, and Mohammed

joined in prayer.”

Indonesia is in a position to seek assurance from the US leader that he will keep his promise to embrace the Muslim world and usher in a new sense of realism in American society that because Islam is an integral part of America, it should no longer be seen as going against the nation or the Western world, even as the US-led campaign against terrorism intensifies. The dichotomy of the West versus Islam must come to an end.

The President Postwww.thepresidentpost.com March 12, 2010 3

Interview

On the global economic condition

Despite volatility, the glob-al economy in 2005-2008 post-ed positive growth. However, the International Monetary Fund projected that last year the glob-al economy suffered the deepest plunge of minus 1.3% since the Second World War. Global in-dustrial production also plum-meted in line with plunging industrial production in industri-alized countries.

On China’s and India’s trade strength

China is a market with the most rapid growth. In terms of share of global gross domes-tic product, China moved from sixth place with 4.7% growth in 2004 to number 3 with 7.1%

TRADE MINISTER MARI PANGESTU

“We must form a synergy with China, India”China and India are the two countries that showed robust growth amid the global financial crisis last year. Both countries continued to dominate the world market with their products such as electronics, automotive, and electricity appliances.

In terms of percentage, their global trade share also continued to increase, including on products sold in Indonesia.

Trade Minister Mari Elka Pangestu said Indonesia last year suffered a trade deficit with China but enjoyed a trade surplus with India.

The President Post has compiled, from several media, the minister’s public statements on a number of topics, especially with regards to China and India, as follows:

in 2008, just behind the United States and Japan, leaving Indone-sia far behind. This means Chi-na is a production source with a market much bigger than any other country in the world.

As for India, it is a country with a vast domestic market, like Indonesia.

On factors that differentiate Indonesia’s trade strength with China and India

In Indonesia, the index on tar-iff limits is 4.63; China 6.33; and India 14.46.

India still applies many high tariffs, while Indonesia’s tariffs are already low due to reforma-tion and many other factors.

China is really remarkable as it is starting to lower its tariffs. Chi-na is also more prepared in imple-

menting free trade with ASEAN.

China has seen a fantastic trade growth trend. Many in this country are talking about how to compete with China, a hot top-ic discussed worldwide because in reality China has demonstrat-ed exceptional progress.

Compared to India, China has much bigger capital and fi-nancial resources. China enjoys sound economic growth driven by vast financial resources. The country’s massive financial in-dustry supports new investment growth.

China offers easy access to huge working capital and other financial sources. Those are the factors behind its status as a glob-al economic tiger.

On Indonesia’s exports to China and India

Indonesia’s export to China doubled last year and tripled to India. Indonesia’s export market share to China grew from 6% to 9% and rose from 4% to 8% to India.

So, we are actually increasing our trade with the two countries, as well with other Asian coun-tries.

Indonesia’s exports to China are natural resources, food and beverages, coal, handicrafts and others.

From China we import elec-tronics, machinery, electrical ap-pliances, and others.

From India we import almost the same things such as auto-motive products, machinery and spare parts.

The two countries are doing exactly what Japan, Korea and Taiwan did. They invest to pro-duce electronics or automotive items in Indonesia to be export-ed, including to their own coun-tries.

Take for example TVS motor-cycles, some of the raw materials of which are imported from India while others are local contents. Once ready, the motorcycles are exported to ASEAN countries and return to India.

In conclusion, Asia is a future market with sustainable growth and we are lucky to be in a region with robust growth.

On Indonesia’s competitiveness with China and India

On how we can compete with

China and India, the answer lies on how we can cut high costs in our economy, improve our infra-structure and others.

I get the same question all the time. To compete with China and India on products with a huge volume is difficult indeed. This is because if we produce one item, they can produce a hundred. We just cannot compete there.

So, in my opinion, we should not compete head-on. We should compete with them through products that they don’t produce such as natural resources, non-mass produced products and oth-er similar products.

We can compete on quality and product design, and this is where our challenges lie.

On the other hand, we must form a synergy with them through investment. We have to admit that many Chinese prod-ucts sold in Indonesia are also natural resources-based products. We don’t see much of non-natu-ral resources related products yet, and we need to work on this.

This year trade cooperation between Indonesia and China has started. We will open more contacts with Chi-na.

On capitalizing from China’s and India’s market potentials

It can be done

through trade cooperation and by trying to become a significant market.

Indonesia must also form a synergy with them on trade and investment and not be afraid to compete.

It is true that both are huge na-tions with rapid growth, but we have to look at them as opportu-nities due to their huge markets. Also, they still need many prod-ucts and services. We have to be able to tap into their huge mar-ket potentials.

Mari predicted that this year only coun-tries in Asia

will experience high growth. The United States and Europe-an countries would still see low growth.

Indonesia must work very hard to bolster trade with China and India due to their highly poten-tial markets.

Indonesia’s trade with China was negative last year but it is ex-pected to turn around and ink positive growth this year.

Indonesia’s trade is expected to grow 5% this year, which means that trade to both China and In-dia must exceed 5%.

The EconomyThe President Post www.thepresidentpost.comMarch 12, 20104

BKPM promotes “Remarkable Indonesia”

Head of Investment Coordinating Board (BKPM) Gita Wirjawan said he will start promoting investment with the slogan of the Indonesian Chamber of Commerce and Industry (Kadin) “Remarkable Indonesia”.

“While other countries have slogans like Uniquely Singapore, Incredible India, we have Remarkable Indonesia, which sounds very representative

of the country,” he said when receiving the slogan from Kadin Indonesia here recently.

Besides launching the new theme “Invest in Remarkable Indonesia” and improving its official website, BKPM also cooperates with national flag carrier Garuda Indonesia in the distribution of investment pamphlets.

RI, Australia in $30m Carbon Trade Coop

The Indonesian and Australian governments have agreed on carbon trade cooperation of AUS$ 30 million.

According to Forestry Minister Zulkifli Hasan, representing the Indonesian government, they have reached an agreement deal with the Australian Minister of Climate Change and Water Penny Wong.

The bilateral partnership will be realized to reduce emissions caused by deforestation and forest degradation in Jambi province.

According to Zulkifli, Jambi was chosen because a third of its area, or about 1.7 million hectare, was deforested.

Government asked to bridge banking-realsector gap

The Young Indonesian Entrepreneurs Association

(HIPMI) has asked the government to act as a bridge between the real business sector and the banking industry.

In his address opening HIMPI s 14th national working conference at the Ritz Carlton Hotel here on Tuesday, HIPMI chairman Erwin Aksa expressed hope that the government and banking world would be more responsive to the aspirations of the real sector.

He asked the government to create synergy between the financial and real sectors, especially in the extension of bank credit at lower interest rates.

Erwin said the amount of bank credits being extended to the real sector so far was very small.

Allocation for subsidies raised by Rp 44 trillion

The government has raised the amount of its various subsidies by up to Rp44 trillion in the revised 2010 state budget to be submitted to the House of Representatives (DPR) on March 1.

Fuel subsidy was raised by Rp20 trillion, electricity subsidy Rp16.7 trillion, fertilizer subsidy Rp4.4 trillion, and food subsidy Rp2.8 trillion, Finance Minister Sri Mulyani Indrawati said after a plenary cabinet session on the revised 2010 state budget here on Thursday.

She said subsidy for the procurement of rice for the poor was raised by Rp2.3 trillion in line with the government`s decision to increase the amount of subsidized rice for each poor family to 15 kg from 13 kg previously.

Anwar Adnan Saleh

ECONOMIC UPDATES

Zulkifli Hasan

N ow that the world economy is head-ing to-wards full

recovery, trade and finance are increasingly set to become key components in the global economy.

Global trade will face enor-mous challenges such as the risk of increased protection-ism. On the other hand, trade may also open up new oppor-tunities as the world economy is expected to grow.

Internally, trade (domes-tic and external) is a key sec-tor of the country’s economy. For Indonesia trade it has al-ways been a highly important sector – the blood of the econ-omy that goes back to colonial times when it was monopo-lized by a powerful conglom-erate, the Dutch-run VOC, which took advantage of the country’s natural wealth of spices, commodities and raw materials. Today, however, In-donesian exports constitute only about 11% of its GDP.

Throughout many cen-turies, especially during the last few decades, the conduct and composition of global trade has changed immense-ly. Across border exchanges and bilateral trade continued to expand, covering ever larg-er continents and regions. In this era of globalization, mul-tilateral trade has become the main feature of global trade.

It is important to know that the goal of the WTO (World Trade Organization with more than 140 member countries) is to achieve world free trade. Free trade howev-er does not mean it is totally free from all impediments or restrictions.

On the contrary, the present free trade regime is crowded with a myriad of regulations, standards and other restric-tions which have become very complex and difficult to com-prehend.

It seems, however, that there is still the need for the Indonesian business commu-nity to be become more aware of the changes taking place, with emphasis on the many complicated codes and regu-lations and developments in world trade.

Trade as a Key Component of The Indonesian Economy

By Atmono Suryo

The implementa-tion of the ASEAN-China Free Trade Area, which was signed some 8 years ago, was a real shock for the business world which seems to be to-tally in the dark with the many bilateral or regional agreements involving Indonesia.

TRADE IN GOODS & SERVICES

According to the WTO, in addition to trade of merchandise there is now the trade of commercial services which has grown sig-nificantly. Commer-cial services include transport, travel and other commercial ser-vices such as financial services.

GLOBAL TRADE

According to the WTO for the last 30 years trade has been an increasing part of world economic activity. Trade growth is even outpacing gains in output. The year 2008 was the golden year for world trade.

World merchandise exports increased by 15% and reached the high level of $15.8 trillion in 2008. The share of developing economies set new records with exports rising to 38% in 2008.

The financial crisis since Sep-tember 2008 has brought the largest contraction of world de-mand since WW II. The decline of world demand in 2009 ap-pears to be more widespread than expected before, and even Asia was affected. The decision to un-dertake fiscal stimulus programs was a right move to keep up glob-al and regional demand.

After the golden year of 2008, exports declined significantly in 2009, strongly influenced among others by the following factors:

The immense decline of world •consumption and world de-mand which started in the ad-vanced countries The decline of trade finance as •a result of the financial crisis; it was the worst crisis since WW II with the most devastating impact around the world The risk of growing protection-•ism which restrain the growth of world trade Changes in commodity prices •

with its unpredictable ups and downs in demands and prices

In addition to the develop-ments of world finance, trade will be a key component to achieve full recovery and growth of the global economy. It is expected that world trade will recover and increase in 2010-2011.

TRADE REGIMEIn this era of globalization and

the financial crisis, there is the increasing pressure to restruc-ture the global financial sys-tem. No consensus, however, has been reached so far on this issue. Meanwhile, a number of short-term measures are being intro-duced and implemented.

For outsiders the question is whether there will also be in-creasing demands to improve the present trade regime. The WTO meeting in Seattle some years ago, which drew strong protests, was a clear message of discontent on the asymmetric developments of world trade. There is now the cry for fair trade instead of free trade.

The Doha round in Qatar in November 2001 has so far not made progress. Since then meet-ings were held at Cancun and Hong Kong but again with little or no results.

One of the key issues concerns the problem of subsidies, in par-ticular agriculture subsidies,

which is doing harm to develop-ing countries. Another issue re-fers to the “development round” which was set out in Doha but seems to go nowhere. For out-siders it is difficult to keep track with the developments within the WTO.

TRENDS TO WATCHTrade activities continue to de-•velop in the Asia-Pacific region to achieve free trade through the reduction or elimination of tariffs and other trade mea-sures ASEAN seems to become the •center of a whole set of trade agreements, which include those with China (ACTFA), South Korea and JapanASEAN is also active in the •area of regional economic in-tegration covering important economic sectors, including the real sector Asia is expected to take the •lead in the international efforts to achieve full recovery and growth of the global economy

It is important to watch de-velopments in Asia, in partic-ular what the countries in Asia have in mind. ASEAN is expect-ed to come up with trade policies which would strengthen the posi-tion of Asia and at the same time support international efforts to beef up global economic recovery and growth.

For Indonesia trade it has always been a highly important sector – the blood of the economy that goes back to colonial times when it was monopolized by a powerful conglomerate, the Dutch-run VOC, which took advantage of the country’s natural wealth of spices, commodities and raw materials.

INDONESIA’S COMPETITIVE POSITION

It is clear that Indonesia would be hard-pressed to strengthen its domestic economy and its com-petitive position in Asia and the Pacific and as such the following measures should be taken:

Building up its infrastructure •which is an important element to smoothen the flow of mer-chandise and trade in services Eliminating all impediments •as Indonesia is being handi-capped by a high-cost econo-myProviding the private sector •with finance and credit facili-ties and lower interest rates in order to be able to competeModernizing its trade sec-•tor to upgrade and restructure the composition of its exports in order to become also an ex-porter of high quality manu-factured goods in line with the developments in Asia

The period of 2010-2015 will be crucial to the country. Indo-nesia is presently regarded as one of the top ten emerging coun-tries because of its economic size, economic growth and its poten-tials. The coming years will de-termine Indonesia’s trading po-sition in the highly competitive global economy.

The writer is a former ambassador to te EU

Trade activities during the colonial times when the Dutch-run VOC monopolized Indonesian economy

Photo: www.engelfriet.net

A s a young entrepreneur, Taufik Hidayat (30), Director of Sarana Grafika Indonesia, decided to expand his business through

the acquisition of Standard Factory Buildings (SFB) and live in The Veranda Golf Town House in Kota Jababeka.

“I was the first resident of The Veranda Golf Town House when I moved from my house in Jakarta to Kota Jababeka 3 years ago. I feel safe living in The Veranda Golf Town House because Jababeka is very concerned about creating a safe environment; so far everything is secure”, Said Taufik.

“I bought a house in The Veranda Golf Town House because I already owned a factory and ran a business in Kota Jababeka. Initially I thought about buying a house in another residential area in Cikarang, which is developed by another residential developer, because they are more advanced with regards to residential facilities. However, travel time to and

“The Veranda Golf Town House is one of the bestresidential areas in the region”

from work exceeds 20 minutes as a result of traffic. In comparison, now I need only 5 minutes to go to my fac-tory”.

He loves the view of the green grass of the golf course behind his house, “A good location to live, a beautiful view, and at lunchtime I can go home to have my lunch. Veranda is one of the best residential areas in the region” He added.

In the end of 2003 Taufik bought an SFB and started his printing and packaging operations in 2004. Con-sidering that his employees need housing, Taufik bought them a house in the Gardenia Residences complex. On the other hand, the acquisition of property serves as a good invest-ment, since the price of properties in Jababeka has increased significantly over the past years. In 2007, Taufik bought a housing unit in The Veranda Golf Town House and he bought 1,200

square meters of raw land next to his factory in 2008, which is intended for expansion.

Taufik does not only run Sarana Grafika Indonesia, he also runs a food and snack business with his friends. The snacks are made from mush-rooms and sweet potatoes. For now it is still a small business but once it increases in size he will not hesitate to open more factories in Jababeka, be-cause Jababeka is the biggest indus-trial estate in South East Asia.

His life guideline in running his busi-ness is very simple, “Do your best and think positive”. By doing your best, the result will be the best and if we are not doing our best, we won’t get the best result. Sometimes Taufik and his em-ployees have a different point of view when they think less positive. How-ever, Taufik tries to bridge their point of view and remind them to always think positive.

“I was the first resident of The

Veranda Golf Town House when I moved

from my house in Jakarta to Kota Jababeka 3 years

ago. I feel safe living in The Veranda

Golf Town House because Jababeka is very concerned

about creating a safe environment

The Economy

The President Postwww.thepresidentpost.com March 12, 2010 5

2009: LANDMARK YEAR

T he Indonesian political elite, some of whose members con-tinue to play politics in ways

that undermine the government, should be aware that the interna-tional community views the In-donesian economy as quite en-couraging. The assessments of the World Bank, IMF, ADB and many international banks are positive. But while Indonesia is doing remarkably well, certain risks remain, however.

Indonesia is seen by the in-ternational community as an emerging country that is doing remarkably well. In the last 5 years, Indonesia has been a mem-ber of the prestigious G20. How-ever, at the same time the country is facing a number of risks which should be resolved.

In its report “The Indonesian Outlook 2010”, Deutsche Bank rightly states that 2009 was a landmark year for Indonesia in several fronts, among others:

After China and India, it is the •third fastest growing economy in East AsiaAfter facing a bout of investor •outflow in late 2008 and ear-ly 2009, Indonesia’s financial market recovered quickly It sustained one of the strongest •performances in the regionIt has gone through a peaceful •set of parliamentary and presi-dential electionsIt has scored key achievements •in the areas of regional cooper-

RI Economy Doing Remarkably Well

ation and national security It has seen rising trends in con-•sumption, investment and trade

At the same time Deutsche Bank notes that Indonesia faces three main risks:

domestic politics that may lead •to revelations of corruption scandals and infighting capital flows surge that puts •the rupiah under pressurea slowdown in the global econ-•omy in the second half of 2010

As economic observers would rightly say, the domestic political environment, loaded with unnec-essary political upheavels, is hurt-ing and impeding sound econom-ic development. It is sapping the country’s energy to achieve larger national objectives. It is time for Indonesia to politically grow up and become more mature, espe-cially now that it is rated as the third largest democratic country in the world.

In the area of economics the business and investment climate continues to be another risky fac-tor.

POSITIVE ECONOMIC TRENDS On the positive side, Deutsche

Bank data on the developments for the years 2008-2011 show some positive trends, particu-larly with regard to national in-come, growth and external ac-counts (Figure 1).

2010 GDP GROWTH

Bank Indonesia’s assessment is that the Indonesian economy is

positioned to grow beyond orig-inal forecasts as follows:

GDP growth 5.0%-5.5% Main factors behind the fore-

cast are:Export •Private consumption•Inflation •

RISING MOMENTUM From an economics perspec-

tive, rising momentum is devel-oping for Indonesia in the years ahead. As the economy has been moving on the right track and the global economy is recovering. Indonesia’s goal to achieve 7% growth is within reach.

Efforts to reduce poverty and unemployment, however, will re-main a continuous problem as with most developing countries.

Much has been achieved in the area of macro-economics and fi-nance, but much work has still to be done to upgrade and restruc-ture the so-called real sector of the economy which still lags be-hind. This risky sector covers such areas as agriculture, indus-try and services, the backbones of the economy.

A very encouraging statement was made by World Bank Coun-try Director Joachim von Ams-berg in a seminar organized by the Modernisators Group. He rightly pointed out that:

Indonesia will have an unique •opportunity to rise as a dy-namic inclusive middle-in-come economyIndonesia should become a •hub of labor-intensive industry in Asia like China

By Atmono Suryo

Indonesia is seen by the international community as an emerging country that is doing remarkably well. In the last 5 years, Indonesia has been a

member of the prestigious G20

Indonesia should develop a •leading sophisticated com-modity economy like Australia

Indonesia has the potentials to achieve such goals but it would be necessary to remove the many obstacles and the risks factors.

The writer is a former ambassador to the EU

Deutsche Bank forecasts

2008 2009F 2010F 2011F

National Income

National GDP (USD bn) 507.8 532.2 692.9 822.8

Population 9mn) 235.1 238.0 240.8 243.7

GDP per capita (USD) 2159 2237 2878 3376

Real GDP (YoY%) 6.1 4.3 5.5 6.5

Private consumption 5.3 5.1 6.0 6.0

Government consumption 10.4 11.9 8.4 7.0

Gross fixed investment 11.7 3.7 11.4 8.8

Exports 9.5 -11.2 8.4 8.0

Imports 10.0 -17.9 10.9 7.0

External Accounts (USD bn)

Merchandise exports 139.6 110.9 118.2 127.6

Merchandise imports 116.7 84.0 89.1 94.4

Trade balance 22.9 26.9 29.1 33.2

% of GDP 4.5 5.0 4.2 4.0

Current account balance 0.1 7.7 10.5 14.3

% of GDP 0.0 1.4 1.5 1.7

FDI (net) 3.4 1.5 3.7 4.8

FX reserves (USD bn) 50.9 64.5 68.0 72.0

FX rate (eop) IDR/USD 10950 9430 8950 8775

General

Industrial production (YoY%) 3.0 1.5 4.0 8.0

Unemployment 11.5 11.9 11.8 11.5

Source: CEIC, DB Global Markets Research, National Sources

FIGURE 1: DEUTSCHE BANK FORECASTS

“Indonesia shoud become a hub of labor-intensive middle-income economy”Joachim von AmsbergWorld Bank Country Director

LivingThe President Post www.thepresidentpost.comMarch 12, 20106

Why France is theBest Place to Livein the World

Bindi Dupouy, an Aus-tralian living in Paris, and her French hus-band, just had their first child, a son born in the country.

Dupouy, a 28-year-old lawyer, got almost five months paid ma-ternity leave from her company for the birth. She can take anoth-er seven months off beyond that -- a year total -- unpaid, if she wants, with her job guaranteed under French law.

When her son Louis was born, healthy and by way of a normal delivery, she got to stay in her lo-cal French hospital, around the corner from where she lives, for five full days, to rest.

Welcome to France, voted the best place in the world to live for the fifth year in a row by Inter-national Living magazine, which has been analyzing data and pub-lishing its annual Quality of Life Index for 30 years.

One of the reasons France keeps winning the ranking is its world-class health care system, which Dupouy just experienced first-hand.

“They treat expecting mums like treasures here,” Dupouy told CNN from her Paris apartment.

“They take really good care of you. The health care system is just amazing.”

She said she wouldn’t have got-ten the same maternity leave -- or care -- back home in Australia.

At her job, Dupouy also gets seven weeks paid vacation a year, although it’s her first job as an attorney since graduating with a law degree in Australia. She doesn’t think twice about taking the Metro across town -- for just $1.37 a ride -- to visit a friend. Or she picks up a rental bike at one of the many computerized bike hire racks in town to get around.

France scores high marks across the board in the survey, which is done every January, from health care (100 points) to infrastruc-ture (92 points) to safety and risk (100 points).

“No surprise,” said the maga-zine in its report.

“Its (France’s) tiresome bu-reaucracy and high taxes are outweighed by an unsurpass-

able quality of life, including the world’s best health care.”

“The bread, the cheese, the wine,” Dan Prescher, special proj-ects editor at the magazine, told CNN, when asked why France just keeps on winning year after year.

“That weighs pretty heavily in quality of life.”

They treat expectant mums like treasures here. The health-care system is just amazing.

Prescher admitted the maga-zine had an “American bias” since the vast majority of its subscribers are Americans spending in U.S. dollars.

“France is one of those gold-en places in the American con-sciousness,” he said.

The annual index ranks 194 countries and comprises nine categories: Cost of Living, Cul-ture and Leisure, Economy, En-vironment, Freedom, Health, In-frastructure, Safety and Risk and Climate.

The Index analyzes data from several official sources, including government web sites, the World Health Organization, and several media sources.

Following France in the top ten are Australia, Switzerland, Germany, New Zealand, Luxem-bourg, the U.S., Belgium, Cana-da and Italy, in that order.

“France always nets high scores in most categories,” the magazine said.

“But you don’t need number-crunchers to tell you its ‘bon vi-vant’ lifestyle is special. It’s im-possible to enumerate the joy of lingering for hours over dinner and a bottle of red wine in a Pari-sian brasserie. Or strolling beside the Seine on a spring morning, poking through the book ven-dors’ wares.”

Other European countries slipped a little in the magazine’s rankings this year, with the ex-ception of France and Germa-ny. Britain dropped to 25th place from last year’s ranking of 20.

Variety is also seen as a major factor in France’s appeal, with the survey noting that “roman-tic Paris offers the best of every-thing, but services don’t fall away

in Alsace’s wine villages, in wild and lovely Corsica, in lav-ender-scented Provence.”

The United States dropped from third to seventh place in this year’s rankings, largely be-cause of the grinding econom-ic crisis last year.

“Sustaining the American dream has escalated out of the reach of many,” the magazine said.

“The depression hit the United States and Great Brit-ain hard,” Prescher told CNN. “That weighs down the rat-ings.”

Of course, France too has its problems. The country suffers from high youth unemploy-ment, particularly among the disaffected young people who live in its equivalent of the proj-ects, known as les banlieues.

Late last year, the French government opened a national discussion about national iden-tity, which has evolved into debates over whether immi-grants, and particularly Mus-lim immigrants, are French enough. The country has the highest Muslim population of any European country, with an estimated six million living in the country.

But for the most part, French people enjoy a good lifestyle. International Living says that during their large chunk of lei-sure time, the French enjoy vis-iting the country’s many beach-es and Alpine ski resorts.

Dupouy -- like more fa-mous expats Ernest Heming-way and Julia Child before her -- agrees.

She and her husband vaca-tion every year at the seaside near Bordeaux, in the south-west corner of France, where her husband’s family has a home. They also go skiing in the Alps during the winter.

She says that even if she and her husband decide to leave France for awhile during their lives, they’ll always come back -- every year, probably.

“The culture, the food, the family, it’s all just really nice here,” said Dupouy. (CNN)

France, voted the best place in the world to live for the fifth year in a row by International Living magazine, which has been analyzing data and publishing its annual Quality of Life Index for 30 years.

Photo: www.photos4travel.com

Photo: www.photos4travel.com

The President Postwww.thepresidentpost.com March 12, 2010 7

Health

W hen Eugenie Smith’s hands started tingling, she figured her biking gloves needed more pad-

ding. When she felt out of breath after a short walk on a treadmill, she assumed it was pneumo-nia. When her chest hurt, Smith chalked it up to indigestion.

She was wrong, wrong, wrong.Smith was actually having a

heart attack, and needed three stents. She was 46 at the time, and in otherwise perfect health.

While it may sound odd to miss the signs of something as monumental as a heart attack, cardiologists say they see it quite often.

It happens “ALL THE TIME!!!” Dr. Kenneth Rosen-field, an interventional cardiolo-gist, said.

“Every week. Seriously.”Rosenfield says a “Hollywood

heart attack” -- the kind where you collapse to the ground clutch-ing your chest -- is the exception, not the rule.

“We need to do a better job of letting people know what the types of symptoms that can indi-cate a heart attack,” he says.

Smith couldn’t agree more. Looking back at her heart attack

Is Your Heart in Trouble?

eight years ago, she now sees she had symptoms for six months and missed them.

“My message to everyone is simple: If your symptoms are fre-quent do not hesitate. Have them checked before it is too late,” she says.

Former President Bill Clinton was hospitalized recently and re-ceived two stents after he experi-enced brief periods of discomfort over several days. Clinton, who’d undergone bypass surgery in 2004, said he began feeling tired around Christmas.

“I didn’t really notice it until about four days ago when I felt a little bit of pain in my chest, and I thought I had to check it out,” he said.

The signs that you’re having a heart attack -- or that your arter-ies are so clogged up you’re about to have one -- vary from person to person. You can listen to heart at-tack patients describe what it felt like to them, and the American Heart Association, the National Heart Lung and Blood Institute, and the Mayo Clinic have lists of heart attack symptoms and warn-ing signs.

Here’s a list of some of the more common signs:

CHEST DISCOMFORTWhile not everyone feels it,

chest pain or discomfort is still the most common sign of a heart attack, according to the Ameri-can Heart Association.

The pain isn’t necessarily over-whelming.

“It was a relatively mild pain that I kept expecting to go away, but it never did,” says Duane Marcus, 56, of Stone Mountain, Georgia, who had a heart attack two weeks ago.

Rolanda Perkins, who had a heart attack just over four years ago at age 39, says at first she ig-nored her chest pain because she thought it was indigestion.

“I figured I could go to the doc-tor in the morning, but morning came for me at about 3:30 [a.m.] when the pain got worse and I had a shortness of breath,” she re-members.

“I knew that something was wrong.”

In recent years Perkins, who lives in Tennessee, has complet-ed two half-marathons. Now she tells people to listen to their bod-ies.

“My body was speaking to me, and I was not listening,” she says.

DISCOMFORT IN OTHER PARTS

OF THE UPPER BODYRob, an Atlanta businessman

who asked that his last name not be used, said pressure behind his ears while working out on the stair-stepper was the first sign that something wasn’t right.

He was 50 and on vacation at the time, and he didn’t think much of it. But when he got back home he also started to experi-ence a bit of tightness in his chest while exercising.

It seemed so strange that he walked into a cardiologist’s of-fice without an appointment and insisted on seeing the doctor. He had bypass surgery the next day.

Rosenfield, head of vascular medicine and intervention at the Massachusetts General Hospital, says pain in a variety of places can indicate a heart attack.

“I often tell my patients that they should be mindful of any symptom from the waist up which seems different or unusu-al,” he says, including “heavi-ness, pressure, squeezing, aching, or discomfort in the chest, back, neck, shoulders, or arms, wrists, elbows, between the shoulder blades, aching in the jaw, throat, or even gums or earlobes.”

Of course, discomfort in any of those areas could mean myri-ad other problems and not a heart attack at all.

So how do you know the dif-ference?

Rosenfield says pay particularly close attention if you have a per-sonal or family history of heart disease or risk factors such as high blood pressure or high cholester-ol. Other reasons to be on guard is if the symptoms are particular-ly intense, happen for no appar-ent reason, if they get worse with exercise, if they don’t go away, or if they go away and come back.

GASTROINTESTINAL PROBLEMSWhen Dr. Malissa Wood’s fa-

ther complained about stomach pain and nausea, she paid close attention because he said it felt different from ulcer problems he’d had in the past, and because

W hen celebrity chef Jamie Oliver sat down for an interview with CNN -- just after giving a speech

in which he railed against Amer-ica’s unhealthy food system -- he remarked that he was tired and wished he had a beer.

That’s the charm of Oliver -- the dynamic cook who grew up working in his dad’s pub in Es-sex, England, and went on to be-come “The Naked Chef.” He doesn’t seem particularly inter-ested in food rules. He just wants people to be healthier. And to be healthier, he says, we need to learn where our food comes from and to know how to cook it.

“You know, we don’t have to pretend that burgers aren’t indul-gent. We love burgers! The chip is the most incredible, brilliant invention in the world. Eat your chips!” he told CNN.

“But not every day.”

Oliver on Wednesday was named the recipient of the TED Prize, an annual award given to a speaker at the TED Conference, which is being held this year in Long Beach, California.

Former winners include for-mer President Bill Clinton, biol-ogist E.O. Wilson and the rock star Bono. All are given $100,000 and are asked to express one “wish” they hope will change the world. The non-profit organiza-tion then helps recipients to ral-ly support for their cause.

Oliver wished for an overhaul of the American food system, saying the country’s poor deci-sions about what to eat are short-ening life spans and increasing health care costs.

“My wish is for you to have a strong, sustainable movement to educate every child about food, to inspire families to cook again and to empower people every-where to fight obesity,” he said in a speech at the TED Conference here in Long Beach, California.

Oliver will star in an upcoming ABC series where he promotes lo-

JAMIE OLIVER:

‘Eat your chips,’ just not every day

cal, healthy food as a way to fight obesity in Huntington, West Virginia, which he called the unhealthiest community in the United States.

“This is a global problem. It is a catastrophe. It is sweeping the world. England is right behind you [America], as usual,” he said.

“We need a revolution.”Members of the audience stood

up to pledge Oliver their support after his short talk.

Oliver outlined a number of specific steps to help America get back to local and fresh foods and to combat obesity. Among them, he said:

Every child in the U.S. should •learn to cook 10 meals before leaving high school.Supermarkets should appoint •“food ambassadors” to explain to customers how they can pre-pare local, fresh and seasonal foods.Food companies should make •education a central part of their business.Food labeling should be im-•proved to accurately warn peo-ple about unhealthy food. He called America’s current food-labeling system a “farce.”

Oliver’s new reality show is called “Jamie Oliver’s Food Rev-olution.” He is the author of a number of cookbooks.

In a CNN interview, he said he supports First Lady Michelle Obama’s initiative to combat childhood obesity. He said he hopes the first lady will grant him a meeting in coming weeks so they can talk about reforms to the U.S. food system.

In the U.K., the chef previous-ly launched a campaign called “Feed Me Better,” which aimed to improve school lunches.

He presented a petition with more than 270,000 signatures

to the prime min-ister’s residence at 10

Downing Street in 2005, and officials promised to spend an added 280 million pounds ($437 million) to improve school food quality.

“Now is the time for the aw-ful statistics, the lack of fund-ing, you know, the true pain that is being caused by diet re-lated death -- it’s kind of got to a tipping point where some-thing has to happen,” he said.

“I’m a food lover,” he add-ed.

“The problem that we have is a burger is not a burger, a pizza’s not a pizza. Milk’s not milk anymore, do you know what I mean?

“The big clean-up needs to happen.”

TED offers video lectures on its Web site for free -- the idea being to disseminate “ideas worth spreading,” as its slogan says.

The group’s conference con-tinues through Saturday and includes talks from celebrities like Bill Gates, Sheryl Crow, Sarah Silverman, James Cam-eron, David Byrne and Eve Ensler, as well as prominent thinkers, biologists, technolo-gists, artists and musicians.

He said the global food sys-tem can be revolutionized through the simple steps of in-dividuals. He called on Amer-ica to be a leader in these ef-forts.

“If America does it I believe other people will follow,” he said.

“It’s incredibly important.” (CNN)

The global food system can be revolutionized through the simple steps of individuals

he had a history of high blood pressure and vascular disease.

Wood, a cardiologist and assis-tant professor of medicine at Har-vard Medical School, made sure her father received quick atten-tion, and it turned out his right coronary artery was 92 percent blocked, requiring stents and by-pass surgery.

FLULIKE SYMPTOMSDr. Robert Superko says he’s

seen it many times: A patient’s routine EKG will show signs of an old heart attack, but when he asks whether the patient has had a heart attack the person says no, adding, “But, oh yeah, doc, last

While it may sound odd to miss the signs of something as monumental as a heart attack, cardiologists say they see it quite often.

year I had a really bad flu.”Superko, a cardiologist and

author of the book “Before the Heart Attacks,” says significant fatigue, feeling exhausted for sev-eral days, gastrointestinal prob-lems and a general feeling of not being well can be signs of a heart attack or heart problems -- and they’re easy to miss.

“You can see how people could just write it off as the flu,” he says.

SHORTNESS OF BREATHShortness of breath can be a

sign of a heart attack even if you don’t have any chest pain or dis-comfort. (CNN)

Shortness of breath can be a sign of a heart attackeven if you don’t have any chest pain or discomfort.“

When we enter the golden age of retirement, what will happen to us? What are our activities? What are our priorities? How about self-actualization at that time?

Talking about life accomplish-ment, the golden age of retirement may be the highest point in your life when the goals you had when you were young can be achieved.

Housing options are becoming an important aspect when we want enjoy life at an old age, both physically and spir-itually. It is undeniable that our body’s natural process will experience decline with age. The fast-paced and busy life of the city makes it difficult for our children to give us all the help we need or ac-company us on a regular basis.

The “Senior Community” is an emerging trend in big cities today. The seniors spend time and their activities together and share their experiences.

Senior Housing Jababeka Medi-cal City will present a new concept and paradigm; seniors are living near their children’s hearts, but are not always accompanied or assisted by their children and are free to do activities on their own and be cre-ative.

Senior Housing will be part of a

regional integrated one stop world class health service. The location is just a few meters from International Hospital facilities, so that all medical emergencies can be handled with-out facing traffic problems of a large city.

Access and residential facilities are user friendly and especially catered to the capabilities and needs of its seniors. Toilets and its accessibil-ity are designed to prevent injuries and facilitate mobility, especially for those who use a walker.

The Senior Community will be built and become the heart of the activity center, where seniors can spend quality time together and maintain a healthy body and soul. Exercise programs, such as garden-

ing and flower planting, keep the seniors fit and games for the mind keep the brain and memory active. Senior sport facilities designed for seniors are also available. Library, skills room and karaoke are other facilities and activities for seniors in

Jababeka Medical City.We don’t have to

feel that we are far from our family, be-cause every time our children and grand-children visit, we can do activities together. “Family Day” events will be held to enliven the atmosphere and get to know each oth-ers family.

Remove the old par-adigm and find out that living inde-pendently in the golden age means time to enjoy in Senior Housing- Jabebeka Medical City. For those of you who still work part time at your golden age or for those of you who have fully retired, to all your needs can be catered.

Happy LivingIn Your Golden Age

The “Senior Community” is an emerging trend in big cities today

(021) 893 4580 ext. 414 & Rossy 0811 851 769

8EducationThe President Post www.thepresidentpost.comMarch 12, 20108

I n an unprecedented move to cleanse the sector of edu-cation from political greed, Minister of Education Prof

Dr Muhammad Nuh has called on politicians to stop riding on education as a vehicle to realize their personal ambitions.

“Whoever it is, whether he or she is a presidential candidate, a gubernatorial candidate, a candi-date for regent or mayor, the per-son in question must not use edu-cation as a commodity to attract voters,” the minister said during a visit to the daily Fajar in Makas-sar, South Sulawesi.

“Even members of the central government should not do that,” said the minister, who is a for-mer rector of Sepuluh November Surabaya University of Technol-ogy (ITS).

Education observers say that it is common in Indonesia for poli-ticians to attract parents and stu-dent voters by giving them sweet promises of free education, pro-vision of new jobs, better living standards and others, but after be-ing elected to their intended posi-tions, they forget their words.

In 2009, there were 524 elec-tions from national to provincial and regency levels. In the run-up to each of these elections, politi-cians promised to exempt stu-dents from school fees in order to win votes from parents and young voters.

For many years now the Indo-nesian society has been led to be-lieve that good education means free education; that a good gov-

Minister Nuh Urges PoliticiansNot to Spoil Education with Political Ambitions

By Alci Tamesa

ernment is one which provides free education and a bad one is one which cannot do so.

In the run-up to the forma-tion of President Susilo Bambang Yudhoyono’s second cabinet in October last year, national televi-sion stations were full of free ed-ucation ads.

Such situation creates the im-pression that the government’s success in the sector of education is measured by the extent of its free education services.

Minister Nuh flatly rejects such a notion as nonsense, be-cause one cannot have high qual-ity education when everything is free of charge.

To have high quality education one needs high quality teachers, adequate technology, and good teaching-learning process. All these require investment, includ-ing bringing in professors from abroad, building expensive facil-ities, or establishing cooperation with world-class universities.

In recent years many Indone-sian high schools and universi-ties have established cooperation with foreign institutions through dual degree program, exchange of teachers and students, setting up

of joint research units, and even mutual recognition of their curri-cula, all of which facilitate trans-fer of credits from one university to another.

So an emphasis on free educa-tion—though this was originally meant to support children from poor families—is a wrong ap-proach to building a nation’s hu-man resource potential.

In fact, the government pro-vides a huge number of scholar-ships every year, either by itself or through cooperation with foreign governments and international organizations.

It is true that the government needs some kind of education

politics, the minister said, but that means the formulation of the right policies on education. “But it must not be turned into a com-modity for sale,” he said.

“Please do not treat education like goods on sale in the market. Whoever you are, whether a pres-idential candidate or someone running for office on provincial, mayoralty, or regency level, you must avoid touching this sector.

“Let education proceed accord-ing to its own logic and academ-ic tradition. Do not touch it,” the normally soft-spoken Nuh said

emphatically during his visit to the office of the South Sulawesi-based newspaper.

Turning to the free-education policy of his predecessors, Prof Nuh said free education could be good to some extent, which is to help the poor. But, if at the end of the day it is used as a political commodity to attract voters from poor segments of society, that is a blunder which will eventually backfire, he added.

During his term as Minister of Education, he will never pro-mote free education but will im-plement policies that enable the rich to subsidize the poor.

So students from rich families

should rightly pay school fees in order for those from poor fami-lies to attend schooling free of charge. “But if everything is free of charge, there will be negative implications,” he said.

For instance, in the context of free education, teachers would feel that they are not obliged to teach seriously because students don’t pay them anything.

“Such schools will be closed down somehow because people will think that anything that is free often means cheap or poor in quality so it must be shunned,”

E ver since 1928 when the national anthem Indonesia Raya (Great Indonesia) was first in-

troduced, its composer Wage Ru-dolf Soepratman wrote the lyr-ics on the need to first “build the soul” before building the body of the nation.

But since then Indonesian ed-ucation has been directed toward physical development only, omit-ting in the process the need for moral and spiritual development.

This is the reason why Indone-sian prisons are full of scholars—people, who are smart cognitively but have no integrity or lack mor-al dignity. This is also the rea-son why we have an abundant of scholars across the country, but at the same time those involved in white-collar crimes are also uni-versity graduates known to be ac-ademically smart.

What went wrong? Minister of Education Prof Dr Muham-mad Nuh has the right answer—a tragic lack of moral and spiri-tual education at almost all levels in society.

The higher the level of educa-tion, the more such topics as re-ligion and ethics are deemed as unnecessary and irrelevant. At several universities, some stu-dents get a semester on religious and moral education, but in most schools the subjects are scrapped from the curriculum.

“Education can no longer be carried out through such a sys-tem,” says the minister. “Educa-tion must arouse within students noble human values of dignity, and this must be done through schools. It must become a tradi-tion at schools.”

“Let us start a new movement,” Prof Nuh declares.

“It is a movement to arouse a collective awareness in society toward the need of having good moral education, comprising character building, ethics, cul-tural values, noble ideals and dig-nity. We want President Susilo Bambang Yudhoyono to launch this movement,” he said

of its toilets and bathrooms, how to deal with garbage, all of that is part of a school’s daily practic-es, he says.

Character cannot just be taught as a lesson, the minister notes, he said, “it must be shaped by the teacher as the role model for his or her classes.”

“Parents must also become role models for their children at home. So role-modeling is the key word.”

Throwing his weight behind the minister, Director General for Primary and Secondary Edu-cation Suyanto says that though such values are abstract and can-not be taught as a hard lesson, their impacts can be felt direct-ly by the way students communi-cate among themselves as well as with their teachers.

For instance, a teacher who tends to his or her students affec-tionately while teaching and edu-cating them will prevent students to display bad behaviors. The op-posite is also true, as teachers who do not care or who pay little at-tention to students will see stu-dents getting naughtier and wild-er due to a lack of direction and patronage.

But character building is not an overnight task. Teachers alone cannot impart good personali-ty on students because students get along with them only during school hours whereas the rest of the day the students mingle with their families.

So, family education is anoth-er important area that must be straightened out. Parents who abandon their natural role as edu-cators will see their children’s fail-ures getting worse.

Indonesia to Revitalize Moral Education

By Alci Tamesa

Minister of Education Prof Dr Muhammad Nuh has called on politicians to stop riding on education as a vehicle to realize their personal ambitions.

he said.The Government of President

Susilo Bambang Yudhoyono has allocated Rp9.2 trillion in special funds called DAK to help schools renovate facilities and build li-braries, science laboratories and others.

The fund is transferred direct-ly from Jakarta to local govern-ments and it is the local govern-ments that will determine which schools should get how much and for what purposes.

His office will “only provide guidance” on the usage of the fund, but realization of the plan is done by the local governments and the recipient schools, the minister said.

With the China-ASEAN Free

Trade arrangement now in place, Indonesian schools will witness even tougher competition at home where their graduates are challenged by those from univer-sities abroad.

This is because of the fact that under the regional agreement, governments can no longer erect barriers against the free flow of expertise and jobseekers. This in turn means that free education is a fallacy that must be avoided.

The right way to enable stu-dents from poor families to have good education is not to give them free education but to in-crease their parents’ earnings.

Therefore, analysts say, the Government’s education policy must go hand in hand with ef-forts to improve the welfare of lower segments of society.

“Whoever it is, whether he or she is a presidential candidate, a gubernatorial candidate, a candidate for regent or mayor, the person in question must not use education as a commodity to attract voters.”Prof. Dr. Muhammad NuhMinister of Education

During his term as Minister of Education, he will never promote free education but will implement policies that enable the rich to subsidize the

poor.

Photo: www.cuplik.com

In a long-awaited move to rectify the orientation of education, the Indonesian Government says it will now revitalize moral education besides

expanding the curriculum content at all levels.

“It is a movement to arouse a collective

awareness in society toward the need of having good

moral education, comprising character

building, ethics, cultural values, noble

ideals and dignity. We want President Susilo Bambang

Yudhoyono to launch this movement.”

The minister says that a school culture begins with its usual prac-tices, which will shape a tradition that in turn forms culture and civilization.

How teachers communicate with students, how they arrange classrooms, how schools take care

This is why holistic educators say that education is not just a matter of sharpening learners’ minds but is a comprehensive area of responsibility involving parents, teachers, and even com-munity leaders.

Education analysts say that a tragic lack of good role models in society is to blame for Indone-sia’s difficulty in producing well-rounded graduates with integrity and balanced personality.

Prof. Dr. Muhammad NuhMinister of Education

Photo: President University

“Character building is not an overnight task. Teachers alone cannot impart good personality on students because students get along with them only during school hours whereas the rest of the day the students mingle with their families.

8 The President Postwww.thepresidentpost.com

Display until April, 2010 /// N0. 10Published by President University

9BusinessBTN plans to issue bonds

State-owned Bank Tabungan Negara Tbk (BTN) plans to issue its 14th bonds worth Rp2 trillion in the first half of this year said BTN Treasury Director Saut Pardede here last week.

“Since 1989 the bank has 13 times issued senior bonds. In 2004 it issued subordinated bonds,” he said.

In total, the bank has issued Rp6.350 trillion worth of bonds, including outstanding bonds worth Rp3.250 trillion.

Net profit of Holcim Indonesia up 217%

The net profit of the country’s third-largest cement maker PT Holcim Indonesia shot up by 217 per cent to Rp896 billion (US$97.4 million) from the previous year on larger sales and foreign exchange gain.

The Indonesian unit of the Swiss-based cement giant Holcim Ltd posted Rp5.9 trillion in sales in 2009, up from Rp5.3 trillion in the previous year.

Demand for cement rose with brisker construction and property industry to follow the economic recovery, the company said in its financial report.

BJB Bank to launch IPO

PT Bank Jabar Banten (BJB), which is owned by the West Java and Banten provincial administrations, will launch an initial public offering selling share to the public worth Rp800 billion (US$87 million).

The bank will sell 20% of its shares to the public in the IPO to be held around June, BJB President Agus Ruswendi said.

Bahana Sekuritas and CIMB GK Sekuritas are the underwriters.He said the bank shareholders have also pledged to inject Rp200 billion into

the bank to be used to finance business expansion.

Indian airline shows interest to fly to Indonesia

An Indian airline, Jet Airways, is interested in flying to Indonesia.

“There have been talks, but as yet there has been no official request from the Indian government,” Director of Air Transport Tri S. Sunoko told Tempo.

There is room for an Indian airline in the country since Air India closed shop here, he added.

Tri explained that a bilateral agreement between the two countries allows Indonesia to fly to Mumbai and Kolkata.

Jet Airways is an airline based in Mumbai, and serves 63 domestic and international routes, including New York, Toronto, Brussels, London, Hong Kong, Singapore, Kuala Lumpur and Bangkok.

Five investors eager to develop tourist hubin Lombok island

Chairman of the Investment Coordinating Board (BKPM) Gita Wirjawan said at least five investors had reiterated their intention to develop an integrated tourist hub in Lombok island, West Nusa Tenggara province.

“Several investors have filed applications to us. One of them is Emaar Properties (of Dubai), the others are from other areas (than the Middle East). To be sure, they are companies of good caliber,” he said here last week.

The BKPM chief said five companies had expressed interest in developing the project.

Expres Airline flies to Poso

Another commercial airline company will fly from Makassar to Poso and over the Poso-Manado-Makassar route.

Head of the Poso transportation agency Poso Husni M Kasim said the airline has a capacity for 40 passengers, and “if everything goes well, the airline company will start flying over the Makassar-Poso route this month.”

He added that the opening of the new route is earlier that originally planned.Kasim said another airline company, SMAC (Sabang Merauke Air Center),

with the 20-pax Casa 212-200 had already been flying over the Makassar-Poso route since early this month.

BUSINESS BRIEFS

Gita Wirjawan

P T Pertamina Geo-thermal Energy plans to drill 33 geo-thermal wells this

year, as part of the second stage of the 10,000 megawatt power plant project.

“The plants will start to op-erate between 2011 and 2014,” Pertamina Geothermal En-ergy Operation Director M. Irhas told Tempo last week.

According to him, the drill-ing cost is between US$4.5 million and US$6.7 million for one well.

In 2009, Pertamina had al-ready finished drilling in 23 geothermal wells.

The areas worked on by Pertamina are in South Su-matra, in Lumut Balai with a capacity of 4 x 55 megawatts, Ulubelu (Lampung) 4 x 55 megawatts, Hululais (Beng-kulu) 2 x 55 megawatts and Penuh River (Jambi) 2 x 55 megawatts.

Power plant development is also being carried out in La-hendong with a capacity of 3 x 20 megawatts and Kotamoba-gu of 4 x 20 megawatts, both situated in Manado, North Sulawesi.

In West Java there will be the development of Kamo-jang Unit 5, which will pro-

Pertamina to Drill 33 Geothermal Wells in 2010

duce 30 MW of electricity and the Karaha Bodas development of 30 MW.

The electricity produced will be channeled to state-owned power firm PLN to fulfill nation-al energy needs.

“The project contract is for 30 years,” he said.

PERTAMINA SIGNS GAS DEALS WORTH US$265 MILLION

Meanwhile, Pertamina has signed four contracts worth US$265 million as part of the Upstream Oil and Gas Regulato-ry Agency BP Migas s efforts to meet domestic gas demand.

“Pertamina EP is committed to supply more than 71.2 billion cubic feet of gas to consumers,” Syamsu Alam, Pertamina EP s exploration and development di-rector, said here last week after signing the contracts.

The four contracts covered Gas Sale Purchase Agreement (PJBG) between Pertamina EP and PT Medco E&P Indonesia, Amend-ed PJBG between Pertamina EP and PT Pelangi Cakrawala Losarang, Amended PJBG be-tween Pertamina EP and PT Tossa Shakti, and PJBG s Head of Agreement (HOA) between Pertamina EP and PT Pertami-na Gas.

PJBG with PT Medco E&P

Indonesia is to supply 1.3 bil-lion cubic feet gas for re-pump-ing stations at Pengabuan (Ser-dang, North Sumatra Province) and Ibul (South Sumatra).

The agreement is effective from April 27 April 2009 until November 2013 or until the sup-plies are completed.

The agreement with PT Pelan-gi Cakrawala Losarang concerns 6.2 billion cubic feet gas supply for industries at Losarang (Indra-mayu, West Java Province).

The amended agreement is val-id from 18 December 2008 until 31 December 2018 or when the supplies are completed.

Based on the amended agree-ment with PT Tossa Shakti, Per-tamina EP will provide 1.4 bil-lion cubic feet gas to meet the demands of glass companies in Central Java.

The agreement is valid from 1 January 2010 until 31 December 2011.

PT Pertamina EP, based on the agreement with PT Pertam-ina Gas, will supply 62.3 billion cubic feet gas for Natural Gas Liquification (NGL) Plant in South Sumatera. The agreement is valid for 15 years since 1 Jan-uary 2013.

Pertamina EP is the second largest oil and gas producer in In-donesia. In 2009, Pertamina EP produced 127.1 thousand barrels per day, exceeding the target of 125.5 thousand barrels per day.

The plants will start to operate between 2011 and 2014

In 2009, Pertamina had already finished drilling in 23 geothermal wells.

Photo: www.elshinta.com

The Indonesian Banking In-dustry recorded a significant net profit in 2009, as indicated by the increase in some banks’ net prof-its.

BNI Bank recorded a 103% in-crease in net profit, from Rp1.22 trillion to Rp2.48 trillion

The increase of net profit was due to net credit revenue, which increased 12% to Rp11.13 trillion over 2008.

Besides that, fee based income increased 21%, from Rp3.55 tril-lion in 2008 to Rp4.3 trillion last year.

“Our financial fundamentals are getting stronger,” BNI’s Man-aging Director CEO Gatot M. Suwondo told Tempo in Jakarta last week.

Up until the end 2009, the to-tal assets of this state-owned bank were Rp227.50 trillion or an in-crease of 13% compared to the last position at the end of 2008.

Outstanding credit at the end of 2009 amounted to Rp120.84 trillion, composed of small and medium-scale enterprises credit, followed by corporatie and inter-national credit.

Meanwhile, consumer credit was only 15% and Islamic Syari-

Bank Profits IncreaseSignificantly

ah financing 3%.Besides BNI, other banks re-

cording significant profits were OCBC NISP and CIMB Niaga.

The President Director of OCBC NISP Parwati Surjaudaja said that the net profit obtained by the bank up until the end of last year amounted to Rp435.9 billion, an increase of 38% com-pared to the previous year.

According to Parwati, they will increase this year’s credit growth up to Rp7 trillion.

It is predicted that the credit composition will not be too dif-ferent from last year, which was corporate credit (34.4%), con-sumer credit (29.6%), commer-cial credit (1.8%), and micro credit (1.8%).

OCBC NISP plans to increase credit rates if Indonesia’s inflation and economic growth increase.

“We will increase the credit rate in the second or third quar-ter of this year,” she said.

Even if the credit rate increas-es, the credit growth target could hopefully be reached.

The net profit of Bank CIMB Niaga also rose, to 131% to Rp1.6 trillion (US$173 million).

State power utility PT PLN plans to build two gas pow-er plants with a total capaci-ty of 600 megawatts (MW) in South Sumatra this year.

PLN president director Dahlan Iskan said in Jakarta last week the two power plants will be using gas from South Sumatra.

“The power plants will also make use of the pipelines al-ready in place there,” he said.

He added that the power plant in Prabumulih will have a capacity of 200 MW, and the one in Musi Rawas 400 MW.

The power plant in Prabu-mulih will use 45 MMSDFD of gas from the Singa Field op-erated by Medco EP Indone-sia, and the one in Musi Raw-as will be using 80 MMSCFD of gas from the Jambi Merang Field run by Hess Indonesia.

“We have already signed a contract for the gas which will be supplied starting in March 2010,” he said.

Dahlan added that PLN de-

PLN to Build Two Gas Power Plants in South Sumatra

cided to build the projects by itself as the gas supply has been secured and at a relatively low price. But the procurement mechanism was still being considered, he said.

Several options had been con-sidered such as gas power plant (PLTG) or more practical a pow-er plant using both gas and coal (PLTGU).

If the choice is PLTG, the investment in the two power plants would reach US$420-480 million, but if the choice is PLTGU, the investment may reach US$660 million.

“We also have not decid-ed whether the procurement mechanism would be a lease, operational cooperation, or otherwise,” he said.

Dahlan also said that ac-cording to an earlier plan, the gas supply from Singa and Jambi Merang will be brought to Java.

But as the gas power plants currently operating in Java al-ready have their gas supply al-ready secured with the LNG receiving terminal in Jakarta Bay, the plan was canceled.

And besides, the capacity of the existing power plants in the Java power grid is already adequate at 30 pct above peak load.

In addition, investment in transporting gas to Java by pipeline is already too big.

Dahlan Iskan

P T Bank Danamon Indonesia Tbk. (Da-namon) has an-nounced that it made

a net profit after tax (NPAT) consolidation of Rp1.53 tril-lion for the year 2009.

Its capital adequacy ratio (CAR) stands at 20.7%, well above the minimum require-ment of 8%, making it one of the highest performers in In-donesia.

As of December 31, 2009, Danamon’s total loans reached Rp63.28 trillion, against its market penetration worth

Profitable Danamon Looking Ahead with Greater Optimism

Jeannifer Filly Sumayku

Rp34.08 trillion, or 54% of the total loans.

Danamon’s total worth of credit, including micro-cred-its obtained through Danamon Savings and Loans (DSL) and motor vehicle financing schemes through Adira Finance, grew 12% and 13% a year respective-ly.

“We saw positive developments in all our business segments throughout 2009. This is appar-ent from the bank’s net profit af-ter tax worth above Rp1.5 tril-lion,” says Sebastian Paredes, the bank’s president director.

“Despite going through tough domestic condition and glob-al challenges over the past two years, we have made positive gains in business, and we are well positioned to do better in 2010,” he says.

“We realize that Indonesia’s economy will improve in the fu-ture, so we have targeted a cred-it growth of 20% across all out business lines. Danamon’s cross-selling activities have also become more intensive and in this way we have synergy among all our busi-nesses,” Sebastian says.

Meanwhile, Vera Eve Lim, the director and Chief Financial Of-ficer, adds that the value of the bank’s equity had soared 49% in 2009, pushing its CAR to 21%, thereby making it one of the best banks in Indonesia.

The bank’s net operating prof-it grew 19% last year to Rp5.65 trillion, while its net interest mar-

gin (NIM) was recorded at 12% Versa notes.

Danamon Savings and Loans scheme, which serves small and micro segments through more than 1,200 units across Indone-sia, saw a rapid credit growth to Rp1.32 trillion in 2009.

Total credits under the scheme reached Rp 12.3 trillion, repre-senting 19% of the bank’s total loans.

At the end of 2009, financing through Adira Finance reached Rp19.13 trillion, or up 13% from the figure of the same period the year before.

Loans for small and medium-scale enterprises (SMEs) as well as commercial loans reached Rp16.5 trillion, representing 26% of total loans.

Retail credit which forms 8% of the bank’s total loans reached Rp4.9 trillion, mainly support-ed by business credit cards and mortgages.

“The quality of our funding increased substantially compared to that in previous years. This is indicated by increased ratio of gi-ral money and savings (CASA) of third party funds, from 26% in 2008 to 33% in the year 2009. Savings account grew to Rp 15.0 trillion in 2009, from Rp 12.85 trillion in 2008,” says Vera.

PT Bank Danamon Indonesia Tbk was established in 1956. As of December 31, 2009 it had over 1,900 branch offices and points of sales, including units for Da-namon Savings and Loans (DSP) and Syariah schemes. By then it had been cooperating with branch offices of Adira Finance.

Danamon manages more than 14,000 ATMs, including joint ATM access systems called ATM Bersama and ALTO in 33 prov-inces. Some 40,000 employees are in place to ensure customer satisfaction.

As of December 31, 2009, Danamon’s total loans reached Rp63.28 trillion, against its market penetration worth Rp34.08 trillion, or 54% of the total loans.

BusinessThe President Post www.thepresidentpost.comMarch 12, 201010

Title Sponsor Oficial Media Partners Supporting Industry Partners Organised byIn Association With

The World Bank Asian Development Bank BAPPENAS

Coordinated bySector Sponsor

Confirmed Participants include :ADB - Asian Development Bank ● Areva T & D ● Bambang Djaja ● Bloomberg TV ● BPMigas ● British Chambers of Commerce ● China Gezhouba ● Comité Maritime International ● Coordinating Ministry for Economic Affairs, RI ● Copper Cable Company ● Digital Divide Institute ● Ecolutia Services ● Embassy of Canada ● Ernst and Young ● ESRI ● Euroasiatic Jaya ● EuroCham ● Export-Import Bank U.S. ● France Pavilion ● General Electric ● Grundfos Indonesia ● Hitachi Asia Ltd ● Holcim Indonesia ● IFC ● IGADD - Investor Group Against Digital Divide ● Indonesia Investment Coordinating Board ● Intel Corporation ● International Power ● ITU - International Telecom Union ● Jayaco Alderon Persada ● Jembo Cable ● JGC Corporation ● Kaltimex Energy ● KMI Wire & Cable ● Korea Rural Community Corp (KRC) ● Leader Universal Holding Bhd. ● Lovells LLP ● Maersk ● Malaysia Pavilion ● MEC Holdings ● Ministry of Communication and Information, RI ● Ministry of Finance, RI ● Ministry of Public Works, RI ● Ministry of State-Owned Enterprises, RI ● Ministry of Transport, RI ● Mitsubishi Corporation ● Mitsui & Co ● National Development Planning / National Development Planning Agency, RI ● National Thai Communication Authority ● Navigat Energy ● GE Jenbacher ● Netherlands Pavilion ● Nokia Siemens Networks ● Palapa Ring Consortium ● Pemda DKI Jakarta ● Pertamina Geothermal ●Perusahaan Listrik Negara ● PGN ● Philippine Pavilion ● PIARC World Road Association ● PLN Geothermal ● Sampoerna Education Foundation ● Sarana Multi Infrastruktur ● Siemens ● Sojitz Corporation ● South Korea Pavilion ● Sumitomo ● Telekomunikasi Indonesia ● Total E & P Indonesie ● Thailand Pavilion ● Trakindo Utama ● World Bank ● Zinkpower Austrindo ● Zug Industry Indonesia..... and many more!

To Exhibit or Sponsor contact Infrastructure Asia 2010 Secretariat : T (021) 576 4240 | F (021) 576 4239 | email: [email protected] | www.infrastructureasia.com

Infrastructure Asia 2010 Seminars : Franco - Indonesian Energy Seminar | Information Technology and Telecommunications Solutions

The Government ofThe Republic of Indonesia

Hosted bySupported by

United NationsESCAP

Mr. Madhu KoneruExecutive Vice ChairmanMEC Holdings, UAE

Mr. Fred P. HochbergChairman & President of Ex-Im Bank

United States

H.E. Noeleen HeyzerExecutive Secretary of UNESCAP and

Under Secretary of United Nations

H. E. Kamal NathMinister of Road Transport & Highways

Republic of India

In Conjunction With

Headline Speakers include :

14th - 17th April 2010, Jakarta International Expo, Jakarta - Indonesia

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Join The Market Leaders!● Unprecedented Level of Speakers Delivering Groundbreaking Insights.

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H.E. Susilo Bambang Yudhoyono* President, Republic of Indonesia

H. E. Boediono*Vice President, Republic of Indonesia

H. E. Armida S. AlisjahbanaState Minister, National Development Planning / Chairperson of Bappenas, Republic of Indonesia

H. E. Hatta Rajasa*Minister, Coordinating Minister for Economic Affairs,

Republic of Indonesia

H. E. Sri Mulyani Indrawati*Minister, Ministry of Finance,

Republic of Indonesia

* To Be Confirmed

H. E. Djoko Kirmanto*Minister of Public Works,

Republic of Indonesia

H. E. Tifatul Sembiring*Minister of Communication and Information

Technology, Republic of Indonesia

Mr. Dahlan Iskan*President Director of Perusahaan

Listrik Negara (PLN)

H. E. Darwin Saleh*Minister of Energy and Mineral Resources,

Republic of Indonesia

H. E. Freddy Numberi*Minister of Transportation,

Republic of Indonesia

H. E. Gita Wirjawan*Chairman, National Investment

Coordinating Board, Republic of Indonesia

Mr. John Krenicki*President and CEO

General Electric Energy

THE COORDINATING MINISTRY FOR ECONOMIC AFFAIRSREPUBLIC OF INDONESIA

The President Post

The state enterprises ministry is still studying merging PT Semen Kupang with PT Semen Gresik to save the company, State Enter-prises Minister Mustafa Abuba-kar said last week.

“The merger plan still has to be studied again as there are still problems to be solved,” he add-ed.

He said it was still too early to merge the two state-owned com-panies, as PT Perusahaan Pen-gelola Aset (PPA) is still restruc-turing PT Semen Kupang.

Government Mulls Semen Kupang-Semen Gresik Merger

The PPA earlier suggested four options for PT Semen Kupang, namely liquidation, restructur-ing, operational cooperation with investors and corporate action.

“We cannot as yet decide the result of the study on saving the assets of PT Semen Kupang, whether it will be a capital injec-tion, a merger or an acquisition,” he said.

“Although the annual results of evaluation on PT Semen Gresik s performance showed quite a sig-nificant development, this would not make a merger automatical-

ly a solution for saving PT Semen Kupang.”

Abubakar said what was ur-gent now was increasing the pro-duction capacity of PT Semen Gresik to meet domestic de-mands, which are predicted to continue to increase until 2014.

PT Semen Gresik can still meet the national demand until 2014 with its production capaci-ty of 47 million tons and growth in demand of 38 to 39% a year, in addition to around 10 mil-lion tons of additional produc-

tion a year and an annual cement consumption growth of around 6-7%, he said.

PT Semen Gresik s president director, Dwi Soetjipto, said the company would not only have as-sets but also liquidity and debts restructured.

He said unless PT Semen Ku-pang restructures its debts, PT Semen Gresik would not get any benefit from the planned merger.

“It would even be better for us to build a new plant (rather than merging with it),” he said.

Industry Minister M.S. Hidayat predicted car exports in 2010 would reach 80,000, close to 2008’s figures.

“Car exports this year are pre-dicted to be close to the figures of two years ago,” he said at a meeting with members of the As-sociation of Indonesian Automo-tive Industries (Gaikindo) here last week.

He is optimistic because the global market has started to re-cover.

Car exports in 2009 dropped steeply due to world recession.

In 2008 the country`s car ex-ports reached 100,000 units but later dropped sharply to around 55,000 following a global financial crisis.

He said the automotive indus-try and transport means in partic-ular is one of the 10 big industries the government is relying on out of 30 industrial clusters already identified.

Car Exports Expected to Reach 80,000 units in 2010

The government has relied on the automotive industry to help boost the growth of industrial sector until the next five years.

Hidayat said to accelerate automo-tive industrial growth in the country, supporting industries need to be de-veloped, including automotive com-ponent industries.

“Not only after sales service com-ponent industry but also industry of components for car assembling,” he said.

The government is developing tourism in Eastern Indonesia, ac-cording to Winarno, the secre-tary of the Tourism Destination Development Directorate Gener-al, “as this area will later become another main tourist destination besides Bali.”

“Bali is the connector for tour-ism packages in Eastern Indone-sia,” he said last week.

Winarno also said that the po-tential for tourism in Eastern In-donesia was very big.

Many tours and travel agen-cies, especially in Bali, have of-fered travel packages to these areas which are still lacking in ac-cess and infrastructure, he noted.

“The number of tourists has gone up by 100% in the past two years, although the number is still lower than other established tourist destinations,” he said.

According to Winarno, tour-

Tourism in Eastern Indonesia to be Developedists in Eastern Indonesia normal-ly choose special packages such as diving, komodo watching or cul-tural and adventure tourism.

Preferred destinations include Lombok, Flores (Komodo Is-land and Lake Kelimutu), Tora-ja, Makassar, and Raja Ampat in Papua.

LINER PASSENGERS RECEIVED BY C. JAVA GOVERNOR

Meanwhile, Central Java Gov-ernor Bibit Waluyo received in audience 107 foreign tourists vis-iting the province by the cruise ship M.V. World last week.

The luxury vessel carrying tourists from the US, Asia and several European countries called at Semarang s Tanjung Emas port Wednesday morning.

The captain of M.V. World Dagsverik said he was proud to visit Central Java.

He said that the tourists of the ship were warmly welcomed at various tourist sites and destina-tions in the province.

Governor Bibit Waluyo hoped the tourists would enjoy the many tourist objects and desti-nations offered to them, and ex-pressed his wish that some day they would return to Indonesia.

He also hoped that upon their return in their respective coun-tries they could promote the tourist objects and destinations they visited.

The marketing chief of the Central Java Cultural and Tour-ism Agency Budiyanto said the ship called on Semarang for two days, and that the tourists had visited places like Borobudur and Prambanan temples.

He said there will be other ships to call at Tanjung Emas.

M.S. Hidayat

“The merger plan still has to be studied again as there are still problems to be solved.”Mustafa AbubakarState Enterprises Minister

Raja Ampat, Papua Photo: David Doubilet/National Geographic

The President Postwww.thepresidentpost.com March 12, 2010 11

Human Capital

Naresh Makhijani Krishnan Rajendran James Creelman

T he Human Re-sources (HR) function cannot own the organi-zational culture. Indeed, repeat-

ed research over the last couple of decades proves that organi-zations fail to create a high-per-forming culture that deliver supe-rior returns to shareholders when responsibility for culture is seen as a “HR thing.” Rather culture, as with strategy, has to be owned by the senior management team and therefore viewed as a core or-ganizational capability, as shown in figure 1.

Indonesia HR Organizations Must be Better at“Managing Culture”

“actively” disengaged, note that the vast majority of these employ-ees joined their organizations full of hope, expectation and with a firm commitment to give their best. So what happened to trans-form these employees from being “actively” engaged to various de-grees of disengagement?

Simple, they became embit-tered and resentful as a result of the culture of the organizations that they joined: a culture that might be autocratic and where managers rule through fear, where people are not encouraged to participate in decision-making or empowered to take action or where suspicion and distrust in-form all relationships – manager/direct report, employee/co-work-er, company/supplier and compa-ny/customer.

We would argue that get-ting the culture right (that is one where most employees are “ac-tively engaged”) is the requisite underpinning of all the value-adding work that HR can deliv-er. If the culture is not right then no matter what HR does or how hard it works, little will actually change in the workforce – and few of their interventions will make a real and lasting difference to performance.

Yet, getting the culture right is understood in most organiza-tions, at least at a superficial lev-el. Within previous issues of The President Post we have spoken at lengths about the Balanced Score-card, which is a strategic perfor-mance management framework that comprises a financial and three non-financial perspectives of customer, internal process and learning and growth and that identifies appropriate objectives, measures and targets.

Within the learning and growth perspective (which is es-sentially about “people”) of just about every Balanced Scorecard that exists there will be a strate-gic objective that relates to cul-ture. Typically this is articulated as “create a high-performing cul-ture,” or something similar.

Culture’s placement within the learning & growth perspec-tive signals that HR is perceived as the custodians of an organiza-tion’s culture, as day-to-day re-sponsibility for this perspective is typically devolved to the HR or-ganization.

The role of HR is to educate the senior team as to the importance of ensuring that the required be-haviours, values and mindsets are in place to support strategic exe-cution. HR must be able to dem-onstrate that strategies will not be successfully implemented with-out the appropriate cultural in-frastructure.

Hand-in-hand with culture is an understanding of values. In-deed, when culture is measured on a Balanced Scorecard it is typ-ically through a metric of how employees are living the values or perceive their importance in the hurly-burly of daily operations.

For HR professionals looking to create a high-performing cul-ture the starting point should be an understanding of how to identify and shape corporate val-ues. This process must involve the senior team and be facilitat-ed by HR and perhaps with ex-ternal consulting support. Val-ues creation cannot be devolved to lower level teams as it is the se-nior leadership team that sets the cultural tone. The first task of the leadership team is to shape a ro-bust view of the type of culture than the organization wishes to possess (entrepreneurial, sales-fo-cuses, team-based etc) so to de-liver to its strategies. The senior team can then agree on the spe-cific values that support this cul-ture and should also describe the appropriate behaviors. Describ-ing the behaviors make the values “come alive” and be more than “nice sounding words.”

As a case example, in our book we described how the senior team of one large US-based financial services com-pany decided on the four val-ues of: integrity, openness, respect for people and account-ability. To ensure that they were more than “nice sound-ing words” each was subject-ed to a rigorous definition of meaning and was captured in a document that was circulated to all employees.

For example, the definition for accountability was “valuing accountability is valuing the mindset that says: If it’s going to be, it’s up to me. It’s the be-lief that we are powerful peo-ple, capable of getting the re-sults that we want.”

The statement continued that valuing accountability “is the rock-solid belief in the im-portance of the marriage of in-dividual growth and the finan-cial success of the company.”

Five guiding employee behav-iors for accountability were then defined:

Accepts personal responsi-•bility for his/her actionsTakes ownership of team •goals and is accountable for his/her part in the processAvoids making excuses or •placing blameFollows through on com-•mitments and promisesDisplays a “can-do” attitude •and commitments to get the job done.

To drive performance, how these values are lived out in the organization must be measured. Formal surveys, or opinion polls, are typical mechanisms for capturing how employees view how the values are being lived and for assess-ing the culture generally. Such surveys can be deployed in ei-ther paper or online electronic formats. In our book we pub-lished a useful cultural survey instrument, a portion of which we publish here. The employ-ee who fills in the profile ques-tionnaire has to state on a scale of 1-7 which of positive and negative statement most accu-rately describes the culture of the organization.

A strength of this profil-ing technique (and there are many similar) is that it unam-biguously points to the cultur-al strengths and weaknesses of the organization as perceived by the employees themselves. This can serve as a powerful “gap analysis” between the de-sired organizational behaviors and, as articulated through values and the “as is” state. For example, if the value calls for teamwork but there is a high agreement with the profile statement “narrow focus, turf issues, we versus them” then considerable work will need to be done to inculcate the team-work value. It will also pro-vide HR will crucial data with which to prioritize people-re-lated interventions.

Getting the “culture right” requires a strong partner-ship between the senior man-agement team (that owns the culture) and the HR organi-zation (that facilitates the pro-cess to implement the appro-priate organizational culture). We would strongly argue that the success of the work that HR does with regard culture largely determines 1) the long-term success of all their other performing-enhancing inter-ventions and 2) whether or not they are accepted as sought-af-ter business partners.

This article is extracted from the book: Managing Human Capital in Indonesia: Best Practices in Aligning People with Strategic Goals (Azkia, Indonesia, 2009)

POSITIVE

Always Mostly Occasionally Sometimes both Occasionally Mostly Always

NEGATIVE

7 6 5 4 3 2 1

People clearly understand mission, vision and goals

People are unclear about mis-sion, vision and goals

Flexible/fluid/empowered Hierarchical/boss driven

High service consciousness/focus on the customer

Low service consciousness/low focus on the customer

Teamwork/mutual support and cooperation

Narrow focus/turf issues/we versus they

People are highly accountable for results and actions

People find excuses/feel victim-ized/blame others

Open to change Resistant to change

Encouraged to innovate/creativity welcomed

Do what is told/risk averse/poor support for new ideas

High performance is recognized and rewarded

High performance is expected but not rewarded

Core values and ethics are very important

Values and ethics nit stressed or tend to be ignored

Positive/optimistic/forgiving Insecure/fearful or negative environment

Getting the “culture right” requires a

strong partnership between the senior management team

(that owns the culture) and the HR organization

(that facilitates the process to implement

the appropriate organizational culture).

FIGURE 3: CULTURAL SURVEY INSTRUMENT

FIGURE 1: CULTURE AS A CORE ORGANIzATIONAL CAPABILITY.

But with ownership proper-ly assigned, then HR has a crit-ical role in ensuring that the re-quired culture is put in place. But research to support our book Managing Human Capital in In-donesia: Best Practices in Align-ing People with Strategic Goals finds that most business leaders do not believe that their HR or-ganizations are playing a role in inculcating the right culture (fig-ure 2).

Source: The Conductive Organization. Saing-Onge/Armstrong.

FIGURE 2. PERCENTAGE OF BUSINESS MANAGERS WITHIN INDONESIAN COMPANIES THAT BELIEVE THAT THEIR HR ORGANIzATION HELPS TO INCULCATE THE REqUIRED CULTURE FOR DELIVERING SUPERIOR PERFORMANCE.

A recent poll by the world lead-ing market research organiza-tion Gallup showed conclusive-ly the importance of getting the culture right. Gallup found that fully 73% of employees are dis-engaged from the organizations for which they work. This means that they just turn up at work and go through the motions or, worse, do all they can to do as lit-tle as they can. Even more wor-rying is that a significant percent-age of these disengaged worked are described as “actively” disen-gaged, which means that they are likely to purposefully derail or-ganizational activities and sabo-tage performance improvement plans. They become “the enemy within.”

Whether simply engaged or

Stra

tegy StructureS

ystemsCulture

Leadership

Cu

sto

mer

Environment

M

arketplace

Agree 41.67%Neutral 30%

Disagree 16.67%

StronglyDisagree16.67%

NA 5%StronglyAgree1.67%

ManagementThe President Post www.thepresidentpost.comMarch 12, 201012

Indonesian Leadership in Changing Times:It’s Leading with Style

Dewi TobingTransforming LearningHay Group Jakarta

Lusi LubisManaging ConsultantHay Group Jakarta

HIGH PERFORMANCE CLIMATE GENERATES BOTTOM LINE PERFORMANCE

D ecades of Hay Group re-search shows that the right climate can increase bot-

tom line performance of teams by up to 30%. Significant im-provement in organizational per-formance can be expected to result from improved organiza-tional climate. So, slightly im-proving an organization’s climate can have a huge impact.

Studies done by Hay Group have shown that leaders who can create a positive work climate for their people make an impact on bottom line performance. Below are two examples:

We studied 33 new Directors •of a global technology firm and found out that those who cre-ated a high performing, ener-gizing climates outperformed their peers by $711 million in profit annuallyIn a similar study of leaders, •within a call center, we found that teams led by managers creating positive climates deliv-ered 26% more sales than their target – compared to addition-al 4% delivered by their peers. They also had substantially lower absence rates and lower staff attrition.

KEEP EMPLOYEES ENERGIzED AND ENGAGED

Businesses that win in a tough business environment provide clear direction in the face of un-certainty, reassuring when neces-sary, all the while continuing to push for results. Successful lead-ers concentrate on creating ener-gized and engaged work climates. They get people looking at what they can do, so that they feel em-powered and energized to help the company through the chang-es and challenges it faces. They know it’s important not to leave employees in the dark about the company’s strategy. These leaders make decisions quickly and then communicate them effectively to staff so people have an area to fo-cus on moving forward.

Worryingly, Hay Group study reveals that today’s leadership tal-ent appears to be merely average at creating conditions for success. In our review of 476 leaders from high profile organizations operat-ing in the Indonesian market (see figure 1), we found that 72% of leaders weren’t engaging the peo-ple that they lead and in fact were effectively de-motivating them. Only 18% of leaders were creat-ing a high performance and ener-gizing climate.

A high performance climate is one that makes optimal use of ev-eryone’s abilities. This climate suggests that employees are fully engaged and exerting the great-est amount of discretionary ef-fort and organizational commit-ment. An energizing climate is one that facilitates a high degree of discretionary effort and orga-nizational commitment. Em-ployees experiencing neutral cli-mates are unlikely to be exerting their full degree of discretionary effort or commitment. De-moti-vating climates are likely to result in high turnover and frequent ab-sences, leading to employees to perform significantly below their optimal levels.

This research was based on a gap analysis of employees’ ide-al working climate and the cli-mate they were actually expe-riencing on a day-to-day basis created by their leaders. The gap was defined here as the difference in what the subordinates expect from their leader and what they actually get in each dimension of organizational climate. The number of gaps out of six dimen-sions of climate that are created by leaders, relates to the positive or negative climate the subordi-nates feel. The larger the amount of gap, means the more de-moti-

Ed KrancherManaging ConsultantHay Group Jakarta

When you ask Indonesian leaders whether or not the

country is going through a recession

they will provide you with different

answers depending on the industry

they work in. What they all agree upon though is that they are facing a tough economic climate with accelerated

business changes.

Leaders need to act decisively to anticipate for

market changes, defend and capture

their share of the market and

stay ahead of the competition.

Employees need a working

environment that inspires

their individual effort and team commitment to

drive performance.

Therefore, organizations

need leaders (at all levels) that are

ready to strengthen their organization,

aligning their people with the

strategy and positioning them

for success.

vating climate the subordinates get and the larger the opportu-nity lost in terms of discretionary effort. Climate is therefore the profit and loss statement of how effectively an organization is de-ploying its human resources.

It is this set of elements that to-gether create an engaging, em-powering work climate (see fig-ure 2).

Clarity: all employees know what is expected of them and un-derstand how those expectations relate to the larger goals and ob-jectives of the organization.

Standards: the degree to which people feel that challeng-ing but attainable goals are set for both the organization and its em-ployees. Also the emphasis that employees feel management puts on improving performance, do-ing one’s best and that mediocri-ty is not tolerated.

Responsibility: employees have authority delegated to them to which they can run their jobs without having to check every-thing with their boss. Also the degree to which they feel fully ac-countable for the outcome and are encouraged to take calculat-ed risks.

Flexibility: the degree to which employees feel there are no unnecessary rules, procedures, policies, and practices that inter-fere with task accomplishment and good new ideas are easily ac-cepted.

Reward: employees feel that they are being recognized and re-warded for good work. Recogni-tion is directly and differentially related to levels of performance. People know where they stand in terms of their performance

Team Commitment: The feeling that people are proud to belong to the organization, will provide extra effort when needed, and trust that everyone is work-ing toward a common objective.

TURNING ON THE STYLESo, what’s going wrong? What

makes the difference between a leader who creates a de-moti-vating climate and a leader who creates a high performance one? Our research shows that it main-ly boils down to the style.

Backed by over 30 years of re-search, Hay Group has identi-fied the six leadership styles that have the biggest impact on team climate – Directive, Visionary, Affiliative, Participative, Paces-etting and Coaching. We also

know that the more of these lead-ership styles a leader has under his/her belt, the better climate they tend to create within their organization, team and among subordinates. This is also clear-ly demonstrated in our analysis with Indonesian Leaders. The Indonesian leaders that are able to use the full range of leadership styles create energizing, engaging work climates.

Directive: demands immedi-ate compliance. To be used spar-ingly but is effective in a crisis or to kick start an urgent turn-around.

Visionary: inspires and is able to explain how and why people’s efforts contribute to the vision. Moves people towards shared outcomes through empathy and clarity.

Affiliative: creates harmo-ny that boosts morale and solves conflict. A useful style for heal-ing rifts in a team or for motivat-ing during stressful times. How-ever sustained usage, without other styles to balance, could lead to toleration of mediocrity and underplaying the importance of performance in the reward sys-tem of the organization.

Participative: values inputs and gets commitment through participation. A listener, team worker, collaborator and influ-encer.

Pacesetting: drives to achieve through own efforts, has high standards and initiative. Can be impatient and prone to mi-cromanaging and leading only through example.

Coaching: encourages, del-egates and improves perfor-mance by building their people’s long term capabilities. Listens and helps identify their people strengths and weaknesses.

The Hay Group research shows that the majority of Leaders oper-ating in the Indonesian market create a de-motivating climate by using only two or less styles of leadership (see figure 3). By con-trast, the majority of leaders cre-ating high performance and ener-gizing climates were using four or more leadership styles. Looking closer at which styles were used by the leaders creating the high performance and energizing cli-mates, there were telling differ-ences.

The leaders making the most positive impact on the perfor-mance of their team drew on

a much broader range of styles principally Visionary, Coach-ing, Participative, Affiliative and also Directive. They use most of them in a given week, seamless-ly and in different measure, de-pending on the business situa-tion. Leaders who had a negative impact on organizational climate rely too heavily on one or two styles. Their styles of leadership tend largely to be Directive. This style shows a focus on the task in the short term at the expense of the bigger picture.

Looking at the composite re-sults on the inventory of leader-ship styles of Indonesian Leaders (see figure 4 and 5), both leaders and their subordinates agree that the Directive style is the domi-nant style leaders use in facing business and managerial situa-tions. Leaders assessment on own style is saying that they also use a Coaching style; however accord-ing to their subordinates, this Coaching style is only a back-up style, not used on a frequent ba-sis. These two graphics also show that the composite of leadership style has a similar shape, between leaders and subordinates assess-ment. It means that the leaders have quite a good self awareness on their style.

During a real business chal-lenge it’s easy to fall into bad

habits. Perhaps the biggest risk is adopting an exclusively Direc-tive approach, which at its worst involves micromanaging employ-ees. Used in isolation this can ad-versely affect the overall work cli-mate within an organization.

When leaders use a mixture of styles they create the clarity, flex-ibility and the responsibility that employees need in order to be ef-fective. They’re also able to main-tain a focus on high standards and create much needed team commitment that is often in short supply during rough times. These styles demonstrate a lon-ger term approach taken by these leaders. They arouse their peo-ple’s discretionary performance by explaining the why behind the what, showing an interest in their team as people and understand-ing what motivates them. In ad-dition, they involve their team in the decision making that sup-ports the execution of the team’s objectives and builds capabili-ty to enable effective delegation and trust. They give employees goals to focus on and room to in-novate, while also encouraging them to work collaboratively. All of this is important because em-ployees that are engaged by the right kind of leadership will go the extra mile.

The aggressive growth expe-rienced by Indonesian compa-

FIGURE 1: ORGANIzATIONAL CLIMATE CREATED By 476 LEADERS IN INDONESIA ACROSS INDUSTRY SECTORS.

FIGURE 2: THE 6 DIMENSIONS OF ORGANIzATIONAL CLIMATE

FIGURE 3: LEADERSHIP PROFILE OF INDONESIAN LEADERS THAT ARE CREATING MOTIvATING AND DE-MOTIvATING CLIMATES

FIGURE 5: COMPOSITE OF LEADERSHIP STYLE FROM SUBORDINATES’ ASSESSMENT

nies has resulted in companies to put people in leadership positions without giving adequate time or exposure to the leadership chal-lenge they face. Leadership roles are too often filled by individu-al contributors who are individ-ually the best at what they do, but are unprepared for the de-mands of leading others. The key is to invest in a leadership pro-gram that can guide managers on how to deliver engaging high performance climates and consis-tently measure the results. Use feedback data to help leaders un-derstand the impact of their be-haviours. In addition, organiza-tions need to provide support and challenge their leaders to broaden their leadership repertoire, invite them to “Lead with Style”.

About Hay GroupHay Group is a global consult-

ing firm that works with lead-ers to turn strategies into reality. We develop talent, organise peo-ple to be more effective, and mo-tivate them to perform at their best. With 86 offices in 47 coun-tries, we work with over 7,000 cli-ents across the world. Our clients are from the public and private sector, across every major indus-try, and represent diverse business challenges. Our focus is on mak-ing change happen and helping organisations realise their poten-tial. Visit www.haygroup.com.

FIGURE 4: COMPOSITE OF LEADERSHIP STYLE FROM LEADERS’ ASSESSMENT

De-motivating 72%

Neutral 10%

Energizing 8%

HighPerformance10%

OrganizationalClimate

Standards

Clarity

TeamCommitment

Rewards

Responsibility

Flexibility

90

80

70

60

50

40

30

20

10

0

Directi

ve

Visionary

Affiliativ

e

Participativ

e

Pacese

tting

Coaching

Motivating Climate De-Motivating Climate

Directive

90

80

70

60

50

40

30

20

10

0

100

Visionary Affiliative Participative Pacesetting Coaching

Per

cent

ile S

ho

wn

Bac

kup

Do

min

ant

86% 42% 55% 45% 30% 62%

Directive

90

80

70

60

50

40

30

20

10

0

100

Visionary Affiliative Participative Pacesetting Coaching

Per

cent

ile S

ho

wn

Bac

kup

Do

min

ant

80% 57% 65% 55% 26% 69%

The President Postwww.thepresidentpost.com March 12, 2010 13

Investment

JABABEKA’S PROPERTY INDEX

October-December 2009

No. SEGMENTSSIZE - M2

PRICESBuilding Land

RESIDENTIAL

The Veranda Town House

1 Veranda Deluxe 294 166 Rp. 2,008,000,000

2 Veranda Premium 294 153 Rp. 2,073,600,000

3 Veranda Corner 345 210 Rp. 2,305,600,000

Simprug Garden

1 Green Pine 53 112 Rp. 470,000,000

2 Yellow Pine 70 120 Rp. 532,000,000

3 Golden Pine 90 136 Rp. 728,000,000

Orchid

1 Orchid Deret 53 120 Rp. 266,500,000

2 Orchid Corner 53 225 Rp. 382,600,000

3 Orchid Corner (Limited) 53 189 Rp. 424,600,000

Tropikana Garden

1 Zelosa - Standard 113 119 Rp. 817,665,000

2 Axela Standard 155 160 Rp. 1,017,678,000

3 Ortiz - Standard 188 300 Rp. 1,525,560,000

Metropark Condominium Tower A

1 Deluxe , 2nd fl 27/1 Bdr Rp. 218,950,000

2 Deluxe ,3rd fl 27/1 Bdr Rp. 218,950,000

3 Deluxe, 5th fl 27/1 Bdr Rp. 224,500,000

4 Deluxe , 7th fl 27/1 Bdr Rp. 257,500,000

Metropark Condominium Tower B

5 Deluxe , 2nd fl 27/1 Bdr Rp. 218,950,000

6 Deluxe, 3rd fl 27/1 Bdr Rp. 218,950,000

7 Deluxe , 5th fl 27/1 Bdr Rp. 224,500,000

8 Premium, 6th fl 54/2 Bdr Rp. 416,300,000

9 Deluxe, 6th fl 27/1 Bdr Rp. 261,900,000

10 Deluxe , 7th fl 27/1 Bdr Rp. 261,900,000

Pavilion-Exclusive Boarding Houses

1 Grande-Corner 221 216 Rp. 1,287,000,000

COMMERCIAL

Pavilion Niaga

1 Block A3 100 50 Rp. 575,000,000

2 Block A2 100 50 Rp. 575,000,000

Ruko Sunter Niaga Mas

1 Corner 165 71.5 Rp. 1,025,000,000

2 Standard 120 52 Rp. 750,000,000

Ruko Sentra Niaga Square

1 Block 8B Standard 1 (4 x 11), 2nd fl 80 44 Rp. 495,000,000

2 Standard 2 (5 x 10), 3rd fl 150 50 Rp. 715,000,000

3 Corner (6 x 10) , 3rd fl 180 60 Rp. 891,000,000

4 Block 8C Standard 1(4 x 11) , 2nd fl 80 44 Rp. 495,000,000

5 Standard 2 (5 x 10) , 3rd fl 150 50 Rp. 715,000,000

6 Corner (6x10) , 3rd fl 180 60 Rp. 891,000,000

INDUSTRIALSIZE - M2

Land Factory Office

1 Standard Factory Building 1380 831 128 Call

2 Grand Standard Factory Building 3931 830 115 Call

3 3-IN-1 Factory Building 576 310 146 Call

4 New 3-IN-1 Factory Building 1214 304 124 Call

5 Supporting Industrial Building 360 80 80 Call

6 R & B 360 360 80 80 Call

7 Land Plot Call

SALES and MARKETING OFFICEJababeka Center, Plaza JBJl Niaga Raya Kav 1-4 Kota Jababeka, Cikarang Baru Bekasi, West Java, IndonesiaPh. (+62 21) 893 4350Fax. (+62 21) 893 4331 / 4038

Notes: The Above Prices are not Included: Tax 10%; PPAT; BPHTB fee; KPR/Notarial Fee and can be changed without prior notice

Bosowo Group is set to raise its share ownership in Jakarta Lingkar Baratsatu (JLB), the operator of the Kebon Jeruk-Penjaringan toll road (Jakar-ta Outer Ring Road West 1/JORR W1). Bosowa will in-crease its stake from 25% to 52% in July this year by in-jecting Rp250 billion which will mostly be funded from internal sources.

The company had so far in-vested Rp218 billion in the project for a 25% share own-ership.

Bosowa Group Chairman Erwin Aksa said the move is part of the company’s agree-ment with other shareholders which allowed the company to gradually raise its stake un-til July 2010.

Erwin added that with a 35-years concession, the com-pany hopes to reach a break event point in 7-8 years time.

Bosowa does not plan to in-crease its investment in the toll sector any time soon.

“We haven’t thought about

Bosowa Takes Controlof JORR W1 Toll

working on another toll project just yet because most of the in-vestments on toll projects that have been tendered are hindered by land issue,” he said.

The Makassar-base company is so far operating the Makassar toll road and two toll lanes in Ja-karta (W1 and Bintaro).

The current shareowner com-position in BLJ is Bangun Tjipta Sarana with a majority control of 52%, Jasamarga 23% and Boso-wa Group 25%.

In the toll project development, which costs Rp1.22 trillion, Bank Mandiri acts as the leader in the loan syndication with mem-bers consisting of Bank Buko-pin, Bank DKI, and Bank Panin with each pledging Rp100 billion loans.

The remaining Rp685 billion is funded by Jakarta Lingkar Ba-ratsatu (JLB).

The Kebon Jeruk-Penjaringan toll road stretches through four sub-districts, namely Kemban-gan, Cengkareng, Kalideres, and Penjaringan.

Reliance Securities’ (RELI) net profit soared 560% to Rp66 billion last year from only Rp10 billion in the previous year with Rp36 billion of the company’s profit contributed by BUMI shares.

RELI President Director Orias Petrus Moedak attributed 90% of the profit from stock portfolio to BUMI shares.

Of the Rp66 billion net profit, Rp40 billion came from the com-pany’s stock portfolio and the re-maining Rp26 billion from prof-it as a stock broker.

Moedak said the company no longer has BUMI stocks in its

Reliance Books 560% Net Profit Surge

M obile advertising takes up about 10% of Indone-sia’s advertising

market worth about Rp4 trillion annually and Telkomsel hopes to tap 10% of the Rp4 trillion mo-bile advertising market.

“The advertising industry has entered a new phase in delivering messages to the public through digital technology. Given this condition, we came up with a new creation and innovation for our services by providing cellu-lar and digital advertising service convergence,” Telkomsel Presi-dent Director Sarwoto Atmosu-tarno said during the launch of mobile advertising service in Ja-

Telkomsel Eyes Rp400 billion from Mobile Advertising

karta, late last month.The mobile advertising service

includes commercial service de-livery to its customers via SMS, NSP, MMS, NSP, outbound call, and cell broadcast, and Telkom-sel is facilitating all industries with the new massive and on-tar-get advertising solution.

“The mobile advertising ser-vice contains various information and offers according to Telkom-sel’s customer profiles which have now reached 80 million custom-ers,” said Sarwoto.

To use the mobile advertising service, advertisers can collabo-rate with 33 media sellers.

“We will invite media sellers to become our partners to com-

pile the advertising contents and we hope to get 100. Meanwhile, we already have more than 100 advertisers and we hope to see the number grow to more than 1.000,” he said.

In 2009 Telkomsel delivered 500 advertisements that involved more than 100 top brands from various product categories such as banking, food and beverages, consumer goods and automotive.

GREEN BTSTo support the green move-

ment, Telkomsel has already used 132 environmentally-friendly base transceiver stations, making it the telecommunication com-pany with the most green BTS

in Asian country. BTS recently operated its 132th green BTS in Senayang Island, Riau Islands.

Telkomsel GM Radio Oper-ation and Power System Iwan Chairul said the green BTS is spread across the Indonesian re-gions, Sumatra 33 BTS, Java 22 BTS, Bali and Nusa Tenggara 23 BTS, Kalimantan 18 BTS, Su-lawesi, Maluku and Papua 36 BTS.

“They have existed since 2005. This year we will invest in 39 so-lar cell BTS,” he said.

Investment for one solar-pow-ered BTS is about Rp1.2 billion that can be used for about 20 years.

Alternative use of energy sourc-

Indonesia’s rating agency Pe-meringkat Efek Indonesia (Pe-findo) is upbeat with Indonesia’s economic growth this year.

Based on a survey conducted on 100 chief executive officers (CEO), the majority is convinced that they would see their profit and assets growing by more than 10% this year.

“74% pro-jected reve-nue growth of more than 10%, while 65% expect as-sets to grow by more than 10%,” said Pe-findo President Director Kahl-il Rowter dur-ing a Media Fo-rum in Jakarta last month.

The sur-vey showed that 85% be-lieve that busi-ness will be much better in this year of the Golden Ti-ger compared to last year. Al-though 2009 was engulfed by the global financial crisis, 93% said the year was still better than 2008.

“The optimism from the busi-ness sectors captured in this sur-vey is quite positive regardless of the problems displayed on tele-vision (for example, the special House committee on the Bank Century case).

“Key players remain upbeat with Indonesia’s economy,” he said.

The government has set an economic growth target of 5.5% this year. Finance Minister Sri Mulyani said despite the condu-cive condition, Indonesia still has to watch out for external factors that could affect the economy.

100 CEOs Optimistic Profit to Exceed 10%

“Of course we expect 2010 to be better. We were able to maintain the econom-ic growth and the momen-tum but we will not revise the growth target just yet. The downside risk is still lingering and pulling down our eco-nomic growth,” Mulyani said

recently.M u l y -

ani predict-ed that the negative risk from the global econ-omy can emerge in the second half as in-dustrialized c o u nt r i e s w i t h d r a w their stimu-lus.

The earli-er than ex-pected debt crisis in some Euro-pean coun-tries showed that eco-nomic resil-ience in that

region is not as strong as many believed.

She also considered the US economy still vulnerable de-spite its fiscal consolidation policy. Mulyani said the gov-ernment will retain household consumption growth above 5% in the medium term to get the economy to grow at more than 6% on average per year. Household consump-tion makes up about 65% of the country’s gross domestic product.

Household consumption grew 4.9% last year, down from 5.3% in the previous year. The government is tar-geting household consump-tion growth at 5.2% this year

es has become an option for tele-communication operators to se-cure power supplies to operate their BTS.

Aside from solar cell, Telkom-sel also adopts fuel cell tech-nology with hydrogen and uses environmentally-friendly tech-nologies that do not generate pol-lution, noise or smells.

“In the future, Telkomsel will develop BTS using alternative energy sources. The most suitable for Indonesia’s geographic condi-tion is microhydro-powered BTS that can take advantage of the rivers around the BTS as well as develop BTS that uses bio fuel,” said Iwan.

portfolio because it has already sold them all.

This year the company is aim-ing for 20% net profit growth to Rp79.2 billion.

To achieve the target, the com-pany plans to open 5 branches this year in Java and Sumatra. So far, it only has branches in Java and Bali.

“We hope to open one in Me-dan by the end of the year. We opened one in Java at the begin-ning of the year, in Solo and it was quite interesting,” Moedak said.

BANK ACqUISITIONReliance Securities is plan-

ning to acquire a domestic bank and has readied Rp130 billion for the acquisition. The company is currently holding talks with two banks.

“We intend to invest in a bank. We have readied the funds and done a lot of negotiations, but so far we haven’t struck a deal,” Moedak explained, adding that the management has obtained shareholder approval for the plan.

“We have met about 10 times but still haven’t reached any agreement,” he said, while de-clining to disclose the names of the banks.

Furthermore, he explained that the company intends to be-come the majority shareholder in the bank.

“Our expectation is that the bank, which will be our subsid-iary, can form a synergy with us,” he said.

The management has also secured approval to issue Rp150 billion bonds but decided to hold it due to sufficient capital.

“We still have suf-

ficient amount of capital. But if the plan goes ahead, we will use the proceeds for marginal ex-penses,” he said.

This year, Reliance is aiming for 20% customer growth which will be boosted through the new-ly launched online trading pro-gram dubbed Relitrade.

“The online trading program has actually been around since last year but we’ve only launched it recently,” Moedak said.

The securities company invest-ed Rp2 billion in the online trad-ing program.

Daily customer transaction at Reliance reaches Rp150 billion and the company hopes to boost it to Rp200 billion with online trading.

Kebon Jeruk-Penjaringan toll road (JORR W1)

Photo: www.djakartanews.blogspot.com

Based on a survey conducted on 100 chief executive officers (CEO), the majority is

convinced that they would see their profit and assets growing by more than 10% this year.

“Of course we expect 2010 to be better. We were able to maintain the economic growth and the momentum but we will not revise the growth target just

yet. The downside risk is still lingering and pulling down our

economic growth,”

Sri MulyaniFinance Minister

This year, Reliance is aiming for 20% customer growth which will be boosted through the newly launched online trading program dubbed Relitrade.

Image: www.a2zwealthplanners.com

LeadershipThe President Post www.thepresidentpost.comMarch 12, 201014

Two day training programsWeek long development programsOne day seminars

Company In-house Programs.Public programs at President Executive Club.

Please Contact:DR. Karan Singh BA. MBA. DBA.

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T he origins of Self Directed Work Teams are associated with an Eng-lishman named

Eric Trist, who, in the 1950s co-authored a paper which used the term socio-technical system. The concept challenged many of the elements of Frederick Taylor’s Scientific Management.

Scientific management was developed in the beginning of the century and used extensive-ly by Henry Ford in his automo-bile plants in the 1930s – a sys-tem that proposed specialization through breaking down job re-sponsibilities into small parts, en-abling faster efficiency and bring-ing about predictability and a sense of order. Thus setting the stage for mass production and standardization in factory work.

Scientific Management had fa-cilitated a number of advantag-es like improvements in quality and efficiency, as well as allow-ing workers with little or no ex-perience, education or training, to become fairly productive fair-ly quickly.

At the same time Scientific management had its downsides. Workers pursued their tasks with a narrow focus and it did not al-low them an opportunity to un-derstand the whole work process. Nor let them participate in a va-riety of tasks, and in their plan-ning and in their improvement. In the words of Fisher (Kimball

concept spread to service organi-zations as well.

THE PRESENT SDWTFisher’s definition: Self-directed Team (noun): A

group of employees who have day-to-day responsibility for managing themselves and the work they do with a minimum of direct super-vision. Members of Self Directed teams typically handle job assign-ments, plan and schedule work, make production-and/or service-related decisions, and take action on problems.

The key element being EM-POWERMENT, and according to Jack Sherwood, a prominent STS (Social & Technical Sys-tems) consultant, SDWTs sit on the higher end of the Empower-ment continuum (Figure 1)

Self Directed Teams comprise of members who are jointly re-sponsible for whole work process-es, with each individual perform-ing multiple tasks; in many cases like small self sustaining business-es that can be jointly managed by the organizational membership. In an example from Procter & Gamble Lima, the company was divided into Product Organiza-tions where team members decid-ed on who would do what, rather than having individuals separated into jobs like operators, mechan-ics and trades people. Everyone had a common title – Technician – and everyone shared responsi-bility for the team’s success.

true empowerment is achieved only when ALL FOUR vari-ables work together in harmo-ny.

SDWTs is just not anoth-er management fad and there are actual real world exam-ples to show that they outper-form Traditional Operations; and the best research exists on two decades of experience with-in Procter & Gamble, showing up for, as one example, a 30 to 50 percent reduction in manu-

SDWTs: What are They andWhere did They Come From?

Self Directed Work Teams Traditional Organizations

Customer DrivenMulti-skilled workforceFew job descriptions

Information shared widelyFew levels of management

Whole business focusShared Goals

Seemingly chaoticPurpose achievement emphasis

High worker commitmentContinuous improvements

Self-controlledValues/Principle-based

Management DrivenWorkforce of isolated specialists

Many job descriptionsInformation limited

Many levels of managementFunction/Department focus

Segregated goalsSeemingly organized

Problem-solving emphasisHigh management commitment

Incremental ImprovementsManagement controlledPolicy/Procedure-based

Self Directed Teams comprise of members who are jointly responsible for whole work processes, with each individual performing multiple tasks

By Dr. Karan Singh MBA, DBA

Dr. Karan Singh MBA, DBA, Organization Development Consultant, is presently Management Development Director at President University, and Managing Consultant of PT King & Singh Consulting. In his seventeenth year in Indonesia, Dr. Singh has wide experience, across a range of multinational companies, in areas like corporate training, market entry strategy, integrated marketing (external and internal marketing), communications, and human performance improvement.

TABLE 1: THE ESSENTIAL DIFFERENCES BETWEEN TRADITIONAL ORGANIzATIONS AND SDWT

SDWTs is just not another management fad and there are actual real world examples to show that they outperform Traditional Operations; and the best research exists on two decades of experience within Procter & Gamble, showing up for, as one example, a 30 to 50 percent reduction in manufacturing costs.

Photo: www.workstyle-lifestyle.com

Fisher, author of ‘Leading Self Directed Work Teams’), “Per-haps most detrimentally, it pre-vented them from understand-ing the customers who used their products and services.” This al-most forced workers to adopt and inward view concerning job secu-rity and job rights rather than a larger view about customers and customer-related efficiencies; and these job concerns often worked against the good of the enterprise as well as the individual.

SOCIO-TECHNICAL SySTEMSThis was Trist’s alternative to

scientific management, which he discovered through observing the work of an extraordinarily pro-ductive coal mining team in post-war England; from where he pos-tulated that the formation of a team that had complete (joint) re-sponsibility for (a) the entire op-eration, (b) the interface between its people (the social system) and (c) their tools, would lead to more rewarding job performance and enhanced productivity.

The early roots were seen in the United States in the 1960s and 1970s with experiments called “semi-autonomous work teams ”or “technician” operations start-ed in Procter & Gamble plants in Ohio and Georgia. Later the

Fisher captures the essential differences between Traditional Organizations and SDWTs (Ta-ble 1)

SDWTs focus on people as be-ing the competitive advantage and to get the best out of people they need to be empowered – as the author (fisher) states, “Com-petitive Advantage comes from fully utilizing the discretionary effort of the workforce, not from buying the latest gadget or using the latest management fad. Vol-untary effort comes from employ-ee commitment, and commit-ment comes from empowerment. It is simple human nature. Why? In the words of Doug King, hu-man resources manager at Wey-erhaeuser, ‘It’s hard to resist your own ideas’.”

Self Directed Teams are the most advanced form of Empow-erment.

The next question is, what ex-actly is empowerment? Fisher de-scribes it as a function of four variables: ARIA

AuthorityResourcesInformationAccountabilityFisher emphasises that if any

one of these variables is zero, then the whole is also zero, such that

facturing costs.In the same breath the author

also offers a caveat or two:That SDWTs are not an end •in themselves but a means to an end. They are a meth-od of improving results, not a substitution for them, and offers an example of a mis-take – “Sorry, our poor cus-tomer service is caused by the fact that everyone is in a team meeting right now”.Some believe that SDWTs •connote an absence of man-agement personnel, which is not true. They mean a change in management role and not the elimination of supervisors and managers.Some also believe that the •name implies freedom to do whatever one wants. This is also not true. All teams have to operate within boundary conditions, and Fisher offers alternate terms that could overcome these misconcep-tions – Work Centred Teams or High Performance Work Systems.In summary, Fisher says that

these operations are ones in which skilled, well informed people take direction from the work itself rather than from management.

FIGURE 1: SDWT SIT ON THE HIGHER END OF THE EMPOWERMENT CONTINUUM

Selected EmployeeInput

Ongoing EmployeeTaskforces

Self-DirectedWork Teams

Low Empowerment High

The President Postwww.thepresidentpost.com March 12, 2010 15

CorporationPhoto: www.wockhardthospitals.wordpress.com

Unilever is a multi-national company that needs no in-troduction. This huge consumer goods enterprise has established its presence in var-

ious countries, including Indo-nesia. Its products from Europe have penetrated not only urban communities, but also rural areas across Indonesia.

Unilever’s success does not come automatically. It is the re-sult of long years of commit-ment to the business philosophy and core values laid down by its founders.

The multinational giant came into being following the merger of two competitors which used to be hostile to one another—Mar-garine Unie and Lever Brothers.

One of its business leaders and smart marketers worth remem-bering is William Hesketh Lever. He was known as a hard-work-ing, innovative, and skilled mar-keter who formulated the foun-dation of what is now a proud symbol of success in global con-sumer goods business.

Born in Wood Street, Bolton, England, on Sept 19, 1851, Wil-liam was raised in a family of sev-en children and learned to do business from his parents.

William’s first job was relative-ly trivial—producing cutters and soap bars. From morning till eve-ning he worked hard in return for £7.

He became his father’s busi-ness partner until 1872, the same year he began producing Lever’s Pure Honey soap, which led him to become a soap manufacturer. Unexpectedly, the soap sold well, as purchase orders streamed in from every direction.

Knowing that prospects of the soap market were bright, William

went on to mass-produce the soap in a smaller pack-

age. The

s o a p w a s m a n -u f a c -t u r e d

Unilever: Providing Enjoyable and Meaningful Life to Customers

By Jeannifer Filly Sumayku

at Warrington factory in 1884 through a partnership with Wil-liam Hough Watson, an alche-mist.

The soap was named Sunlight, which used natural raw materials of vegetable oil while other soap products used animal fats.

The sales of this soap were amazing. In the span of three years, the factory managed to produce 250 tons of such soap per week and sold 40,000 tons of it every year.

After that, he moved the facto-ry to the suburb of Liverpool in Wirral area, a small village that swiftly transformed itself into an industrial centerlater known as Port Sunlight.

William managed to run the industry which provided field jobs to many people. This way he nurtured the local communi-ty’s sense of belonging. They be-gan to feel as if they owned the factory.

By 1887, Sunlight had pene-trated Europe, America and Afri-ca. Through this soap, the British Empire reaped many benefits.

Five years later, the soap at-tracted the American market, and Lever Brothers were able to retain a handsome market share in America.

After having penetrated many countries with this soap, William developed two more brands of soap—Lifebuoy and Lux Flakes.

By this time he had already started to produce canned foods, processed fish, sauces, and ice cream.

His fame and that of the prod-ucts he was associated with paved the way for his canned food busi-ness to be accepted widely in the market. Sales figures soared and the products remained in many people’s hearts.

During World War I, Lever Brothers, which was then based in London, approached Marga-rine Unie Company based in Rot-terdam, The Netherlands, and merged with it because they pro-duced similar consumer goods.

This merger gave birth to a new company called Unilever as of January 1, 1930. Following the merger, Unilever maintained two headquarters—one in London

and the other in Rotterdam. As a result of the merger,

it had a larger amount of profit and dividends as well. And with this Uni-lever felt much stron-ger to expand its wings across the globe.

But soon Unilever dis-covered that it was not

alone in the business, as Procter & Gamble (P&G) emerged as a strong competitor it should not ignore.

After the acquisition of Thom-as Hedley Ltd and penetration into the British market in 1930, Procter & Gamble emerged as a tough competitor and a key actor in business that Unilever could not underestimate.

This competition encouraged William to chart further innova-tive ideas; he produced shampoo products, liquid soaps, and deter-gents. Its margarine was enriched with nutritional products in the form of vitamin A and D.

Such innovation put on hold the expansion of Procter & Gam-ble, giving Unilever an upper hand to become a market leader in Europe and the Americas.

In fact, during World War II, the armies from Europe and the United States got their logistic supplies from Unilever.

Apart from William, another key trendsetter that played an im-portant role in instilling the val-ues of Unilever was Countway, who promoted Lux Soapflakes as a soap that does not harm cotton-based clothing and silk.

Countway’s marketing strategy led to a sharp increase in the sales of Lux bathing and toilet soaps as well as Rinso detergent.

Both William and Count-way advocated the importance of large-scale promotion and adver-tising, a strategy that is retained even to date by Unilever offices across the globe.

Unilever is known as one of the big-spending advertisers in any country to date because it believes that promotion through mass media advertising is the right way to bring the product message directly into the hearts of the customers.

After World War II, there was a “consumer boom” in the sense that many people began to pur-chase consumer goods in large scale across Europe.

This new tradition aroused Unilever’s awareness that it should focus on enhancement of technology in order to strengthen customer satisfaction.

Port Sunlight was made the center of research and product development. Since then Unilever has expanded to many countries, including Indonesia.

PT Unilever Indonesia, which later became a publicly-list-ed choice of portfolio investors, was established on 5 Decem-ber 1933 as Lever’s Zeepfabriek-en N.V. by decree No. 23 of Mr.

A.H. van Ophuijsen, a public no-tary in Batavia (now Jakarta), and approved by the then Governor-General of Dutch-Indies.

By decree No. 92 of public no-tary Mr. Mudofir Hadi SH dat-ed June 30, 1997, the Company’s name was changed to PT Uni-lever Indonesia Tbk.

The company offered its shares to the public in 1981 and since January 11, 1982, it is registered at the Jakarta Stock Exchange (now Indonesia Stock Exchange) under the initial of UNVR.

At the company’s Annual Gen-eral Meeting on June 24, 2003, the shareholders agreed on a stock split, reducing the par value per share from Rp100 per share to Rp10 per share.

At the end of 2008, U N V R r a n k e d third in the Indonesia Stock Ex-change in terms of market capi-talization.

Unilever owns eight main fac-tories in Jababeka Industrial Es-tate, Cikarang, West Java, and Rungkut Industrial Estate, Sura-baya, East Java, with its head of-fice in Jakarta.

The company’s products com-prise at least 30 key brands sold through a network of about 400 independent distributors and hundreds of thousands of outlets throughout Indonesia.

Products are distributed through central distribution cen-ters, satellite warehouses, depots and other facilities.

Based on Unilever’s Annual Report of 2008, the HPC (Home and Personal Care) business grew at 21.1% (in 2007 it was 10.8%) and contribution from foods and ice cream businesses saw acceler-ated growth to 35.1% (it was 19% in 2007).

The strong growth in net profit for the year was attained against a background of cost increases in many raw and packing materials due to higher global prices in oil, chemicals and other commodi-ties.

The net cash flow from operat-ing activities was Rp2,786 billion in 2008, up from Rp2,250 bil-lion in 2007. It invested Rp1,005 billion in capital expenditure in 2008, in part for expansion of

factory operations to meet ris-ing demand. But in 2008 it also completed construction of the largest skin care factory in Asia at Cikarang, and invested in a new SAP enterprise resource planning system across all their sites.

Dividend payments remained high with a total of Rp1,999 bil-lion in 2008, an increase of 21.9% from 2007.

With an eye to the investment needs to support its growth, Uni-lever has remained committed a high dividend payout policy in the foreseeable future.

Based on CLSA prediction, Unilever’s income for 2010 will

increase by

16.02% to Rp21.22 tril-lion—up from Rp18.28 trillion in 2009.

Net profit will also increase 18.12% to Rp4.19 trillion from Rp3.55 trillion in 2009.

As of 9 March 2010, UNVR stock at Indonesia Stock Ex-change was strong enough clos-ing at the position Rp11,900.

The stock was transacted 221 times with a total volume of 1,034,500 stocks worth Rp12.2 billion. In 2008, Unilever’s worldwide turnover was €40.5 billion. The company employs around 174,000 people in around 100 countries worldwide.

Unilever’s success cannot be separated from the solid val-ues that William had implanted many years ago.

One of his strategies is to build good brand image. This is why Unilever gives high priori-ty to brand imaging of its prod-ucts rather than popularizing the name Unilever itself.

A network of distributors all over the world also contributes to Unilever’s strength and market leadership.

All over the world Unilever aims to create a clean environ-ment to live in; reduce wom-en’s workload; improve people’s health and personal charm; and promote a life that is more enjoy-able and meaningful for its cus-tomers. All these values can be summarized in one word: vitali-ty.

Unilever’s success does not come

automatically. It is the result of long years of

commitment to the business philosophy and core values laid

down by its founders. “All over the world Unilever aims to create a clean environment to live in; reduce women’s workload; improve people’s health and personal charm; and promote a life that is more enjoyable and meaningful for its customers. All these values can be summarized in one word: vitality.

LivingThe President Post www.thepresidentpost.comMarch 12, 201016

The President PostOFFICEMenara Batavia 25th Fl. Jl. K.H. Mas Mansyur Kav. 126Jakarta 10220, IndonesiaPhone : (021) 572 7337Fax : (021) 572 7338Email : [email protected] : www.thepresidentpost.com

PUBLISHED BYYayasan President University

CEO & EDITOR IN CHIEFAli Basyah Suryo

CONTRIBUTORSAtmono SuryoCyrillus Harinowo HadiwerdoyoNaresh MakhijaniTaufik DarusmanThomas W. ShreveJeannifer Filly SumaykuEka Putri

EDITORIAL & ADVERTISING/CIRCULATION DEPARTMENTSMonica Siregar

LAYOUT & DESIGNMohamad Akmal

Agus Canny, the Marketing Di-rector of PT Taman Wisata Candi Borobudur, Prambanan & Ratu Boko, says that the ancient place of Prambanan Temple, which dis-appeared in the 10th century fol-lowing the Merapi volcano erup-tion, has been reconstructed and preserved by PT TWC Borobudur, Prambanan & Ratu Boko.

He claims that this 18-hectare Hindu–Buddhist heritage is no less magnificent than the renowned palaces in Greece.

Recently, the Indonesia Austra-lia Business Council (IABC) used this beautiful place as the site for its annual conference in Yogyakar-ta special province.

Canny, who is in charge of pro-moting Prambanan Temple, is optimistic about the palace being able to attract more international visitors 10 years from now.

He is now preparing to pro-duce a movie that will be shown in Hollywood, and hopes to see Harrison Ford reprise his “Indiana Jones” role with Ratu Boko as its backdrop.

Yogyakarta and its surrounding

A rapidly developing tour-ist resort is attracting the attention of international business communities in

Indonesia. This popular destination is 170

km away or only a three-hour drive from Jakarta.

To get there, take the Jakarta-Merak toll road and go through the scenic inland route of Se-rang-Pandeglang-Labuan, Bant-en province.

It is a “prime location” as re-ported in 1987 by the Japan In-ternational Cooperation Agency (JICA).

Tanjung Lesung is one of the most potential tourism objects in

A Charming Destination with Myriad ProspectsAncient Temples as Seen by Agus Canny

areas are very rich in Hindu–Bud-dhist heritage that needs proper promotion to attract international tourists.

In fact, Yogyakarta has sufficient facilities to satisfy the interests of international visitors, and this is a plus point for Indonesia’s tourism industry.

Canny, who used to work at Ma-tari Advertising and the Tanjung Lesung project under Jababeka Group, was recruited by the Min-ister of State-owned Enterprises to be the director of PT TWC Borobu-dur, Prambanan & Ratu Boko.

He believes that the rich diversi-ty and beauty of this country must be promoted in a better and more integrated manner.

A graduate of Columbia Univer-sity in New York, Agus is a man of strong convictions.

The President Post apologizes for wrongly identifying Agus Can-ny as VP for Corporate Marketing of Jababeka Group. That is actually his previous position before joining PT TWC Borobudur, Prambanan & Ratu Boko.

By Jeannifer Filly Sumayku

By Jeannifer Filly SumaykuBanten, a new province in Indo-nesia, and is situated at the west-ernmost tip of Java Island.

It seems unbelievable that af-ter passing through the busy toll road, escaping Jakarta’s hustle and bustle, we can find a stretch of beautiful landscape that en-riches the western beachfront of Banten province.

This city has a lot of historical relics such as the ruins of Suro-sowan Palace, Kaibon Palace, ‘Masjid Agung Banten’ [Banten Great Mosque], Speelwijk fortress and Chinese temple Avalokitesh-vara.

There is also the harbor of Ban-ten, Karanghantu [literally trans-

lated as devil rock’s harbor] that is still being used to date despite the fact it was constructed centu-ries ago.

Banten Province consists of four regencies, two cities, 94 districts, 128 sub-districts, and 1,339 villages.

Banten is geographically strate-gic because it links Java with Su-matra as well as the capital city of Indonesia and the West Java province. This is why it is a po-tential market.

One of the pioneering compa-nies developing this region is PT Banten West Java Tourism De-velopment Corporation (BWJ), which was established in 1990.

The company develops prom-ising new sites for tourism and tourism related purposes.

It is a 100% privately owned company and is among Indone-sia’s leading tourism development corporations (TDC) handling such projects in Nusa Dua Bali, Lombok, Manado, and Bintan.

As its first major project in Ban-ten, West Java, TDC has a license from the National Land Agency (BPN) and is supported by the Directorate General of Tourism to develop 1,500 hectares of land at Tanjung Lesung as a new tour-ist destination.

It sits on a peninsula on the western coast of Banten, border-ing the Sunda Strait. The area is rich in natural beauty and attrac-tions.

A four-star hotel, the Bay Vil-las, along with Kalicaa Villa es-tate, a beach club, Legon Dadap village, a sailing club, and a driv-ing range complete the charm of this international tourist destina-tion.

There are a variety of attrac-tions such as water sport, spa, golf driving range, eco-tourism site, Ujung Kulon resort, Kraka-toa, Liwungan and Badui village tour, etc. In short, it is a location for people to relax.

Modern infrastructure such as electricity, telephone lines, mo-

Tanjung Lesung is one of the most potential tourism objects in Banten, a new province in Indonesia, and is situated at the westernmost tip of Java Island.

I t was an extraordinary oc-casion marking Sri Sultan Hamengku Buwono X’s 21st anniversary of his cor-

onation outside the Yogyakarta region.

The anniversary took place in Manohara Hotel, which is in the vicinity of the Borobudur Temple on Saturday, March 6th, 2010.

The idea to hold the anniversa-ry in Borobudur was initiated by Mr SD Darmono (left in top left photo), the president commis-sioner of the Borobudur Tourism Park (TWCB) and approved by the Sultan, who endorses the ef-fort to boost the tourism indus-try in Central Java, Yogyakarta, in the Borobudur area in partic-ular.

The anniversary ceremony started after a dinner party at 6 pm and was attended by hun-dreds of people and dignitaries around Magelang and Yogyakar-ta. The audience consisted of peo-

The 21st Anniversary of the Coronation of Sri Sultan HB Xple of various social and different ethnic backgrounds, attesting the Sultan of Yogya’s strong advocacy for pluralism, the philosophical basis of the Indonesian State.

In his elegant speech the Sul-tan said that the anniversary was not a political but a genuinely cultural event.

With the Borobudur Temple perched majestically in the back-ground, on a finely-furnished stage a group of young and well-built dancers performed Beksan Lawung Ageng, a war dance au-thentically created by Palace art-ists and rarely performed any-where outside the Palace.

A thought worth thinking about

What if the anniversary of Sri Sultan HB X’s coronation was held in a genuinely tradition-al way, equipped with the palace ancient four-wheeled chariot and its ornaments plus the Borobudur Temple with its rich cultural her-itage as its background?

If it was well prepared and well organized, it could be a coro-nation anniversary event many would say look more majestic than Queen Elizabeth of Eng-land’s coronation anniversary at the Buckingham Palace.

If only those who are in charge of the tourism industry in the country could see the opportuni-

In his elegant speech the Sultan said that the

anniversary was not a political but a genuinely

cultural event.

By Gunawan Wibisono

bile phone network, satellite TV, high speed Internet ac-cess, water treatment plant, waste water treatment plant, security service, nice road and beautiful scenery add to what is already an alluring site.

Tanjung Lesung is a presti-gious destination with a wide range of investment oppor-tunities. And BWJ is invit-ing prospective land buyers and developers to submit their bids.

PT Banten West Java is an experienced resort planner and developer, and is wide-ly recognized as a prime con-sultant in the development of the area.

The shareholders of BWJ are respected local business-men well experienced in such businesses as property, textile and garment, chemicals and various manufactured goods.

A management team of multi-skilled professionals is in charge of the project.

There are a variety of attractions such as water sport, spa, golf

driving range, eco-tourism site, Ujung

Kulon resort, Krakatoa, Liwungan and Badui

village tour, etc. In short, it is a location for people

to relax.

PICTORIAL EVENT

ty and had made rigorous plan-ning and proper actions, such event would no doubt attract enormous number of domestic as well as foreign tourists.

Let’s make it happen!

The anniversary ceremony started after a dinner party at 6 pm and was attended by hundreds of people and

dignitaries around Magelang and Yogyakarta.

TANJUNG LESUNG: