Putera Satria Sambijantoro's Blog

China-US Showdown and Indonesian Foreign Policy

2012-01-01T21:46:00.000+07:00

TWO TO TANGO. President Susilo Bambang Yudhoyono is reportedly not at the same wavelength with his Foreign Minister Marty Natalegawa on the US plan to build military base at Darwin, Australia. In contrast to the cucumber-cool Yudhoyono, the Australia-educated Marty insisted that the US Darwin plan would increase tension in Asia-Pacific region and create a "vicious cycle of mistrust" among neighborhood countries.

(Photo by Ikhwan Yanuar)

Has Indonesianforeign policy transgressed from the initiative of the country’s foundingfathers?

As the recentstring of events in Asia-Pacific shows, the relevancy of Indonesian foreign policy of Free and Active (bebas aktif),which was once a landmark on how Indonesia dealt with its foreign policymatters in its post-independence era, is currently in question.

Strategically locatedin the heart of Asia-Pacific, a region where countries are currently busy stockpilingtheir economic wealth and bracing against each other to strengthen regional influence,early signs showed that Indonesia is currently in the brink of being insubstantial.

To lead is easiersaid to be done, especially when Indonesia is living in an embattled region whoseinfluence is being fought by two powerful forces such as China and UnitedStates. Yet there is no doubt that Indonesia could do much, much better ratherthan “sit down and watch the battle between two giants unfolds” as its presentstance suggests.

As the UnitedStates proceeds with its plan to establish a military base in Darwin,Australia, deploying roughly 2,500 US marines in the area, the standpoint of PresidentSusilo Bambang Yudhoyono somewhat shows that Indonesia responds lightly to theissue.

ForeignMinister Marty Natalegawa, who previously denounced the Darwin plan as “creatinga vicious cycle of tensions and mistrust”, was reportedly at odds with his boss Yudhoyono. Apparently, Yudhoyono sided with US President Barack Obama, theDarwin plan’s initiator who was reportedly irked with Marty’s statements anddirectly assured Yudhoyono during the ASEAN forum in Bali that the Darwinmilitary base, which was only 850-kilometer away from Indonesia, was “nothingspecial”.

Imagine havingSoekarno instead of Yudhoyono as president; then the US would think more thantwice to establish a military base in Darwin.

Economicsaffairs might not be the best expertise of Soekarno, who proclaimed Indonesianindependence and became the country’s first president yet ended up being toppledfrom power because of his clumsy economic management. In terms of foreignaffairs, however, Soekarno’s track record is historical: He successfully putIndonesia, a young country that only gained independence a few years back atthat time, in the world map.

Despite hispolitical ideology that was more frequently associated with communism andSoviet Union, Soekarno, impressively, still managed to earn reverence from the US as well. During his presidency,Soekarno was even deemed as a daunting figure to the US. At that time under theleadership of John F. Kennedy, the US tried to “win over” Soekarno from the Soviet Union’s hands by inviting the president to Washington and providing Indonesia with billions of dollars in civilian and military aid in the early 1960s.

Soekarno,however, impressively managed to remain impartial on the Cold War that pits theUS and the Soviet Union, even leading the plan to intercede the hostilitiesbetween the two countries by establishing the Non-Aligned Movement (Gerakan Non-Blok) whose members comprisedof third-world countries’ leaders.

ReflectingIndonesia’s scrawny stance on the US Darwin military base issue: does Yudhoyonolean to the United States? Or is he merely being insubstantial due to his weak leadership,especially when he was benchmarked to Soekarno? If both questions are answeredwith a “yes”, then it’s fair to say that Indonesia is not independent and notactive –thus going astray from the nation’s highly acclaimed Free and Activeforeign policy.

As the lasttroops of US military step out from their exhausting wars in Afghanistan and Iraq, the 2012 and after will be the years when the US will focus its foreign policies –aswell as its multi-trillion dollar military budget– from Middle East toAsia-Pacific.

Bolsteringinfluence in the Asia-Pacific and ASEAN region is especially necessary for theUS considering Obama is currently eyeing to execute the ambitious Trans-Pacific Partnership (TPP Free Trade Agreement); an economic deal that will include theUS in the free trade agreement with ASEAN.

So far, sixcountries in the Asia Pacific region –China, India, Japan, Korea, Australia,and New Zealand– have implemented free trade agreements with the ASEAN. ConsideringASEAN’s massive population and market potential, it is thus a rational strategyfor the US to follow their footsteps in the mission to restore their tattering economy.

The world may usherthe era of power transition with growing economies in the Asia-Pacific region,at the same time when the economies in the Europe and the US are declining. Theboisterous economy of China’s especially leads Asia-Pacific region to becomethe world’s new centre of gravity, while ASEAN’s strong domestic market wasalso perceived as crucial to save the recession-plagued economies of Westerncountries.

For Indonesia, a nation that is frequently referred as the central figure in the ASEAN region, the year of2012 would be pivotal. For Indonesian President Yudhoyono, this should be the year to revive the Freeand Active foreign policy in the upcoming China-US encounter whose battlegroundwill take place at the coruscating region of Asia-Pacific.

KPK Selection Process: When a Serial Killer Chose His Own Team of Detectives

2011-12-08T15:15:00.001+07:00

OVERLOOKED. Yunus Husein, the former chief of the Financial Transaction Reports and Analysis Centre (PPATK) was not chosen by lawmakers to lead Indonesia's top anticorruption body allegedly due to his fearsome reputation as "the man who knew the balance of your bank account".

(photo by Arief Manurung)

The House ofRepresentatives complex at Senayan, Jakarta became a stage of another failureof democracy after House lawmakers from Commission III overseeing legal affairsnamed its four new leaders for the Corruption Eradication Commission (KPK).

When I attendedthe voting process on Friday last week, it was a strange view that therewere few –or if even any– journalists, NGO representatives, commission’sstaffs, and even security guards who were seen clapping in the midst of noisyapplause and loud celebration among the lawmakers after the Commission’s chairmanread aloud the result.

Thedisappointment of the neutrals who witnessed the voting process and follow the issuethoroughly was clear: the current KPK composition is a massive letdown, and thelawmakers’ decision did not represent them and their fellow Indonesian people.

The appointeeof lawyer Abraham Samad, National Police Commission member Adnan Pandupraja,and senior prosecutor Zulkarnaen to fill the KPK top posts had raised eyebrowson whether the House lawmakers have already done their main task ofrepresenting the public properly.

The governmentselection committee tasked to assess the eight candidates merely placedAbraham, Zulkarnaen, and Pandu as underdogs in the race, placing the three ofthem as the fifth-, sixth, and seventh-best candidate in its ranking,respectively.

There is nodoubt that the naming of lawyer and antigraft activist Bambang Widjojanto was nomore than "sweetener" to play down public controversy in the issue. In rationalway of thinking, there is no explainable reason for the lawmakers to eliminatethe flawless Bambang, who the selection committee assessed as its bestcandidate and thus was viewed as the heavy favorite in the race among thepublic.

Although itcould hardly be described as the worst composition for KPK, the current oneis without doubt would be a setback for the country's top anticorruption commission.

Among the fivenew executives of KPK (the four new executives plus the incumbent BusyroMuqoddas), the absence of a financial and auditing expert is hardlyunderstandable.

In manyoccasions, lawmakers repeatedly uttered about the importance for KPK to focusnot only on prosecuting corruptorsbut also on preventing corruptionpractices to occur. While prosecuting would punish corruptors and instigatefears among the people, preventive measures, the lawmakers argued, would makepeople who want to commit corruption were “unable” to do such practices andreduce corruption tally in the long run.

But why doesthe KPK’s new five executives comprise one prosecutor (Zulkarnaen) and fourlawyers (Abraham, Bambang Busyro, Pandupraja), yet there was not any expert whohas background in financial and auditing investigation?

Among the eightnames proposed by the government selection panel to the House, there were twocandidates who met the criterion: Yunus Husein, the former chief of theFinancial Transaction Reports and Analysis Centre (PPATK); and HandoyoSudrajat, the KPK internal affairs director. The two were rated highly anddeemed as frontrunners, too, as Yunus and Handoyo was ranked by the selectionpanel as the second- and fourth-best candidates in its ranking, respectively.

If lawmakerswere talking about preventive measures, then they should definitely chooseperson with expertise in auditing and financial investigations. They could,without doubt, strengthen the KPK’s supervision system or even established a newscheme that could limit the corruptors’ assets-movement –and surely potentialcorruptors would have to think twice to commit fraudulent practices as they hadtheir bank accounts watched closely.

While lawmakersargued that the rejection of Yunus was related to his close ties with PresidentSusilo Bambang Yudhoyono and the ruling Democratic Party; but this argument iscertainly baseless. In this leaked document of the candidates’ review, theselection panel rated Yunus as the third-highest candidate in the attribute of “independency”after Bambang and Abdullah.

How could Yunus–who garnered 105 compared to the newly elected KPK chief Abraham who earned 94in “independency”– was rated highly in that criterion if he leaned to certainpolitical figure and thus was not independent?

In addition tothe inexplicable omission of both Yunus and Handoyo, the exclusion of a boldfigure such as Abdullah Hehamahua was also a loss in immeasurable extent. Hewas valiant, independent, and –as an officer at the KPK– knew exactly theinside problems of the KPK and how to fix them.

The only oneswho dislike a great anticorruption fighter like Abdullah perhaps would be thecorruptors themselves. Portraying Abdullah as a fearless figure would be an understatement. He was described at his best with his own words, which he uttered during hisfit-and-proper test with the lawmakers: "I want to be murdered by corruptors."

From the politics-riddenselection process for the new KPK leaders, we could see the major flaw of our widelyapplauded democracy. That is, when the personal interests of our directlyelected politicians set aside the country’s anticorruption agenda, which infact should become the main priority.

In Indonesia,it was hilarious to know that the corruptors themselves were given the mandateto choose the leaders for the country’s anticorruption body. It is very much thesame with a serial killer who has the authority to choose the team of detectivesthat would investigate his case –surely, it would be rational choice for him topick the less-skilled detectives to avoid getting caught.

New KPK Leaders: Rational Selection or Politics?

2011-12-06T14:48:00.001+07:00

This leaked document obtained by TheJakarta Post reveals the detailed scores* of the government-tasked selectionpanel which was assigned to assess the eight candidates competing to become thenew Corruption Eradication Commission (KPK) executives.

	Leadership	Integrity	Competency	Independency	Total score	Decision
Bambang	95	96	92	92	450	Chosen
Yunus	89	92.5	91	87.5	432	No
Abdullah	82.5	90	81	88	410	No
Handoyo	76	86	84	87.5	401	No
Abraham	75	79	73	78	367	Chosen
Zulkarnaen	77.5	79	81	78	379	Chosen
Pandupraja	72.5	75	72.5	73	352	Chosen
Arianto	82	70	83	71	367.5	No

* source: Government-tasked Selection Panel

*ranking was sorted by candidate's integrity, not overallscore

*using conversion score of maximum 120. i.e: Bambang received 114for 'leadership' hence his conversion score was 0.95

Based on the ranking, the selectionpanel recommended four names to the House of Representatives to be chosen asthe new KPK executives: lawyer Bambang Widjojanto, former Financial TransactionReports and Analysis Centre (PPATK) chief Yunus Husein, KPK advisor AbdullahHehamahua, and KPK internal affairs director Handoyo Sudrajat

In choosing the new KPK fourexecutives, however, the recommendation of the selection panel -which comprisesof academics, psychologists, legal experts and former KPK leader- wasapparently 'neglected' by the House of Representatives Commission IIIoverseeing legal affairs. As the consequence, doubts emerged: Were the chosen candidates really thebests among the rests? Or was the selection process merely politics?

Protect Our Finance Minister, Mr. President

2011-10-17T14:47:00.024+07:00

photo: Dwianto Wibowo for Tempo Magazine

It could look a little bit déjà vu if this three-week drama of cabinet reshuffle concludes with the dismissal of Indonesia’s tough Finance Minister Agus Martowardojo from President Yudhoyono’s administration.

Previously, Yudhoyono had let go another stellar Finance Minister, Sri Mulyani Indrawati, due to pressure from his mischievous coalition partners that were spearheaded by the Golkar party last year.

There is a possibility that last year’s drama could repeat itself this year with the same protagonist, same villain, and same ending: The villain bullies the protagonist, the protagonist is afraid and bows to the villain’s demand, and the ending wraps up with the protagonist ends up as the losing side.

The protagonist is of course President Yudhoyono, who decided to let go Mulyani last year even though she was arguably the best minister he ever had in years.

Yudhoyono clearly did not learn from his past mistake as Agus Martowardjojo, the current Finance Minister, is currently on the hot seat again. Just like last year, Yudhoyono did not give Agus enough protection to shield the Finance Minister from politicians’ perpetual harassments, leaving Agus standing alone in his battle to defend the state’s interest.

On the other side of the ring, the villain in is still the same as well: Golkar chairman Aburizal Bakrie who, impressively, managed to dictate many important decisions in Yudhoyono’s presidency and made the president himself very much like a controlled puppet.

After succesfully expelled Mulyani last year, the ousting of Agus from the Finance Minister post this year would reflect both Aburizal’s massive clout in the administration and Yudhoyono’s lame leadership. By driving Agus out, the message delivered by Aburizal was clear: You can mess with Yudhoyono, but don’t ever try to mess with me or my party.

Like Mulyani, Agus maintained a tough stance towards the Golkar party politicians and their power-hungry peers at the House. Agus was especially known for his clash with Golkar politicians over the government’s plan to purchase Newmont shares –a plan that Agus strongly believed would benefit Indonesia.

Lawmakers were against this plan and slammed Agus’s proposal. They furiously insisted the shares must be acquired by West Nusa Tenggara’s local administration, which is supported by a joint venture of a business unit that is owned by Golkar’s Aburizal.

The Finance Minister vs. House lawmakers battle repeated again last week over debates on the fuel subsidy quota, in which Golkar lawmaker Melchias Markus Mekeng lambasted Agus and described him as ‘does not have the authority to dictate the House’.

The fact that many Golkar politicians dislike persons with integrity such as Agus Martowardojo, Sri Mulyani, or even Trade Minister Mari Elka Pangestu (a Golkar lawmaker once uttered a racist statement and baseless accusation against her) is very much incomprehensible. For neutral political observers, it could only show that the party’s ideology is more about power and money, not the advancement of Indonesia to become a better nation.

Besides, if Golkar’s politicians and President Yudhoyono really care about Indonesia, they should understand that the timing of Agus’s exit could not be worse than now.

On Thursday last week, President Yudhoyono stated that he “would focus the next cabinet reshuffle to harness global economic challenges”. In truth, his decision to eject Agus from the Finance Minister chair would prove otherwise.

It is no exaggeration to say that if the current situation remains unchanged, we could bump into one of the world’s biggest economic crises next year. The European and American politicians are particularly responsible for the mess: Eurozone leaders are yet to reach agreement on what to do with their problematical currency, while the Republicans and Democrats legislators in United States are busy scuffling for their respective interests for the 2012 elections rather than controlling the country’s soaring fiscal burden.

Consequently, investors were scared off by recent developments in the West and symptoms of worldwide-scale economic crisis started to surface In Indonesia in the last few months. The once-strong rupiah –which once touched the level of 8,650 against the US dollar on August– has been under heavy pressure lately, while the Indonesian Stock Exchange index has plunged from the psychological level of 4,000 to 3,200 in a very short period.

By the time the crisis turns from symptoms into veracity next year, there is no doubt that the leadership of Agus –a former top dog CEO who successfully transformed Bank Mandiri to become one of Indonesia’s largest banks during the global financial fiasco– would be sorely missed.

There are signs that President Yudhoyono would try to minimize the issue by not ousting Agus at the upcoming reshuffle, but merely moved him to other ministerial post, such as the Investment Coordinator Board to replace Gita Wirjawan.

But this strategy makes little sense for two reasons. The first is the fact that the Finance Minister post is very vital, and there is no doubt that our current Finance Minister, who is a highly respected figure among investors and the global economic community, is among the few persons –if not only– capable for the job

The second is moving Agus Martowardojo to other ministerial posts is the same analogy with a football manager who plays his tough centre-back as forward.

In other words, Mr. President: It's like you have the best defender in disposal, yet you still leave a huge loophole in your defensive line as you give the crucial centre-back position to a less capable player.

. .

What They Don't Teach You at Indonesian Universities

2011-07-30T10:48:00.009+07:00

NO QUESTIONS? Asian students –including Indonesian– have always been notorious for their reluctance to ask questions or participate in the classroom’s discussions, and it is no secret that they are always more concerned towards academic matters and written exams.

“How does Satria know all of those things?” my friend whispered almost soundlessly to a friend who sat next to her.

“Perhaps he always tried to memorize all that he read, so he could pamer (show off) to all his friends and lecturers when questions are asked,” she said.

Sadly, a person whom she was referring to was me. At that time, my macroeconomics lecturer asked his students who was the chairman of the Federal Reserve (US central bank) prior to the legendary Alan Greenspan, and as nobody seemed to be interested in answering his question, I eventually raised my hand and answered the question correctly.

Her sarcastic response is the sort of reaction that you could expect from other students if you are a student in Indonesian universities who want to be proactive inside the classroom. It is no secret that in most Indonesian universities, a learning environment where students are freely exchanging ideas and defending their own opinions is, unfortunately, not present.

In my early years in college, a lecturer once told me that my university was paving its way towards a world-class university in its teaching system; where learning in a classroom soon would become a two-way discussion between both students and lecturers instead of a one-sided talk. Lecturers, he predicted, could become no more than facilitators in the future.

In an internet era where students have boundless access to knowledge and not only limited to their textbooks as their education materials, I heard with awe as this promising idea could possibly enhance my learning experience in university, as well as improving the quality of our education system in the future.

Fast-forward four years until I finally reach my last year in college today, the reality in the Indonesian classrooms still goes very far beyond from what I have envisaged in my early years in the university.

Students’ feedbacks, lively debates, and heated discussions rarely occurred inside the classroom. In most cases, Indonesian lecturers were asking questions yet the students remained quiet. Even if there was any student who tried to answer question, other students were most likely to label him as a freak who just wanted to show off.

Once my assistant lecturer on Indonesian economy class was so disappointed to see that no single student in the classroom responded to her query. At that time she referred to us as ‘typical Asian students’ who were highly passive compared to Western students who always raised hands to give answers or ask questions.

“Look, if you’re a professor in the United States,” said Alvin, my high school senior who is currently pursuing his master’s degree in Princeton university, “if you are not clear in front of the classroom students will ask you to death.”

“[The students] will hound you to make your points clear,” he added.

The stark difference in learning environment inside American and Indonesian universities could happen possibly because there were less, or even any, incentives for Indonesian students to be active inside the classroom.

A best-selling book titling What they teach you at Harvard Business School reveals that 50% of Harvard students’ grades would be determined by how they participate in class –the quality and frequency of their comments. Then the rest 50% would be determined by how students perform on their mid-term and end-of-term written exams

In staggering contrast, in most of the subjects in my university, the combination of mid-term and end-of-term written exams’ scores account for 80% for our final grade. Participation in classroom, on the other hand, only accounts for 20% –sometimes 10% or is not even reviewed at all.

If Indonesian universities want to encourage their students to become researchers or academics, perhaps this could be the right approach. But for students who major in economics and business like me whose knowledge and understanding would be mostly applied in practical terms; this really is an irony.

Besides, because the largest percentage of our grades is measured by our performances during written exams, most of the students (including myself) come inside the classroom every week empty-headed. For us, what matters the most is how we could perform well during the exam, which could be achieved by studying insanely hard just one or two days prior to exam day.

Truthfully speaking: Indonesian students don’t really care about the learning process –things like classroom’s discussions or case-in-studies of how the theory works in real life– since they pay enormous heed only to the written exams, which can contribute more to their grade point average (GPA).

Indonesian university students are excessively judged by their GPA. While this could be used as indicator on measuring students’ comprehension towards the subject that they learn, it should not be deemed as the perfect measurement.

Indeed, with Indonesia’s current education system, students who graduate with cum-laude GPA emblazoning their graduation certificates are more likely to become an academics rather than policymakers, entrepreneurs, or innovators who are equipped with problem-solving skills.

I feel bad for my parents because I neither have a cum-laude GPA in my academic record nor the extraordinary problem-solving skills; but am I doing the wrong thing here if I just raise my hand in the classroom because I want to ask questions or respond towards my lectures’ queries?

In an education culture like Indonesia where students remain acquiescent and quiet almost all the time, your child would be identified as a pamer or “show off” student if he or she ever does that –thus the answer of the previous question is, unfortunately, most likely a yes.

This article was published in The Jakarta Post on Saturday, July 30 2011

China-US Relations: Why China Can't Bluff

2011-07-26T10:41:00.009+07:00

BIG PLAYER. With US$ 1.6 trillion dollar of US treasury bonds in possession, China's Hu Jintao is betting big in United States and is being held hostage by Barack Obama and his economic policies.

The game of Poker expects the player with the strongest hand to raise the bet, control the opponents’ moves, and dictate the flow of the game.

So why could not China –as the biggest United States’ creditor with 1.5 trillion of US treasury bonds in hand– just dictate United States and tell Washington what to do? The riddle here is why China succumbed to the pressure from the United States in some of its economic policies –like appreciating its currency– whereas they supposedly have the power to direct Washington to conduct economic policies for Beijing’s benefit.

Onviously, China is anticipated to be acting something more like this: “You do what I say,” said Hu Jintao to Barack Obama, “or I’ll stop lending you money, I’ll stop buying your assets, and I’ll sell all these 1.6 trillion treasury bonds in instant.”

In fact, such conversation is not happening –because the situation is more complicated and some things are definitely easier to be said than done.

Holding 1.6 trillion of the US treasury bonds does not mean China is holding United States hostage –it could be, in some ways, the other way around. Instead of having a strong hand that allows its player to bluff and dictate the game, it turns out that the 1.6 trillion dollar US assets that China is holding right now is a devilish bug that limits Chinese policymakers from doing what they deem necessary for their economy.

In its effort to boost export and increase trade competitiveness, it is well known that People’s Bank of China –China’s central bank– has been continuously interfering the market by purchasing US dollars every time they deem the situation as necessary.

This policy ultimately leads to two outcomes. The first is the world’s economy is overwhelmed with Chinese currency, the renminbi, whose rate is excessively undervalued since there is way too much supply of the currency in the market.

The second is China hold too many foreign exchange reserves in their possession. Because China continuously purchase US dollars –and other currencies as well– and fill the market with renminbi, at the end of March 2011 China’s foreign reserves has accumulated to a astounding level of US$ 3.05 trillion; 60% of which (about US$ 1.6 trillion) composed of US dollar that comes mostly in the form of US treasury bonds.

The latter outcome is a condition that prompts a big-scale headache for Chinese policymakers at present.

If something happens to United States and their economy, China could not simply sell their US treasury bonds. Holding US$ 1.6 trillion of US dollar-denominated assets makes China the big player, hence if China sell its assets, other countries are more likely to follow suit. Eventually, this will drive down the value of China’s own assets and put their multi-billion investment at stake.

With an investment worth of more than a trillion dollar in United States treasury and institutional bonds –and some in the form of stocks–, it makes a lot of sense if the officials from Beijing are watching United States’ economic policies in vigilant state.

For example, a few months ago Chinese policymakers were infuriated to see their US dollar-denominated assets to decline in value because of the quantitative easing policy implemented by the officials of The Federal Reserve, United States central bank, who craftily depreciated US dollar to boost the United States export sector.

Just recently, the Republicans are losing their marbles as they are putting the world’s economy at bay by trying to push the United States economy into default in the protracted debt-ceiling negotiation against Barack Obama. The situation is serious: If a new bar of debt-ceiling is not set and United States goes into default, the US dollar will surely freefall and the Chinese, with its US$ 1.6 trillion of dollar-denominated assets in their stash, would be among the party that suffers the biggest economic losses.

The situation could go from bad to worse due to the fact that rating agencies like Moody's and Standard & Poor's have considered the possibility of downgrading the United States credit rating from its current rating (AAA) this year.

But, where to invest besides in US treasury bonds? No matter how worse the situation that engulfs US economy at present, the US treasury bonds remains the largest and the most liquid investment in the world. Moreover, amidst the deteriorating euro and the volatile yen, the fact that the US dollar is still considered as the world’s reserve currency should not be ignored.

At the moment, China does not really have better solution and alternative in this game. Eventually this makes any bluff from China to the United States meaningless –because the opponent, apparently, knows that China is betting loads of money in the pot with a very, very weak hand.

An Open Letter to Bambang Soesatyo

2011-05-25T09:00:00.006+07:00

(Photo by Elvan Dany Sutrisno)

Dear your honor, Golkar party lawmaker, Pak Bambang Soesatyo.

You reiterated that you ‘do not mean to be racist’ and thus refused to apologize to Minister of Trade Mari Elka Pangestu regarding your remark several days ago. Your argument was supported by your colleague from Golkar party who said that that the media seemingly twisted your words hence they looked like racist, while in fact those words are not really the point of your whole statement.

Yes, I could see what your Golkar colleague sees: That the point of your whole argument is not about that racist remark but more referring to ‘incompetent ministers’ in President Yudhoyono’s cabinet and the lack of strict selection in choosing them. Therefore, here I am putting aside the debates of your racist remark’s controversies, and thus just focusing on analyzing your opinion of incompetent ministers in Susilo Bambang Yudhoyono’s cabinet.

Unfortunately, your criticism of saying Mari Elka Pangestu as an incompetent minister is as irrelevant as saying that she is ‘doing her ministerial tasks for the sake of her Chinese ancestors’. In my opinion, both statements are completely biased and baseless, and obviously they are not the kind of statements that I expect from a lawmaker and people’s representative like you.

Of course, we know that there are some incompetent ministers in the government. But as long as I have been observing, it’s the ministers from political parties –including some ministers from your party– that could be considered as incompetent; not people from professional background, like Ibu Mari.

I am a student in a state university, and I consider myself as lucky enough to have the privilege of sitting in classes and receiving public lectures from some ministers and important policymakers in our government. While I have always been amazed with the breadth of knowledge from ministers of professional background, my encounter with ministers who are from political party background always ended up in disappointment –at least from my own experiences.

Ministers from professional background like Mari Elka Pangestu and Sri Mulyani Indrawati were my lecturers in international economics and macroeconomics class; while several weeks ago Gita Wirjawan visited my faculty to deliver his public lecture. The way Ibu Mari, Ibu Ani, and Pak Gita taught me economics were amazing, and I bet that almost all students who attended their lectures would agree to me.

But how about ministers from political parties? I once had one as my lecturer few semesters ago, and he always came late to the classroom –and my classmates and I had bitter memory when we always had to wait about 1.5 hour before he could start his class. When we ask him questions, he always beaten around the bush and we just could not get his points. My friend even suspected that he redirected the subject because he actually could not answer that question at all.

Outside the university, once I attended a seminar on an event that was brought in English and invited a minister from Golkar –yes, from your party, Pak Bambang– as the speaker. It was such a humiliation for him as his English proficiency was really poor and at that time I was asking myself, “What would foreigners thinking if this kind of guy represent Indonesia at the international stage?”

Moreover, that Golkar colleague of yours even came late to the event and the seminar has to run for about one hour without him.

In fact, history shows that several posts in the ministry such as Trade Minister, Finance Minister, Foreign Affairs Minister, and Investment Board Coordinator were always given to people from professional background and rarely from political parties.

Why? I personally don’t know, but my guessing is: Maybe ministers from political parties background are less competent, and thus President Yudhoyono does not trust them?

We all realize that those ministerial posts could be considered as the most important ones, and assign random people for those crucial posts would be risky. Besides, the tasks for those ministers require more interactions with foreigners compared to other ministerial posts, and thus portraying Indonesia’s image at the international stage.

In addition, the ministers’ names that circulated in the media early this year because they got red marks from Presidential Monitoring Unit (UKP4) all come from political parties. Hence, based on this reality as well as from my own experience with ministers from political parties background, I obviously will not assign them for those important posts if I were a President.

Therefore, if your accusation of ‘incompetent minister in the cabinet’ is directed to my lecturer Ibu Mari, then you are directing your gun to a wrong target. Maybe it is more relevant if you point that kind of criticism to your politician colleagues.

Of course, what I’m saying does not mean all ministers who come from political parties background are all bad and unreliable. Political parties, after all, are important element of democracy and one major road for citizens to participate in the government.

But it seems today most of the Indonesians are tired already and becoming skeptics with Indonesian politics and political parties. This is because the way you and your colleagues act in parliament is disappointing us the taxpayers, who actually pay for your salary.

By the way, I have an advice for you and your fellow lawmakers to restore your image: How about passing a law that requires a cabinet to consist minimum 75% of professionals with no association with political parties? I’m sure that we’ve got more than enough intellectuals in this country who are up for the tasks, and let’s see what Indonesia could achieve in the next few years with these people as ministers.

The Renminbi Blame-Game

2011-05-19T22:23:00.019+07:00

I BOW TO YOU. As United States is running massive deficit on its trade balance at the moment, Barack Obama seeks help from his new foe Hu Jintao while crossing his fingers that China would be willing to help United States by letting the renminbi to appreciate.

It’s interesting to see that for the last few years the centre of gravity of the world’s economy has shifted radically from the west to the east.

In United States, the 2008 financial crisis that was caused by irresponsible bankers in Wall Street has led many countries to stop worshipping United States’ economy as their deity. In Europe, the failure of euro and the collapse of its adopters such as Greece, Ireland, and Portugal make the Europe’s economy no longer relevant to be seen as benchmark.

Countries such as China, India, Vietnam, and Indonesia look more powerful than ever. China, particularly, managed to reach a double-digit economic growth in 2010 and overtook Japan as the second-largest economy in the world. If China’s trend continues, it is even predicted that in 20 or 30 years time United States’s position as the world’s largest economy could be in peril.

And such stellar achievement does not go unnoticed: China’s growing force in its economy has left many western leaders –who have always had histories of looking down to their Asian counterparts– to put more strict attention on the country.

United States now deemed China as an important player in global stage. Hu Jintao’s diplomatic visit to United States in January 2011, for example, was met with more coverage from the United States media than ever.

What exactly is the major factor behind China’s rise today? Of all the far-sighted tactics and strategies of Chinese leaders, economists, and policymakers that have bolstered China’s economy until present; how Chinese central bankers peg the renminbi and keep the currency low has always been considered as China’s most brilliant –and controversial– economic gambit.

Currency devaluation leads to what some economic analysts call as unfair advantage for China. They claim that China is allegedly controlling its renminbi in its own favor at the expense of other countries’ economies, as the downpour of Chinese goods today is increasing their import numbers as well as hurting their domestic industries.

Of course, China’s strategy in keeping its currency low does not matter in the past when Chinese goods only held a small fraction of the world’s economy.

But in a situation like today when Chinese goods could be found in almost every corners in the world, it prompts massive headache for many policymakers in many countries: Citizens are becoming more dependent to Chinese goods, and thus many countries see a massive surge in import in that leads to trade deficit in their balance book.

Is China really the evil here? Criticisms regarding China’s international economics policy could be heard mostly from Americans: Both US President Barack Obama and his Treasury Secretary Tim Geithner has repeatedly launched searing attacks against China’s undervalued currency, while Nobel prize-winning economist Paul Krugman even described China as ‘bad guy in currency war who is to blame for the currency tensions as the cheap renminbi is contributing to global trade inbalances’.

This renders complicated problems for economic policymakers in many countries that import goods from China, especially United States, simply because their domestic industries could not compete with cheaper Chinese goods that are more preferable among the customers.

What deteriorates the problem is today many Chinese goods come in the same quality as American, therefore pushing some western goods in the sidelines, with almost no competitive advantage against exported goods from China.

In addition to hurting many countries’ domestic industries, the maelstrom of imported Chinese goods causes many countries to run deficits in their trade balances, as their import exceed exports number. It is reasonable if many world leaders massively denounce China’s act of depreciating the renminbi far beyond its real value, as this is simply not the right time for China to become so inconsiderate.

The world is still recuperating from the United States financial crisis in 2008; arguably one of the worst economic crises the world has ever seen. In fact, today not all countries have returned to their pre-crisis economic growth, yet China seemingly acts as the real villain whose undervalued currency and massive export numbers are causing global trade imbalances and rendering trade deficits among its trade partners.

But apparently, the argument of deeming China as the real evil here is a little bit too unfair.

The first question we ought to ask is: Why does China, after all the sweltering attacks from various countries, keep insisting in maintaining the renminbi undervalued? While many countries blast China’s acts as immoral during these tough times, it’s difficult to judge their actions as wrong or against the law however.

Keeping an eye on currency’s valuation is necessary if a country’s economy depends very much on its export industry; which is precisely the situation that China is currently in. China’s economy depends much on its export industry –so much that it was reported that in 2007 export in China accounts at a staggering level of US$ 1.22 trillion, or close to 40% of its total GDP.

China’s exports also shows a striking development, as China’s export alone have grown at 25% annual rate in the last decade, over the twice of growth of China’s GDP.

An economy that depends on export sector like China means its citizens also depend on the export industry –or mostly employed in factories or companies that focus on exporting items abroad. For China, it means that adjusting policies regarding its export industry –such as letting the renminbi afloat– is the same as playing with the fates of the Chinese citizens.

It is clear that by devaluating the renminbi, China is trying to make jobs and save its own citizens. For example, a research shows that total employment in China significantly increased by 7.5 million per year over 1997-2005, with export growth contributed at most 2.5 million jobs per year. The researchers also concluded that exports have become ‘increasingly important’ in stimulating employment in China.

Chinese policymakers, after all, are just doing what they have to do: Implement the best policy for their own citizens.

Of course, it is not to say that what China has done is morally justified in this post-crisis period; but it is also unfair to put a verdict that what Chinese policymakers have been doing is completely wrong. Today, the soaring economic growth of China has successfully dragged millions of Chinese out of poverty, and policymakers in China are merely implementing a policy to support its export sector, which provides jobs for million of Chinese and makes them better off.

Yet an economic superpower like United States is acting like a street beggar these days, pleading Chinese policymakers to pity them and help the country to overcome its massive trade deficit.

Why United States is acting so shameful like that goes beyond my comprehension. Well, China’s response regarding this US-China currency fallout is predictable, and it is represented at its best by the words from Yu Jianhua, a Director at China’s Ministry of Commerce, who said:

“Don’t make other people take the medicine for your disease.”

Euro Crisis: Bleak Future for Single Currency

2011-04-20T07:51:00.022+07:00

ONE-HAND BATTLE. In Europe, the implementation of Euro is actually weakening most of the European economies as it limits their monetary independence and prevent them from implementing monetary policies for their own benefits.

Economists and policymakers in Euro-adopter countries are having stormy weather outside their office windows now.

Early this month the Portuguese government declared its inability to pay its debts and requested financial assistance from the European Union (EU). After the economies of Greece and Ireland collapsed last year, Portugal was the third Euro-adopter countries which failed to pay its debts and asked for bailout.

Besides, it may not be the last nation to follow the path of Greece and Ireland, and quite a few analysts claimed that debt-laden economies like Spain, Italy, France, and Belgium could be the next dominoes to fall.

The single currency policy in Euro was supposedly to be great idea at the beginning; but looking at how recent events unfolded, some optimists however started become skeptics: Is the Euro responsible for recent Europe’s mess?

The best way to understand the single currency’s predicament is to imagine a nation’s economy operates like a huge Transformers robot.

Every nation – be it Portugal, Germany, Greece, Ireland, Spain, and others– has its own robot model, with each of the robots has unique characteristics against each other. What’s similar about them is all robots are armed with two guns both on their right and left hands (as seen on the movie), so they can protect themselves from their enemies and their overall stability can be assured.

Suddenly, robots from European countries come up with a seemingly great idea that they, apparently, could become stronger if they just unite and combine their small guns into one gigantic weapon. This could be done only if each robot is willing to sacrifice the gun on their left-hand, so it can merge with other robots’ guns to be transformed into one gigantic and powerful weapon.

Several robots from Croatia and England refuse the offer, but almost all European-built robots agree with this proposal. In the end, those robots boast a one-for-all gigantic and massive weapon as the reward of their unification, with the expense of having only one gun in their right hand as they continue their survival.

Today, the importance of those missing hands starts to be felt; but unfortunately now is simply the point of no return for those European nations.

Basically, to fix problems and avoid crises in the economy, a policymaker is equipped with two powerful “weapons”: A monetary policy which is related with interest rates and currency, and a fiscal policy which is related with tax and government spending. For example, United States implemented both fiscal and monetary policies in the form of a 1 trillion dollar tax cut (fiscal) and slashing interest rate to the level of 0.25 percent (monetary) to resuscitate its economy during the last financial crisis.

But when Euro-adopter country like Spain suffer from high unemployment rate like today, Spanish policymaker could not simply adjust the interest rate (monetary) to shoot down the problem. Because they decide to use Euro as a single currency, all policies that related to currency –which are monetary policies– have to be thoroughly discussed and carefully implemented for the sake of the EU members as a whole, not a single country like Spain alone.

During this situation, other European countries like Germany or France may have different economic interests than Spain’s, and slashing interest rate –a policy which would devalue the Euro– perhaps would make those countries worse-off.

In other words: It’s true that those robots sacrifice one of their hands and hold share in the massive weapon, but one simply could not use the weapon as he pleases –because other robots, presumably, may have different type of enemies to shoot.

What exacerbates the problem is not all European robots are armed with right-hand weapon that is powerful enough to cover their left-hand weapon’s loss. Some countries like Germany and Finland have strong fiscal position, while the balance book of countries like Greece and Ireland are full of debts and could not really afford to spend much money for fiscal policies.

The consequences are predictable: The economies of Greece and Ireland defaulted, and EU member countries with strong fiscal position suffered enormous economic losses as they had to provide the multi-billion bailouts to help those ill-fated economies.

Meanwhile, Indonesia and its neighbors in ASEAN region have been weighing the possibility of having a single currency like Euro for years.

Some ASEAN representatives and economic ministers believed that the implementation of single currency in ASEAN could bring economic community in the region to the next level, as it would enhance economic development in the area and forge stronger ties among ASEAN countries.

But current Europe’s crisis is a lesson to learn for Indonesia and ASEAN as the risk and the potential economic losses if the single currency policy fails is indeed massive.

Yes it is true that the single currency has boosted trade numbers in EU by as little as 10 percent since it was first implemented. But as recent events show, Europe’s single currency in Euro turns out to be a monetary trap and makes some economic problems more complex than they actually are.

If Euro fails in those Europe’s developed and high-welfare economies, adopting single currency in ASEAN –a region where developing and developed economies are living side-by-side and economic gaps among them are obvious– is definitely not a wise idea. At least not for now.

Indeed, after a decade full of applauds for Europe and its success story of single currency implementation, today is the day when the credibility of single currency policy is being put on its highest test.

This article was published in The Jakarta Post on Wednesday, April 20 2011

Food Crisis: Hungry Citizens are Overthrowing Governments

2011-03-21T09:24:00.013+07:00

BREAD TALK. The surge in foods and basic commodities price has sparked public unrests in many parts of the world especially in Mideast countries like Jordan, where a citizen here is seen using a baguette bread to vent his anger to Jordanian government during a street protest.

(photo by Kahlil Marzaawi)

On how to deal with middle and working class people, here’s one good advice that all world leaders (or dictators), could listen: Give them sufficient food and they would give less trouble for you –because food, after all, is the most important necessity that they need.

It was in the year of 1998 when working and middle class Indonesians conquered the streets to end the 32-year autocratic reign of Soeharto, but before those people were longing for the taste of democracy and liberty, it was actually their hungry stomach and bitter economic condition that provoked the transition in the first place.

Following the monetary crisis in 1997, the Indonesian economy was in its nadir and the ASEAN region was infected with currency crisis that was originated in Thailand; which eventually led to massive-scale currency depreciation in neighborhood countries like Indonesia, Malaysia, and Philippines.

In Indonesia, the crisis caused the price of basic commodities to rise beyond the reach of common people, and eventually increased the number of Indonesians who lived below poverty line. As people were pointless at that time and had no one to blame for their suffering, they challenged the autocracy and look for democracy as the solution.

Would Soeharto lose his power if the 1997 economic crisis did not occur? Of course, there were several other factors that contributed to his downfall. But if working-class mothers were not struggling to buy rice and basic necessities at that time, surely their husbands would not have the motive to illegally loot shopping stores and their children would not be so interested to join the street protests.

In November last year, the United Nations Food and Agriculture Organization (FAO) published Food Outlook report and warned against the rising price of basic commodities and the looming food crisis as bleak outlook in 2011.

Less than four months after the ‘prophecy’ was published, it has had its tolls already, as surging global price of foods and basic commodities triggered public uproars which were responsible for the ousting of dictatorial regimes in Tunisia and Egypt, and put other governments in balance.

Widespread corruption, unjust elections, and undemocratic government have long become concern for citizens in Mideast; but it was not until the symptoms of food crisis 2011 materialized that both Tunisian and Egyptian people truly fed up with their governments and decided to take the matter with their own hands.

In Tunisia, inflated food price and bloated unemployment rate were actually the initial motives behind the public unrest that led to the resignation of president Zine al-Abidine Ben Ali. The domino effect then went to Egypt, where people there ultimately realize that they are also experiencing the same problem as their neighbor in the west.

Egypt is the world’s largest importer on wheat; a commodity which has seen its price soaring for more than 50% since last year. In the country, food security has always become a major issue as Egyptians spend about 40% of their monthly income on food; compared to 28% for the Chinese or 6.1% for the Americans in estimations made by the US Department of Agriculture.

When the largest fraction of your income is spent on food, surely you will be the party that suffers the most if there is a hike in food price. Hence, makes no wonder if the Egyptians were among the firsts to take the bull by the horns:

“Hey life is getting harder these days, so why don’t we try the same thing with Husni Mubarak, just like the Tunisians did with their president?”

True, other causes also contribute to this 2011 Mideast revolution; such as greedy tyrants who had been clinging in their offices for too long, or ingrained corruption culture within the government that those tyrants have nurtured.

Or perhaps the influence of social media, which also deserves recognition as seemingly regimes in China, Iran, and North Korea so far have been able to evade the public uproar because their leaders have been notorious for isolating their own people from the internet.

But food crisis irrefutably played a part on the uprisings that lead to the 2011 Mideast revolution. Just recently, Rabah Arezki from the IMF and Markus Brückner from the University of Adelaide publish a research paper that confirms the relationship between international food prices and government stability. Interestingly, their research concludes that there is a positive correlation between food price increase in low-income countries and the likelihood of civil conflict and anti-government demonstrations.

The research is proven true and commonsensical in many ways. For instance, if you were about to join an anti-government demonstration, which issue that you are more likely to join: corruption or rising food prices?

For some people the answer may differ, but if surging price of basic commodities start to affect your earnings and your family, you will have a tendency to choose the latter than the former. Without doubt, people are more likely to go berserk on matters that directly affect them, such as rising food prices, compared to matters like corruption or others.

FAO recently reported that food price had reached a new record high in February; and the world is seemingly welcoming a resurgence of food crisis in 2011. The case of overthrown governments in Egypt and Tunisia is tangible proof that governments have indeed become more susceptible during these times.

This is a serious warning for all immortal-looking dictators from North Korea to Myanmar whose hungry citizens are perhaps next in line to demand revolutions.

This article was published in The Jakarta Post on Monday, March 21 2011

The Genius Gayus is Indonesia's Person of the Year

2011-01-10T17:51:00.008+07:00

COOLER THAN ME? In 2010 no other Indonesian making more headlines in newspapers' front pages than Gayus Tambunan, as his ability to defy Indonesia's law constantly amazed the people throughout the year.

American magazine TIME recently chooses Facebook founder Mark Zuckerberg as its 2010 Person of the Year –an award for person who the magazine perceives as delivering the biggest impact for the world society throughout 2010.

Some identify the award as simply America’s Person of the Year, as the magazine shrugged off its own online poll and chose a less popular American (Zuckerberg) over an Australian whistleblower named Julian Assange, who brings world leaders in tremor with his leaked secrets and wins 20 times more votes than Zuckerberg on TIME official website.

Are we looking for Indonesia’s Person of the Year? Because Gayus Tambunan –a junior tax officer who reportedly possesses bank account and assets worth of 100 billion rupiah (US$ 11 million) that stacks in various forms from posh house to his wife’s luxurious jewelries– would definitely stand a chance.

Sometimes, it’s the crisis that drives significant changes and improvements, and on very rare occasions we should thank someone who brings the crisis to us in the first place.

Scoundrels give birth to heroes, and crises path way to improvement. With his acts, Gayus Tambunan obliquely fixes Indonesia’s notoriously corrupt administration by exposing the weakness of Indonesia’s law and judicial system, which leaves many top-tier government officials from Finance Ministry, Justice and Human Rights Ministry, The National Police, to the President himself, red-faced.

While The Beatles once said that money can’t buy you love, in 2010 Gayus has proved the opposite, as his money power had won the hearts of officials from his detention center as well as from the immigration office who help him defy the law.

If the National Police members and Justice and Human Rights officials could turn back time, perhaps they would not choose to arrest Gayus when he fled to Singapore in March and left him alone instead. The arrest of Gayus was merely a beginning of what would be a huge exposure that slapped those organizations right in their faces, pushing them harder to work on the reform programs that they always half-heartedly implement.

For government officials whose departments are embroiled in Gayus’s play, it has been a fast-pacing, intrigue-plagued drama since:

Had Gayus not been born in this world to become a tax office hitman and played mockery on Indonesia’s law system, Justice and Human Rights Minister Patrialis Akbar would not move a finger to reform his severely corrupt and dilapidated departments, whose performance he frequently boasts as “successful”.

Had he not bribed the prison guards and police officers in charge at his detention center (and got busted later), the hidden and long-concealed defects of law enforcement in Indonesia would not be revealed to the national and international community alike: That is, rich and high-profile criminal in Indonesia have always had the ability to disregard justice and buy themselves out of the prison if the price is right

Finally, had Gayus not disguised himself out to Bali, Macau, and Kuala Lumpur in 2010, the system on Indonesia’s prisons and immigration bureau would not have been fixed and transformed like we are watching right now.

It’s true that the government’s efforts in promoting justice equality for all Indonesians are still in progress following Gayus’s case, and the outcome is still far from perfect until now.

But thanks to Gayus, some minor progresses in Indonesia’s law enforcement start to materialize. If wealthy outlaws want to use the “temporary release service” for their holiday now, for example, at least they will have to pay much higher price –without doubt now detention center officials are facing higher risks to get caught, as the public’s scrutiny about the issue is getting higher than before.

To be our Person of the Year, Gayus has no reason to feel timid of the smart, Harvard-educated person like Zuckerberg. According to inside sources at the tax office interviewed by The Jakarta Post journalist, Gayus is indeed a genius himself as he reportedly boasts an extraordinarily high IQ of 147.

While his acts look clever and dull at the same time, and hence may not necessarily reflect his IQ, they are indeed improving this country in many aspects –both for the short-run and long-run

For leaking to the public about the truth that has long been cloaked, for forcing disgraced government officials to implement a larger level of bureaucratic reform, and for giving the media and public some entertainment to savor; Mr. Gayus Halomoan Partahanan Tambunan is an obvious choice for Indonesia’s Person of the Year of 2010.

This article was published in The Jakarta Post on Monday, January 10 2010

Naturalization and Indonesia's Human Development

2010-12-14T20:26:00.010+07:00

OUR FUTURE. Indonesia's population pyramid is still dominated by children and youths; hence if the country really wants to make big leap in the future, it really needs to pay more attention towards its human capital development –especially ensuring decent education to its younger generation.

My lecturer on population economics class, a brainy and bright young economist named Elda Pardede, said that the easiest way to measure the quality of human capital in one country was to see its sport development. In the case of Indonesia, she is simply not mistaken.

Although the racist Adolf Hitler might not be happy, but overseeing Germany’s demographic trend, there isn’t anything wrong when the Germany national football team had to naturalize and depend on Poland-born players such as Lukas Podolski and Miroslav Klose to reach the semi-final round in the last World Cup.

But clearly something is not right with Indonesia’s human capital development when Indonesia Soccer Association (PSSI) decided to convert the 34-year old, Uruguay-born, Cristian Gonzales into Indonesian to give extra cutting edge to the national team.

Unlike Indonesia, such case could be allowed to happen in Germany since in Europe young and working-age population number is on serious decline, with most of the European countries facing serious threat of their ageing population, and employers there are struggling to find young and reliable workforce nowadays.

In Germany, the 2009 data from World Bank shows that population number decreases by 0.3% compared to the previous year, whilst the federal statistics office of the country forecasts that by 2060 Germany will see its population number to decline to 65-70 million from current population of 81 million.

But while Germany is now recognized as the country that has one of the lowest birth-rates in the world and may find difficulties in finding young people to fill its workforce in the future; the future is supposed to be bright for Indonesia, as its population structure is dominated with youths. More than a half of Indonesia’s 230 million population number is still under 30 years of age –a fact that bolsters the country’s productivity and thus plays important role behind its rapid economic growth.

True, the 34-year-old Cristian Gonzales still has the goal-scoring prowess that our national football team desperately needs. But considering the overwhelming number of Indonesia’s youths in our 230 million people, is the human development of Indonesian really that bad, thus there is no other Indonesian-born striker younger than Gonzales who is up for the task just to score goals?

Indonesia’s underachievement in sports –like our recent disappointment in Asian Games at Guangzhou where we only managed to get 4 gold medals while our close neighbors Thailand and Malaysia brought home 11 and 9 gold medals, respectively– is just one tangible evidence out of many government’s failures to promote Indonesia’s human capital development.

For another example; does anybody know where the state budget for education goes? Because in my campus, there was brouhaha several months ago among students and the University of Indonesia (UI) rector regarding his decision to raise the tuition and entrance fee to the university.

The price very much depends on the major, but prospective undergraduate students in UI have to pay at the range of 10-25 million rupiah for the entrance fee, with yearly tuition fee of 10-15 million rupiah –that’s 10 million rupiah (US$ 1,100) a year if your son dreams to become a future economist like myself, and 15 million rupiah (US$ 1,600) a year if he wants to become a doctor and goes to medical school.

“Tuition fee in UI is very expensive, and a son of tukang bubur (porridge seller) like me could never be able to study there,” said one prospective student of UI concerning the matter in an internet forum.

In case of future human development issues of Indonesia, the words above highlight the disappointment of our younger generations who represent the largest share in Indonesia’s population pyramid.

In fact, those younger generations mostly come from working-class family background, and they are pinning their hopes on state universities to get higher education with relatively cheap price –or even free–, so they can get a better life in the future and liberate themselves from the devil circle of poverty.

Several days ago, The Jakarta Post published a pride-oozing headline on its front page titling “RI makes big strides in human development,” (Dec 11). Well, really?

Speaking from my own experience in my university, as well as my observation on Indonesia sports achievement, the data presented on that news seems to be somewhat different with what happens in reality.

But the good news is: Unlike Germany, our age structure is far from ageing, our population pyramid is still dominated by youths, and clearly we have no shortage of young workforce. If Indonesian policymakers and lawmakers pay more heed to education and Indonesia’s human capital development, and redirect policies to enhance the quality of Indonesian workforce, Europe’s ageing and declining population could actually become our advantage in the future.

Predictably, what happens nowadays is almost the opposite, since policymakers and lawmakers don’t like to do something if they could not get the credit for it, while policies on population and human capital development, unfortunately, tend show their effects in the very, very long run.

We have already had our failure in football’s youth development, and in the future we certainly don’t want things to become worse so we will have to naturalize another Uruguayan to become our next Finance Minister.

This article was published in The Jakarta Post on Tuesday, December 14 2010

It's the Global Economy, Stupid

2010-11-12T23:51:00.020+07:00

PUBLIC ENEMY. Barack Obama might not be popular during the G-20 summit following the decision of The Federal Reserve to pump US$ 600 billion to the US economy; a policy which will weaken the US dollar and propel more hot money inflows, inflation, and asset bubbles to the developing world.

As the United States President, Mr. Barack Obama surely has too many thoughts in his mind, doesn’t he?

The major overhaul in US healthcare system reflected Obama’s responsiveness in domestic policies and fulfilled his campaign promise, while the way he handled the British Petroleum fiasco in Gulf of Mexico indeed had satisfied the environmentalists.

In foreign policy matters there’s an urgent need to embrace the Muslim world after George W. Bush responded the 9/11 attack with waging wars here and there. The relationship has never been bitter: In Iraq, the US enraged many Muslim communities by demolishing the country because of the Weapon of Mass Destruction that never exists. In Afghanistan people still cry for more American troops to be deployed, arguing it is the US’s responsibility to fix the chaos that Bush once initiated.

But it seems Obama’s mind is being crammed with too many foreign issues that the US has to deal with –and the economy is not being put as his major precedence. Perhaps we could recall one of the most famous remarks in the history of United States politics, which was coined by Bill Clinton during the 1992 presidential campaign against George H. W. Bush.

That phase of Clinton’s emphasized the need to put economic issues as the most important priority among others. As Bush at that time gained fame among his voters because of his foreign policy developments, Bill Clinton, impressively, become the eventual winner the election thanks to his audacious –and effectual– campaign slogan: It’s the economy, stupid.

That’s what Obama should know, because the dreadful economy at present is definitely the reason why his Democratic party conceded a defeat against the Republican recently. Obama’s report card in the economy is a complete mess: In US currently unemployment rate soars higher than ever, and the multi-trillion dollar bailout is not actually effective to fix the situation or jumpstart the domestic economy either.

Also, Americans are not too interested with the revamp on regulations of Wall Street, as they urge Obama to put more attention to the jobless people who desperately look for dollars to feed their family on Main Street.

While Obama is not popular home, The Federal Reserve’s decision to boost the US economy by purchasing treasury bonds worth of US$ 600 billion and keep the interest rates at a historically low level may make him a more unpopular figure overseas.

Yes, Obama may be welcomed with ecstasy by Indonesians as he gave his speech in fully-packed hall of University of Indonesia’s. But surely unhappy leaders of G20 economies would not be that kind to shake his hand with such warmth as the Indonesians did –and they surely greeted him with sinister smiles on their faces knowing what the US had done to the global economy.

The US is the major perpetrator behind the recent currency wars, depreciating its dollar in order to make its exported goods more competitive abroad, as well as continually keeping its interest rates low to boost its economy. As if the historically low interest rates are not enough to cultivate hot money inflow and prompt headache among developing countries, now The Fed is looking to print US$ 600 billion more to the economy –a move that will surely increase the US dollar supply in the market, press the US dollar to depreciate further, and ultimately bring the new chapter of currency wars.

The United States is playing dangerous game here in implementing such self-centered policies like those because the consequences of the policy are likely to put the stability of global economy at bay. Depreciation in US dollar currently leads to a considerable corrosion in many countries trade balances, while a near-zero interest rate already stimulates a significant surge in capital inflow among developing countries.

And regarding the US$ 600 billion injection to the US economy: Is this a trade protectionism in disguise? Weaker dollar will eventually make US goods more competitive abroad; stabbing many US trade partners in the process. Countries around the world would not be so happy with this. “You blame me as the global economy’s hitman and now look what you’ve done,” says China.

Does Obama really need to come to G20 meeting anyway? While the global economy is still recovering from an economic mess which the US started, the G20 economy members are supposed to implement integrated and joint efforts to fix the global economy together, not the other way around.

Yes, the G20 group should work in cooperation; and that’s why it was formed at the first place. But now such commitment is in question because currently the group’s de-facto leader seems to be more interested in pursuing egotistic policies to save the his economy alone, not the world.

South Korea and the G-20 Summit

2010-11-11T14:12:00.009+07:00

IT'S OUR TIME. The economic renaissance of South Korea is in the hideout compared to the rise of China and India, so this is the time for Lee Myung-bak to stop being so humble and play a more important role in shaping the world's agenda at the G-20 economic forum.

As the host, South Koreans have a story to share ahead of the G20 summit which will be held on their soil on November 11.

Now a member of the 20 world’s largest economies, South Korea’s imposing economic transformation, which is well-known as “The Miracle of the Han River”, could become an example for every citizen of developing country who envisages writing the same history as theirs.

In my university, I still remembered when my economics lecturer presented me South Korean economy case-in-studies on several occasions. During that time, my economics lecturer –who is also a prominent economist in Indonesia– always underlined the importance for us the Indonesian students, as the future economists and policymakers, to learn from Korea of how their brawny industries and massive exports tally fuel their faster-than-ever economic growth.

It's simply breathtaking seeing Korean companies such as LG and Samsung could compete with Japanese heavyweight like Sony, or when Hyundai and KIA Motors racing neck to neck with US' General Motors. In Indonesia, a nation whose export number holds only a small percentage in our economic lifeblood and for so long has become our Achilles’ heel, South Korea’s success story on its export and industry has become a benchmark for us to succeed.

It is, without doubt, a remarkable achievement for a nation whose economy once damaged badly because of the Korean War, and has few resources in disposal to repair the situation at hand.

With little natural resources and diminutive domestic market, South Koreans could be forgiven for being timid back then. Compared to their northern brother, they were very much overlooked in the global stage: at that time, their economic size was even smaller North Korea and in fact was also ranked among the poorest countries the world.

It was not until Park Chung-hee –recognized as the South Korea’s version of Deng Xiaoping– came to turn the fate of the South Koreans upside down. He helped to unleash the immense potential of South Korea’s industry by laying the foundation of an export-oriented economy, and promote an economic reform which is perceived as the highly-successful gambit that bolsters its rapid economic growth today.

By the time Park Chung-hee became president in 1961, the income per capita of South Korea was merely US$ 72. South Korea’s economy was very small back then –so small that in one of his addresses, Barack Obama mentioned to the young African leaders forum that by the time he was born –that was, the year of 1961– South Korea’s economy stood at the same par as Kenya, even less wealthier.

But thanks to its highly-successful industrialization and massive export numbers, today is a completely different story. The data from World Bank in 2009 shows that South Korea’s gross domestic product (GDP) per capita stood at the level of US$ 17,078, outpacing African developing countries –including Kenya– whose GDP per capita today are still less than US$ 1,000.

Indeed, this rags-to-riches story should be put as lesson for leaders from developing countries who fancy their citizens to have a more affluent future, including Indonesia.

For many developing countries, one of the criticisms pointed to G20 economies’ leaders these days is their ignorance towards less-developed countries, as the forum is mostly dominated by heated debates discussing the interests of developed countries rather than the less-developed ones’.

As a former poor and under-developed country that has gone through one of the most inspiring economic revolutions the world has ever witnessed, citizens from developing world in many parts of Asia and Africa –whose countries are not so fortunate enough to be included in G20 economies– will put profound expectations in the shoulders of South Korean representatives in the upcoming G20 summit.

They will very much hope that the South Korea can help in setting leadership and directing integrated economic policies which will represent and assist developing countries as a whole.

In an era where Asian countries and “new kids on the block” in the economy like China and India start to play a more pivotal role in shaping the world’s agenda, South Korea could host the next G20 forum with brimming confidence.

Yes, it is understandable if South Korea’s achievement in economy is very often underrated and superseded, as China’s and India’s inexorable economic engines are turning too many heads already these days.

But compared to its counterparts in the G20 economies, this is the nation which started the race way far behind its compatriots, yet still managed to stand at the same level with them eventually. This is one of the Asia’s economic tigers which very much depends on export in its economy, yet still weathered the recession relatively successful compared to its other export-oriented peers.

For all its economic accomplishments, in the next G20 economic forum South Korea has more than what it takes to play a more important role in shaping the world’s economy.

G20 economies must not forget the developing world, and on the upcoming G20 summit all the developing countries’ citizens will hope the host can act as their envoy, so that in the future another “Miracle of the Han River” can be engendered.

The Youth Pledge Revisited: It's Time to Bury the Hatchet

2010-10-28T05:36:00.003+07:00

E PLURIBUS UNUM. The experience from my high school times has redefined my view of nationalism, with my Chinese-Indonesian friends acting as the unlikely teachers who taught me the true meaning of Unity in Diversity.

Could anyone be able to mention any nation in earth whose diversity is greater than Indonesia?

No one could. With more than 17,000 islands scattering across the archipelago, in where around 300 local tribes roaming around with each of whom speaking their own local languages; the diversity of Indonesia is definitely unrivaled.

Indonesia’s vast diversity, however, is a two-edge sword and sometimes becomes the major constraint for its citizens to unite and have a mindset as one nation. Since the arrival of the first colonialist –that was the Portuguese in 1512–, it took more than 400 years for Indonesia’s massively-diverse citizens to unite as one nation and declare its independence from the colonialists.

Certainly, the key to our unification was the declaration of Sumpah Pemuda (the Youth Pledge) on October 28 1928, where jongs or youths from various ethnic and cultural backgrounds (Jong Sumatranese, Javanese, Bataknese, Ambonese, and even Chinese) gathered together and vowed to eliminate the great divide of their racial barriers and all declare themselves as Indonesians.

It is the oath that became a keystone in uniting Indonesia’s massively-diverse citizens and later proved to be pivotal for Indonesia to finally unshackle itself from colonialism.

Fast forward eighty two years, it is worth reflecting the values of Sumpah Pemuda once again when we look upon the situation of Indonesia at present.

Violence on behalf of the interest of specific religion and racial groups erupts in many parts of the region, with hatreds and resentments toward each other eclipse the aphorism of “unity in diversity” that is tightly gripped by the Garuda bird as one important part of Indonesia’s national symbol.

While in the past Jong Ambonese worked hand-to-hand with other Indonesians regardless of which part of Indonesia they came from, today there seemed to be no love lost between the Ambonese and Flores people at the street of Ampera when they exchanged blows and spilled each other’s blood.

And while in Merah Putih movie we can watch how a Moslem school teacher fought the Dutch colonialist shoulder-to-shoulder with a Christian farmer and an obedient Hindu soldier, today the religion intolerance in this country can only grow larger than ever following the stab of two church leaders at Bekasi, allegedly did by Moslems who opposed the presence of the church’s activities in the area.

If only our founding fathers who proclaimed Sumpah Pemuda could see what we are doing at the moment; they would surely be very ashamed to have us as their descendants.

Why, as I am deeply puzzled here, do such racial barriers and differences have to matter? During my high school times, my school was mostly dominated with Chinese-Indonesian students with very rich family background, yet in reality they never look me different despite the fact that I am a Moslem Javanese who merely come from middle-class family background.

And regardless our racial, religion, and social status differences; we are still Indonesian at heart.

“You know, I was very impressed by the way you guys enthusiastically sang your national anthem together,” said an Irish teacher who taught high-school students in United States, as he paid a visit to our school.

“In the United States, young people in your age don’t even memorize [the lyrics of] their own national anthem,” he added.

Indeed, it is ironic why those ethnic-group people should look down against each other’s roots, while back then in high school times all my friends always identified me as “Indonesian”, nothing else matters. During that time, my Chinese-Indonesian friends frequently offered me ride home, jovially invited me to their houses, and on occasions even introduced me to their parents who later cooked me dishes so we could have dinner together.

Did those specific ethnic groups say that they did it merely for retaliation, because of one or two things which some Bataknese or Ambonese did in the past? Then they really should learn to forgive and bury the hatchet: When I sat with my friend’s parents around the dining table, I was sure that they had not forgotten how the Javanese people brutally treated their Chinese relatives during the 1998 riot either.

Revenge is never-ending; forgiving each other and living together in such harmony look to be a life more comfortable living. For massively-diverse citizens of Indonesia, it is indeed a better option to choose rather than fulfilling your revenge now and living life full of insecurity later.

Amidst recent clashes involving religion and ethnic groups in Indonesia, this is the day when I miss the moment when a foreigner was in awe and felt really timid seeing Indonesian high-school students from different religions and ethnic groups singing Indonesia Raya sincerely together.

Ask the then Dutch colonialists at this date eighty two years ago, and that’s the same feeling which went through their spines when those Jong Sumatranen Bond, Jong Ambon, Jong Batak, Jong Java, as well as other Indonesian youths from different backgrounds, all ignored their differences and stood as one to sing Indonesia Raya with all their heart.

This article was published in The Jakarta Post on Thursday, October 28 2010

In Australia, It Takes Only One to Tango

2010-09-25T13:02:00.010+07:00

STALEMATE. Australians may have just witnessed one of the most exciting federal elections in the country’s history, but the power divide between Julia Gillard and Tony Abbott in parliament would not be the outcome they were keen to have.

A well-known idiom it takes two to tango definitely does not refer to politics.

At least that’s what we could conclude from Australia’s parliament composition as a result of a nail-biting federal election drama, in which Julia Gillard from Labor Party and Tony Abbot from National Coalition acted as the main protagonists.

In the election, there were weeks when a hung parliament was imminent as both Gillard and Abbot shared the same number of seats. In a country with a de-facto two-party parliamentary system like Australia, a brittle situation from hung parliament –a condition where parliament is divided and neither political party has an absolute majority against each other– is the last thing that any prime minister would want to have.

Fortunately, after weeks of vagueness, Australians could breathe a sigh of relief when Labor’s Gillard finally secured 76 seats (the number required for outright victory from the 150 seats in the parliament) with last-gasp support from Australian Greens Party and three independent members. This ends Australia’s political limbo, even though the predicament is far from over as Gillard’s road ahead is still paved by wobbly rocks.

The major reason why some are skeptics about the stability of Australia’s future government is a parliament with ruling party has no supreme power against the opposition could prevent the government to perform at full throttle.

This could be nasty: during times when government policies urgently require approval from the parliament, politics intervention from the strong opposing party may be the hinderer that stands in the way of the implementation of such important policies.

As a country that reels through both the era of autocracy and democracy (and also experiences the thorny transition between), several examples could be drawn from Indonesia, Australia’s closest neighbor to the north, in terms of parliamentary matter.

In our not-so-distant past, former Indonesian president Suharto can run a top-down politics and an extremely stable government because he had almost no one who can oppose him in the parliament. In addition to the autocratic culture that was stemmed from his leadership style, the fact that Golkar party always came out victorious with overwhelming support in every elections led the party to earn most of the seats in the parliament, which allowed Suharto to implement government policies as he pleases.

Soeharto provides excellent example that the bigger power that a ruling party has in the parliament, then the bigger chance of government policies could be implemented smoothly. In this situation, political interference from opposing parties is unlikely to happen because of the overwhelming power that the ruling party boasts in the parliament.

Today, Susilo Bambang Yudhoyono did try to do just that by embracing other parties to form a giant coalition which hold 75 percent of total seats from the parliament, with expectation that such powerful coalition would weaken the bargaining power of the opposition and ensure the stability of his second-tenure government.

So what would happen in a situation like Australia’s, where a parliament is divided into two fractions, with the ruling party only has wafer-thin majority against the opposition? If you were the leader of ruling party in Australia like Julia Gillard with current parliament’s composition, then in the future you can expect your powerful opposition in parliament to confront and grill you every time you come out with new government policies.

And with her experience as former minister and policymaker, Gillard surely knows that politics could potentially turn very filthy. Several lecturers in my university had experience of being a policymaker in the government, and some of them once uttered of how a crucial economic policy could lose its timing and credibility, and eventually become ineffectual, since it usually has to undergo an arduous and protracted process of Indonesian politics first before it can be approved by the lawmakers.

In United States, very often Barack Obama had to endure torrid times first from the Republican lawmakers before his policies could be put into actions. Indeed, providing check and balance to the government by confronting the ruling party is precisely the job of opposing party, like the Republican. But in academics perspective –particularly in economics field where timing does matter and economic policies needs to be implemented just in time– there are times when a too strong opposition party leads to lengthy political process, which ultimately reduce the efficiency of the government itself.

Yet in 2010 Gillard is not the only world’s newly-elected leader facing difficult challenges. Some of the peers with same fate as hers including Philippines’ Noynoy Aquino, who was just elected this year, but already he has to deal with the problem of the national security and recovering Philippines image to the world following the Hongkong tourists carnage incident.

Or Colombia’s new president Juan Manuel Santos, who presided over as president amidst the growing domestic tension between the country and guerillas and drug kingpins, as well as the problem with the war threat from Hugo Chavez because of the infamous 2010 Colombia-Venezuela diplomatic crisis.

New Briton Prime Minister David Cameron is also unfortunate to occupy 10 Downing Street this year in the middle of anti-British sentiment among environmentalists around the world following British Petroleum fiasco at Gulf of Mexico.

Having only a slim power difference against her opposition in the parliament, with even a single lawmaker defecting could turn her plans upside down, the government during Gillard’s tenure is highly fragile indeed. In the world where encountering an uphill battle is becoming a trend for every newly-elected leader this year, how to tame her stronger-than-ever opposition in the parliament is the test for our beloved neighbor’s first female prime minister to overcome.

This article was published in The Jakarta Post on Saturday, September 25 2010

China: The New King in the Wings?

2010-09-21T19:36:00.010+07:00

Yes, China’s ear-deafening economic engine is now pulling heads–but does it have the capacity to stay at such pace?

Whether China will be able to sustain its rapid economic growth and surpass United States as the world's largest economy remains anyone's guess. Just like China, in the past export-oriented powerhouses such as Japan and Germany were once tipped to accomplish the mission, but none of them is successful until present.

Amidst the storm from the recent financial crisis, which has seen most economies in the world to decelerate, little seems to be taking effect on China as its economy accelerates as fast as ever. Its economy grows to 11.9% in the first quarter this year, a staggering number which is far way ahead from its compatriots in the developing world could produce.

It is hard to deny the fact that China’s road to sustain its economic growth and become a future economic superpower is beset with thorny challenges ahead. Of all the upbeat forecasts of China, the sustainability of its economic growth in the long run is still in question, concerning the forthcoming predicaments.

First and foremost, China is dealing with serious problem on its ageing population. Because of the one-child policy, in the future Chinese working population will decline in number –and as the consequence, tomorrow labor in China would not be as cheap as they are today. As labor price rises and China’s industry becoming less competitive, investors will likely relocate their factories in other labor-intensive countries like Indonesia or Vietnam. With low-cost industry as the backbone that is responsible for the largest share of its economic growth, analysts predicted that China’s export-led growth model will be seriously disrupted by this demographic challenge.

Then, what else can be worse for a country than being blamed as the world’s enemy number one? That is what’s happening on China right now in terms of environmental issues, and this inconvenient situation can stand in the way of China’s ambition to keep its high economic growth long-lasting. Amidst global effort to reduce carbon emission, China now becomes the main perpetrator of the world by piling up pollution: in 2007, the country overtook United States as the world’s largest emitter and has seen a significant increase in carbon emission number since.

Environmentalists all over the world slam China as they deem the country is buying current economic growth at the expense of world’s future. And as time unfolds and its pollution grows, China will surely see more and more condemnations, which will put more pressure for Beijing to implement the green technology and apply strict measures to its dirty factories. These are costly and can reduce industry’s efficiency, and may possibly be the brake that hampers China’s economy from revving full throttle in the long run.

Also, China’s 10 percent-plus recent economic growth is mainly fueled by economic stimulus projects –a short term economic policy which the government implemented to prevent the economy from decelerating during the last financial crisis. And while the economic stimulus project is responsible for the significant swell of bank lending number and growth in credit these days –which instigates fears of the emergence of inflation and China’s property prices bubble–, the growth that it generates is indeed unsustainable in the long run.

Cool it the China way

Concerns regarding the matter have not fallen on deaf ears; with recent developments showing that Chinese officials and policymakers actually understand the threats that country faces no worse than the external observers.

If the main issue is short-term threat of economic overheating, some of the economic policies China’s policymakers implemented show their intention to put their economy in a safer, more sustainable level. In 2010, the Chinese central bankers are not so lenient in giving banks too much freedom. The amount of bank lending may have reached its peak last year, but this year reserve requirements have been repeatedly raised to prevent the market to be inundated with too much liquidity.

In the first quarter this year, China saw its housing prices to surge 10.7% –its highest since the last two years–, which instigated anxiety if the economy of China is experiencing an identical housing bubble problem as United States’. But China’s government has also started to implement restrictive policies on the housing market to cool its most overheated sector.

China’s recent decision to slightly loosen the currency’s peg to the dollar may be seen as the successful outcome of continuous pressure from various world leaders, but the truth is the implementation came cleverly just at the time when China desperately needs to cool its economy to prevent it from overheating.

Indeed, stronger renminbi may lead to less competitive Chinese goods in the global market (which is why this decision is strongly deplored by Chinese exporters). But during post-crisis period like this, loosening renminbi’s peg seems inevitable: at the time when other countries struggle to bounce back from global recession, you definitely do not want to be labeled as “global villain” whose undervalued currency and oversized export numbers continue to deteriorate other countries’ trade balances.

Another effort to encumber its too-fast economic growth can also be heard in the statement of Wen Jiabao, China’s Minister of Industry and Technology, who recently vowed to shut at least 2,000 highly-polluting factories that have not met environmental standards.

The statement is a fresh tonic for environmentalists; but what’s actually behind this? Because for some who remember how China’s representatives wrecked the Copenhagen deal by vetoing the deal of 50% global emission cut by 2050 to be taken out from the accord, how they suddenly change their mind may seem puzzling.

Applying strict environmental measures to Chinese manufacturers may decrease Chinese industries’ output, while loosening renminbi’s peg may possibly weaken China’s exports. But today China’s economy is very prone to overheating, and China’s ignorance towards environmental issues and its egoistic policy to maintain their currency undervalued start taking the headlines. At times like this, implementing policies which can cool down your economy and please the world’s citizens at the same time is indeed a very smart gambit.

Even though it’s still too early to call all these policies a success, reports show that economic growth in China has fallen to 10.3% in the second quarter, with both housing prices and bank lending amount also plummet. The sustainability of China’s economic growth is still in question, but the latest data on China’s economy should calm the world that Chinese policymakers are not unaware of their too strong economic growth and the downside risks that follow.

Crouching Eagle, Hidden Dragon

China’s recent achievement in overtaking Japan as the world’s second-largest economy is putting China in the spotlight as well as drawing attentions from many countries around the world –especially United States, the current frontrunner at the race that is checking his rearview mirror fretfully now because of the boisterous economic engine which Hu Jintao possess behind his car’s hood.

With Hu Jintao in the driver’s seat, previously China has successfully surpassed the economy of Britain and France in 2005, Germany in 2007, and Japan in 2010. Prophecies from oracles like PriceWaterhouseCoopers and Goldman Sachs, meanwhile, have predicted that between 2020 until 2030 the red car will overtake the star-spangled frontrunner as the world’s largest economy.

Yet sometimes to become number one “how” is a more crucial word to be addressed rather than “when”. It does not really matter when China will overtake United States as the world’s largest economy (in 10 years time in 2020 or 20 years from now in 2030). Actually what’s more crucial is how China can sustain its current growth and shunning their economy away from the looming threat of economic overheating, so they can ultimately sit at the top of the world.

One thing for certain is that China now is very different compared to 30 years ago, where its economy was still isolated from the world, as it currently stands right in the heart of the global economy. Now China plays an indispensable role in international trade: the number of goods they export around the world is staggering, and the gigantic demand from its 1.3 billion population became energizer to some recession-plagued countries which have been struggling to find buyer for their tradable items during the last financial crisis.

That’s precisely why China’s economic sustainability matters for the rest of the world: because if the car in red gathers steams and runs off the track, it will take the whole world with it. The commentators and racing pundits can utter everything they want to warn China against such upcoming threats, but so far it seems that the dragon and its rider understand and know exactly what they are doing.

Or are we seeing nothing yet and there’s actually more to come from China? Some of China’s immense potential, however, remain hidden and underestimated. The fact is; there’s a possibility that China’s engine will rev even louder in the future -political reform and information freedom are yet to be fully implemented, with China’s renminbi also waiting in the wings to be used as global currency.

With such menacing power possessed by the red dragon by now, the bald eagle has all the reasons to be worried.

Indonesia: The 10 Natural Sanctuaries Revealed

2010-08-27T19:33:00.016+07:00

Indonesia, with thousand of islands and hectares of forests spread across its archipelago, is illustrious worldwide as one of the top-notch ecotourism destinations. Yet apart from the common and already-congested places, there are other parts in Indonesia that remain somewhat unnoticed, or underrated, both by domestic and foreign sightseers. As you can read below, our marines are blessed with astonishing underwater landscape, and our forests hide faunas that could hardly be found anywhere else in the world beneath its diverse vegetations. These 10 places are relatively remote and their beauties are still concealed, yet they are really, really too precious to be overlooked.

Derawan, East Kalimantan

Few tourists go to East Kalimantan to dive. Some go for the wildlife experience of strolling in its natural and well-protected forest; while some go for its rich gas, coal, and mining bonanza (as it is considered one of the wealthiest provinces in Indonesia and many mining companies run their businesses here). If only divers know something about Derawan, a band of small islands scattered in the province of East Kalimantan. In Derawan, there is an island named Kakaban, where a single lake is home to 4 world's most unique stingless jellyfish species; and Sangalaki island, whose immaculate white sands is Southeast Asia’s largest nesting grounds for endangered green and hawksbill turtles. Derawan is also reportedly to have more than 50 manta ray species and various seahorses and squids. Boasting the most unusual of marine species any diver could ever behold, Derawan is a must-place visit for divers who want to confirm the richness of marine biodiversities that Indonesia inherits.

Komodo Island, Flores

What could be a crucial factor for a place to become a perfect ecotourism destination? Is it because of its pristine coastline and astonishing underwater scenery? Or is it a divine landscape that matters most? But when one possesses both, plus its status as the only place on earth where the remaining Jurassic species wanders, there you have Komodo Island. Formerly nominated as the new 7 wonder of the world, Komodo Island boasts not only its Komodo dragon, but also a Lord of the Ring–like, beautiful meadows. Indeed, Komodo dragon is its main attraction for tourists, but because of that its beach and underwater scenery are underrated. In fact, divers should know that Komodo Island is located at the juncture of Pacific and Indian oceans, which is why hundreds of colorful coral reefs are present under its water. If Komodo Island is not considered a perfect ecotourism destination; I don’t know what else is.

Lore Lindu National Park, Central Sulawesi

Alfred Wallace, a renowned 20^th century naturalist, once said: “The life of wild animals is struggle for existence. The full exertion of all their faculties and all their energies is required to preserve their own existence and provide for that of their infant offspring.” Of all the wild animals he ever encountered during his voyage, he wrote in his journal that the uniqueness and the richness of animal species in Sulawesi region is unrivaled –and that’s how the famous Wallace line was established. Deep in the thick forest of Lore Lindu in Central Sulawesi, live 227 bird species, 77 of which are found nowhere else on earth. Besides, the forest is also the shelter of Sulawesi’s endemic species such as mountain anoa, giant butterfly (a butterfly that is bigger than human hand), dwarf buffalo, babirusa, and three species of tarsier (the world’s smallest primate). Visiting this national park, therefore, offers its visitors a rare experience to encounter various endemic and rare animals in Sulawesi which have been struggling for existence.

Morowali, Central Sulawesi

What Morowali hides beneath its thick forest is similar than one could encounter in Lore Lindu, except one thing: it is a Nature Reserve, not a National Park, which means Morowali has higher protection from the government because of its status. The vegetation is somewhat different, as the still-virgin forest of Morowali is the only wet lowland forest in Sulawesi and, different from other forests in Sulawesi, is bordered by the sea. Morowali Nature Reserve possesses the uniqueness of various Sulawesi’s endemic faunas, which are hardly found anywhere else in the world.

Nusa Penida, Bali

Tourists could be forgiven for overlooking Nusa Penida when they visit Bali, as the island is blessed with various sparkling tourist attractions already: from Kuta Beach, Tanah Lot, or Mountain Agung. But heading west, there’s another thing to do beside watching sunset or surfing. Nusa Penida is the best in diving business in Bali, offering divers various diving spots, each with their unique characteristics. Other diving spots usually only provide the magnificent view of their coral reef collections, but here in Nusa Penida there are unusual diving spots like Crystal Bay, which offers an underwater cave system in your diving experience, or Manta Bay, which is rich of Manta Ray and Tuna fish species below its water.

Raja Ampat, West Papua

In local language, Raja Ampat means “Four Kings”, and it terms of marine biodiversity the facts justify the name precisely. When an expedition was first carried out in obscure islands on west side of Papua in 2001, its shocking result struck the conservation world: Indonesia’s Raja Ampat is the place with the richest marine biodiversity in earth. Almost ten years later with countless explorations, roughly 70% of world coral species –that’s 10 times than the coral species from the entire Caribbean island combined– and more than 1,000 fish species are found in this area. With continuing support from the government to protect and develop the area, the rich marine biodiversity that this area possesses could soon eclipse the popularity of its counterpart in the south, the Great Barrier Reef, as a famous diving spot.

Savu Sea, Flores

There are few sea in the world that become migratory area for whale species which human could visit, Savu Sea in Flores is among those rare spots. Located in the rendezvous of Indian and Pacific ocean, deep beneath the water of Savu live many endangered whale species such as Sperm Whale or even the gigantic Blue Whale. Whale hunting tradition still persists among locals and could be an exotic show for tourists, yet it rarely occurs today. This site offer a unique diving experience as beside its role as major migratory area for whales, it is also home to other endangered and rare animals, such as Green Sea Turtle.

Segah, East Kalimantan

Compared to its counterparts in East Kalimantan, access to this area is a bit tricky and orangutan is rarely seen here, as the forest is located in higher altitude than Wehea and Lesan. But as it is pitted in the area of small mountains and hills, the landscape of Segah is simply amazing. Here Dayak people in Segah are far from modern as they are scattered up on the hills instead of on densely populated lowland.

Wakatobi, Southeast Sulawesi

One lecturer in my university once said during his class, “Have you ever been to Wakatobi? The place’s great, it’s more beautiful than Hawaii.” He was mistaken, of course, because what Wakatobi has below its water is as beautiful as what can be found above. Its white sands and unspoiled beaches are awesome, but just like Raja Ampat, Wakatobi is prominent among divers for being the home to one of the richest marine biodiversities in the world. While there are 300 coral reef species in the entire Atlantic ocean, there are reportedly more than 600 coral reefs found in Wakatobi alone. Moreover, beside possessing one of the richest reef complexes underwater, Wakatobi is also home the longest atoll structure in the world. Somebody should tell my lecturer about that.

Wehea and Lesan, East Kalimantan

Indonesian forest is among the biggest, the healthiest, and the most diverse in earth, equal to huge forests in Brazil and Congo. The richness of biodiversity in rainforest in forests at sub-district Wehea and Lesan (both at East Kalimantan province) is staggering: it is said that new species will be discovered every time a new ecological expedition is conducted on the areas. Besides, forests in Wehea and Lesan are both home to the endangered orangutan, arguably the most intelligent mammal on earth whose population continue to decline to the critical tally of 2,000 in the world. Ecotourism in these two forests presents great experience not only because of its natural wild adventure, but also the cultural picture that tourists can behold from the local Dayak tribe.

This article will be published in the magazine of American Chamber of Commerce. This article represents The Nature Conservancy, a US-based NGO working in conservation issues. All the 10 places here are among the marine and forest sites that TNC protects in Indonesia.

380 Billion Dollar vs. 13000 Billion Dollar

2010-08-04T15:53:00.021+07:00

If 380 billion dollar debt burden could smash Greece's economy into pieces, then will the United States -with 13 trillion dollar debt under its belt- share the same fate in the future?

Barack Obama could not sleep tight these days. The words of one of his economic advisers echo in his mind as he puts his head on his spongy pillow at night, “Alarming news, Mr. President: unemployment rate still relatively high, the threat of deflation still persists, and our economic recovery in overall is limping slowly in the path where China is running riot.”

That economic adviser pauses a while and finish his round of words with a massive blow, “I know that you have spent lots of money these days –but we really need to spend more.”

Spend more? Add more debts? Deep inside Obama’s heart he is surely yearning for the end of massive spending. He knows it, the Americans know it: it’s too much budget deficit already these days and the US debt has gone to a lethal number.

What a doom that Obama inherits. Bill Clinton may have long-sufferingly amassed the money in the mid 1990s, but two Texas cowboys with 'Bush' pedigree splurged it wildly –so wild that if there is anything left for Obama, the massive debt from Bush’s previous fondness of wars is all he’s got.

In Greece, the consequence of piling up debt proved to be fatal. And if even mercurial Gods in Olympus were unable to thwart the crisis; then should anyone remind the mortal Obama that this could be the right moment to stop spending and cut the budget deficit?

No, he should not and will not stop spending. During these hard times, flatlined economy like US need government spending more than anything else to galvanize the economy until it is completely back on the right track –even if that means lots of money poured in to the market with 13 trillion debt daunting behind as the consequences.

Hence if you are embroiled in a financial crisis where the threat of recession or depression is imminent, spending money or running a budget deficit policy is absolute necessity.

After all, maybe one should stop calling US as a liberal and lassez-faire nation from now on, as it is walking the path where the principles of free market and invisible hand are forgotten, and government intervention –such as government spending– matters more than ever.

Here are several lessons we can draw from Greece’s case-in-study and its discrepancy to US. First and foremost, comparing the 380 billion dollar Greece’s debt and 13 trillion dollar debt of the US is somewhat misleading. The United States may possess 40 times bigger debt than Greece, but you simply cannot compare the economy of superpower like US and what they have in Greece. The economy of US is big, and so big that you can have ten countries like Greece combined and in you will still have a smaller economy than the US.

Second, during the last few years Greece is like a zombie waiting his name to be called by angel of death; in 2010 its debt stood at the highest level of 113% of its own GDP and thus it was no surprise when it eventually went bankrupt. But United States is not a dead man walking –at least not yet. Even though its current debt is tenfold compared to Greece’s, that 13-trillion-debt is actually ‘still’ around 90% of its GDP and at least Barack Obama can still breathe for several years before its GDP-to-debt ratio indicator flashes red.

And the third party to blame for Greece’s crisis is Euro. Because of the single currency policy, which Greece shared with other 15 European countries, the country did not have the independency of its economic policies and could not implement essential monetary actions to jolt its economy during the turmoil. The US dollar, by contrast, is a widely accepted currency around the world and becomes an enormous advantage for US who prints it.

Yet no matter how different the US to Greece at the moment; debt is still debt. The bigger your debt is, the higher the interest you will have to pay in the future; which literally means more and more burden your child and grandchild will share. It very much resembles nurturing a time bomb whose blast is just in the offing.

Obama’s spending spree is likely to continue as major solution to salvage the economy. But the question is: how long can he pour the money before the pump eventually runs dry?

It’s 93% of GDP-to-debt ratio which United States has at the moment. The future looks bleak for the Chicago kid.

The National Police: Just How Bad Can They Get?

2010-07-21T21:27:00.007+07:00

The 1998 movie titling The Negotiator tells a story about denigrated police lieutenant (Samuel L. Jackson) who is framed by a top-brass police officer because of his awareness of money embezzlement case, which involves many police officers in Chicago Police Department.

In the efforts of proving his innocence and unfolding the police corruption case, he storms the police building and holds several police officers and civilians as his hostage. However, the hostages are successfully rescued in the end, with Jackson impressively fleeing the crime scene.

“You must have some idea,” said a police officer who investigates one of the civilian hostages to look for clue where Jackson is going.

“I’d really like to help, but my lips are sealed,” the civilian replied. “Frankly I don’t trust any of you; I’m very disappointed in all of you.”

After listening to those lines, I was sure that many Indonesians would agree that the setting of the movie will be more suitable if it takes place in one of the departments in Indonesia’s National Police, instead of Chicago Police Department in US.

I imagine a situation where the National Police really sues a journalist from Tempo magazine and that journalist runs away and becomes fugitive –if I know something about his existence and I were ever investigated, I would utter exactly the same words as that civilian from the movie does.

Observing the National Police’s attitude at the moment, it is not difficult to identify why it is currently considered as the least admired institution in Indonesia. In addition to its notorious status as the most corrupt organization in the country, perhaps it can also be perceived as one of the worst government institutions when it comes to the commitment to serve the people.

Truthfully speaking, I hate everything that has to be dealt with the police –a sentiment which most Indonesians could also feel at the moment.

In fact, I can still genuinely remember when I had to give money to bribe a police officer to pass the driving license test. During my previous attempts, I insisted to take the test without giving any bribe which led me to fail the test with no reason explained by the police officer in charge.

Or when I accompanied my friend, who had his car stolen, and we had to visit the police office four times just to have an available police officer who can handle the paperwork for the car’s insurance.

“Please come again next time, I’m busy here,” said one of the police officers during our third visit. “The other [two police officers in this department] should handle you, but my partner has not returned yet from his holiday and the other one is sleeping and cannot be disturbed,” he said while pointing to the other police officer who innocently slept next to him during his office hours.

And regarding the recent fallout of the bulky bank accounts of several police generals, in reality few were shocked when such case was divulged. If we look around in the neighborhood; the presence of police generals with 9 million rupiah salary (that includes, according to Tempo magazine, their various grants and allowances) yet still manage to possess luxurious houses and vehicles has not been a thing worth a news–it is a well-known scandal among Indonesians.

The National Police, however, was enraged and almost sued Tempo as they think the magazine, in the police’s ridiculous perspective, compared the members of the institution with bunch of pigs in its cover. Soon as the case made public, Molotov cocktails were hurled to Tempo office and, not so long afterwards, an Indonesia Corruption Watch (ICW) activist was beaten and hurried to hospital.

By reacting in such manner, they even proved that the allegation was true; if the facts revealed were false and those police generals were clean or earn the money legally, then why bothered and wasted so much energy responding to the publication in such childish and frantic fashion?

And those rich generals of the National Police, who have been flustered because of the exposure of this hefty bank account case, are the only ones who have the motive to do such violent acts.

Of course, the police generals will not admit to be ones who are responsible for those violent acts, and the National Police will argue that this is just another political plan or slander plot to taint their image in public. But think the logic of their argument: what’s the use of tainting the image of an institution whose reputation among the public has already been at its worst?

After all these disgraces, if those rich police generals still reject the public’s accusations and refuse external interventions in probing their institution; perhaps the best thing that they can do is to trace the source of the money from which their family buy their daily food, and reflect themselves in a mirror.

There are only three ways a person can become exceptionally rich but not from his own salary. First is by becoming entrepreneur who builds his own business, second is by becoming investor who plays and speculates in financial instruments like stocks and bonds, and third is, well, by becoming corruptor who receives illegal bribes and embezzles money.

If those top-brass police officers are neither a successful entrepreneur nor a witty investor, then perhaps the third category fits them best.

Whether they like it or not, so far it seems to be the best explanation to the baffled Indonesians who are currently wondering how they can transform their 9-million-rupiah monthly salary into multi-billion-rupiah bank account.

This article was published in The Jakarta Post on Wednesday, July 21 2010

The England's Enigma

2010-06-28T19:36:00.005+07:00

THE ITALIAN JOB. England's manager Fabio Capello is seen here walking out from the stadium after the 1-4 crushing defeat against Germany in 2010 World Cup. The Italian tactician disappoints his employer, the England Football Association, which has paid him US$ 9,000,000 per year only to see England eliminated in the second round.

Before the World Cup 2010 kicked off, renowned investment bank J.P. Morgan published a 69-page analysis on which nation will bring home the coveted trophy in South Africa. To predict the result of the upcoming World Cup, the analysis applies Quant economic models –a mathematical method which is occasionally used by financial services firms like J.P Morgan to predict stock returns.

The analysis was impressive –so impressive that to predict the final outcome, it includes many variables like market valuation (bookmakers’ odds), FIFA ranking, historical results, J.P Morgan Team Strength Indicator, and even calculates the possibility of each nation to emerge as winner in a penalty shootout if it ever encounters such situation in the knockout phase.

Would you be surprised if based on J.P Morgan’s thorough and comprehensive calculations, they conclude that England will be the World Cup’s champions?

The conclusion of the analysis was hardly surprising considering what the Italian Fabio Capello has in its armory. England, just like old times, enters every major tournament as favorite but always failed to deliver their true potential in field.

England boasting one of the world’s finest marksmen in the shoes of Wayne Rooney, a 34-goal-a-season forward who was so lethal in the penalty box last season that his two-week absence because of injury was the main cause of Manchester United’s failure to lift the English Premiere League title for unprecedented fourth in succession.

Its midfield encompasses the likes of Steven Gerrard and Frank Lampard whose vast energy, endless determination, and goal-scoring prowess make them both irreplaceable and indispensable in their own club.

And if Brazil in 2006 was once famous for its “Fantastic Four” in Ronaldo, Ronaldinho, Kaka, and Adriano; England’s back-four of Glen Johnson, Ashley Cole, John Terry, and Rio Ferdinand (the last was unlucky to be injured for this World Cup) are no less than fantastic as they are inarguably among the best defenders in the world –in fact they are exactly what you need to prevent the most dangerous forwards, like those skillful Brazilians, from tearing your defense apart.

To put it in a nutshell, with those world-class players, England has perhaps the best ingredients every manager can blend in a team.

But there they are, headed to another early exit yet again and caused weeks of research done by J.P Morgan to become a laughing stock as they fail to fulfill such hopes. English football fans can only watch in dismay as the Germans merciless crushed a team filled with world-class players like Wayne Rooney and Steven Gerrard by 4-1 –the least expected score you would imagine from a match that pits two evenly-contested teams, and eternal archrivals, like Germany and England.

Some blame Capello’s stubbornness to strict to his musty 4-4-2 shape, while others blame the English press for being too cruel and giving too much pressure for the players themselves. But beware English people, you should stop looking backward and blaming things. In fact, the future of England national team is in jeopardy and that’s a more urgent problem that needs to be considered very seriously.

Without doubt, this is England’s last chance to mark its name in football’s biggest stage after their triumph in 1966. The statistics shows, however, that this is the oldest England squad ever compete in World Cup, and for the next major competition that England fancies to take part maybe Fabio Capello (it seems that he is likely to retain his position because of the lavish contract fees that England FA have to pay if they wish to terminate his contract) can learn one thing or two from his Italian colleague Marcelo Lippi.

Lippi should take most of the blame for Italy’s early exit in a relatively easy -if not easiest- group in South Africa, as the performance level of the likes of aged Andrea Pirlo and Fabio Cannavaro is no longer the same compared to four years ago, when then Lippi’s popularity as manager shot to stardom as he guided the calciopoli-plagued, golden-age Italians to their fourth World Cup title.

Considering the level of performance of Gerrard’s and Terry’s will possibly decline because of their age in the next European Cup and World Cup, Capello should learn from Lippi’s fault about how important a squad regeneration is.

With England’s golden generation getting older and English football club is getting used to throw foreign players instead of locals in the football field, England football fans may have to cope with the reality that in the future their team will be in a serious decline into a mediocre team.

English people should be wary. When those football fans see England's perfomances in the next World Cup in four or eight years to come, they must brace themselves if the three lions they once proudly support evolve into three pussycats.

Why Sri Mulyani Could be the Next President

2010-05-22T00:21:00.028+07:00

VOTE FOR VENDETTA. 2014 is payback time, during which this Iron Woman will set to bring Indonesia's bureaucratic reform to the next level and take her vengeance to those corrupt lawmakers and politicians.

Six years ago, Susilo Bambang Yudhoyono certainly could remember what it felt like being treated unfairly by his supervisor when he, apart from his position as Coordinating Minister of Political and Security Affairs under Megawati Soekarnoputri, was actually neither invited nor involved by her in several cabinet meetings concerning various political and security matters.

But for Yudhoyono, it seems that every cloud has its own silver lining –so does Megawati’s harsh treatment to him which eventually led to his resignation from his ministerial post on March 11 2004.

This is because in the end, it’s Yudhoyono who had the last laugh. Megawati’s decision to expel Yudhoyono from the other cabinet members –as well as the cruel words from Taufik Kiemas (Megawati’s husband), who added fuel to a fire and accused Yudhoyono of exaggerating things and being ‘too childish’– backfired and contributed to her loss in the presidential election to Yudhoyono at the same year.

In fact, Megawati’s story of how a president made the most of her authority to bully her own subordinate had without doubt helped Yudhoyono to win sympathy from many Indonesians; eventually leading him to win the presidential election and trounce Megawati by a wide margin.

What Indonesia had in the past is somewhat identical to the situation at present, where now finance minister Sri Mulyani Indrawati suddenly turns out to be a media-darling figure and draws sympathies from many Indonesians following her heroic role as the sacrificed bishop to save her king from his inconvenient position in the political chessboard.

For Sri Mulyani, it is worth noting that there were several cases besides Yudhoyono’s story above, particularly women, when someone rose to prominence and eventually ended up on top level in politics because she was able to gain sympathy of the people.

In Pakistan, the father of the legendary Benazir Bhutto was unjustly ousted from power by his political foe through a military coup and was sentenced to death. This later sparked a deep-rooted indignation among the Pakistanis which helped the Pakistan People Party, of which Benazir Bhutto was the chairperson, to gain massive support from the people.

Benazir Bhutto, who once headed finance ministry like Sri Mulyani, finally reached the pinnacle of her politics career when she took oath as the first and the only woman ever to become a prime minister in Pakistan.

The preceding tale was also similar to Megawati Soekarnoputri whose tear-jerking past helped her a lot to be recognized in Indonesia politics and won the sympathy of the people. Her father Soekarno, a national hero who proclaimed Indonesia’s independence, was exiled and sullied when Soeharto took over and Soekarno’s descendents, including Megawati, had to endure 32 years of oppression and tribulation from Soeharto and his cronies.

Prior to her seemingly reluctant move to World Bank, actually Sri Mulyani has drawn many sympathies already for her role of being the shield to the president himself during the fallout of Bank Century bailout, protecting Yudhoyono from the scorching political bullets while at the same time her own boss apparently was more interested in washing his hands clean on the subject.

Besides, Sri Mulyani was, without doubt, the person who deserves the largest share of the credit for Indonesia’s striking economic performance during the last financial crisis which, ironically, was the backbone of Yudhoyono’s victory in the last presidential election.

And now instead of protecting Sri Mulyani from the business and political rascals who have been unsettled by the bureaucratic reform which she initiated, Yudhoyono decided to forgo her and bow to the given pressure.

Fortunately, those cruel treatments of Yudhoyono’s to his meritorious finance minister may be a blessing in disguise for Sri Mulyani herself as well as many Indonesians who have been longing for a fearless, intellectual figure who has the capability and guts to become a president and reform Indonesia from the very top of the bureaucracy itself.

Thanks to the enormous exposure from the press –as well as numerous analysis and insights from high-profile intellectuals in various media–, in addition to the growing sympathies to Sri Mulyani her departure has also opened the eyes of many Indonesians about how brilliant this person actually was and how much she has done to Indonesia’s economy during her tenure as finance minister.

As an old saying goes, you never know what you get until it’s gone. It’s like when Michael Jackson passed away and, because of massive coverage from various types of information media all over the world, all of a sudden all music fans worldwide realized the fact that his contribution to the music industry had actually been so immense.

The difference is that Sri Mulyani is still alive and when she finishes her four-year term as World Bank’s managing director in 2014 and comes back to Indonesia as she has promised, she could be one of Indonesia’s highest profiles for our election during that year.

For Sri Mulyani, the moment could not be better. She is only 47 at present, and if she really wants to bid for presidential post in 2014, she will be 51.

If one still considers her to be too green to be a president, she still has a lot of time behind her back. If Sri Mulyani only runs as a vice-president candidate in 2014 then runs again for president five years later, then she is still 56 at 2019. And bidding at the age of 56 will put her still even younger than Prabowo Subianto, who ran at the age of 57 during the last presidential election and in fact was still the youngest among his counterparts.

One problem that emerges is Sri Mulyani is a well-known technocrat, and it is still questionable whether she possesses such political motivation to be a president –or even as a vice-president.

But Sri Mulyani should reflect to Michelle Bachelet, Chile’s first woman president, who was said to be initially hesitant to run for presidential post because she actually never possessed such ambition. In the end, due to the unprecedented surge on her popularity and pressure from her own supporters, she ultimately changed her mind and the rest that happened in Chile afterwards was history.

There is no doubt that Sri Mulyani’s recent popularity among Indonesians will definitely make political parties slaughtering each other to get her signature four years from now. And if at that time she is equipped with a decent political wheel, the spines of Indonesia’s corrupt businessmen and politicians will surely shiver like they never before.

The bureaucratic reform which Sri Mulyani spearheaded may suffer a temporary setback following her exodus to United States. But when she comes back here to run for a more strategic role to bring a broader scale of bureaucratic reform, she has more than enough ammunition already to get her revenge towards those corrupted evils who have colluded to kick her out from the country that she loves the most.

This article was published in Asia News Network on Tuesday, June 2 2010

Indonesia's Capital Inflow and the Downside Risks that Follow

2010-04-27T13:58:00.012+07:00

WARNING SIGNS. Soaring stock prices and rising Rupiah are outwitting you now; in fact an economic bubble is stealthy lurking behind the shadows because of the overcrowding capital inflows which have flooded Indonesia in recent weeks.

You are simply not a savvy foreign investor if, given current global economic situation, you overlook Indonesia as a place to invest your money.

Back then you used to have well-developed and industrialized countries in the table as your priority to invest because they, in reality, tended to be more secure compared to developing countries.

But while United States economic recovery is still beset with various obscurities, and European’s economic stability is disrupted by the debt-troubled PIGS economies (Portugal, Ireland / Italy, Greece, Spain), currently you may want to wait a little longer before you can be finally sure to invest your money there again.

This is the moment when you should start to notice that in the east, several Asian emerging economies can be considered as less risky places to invest as they are trouble-free and actually withstand the global financial crisis better than developed economies.

Indonesia is one of those economies, recording an impressive 4.5% economic growth during the crisis and has seen significant upgrading in its investment grade rating because of its imposing economic performance.

Besides, its economy is bolstered with political stability, violence-free democracy, and huge domestic market. In the midst of the financial storm which has left most economic frameworks in the world shattered, what Indonesia’s economy boasts in its disposal would surely make you and your fellow investor friends to turn heads.

Indeed, money is flowing in. The rise of demand for one country’s investments theoretically would lead to a higher demand for the currency of the country itself, and the unusually strong Rupiah these days, which surges to 30-month-high level to almost Rp. 9,000 per US Dollar, is a clear reflection of the rising number of foreign investors who have crammed the Indonesia’s market.

The problem is: when someone has too much money in his hands, sometimes it will engender more convoluted quandaries than he previously expects.

While many will perceive the improvement of Indonesia’s image in the eyes of the foreign investors is a good thing for Indonesia, actually policymakers should be wary about the long-run corollaries that can possibly occur when Indonesia is inundated with too much capital inflows.

The most important thing to bear in mind is that the stronger-than-ever Rupiah at the moment, unfortunately, may not make all Indonesians better-off.

For instance, just ask Indonesian exporters who surely have been monitoring the rapid rise of Rupiah in recent weeks with deep anxiety.

In fact, the too-strong Rupiah –whose rate moves in an unpredictable fashion, appreciating swiftly in such a short-period like what we have seen in recent weeks– will be a huge blow for them as Indonesian goods will be more expensive overseas and could eventually damage Indonesia’s exports as a whole.

Yet because of the excess amount of capital outflows, another problem like inflationary pressure is also lurking behind the shadow.

Too much capital inflow can stimulate a considerable rise in money supply and, eventually, inflation. The government could welcome capital inflow to the country, but if inflation’s presence on the economy goes unnoticed and largely ignored, inflation could nibble our economic growth and disrupt our economic development.

If it is already too little and too late and the inflation has soared, Paul Volcker, the former Federal Reserve chair, can be asked about how hard and costly it was he tried to trim down the inflation rate during his tenure.

In addition to the spat over the unusually strong Rupiah and the looming threat of inflation, it is also worth noting that the increasing demand for Indonesia’s investment has lead to yet another problem: the current swell of the price for Indonesian shares and assets to such abnormally level, which emerges concern whether an economic bubble is just around the corner.

For many economists, the most feared weapon that an economic bubble possesses inside its arsenal is its ability to swell and burst almost any time and in such an impulsive way –and very often when it truly bursts, it generates a devastating repercussion. The burst of the housing bubble in the mid-2008 in the United States, in fact, was deemed by many as the key trigger to the worst financial crisis that Americans have ever seen in almost a century.

And economists hate to deal with economic bubble very much: knowing the fact that the term that economists keen to pay heed the most is always ‘stability’; economic bubble, in contrast, has always been notorious for its ‘volatility’.

Economic bubble can possibly emerge because of the fact that the largest share of Indonesia’s massive capital inflow these days, unfortunately, is dominated by short-term investment or hot money.

It is an ‘easy-come, easy-go’ investment: when those investors with their hot-money find more attractive countries to invest, they will simply cash in their chips, pulling their investments out from Indonesia which will cause the once-soaring price of investments and assets to freefall all of a sudden.

With such ominous threat from the burst of the investments and assets bubble, economists’ fear about Indonesia’s excessive number of capital inflows is indeed understandable.

Some may rejoice current news about the massive number of new investors which deluge the country, the insurgence of Rupiah, or the soaring stocks prices in recent weeks; but when we look through the other side of the prism, they actually also leave economists and policymakers in conundrum.

This is basically because failing to solve this excessive capital inflows problem in the short-run may likely lead to bigger problems in the economy, which will require a higher sterilization costs in the future and impede the long-term plan of Indonesia’s economic expansion.

What seems to be a good thing, in actual fact, can also mean exactly the opposite –just like the dilemma faced by Indonesia because of its excessive amount of capital inflows which is seemingly good for Indonesia’s economy, but in actual fact hides perilous threats underneath.

This article was published in The Jakarta Post on Tuesday, April 27 2010

Climate Change: The Failure of Reaching the Consensus

2010-04-03T09:50:00.024+07:00

NOWHERE TO HIDE. Thanks to human's deeds now it is just a matter of time before increasing global temperature and thawing ices cause animals, like this Polar Bear, to be left with almost no place to live.

During the Copenhagen Summit, no common ground was established and the end result of the conference was a shocking loss for all environmentalists. The expectations from the summit is to see whether if countries leaders who set their foot at Copenhagen can assemble specific numbers of carbon emission cut or anything necessary to solve the climate change problem. In such predictable end, the output from the conference turned into zilch, which left many people wonder: if there was no tangible outcome generated from the summit itself, then why wasting time being at Copenhagen anyway?
Few were surprised when those conferences in Copenhagen –as well as at Kyoto or Bali– failed to deliver a solid way out from the climate change issue. Thanks to mankind deeds now the earth is getting sicker. The doomsday’s sign is becoming clearer as global temperature is becoming hotter, yet human beings –who are considered as the most responsible party for the whole problem–stand still and do almost nothing to evade the looming catastrophe.
Also, efforts from countries all over the world were always considered courteousness and there was actually no such thing as tangible actions from them to cure mother earth. World leaders who attended such conferences (which were deemed by them as integrated efforts to fix the climate change problem) walked away from the conferences with huge expectations on their shoulders yet did almost nothing at home. We must accept a bitter fact that so-called integrated endeavour from countries all over the world to fix the situation, in fact, is still yet to be defined.
Indeed, there is still clash of interests among both parties involved. On one hand, environmentalists argue that finding a way out from the hotter-than-ever earth is necessary before the situation becoming any worse in the long run. The ending of the story of our earth and all human beings, of course, will be scary if that happens. But the policymakers, especially those who currently run countries with booming industries like China, still observes things in the short-run as they think that strict regulations, as carbon emission limitation, will disrupt their industries and eventually hamper the massive surge of their economic growth.
This is the decade which will be best remembered by the story of how developing countries are dominating the world’s economy. Economy in China and India are growing at unprecedented rate, and if the condition remains unchanged, it is only a matter of time before they take over the lead from developed countries like United States and United Kingdom. The rise of China –and other developing countries as well– comes with a predictable repercussion: as the economy surges, so does the carbon emission which it generates from their booming industries. It is, indeed, an absolutely distressing fact for the environmentalists.

When great power is not always followed by great responsibility
When the economy of United States grew rapid in the mid-90s (thanks to the scrumptious blend of economic policies from Bill Clinton and Alan Greenspan), the country drew many criticisms from all over the world for the massive pollution it generated as well as its ignorance in the environmental issues. By the end of 2000, United States generated 24% of the world emission, making them the world’s largest polluter at that time.
Most of the questions pointed to United States’ government simply were why it can be so unaware of the environmental problem amid the fact that it has more than enough power to help reducing the emission which it produced. Many can understand if developing countries, who have insufficient funds to apply environmental-friendly technologies to reduce carbon emission, was lagging behind on the effort of tackling the environmental issue. But people wondered why it can occur in United States, a well-developed country which was deemed as one of the economic superpowers during that period.

Yet what happens today is China, not United States, who is actually making headlines on newspapers like Wall Street Journal or Financial Times. Today’s generation are the beholders of how China is pushing very hard to overtake United States as the new economic superpower: its economy is growing with a seemingly unstoppable rate, and it seems only economic overheating can stop its economy from growing as even the financial woes of 2008 could not curb it.
But as China’s economy grows, so does its carbon emission –or to put it in a better way: its ignorance to the environmental issue. According to Netherlands Environmental Assessment Agency, in 2007 the soaring economy of the Chinese saw their carbon dioxide pollution to swell to the level of 24%, while United States is trailing behind at the second place with the level of 22%, two percent adrift behind the new champion.
In various matters like the olympics and the economy China has been breathing on United States’ neck for years and ready to overtake it any time, but in terms of carbon emission production currently China has become the new leader in the pack, successfully overtaking the US in 2005. Massive growth of economy in China yields not only rising GDP but also an increase in carbon emission production, which lately has been deemed as responsible for environmentalists’ resentment towards the country. India, according to the Energy Information Administration, is also predicted to have significant growth rate of carbon emission over the next 20 years. According to the Energy Information Administration's Emissions of Greenhouse Gases in the United States 2004, carbon emissions are expected to surge in Asia over the next 20 years, and based on the same report, the emerging markets will have the largest growth rate of carbon emission over the same period of time.

Environmentalists vs. Industrialists: The clash of the convoluted interests

Source: Energy International Agency

This 2007 data shown clearly that China, India, South Korea, and Australia (countries that are involved in the ASEAN free trade treaty) can become vulnerable preys for environmentalists’ condemnation as they go well within the environmentalists’ shooting range because of their carbon emission numbers. In addition, the ASEAN free trade treaty will intensify their trade activities as well as their industries further –and thanks to the ASEAN’s zero-tariff policy as well, those countries will see their industries rising to an unforeseen level and it is very likely they will be more ignorant towards the carbon emission which they generate.

Led by BRIC Countries: Brazil, Russia, India and China, the economies of emerging markets will be growing significantly which is indicated by their staggering number of GDP growth. So, if there is question asking whether economies activities are the major cause of carbon emission or not, the answer will be mostly yes since it means the use of fuel for production activities and the consumption of products which are the major sources of carbon emission.

And f the original purpose of the installment of the Kyoto Protocol was to reduce the global carbon emission, then we can say that it fails to fulfill the initial expectation. Based on our present situation we can see that –irrespective of the limitation from Kyoto Protocol– the world has seen a rise in carbon emission numbers, which are not only driven by developed countries such as United States and European Countries but also emerging economies like China and India, who have seen a considerable increase in the global emission they produce.

The problem of climate change is trapped in a difficult deadlock and therefore we might well ask whether there is a key or not to break this lingering standstill. Looking at how the world progresses at the moment, it is clear that so far we simply have not done anything. The major difficulties in overcoming this unsolved issue is that many countries, especially developing countries with massive growth like China, fear that the limitation of gas emission will decrease industries’ efficiency and eventually engender a slower economic growth.

Today, environmentalists are like cats on the hot bricks –and what was shown by our carbon emission number we have at the moment may make their blood runs even colder. The earth currently is in a terrible health and the signs of doomsday caused by global warming are becoming more apparent. As if as An Inconvenient Truth movie with its various signs of imminent armageddon are not enough, the cumulative number of world emission continues to surge for years and, unfortunately, it shows no sign of stopping for years to come.

This article was part of the 20-page paper presented at Young Economists' Convention 2010 in De La Salle University, Manila, Philippines. The paper, titling "The Integration of ASEAN and Taking Advantage of the ASEAN Free Trade in Tackling Climate Change", was the first-prize winner in the competition.

Building Integrity of Indonesia's Future Generations

2010-03-21T12:47:00.009+07:00

When my father was defiant to throw me to study at Kanisius Senior High School, at first I just could not comprehend his seemingly confounding decision. Despite realizing the fact that I will study in a Catholic school while actually he had struggled so hard to build an obedient Muslim environment in my family, or knowing that both he and my mother must take turns to wake up very early in the morning to drive me to school (it was located about 20 kilometers from my house); he stood firm on his decision. “The school will shape your mindset,” he argued.

During my three-year high school times there, in fact it did not take as long as three years for his argument to be proved dead right. Inside I discovered that the school was very strict in various matters, particularly in terms of its commitment to produce Indonesia’s younger generations with honest character, which can be considered somewhat hard to find these days.

And it was somewhat surprising how the school takes this simple matter very seriously. I was astounded the moment I found out that the all-boys school has one major rule for its students: that every student who is caught up in the act of cheating, beyond any reasonable doubt, will be shown the door out from the school.

The rule was not mere words. It was three weeks before the national exam, and the school was not so lenient when two of my friends –who both were third-year students at that time–, were caught red-handed when cheating during the class. As the consequence, they had to undergo the agony of dropping out from school as because of their wrongdoing.

After I graduated from high school and enter a whole new environment in university, I realized that unfortunately not everyone in Indonesia is on the same frame of mind. When I was still in my early sophomore year in the university, one of my peers was very surprised on how I could score so high on the national exam without cheating.

“I wonder how you guys achieved an almost-perfect score on national exam like that without bocoran soal (test’s answers). I simply wouldn’t even have passed the national exam if I were you,” he said.

“Back then, I and most of my friends in my high school chip in together to pay millions to insider in the education ministry, thus we can get the bocoran soal and very much relied on that to pass the national exam.”

That’s not the only one. While many were surprised by plagiarism cases that have been dominating newspapers’ headlines in recent weeks, yet for me the news was far from shocking. In actual fact, even here in one of the best universities in Indonesia, students who just do a copy-paste job from the internet for their tasks and conduct such act of plagiarism can still be found.

We can see that dishonesty practices, as they have always been, can be considered custom entrenched in Indonesia. Eventually as more and more people get accustomed to it, such ignominy turns out to be something rational thing to do: since everyone does thing the same way, it’s the people who don’t do it who will be considered wrong among their society.

As I grow up and can see Indonesia in a bigger picture, only now I can understand why my high school decided to pay intense attention to the word of “honesty” on its foundation of learning. For too long various dishonesty conducts, such as corruption, have been the root of evil that hampers Indonesia from reaching its full potential. While Indonesia inherits the land of rich natural resources which makes foreigners to see us with full envy, very frequent many of the resources are utilized to fulfill someone’s greed rather than the interest of this nation as a whole. Corruption practice like that, unfortunately, flourishes very well here in Indonesia.

Every student must be taught that deceitful things like cheating and plagiarism are the most disgraceful thing to be put into practice as it can become the origin of future corruption acts. Such mentality, therefore, should be planted in the mind of all Indonesia’s younger generations from the very beginning of their development.

The future of one nation lies in the hands of its younger generations, and we ought to invest in our younger generations if we want to fulfill our dream of seeing this nation to stride forward. Without doubt, in the future Indonesia needs leaders and government officials who are equipped by not only intellectual aptitude, but also integrity. And yes we really need to start thinking about implementing strict policies when it comes to the subject of reforming the mindset and mentality of our younger generations.

The tangible solution is clear: someone needs to do something to fix Indonesia deep from the root of the problem itself. Perhaps that was the thing which crossed into the mind of my high school’s executives when they established such stern rule; or what exactly my father thought by the time he insisted on putting me to study there.

This article was published in The Jakarta Post on Saturday, March 6 2010

Why Bank Century Bailout was the Right Decision

2010-01-19T09:45:00.014+07:00

HIGH-STAKE DISCUSSION. Finance Minister Sri Mulyani Indrawati and Vice-President Boediono are trapped in the middle of the Bank Century bailout fray, with House of Representatives inquiry team ceaselessly firing them using rifles loaded with political motives bullet.

Imagine yourself being an experienced doctor who acts as the head of a hospital which, because of one mistreatment or two that someone did in the past, is on the brink of a crisis and people don’t seem to put faith in your hospital as they were used to. Just last year you were addressed by the hospital’s directors about the importance of doing what is necessary to prevent the crisis from becoming any worse.

In this situation, you simply realize that another mistreatment or death of a patient will trigger a catastrophic crisis of confidence to the hospital. People around the city will lose faith in the hospital and will never come for treatment anymore. Your own patients can also move away to another hospital. Eventually, as the hospital loses profit and goes under, the worst thing that could possibly happen is your workplace will go bust and you will ended up derided by the hospital’s directors for your lack of competence in handling the hospital’s management.

You can only hope that you will not be tangled in such circumstances –yet what happens next doesn’t really align with that expectation of yours. One day a nurse runs all the way through the hospital alley to your office to bring you urgent news that a male patient is dying and you need to make a swift decision about his treatment. The nurse presents you all the options available as well as her advice:

You can cure him with a remedy. Unfortunately after diagnosing his symptoms, the price of the proposed remedy is astronomical since it is worth Rp. 6.6 trillion and, because of some hospital’s insurance policy, it is the hospital not the patient who has to pay for the whole treatment.
You can just let him dead. But the nurse reminds you that the whole hospital is overwhelmed with crisis of confidence at the moment and if you let him dead, there is a possibility that no one will come to your hospital anymore and patients inside the hospital are likely to move away to other hospital too. Choosing this option will save Rp. 6.7 trillion, but puts approximately Rp. 1,900 trillion of hospital money at risk.
You can reduce the impact of the crisis of confidence by applying blanket guarantee –a hospital policy which ensures the life of all patients inside the hospital–, and then let the patient dead. Unfortunately the nurse informs you that the vice-executive director of the hospital is renowned as a great opposition of a blanket guarantee policy. This option is simply not feasible since he will surely overrule the policy if it is to be implemented.

The doctor in this story, Sri Mulyani Indrawati, ended up choosing the first option among the three options available. And she, with the advice of the nurse (Boediono), eventually decided to inject a lavish remedy worth of Rp. 6.7 trillion in the form of bank bailout to the patient; Robert Tantular and his ailing Bank Century. One year afterwards, instead of thanking her of rescuing the hospital from collapsing, the hospital’s directors (the House of Representatives) furiously point their fingers on she and her partner Boediono as they think the costly remedy was not actually necessary.

Rather than recognized as heroes who secured Rp. 1,900 trillion of hospital money, both the doctor and the nurse is considered as the perpetrators who cost the hospital to suffer a great loss of Rp. 6.7 trillion. The hospital’s directors are also in the notion that the theory of deeming the patient’s death will generate greater loss to the hospital was completely baseless, while both the doctor and the nurse think otherwise.

Now who’s right and who’s wrong?

The lingering debate of the Bank Century bailout is always about whether the bank poses a systemic threat or not if it goes broke. Initially considered as a necessary policy to be implemented at the moment when financial crisis looms, the bailout later turns into one complex twist of controversy. Many people argue that both the doctor and the nurse, as depicted in the hospital analogy, should have taken the second option and let the patient dead instead of giving him such costly remedy.

The fact that even Sri Mulyani and Boediono could not present any solid proof whether the collapse of Bank Century will cause bank rush among Indonesian depositors –whose money in the financial system is accumulated in the level of Rp. 1,900 trillion– is unassailable. The calculation of the possibility of possible crash in Indonesia’s financial system, however, comes mostly from the intuition of both those technocrats themselves.

But, because people’s physiological level is difficult to measure (especially during crisis period as people become more volatile), there is also no solid proof that such panic and bank rush will not happen. In fact, the argument of saying that ‘Bank Century will not pose a systemic threat’ comes also from the intuition and somewhat one-dimensional analysis of the critics and oppositions of the Rp. 6.7 trillion bailout.

In economics, the expression of every argument has to be always supported with solid data –so do every argument in the debate to judge whether Bank Century bailout is necessary or not for Indonesia’s economy. So far, the only solid data which we have now is Indonesia, with various economic policies that Sri Mulyani and Boediono implemented during last year’s hard times (including their decision to give bailout to Bank Century), successfully managed to weather a financial crisis that see many countries’ economies slumping to their lowest level.

Thus, based on the data of our various bright macroeconomic indicators we have at the moment, we have absolutely no proof that the government’s decision to hand bailout to Bank Century was a wrong one.

And when you argue that something is wrong but you cannot prove it, you cannot really say that it is wrong.

As no one have the proof indicating what they did was wrong, Sri Mulyani and Boediono surely did not deserve what they were encountering few days ago. Besides, up to now they have always done things right: it is all because of their economic proficiency and decisive actions that our economy is still standing tall at the time when most of the economies in the world are engulfed in a calamitous recession. Instead of receiving blistering words from the House members and several universities’ so-called activists, in fact Indonesians should have given them credit and praise for all of their hard work.

If only Bank Century inquiry committee members –as well as university students who humiliated Sri Mulyani and Boediono by referring them as thieves– really understand what situation and trade-off that these policymakers were into at that time. Talk is cheap, but if they were the decision makers, would those university students and Bank Century inquiry committee members have the guts to salvage Rp. 6.7 trillion with the risk of putting Rp. 1,900 trillion in jeopardy and wrecking the entire of Indonesia’s economic framework?

And before they deliver their answer, it is better to remind them that when they make the decision, it’s the life of 200 million Indonesians which they put at stake.

This article was published in The Jakarta Post on Tuesday, January 19 2009

Time for the Young to Take Over

2010-01-01T22:26:00.010+07:00

THE YEAR OF THE PRODIGY. Last year of 2009 saw prolific young men rising to the next level and taking over the lead from the older generations. (From top left, clockwise) Anies Baswedan, Gumilar Somantri, Firmanzah, Barack Obama, Jonathan Favreau, and Josep Guardiola.

Persons who are in charge of top-level management positions are usually on the age of 50s or 60s. But few months ago my university friends and I were covered in disbelief as we found out that our newly-elected dean, impressively, did not follow suit. Still at the age of only 33, Pak Firmanzah rose against the seemingly impossible odds to beat other more experienced candidates to become the youngest-ever dean in the history of University of Indonesia’s Faculty of Economics (FEUI).

Because of his young age, at first many consider him as green and lacking on experience to lead the faculty –but so far he has proven the critics wrong. It has only been eight months since Pak Fiz –that’s how we usually call him– took charge as our new dean, but his hard-working attitude and attentive leadership style have made him a popular figure among us FEUI students.

My respected dean is not alone in this case. Recently such occurrence can no longer be considered as unlikely; up to this day we have seen a significant increase in number of younger people who have been given huge responsibility to hold an important role in high level –and so far they have proven to us that they can perform the given task as well as the older and more experienced generation does.

Before Firmanzah, In Indonesia the predecessor includes the person to whom he has to report now, Gumilar Rusliwa Soemantri, who became University of Indonesia’s rector at the age of only 44. UI sees a significant increase of its THES QS universities rank from 287^th to 201^st this year among 4000 universities which were evaluated, thanks to various internal reforms in UI that were encouraged by Gumilar himself.

Even more impressive is the achievement of Anies Baswedan, the rector of Paramadina University whose intellect earned him a place as one of the members of the so-called “Team 8”. Anies Baswedan was merely 38 years old when he was appointed as the head of the University and despite his relatively young age today he is highly regarded as one of the brightest political analysts in Indonesia.

Young people are rising and we can see that this phenomenon does happen in almost every sector in the world. In sports, this year many football pundits heaped praises on Josep Guardiola’s managerial ability as he rose to become the youngest UEFA Champions League winning manager ever. Only in his first season at the club, Guardiola, the former Spanish international who just turned 38 this year, successfully lead his star-studded FC Barcelona team to win the competition, having beaten the veteran 67-year old Sir Alex Ferguson and his Manchester United team in the final.

In world politics, perhaps this year will be best remembered because of the historic victory of Barack Obama, who, despite the robust challenge by far older and more experienced persons like John McCain and Hillary Clinton during the election, has been able to win the US presidential election and become the fifth-youngest man in the US history to occupy the oval office.

Barack Obama seems to read the wind as he also trusted several of his key posts to be given to the younger colleague of his. More experienced economist like the 66-year-old Joseph Stiglitz was left out in the cold and Obama decided to choose younger faces like 48-year-old Timothy Geithner as his Treasury Secretary or 40-year-old Peter Orzag as his Director of the Office of Management and Budget instead. Obama also appointed a young writing-prodigy named Jonathan Favreau, 28, as his Director of Speechwriting –and a brilliant speech deliverer and best-seller book author like Barack Obama definitely doesn’t trust ordinary man in doing that task, which allows the person to have a massive authority in controlling his words.

But unfortunately we did not have much choice during the last presidential election. Susilo Bambang Yudhoyono certainly represented the older generation when he took oath as our president in the age of 60, and the same can also be said to his vice-president Boediono who was 67. Other candidates are very much the same and the youngest among them all is vice-president candidate Prabowo Subianto who, despite all of his youthful spirit and stirring speeches which he brought to us, was actually 57 and surely he will be a bit long in the tooth if he is to represent younger generation in the 2014 election.

Indonesia is lagging behind on the regeneration and this becomes a millstone around our neck today; you can just look to the last presidential election’s candidates or SBY’s ministerial cabinet formation and you will realize that both are still dominated by stale and old-timer politicians. We may have just finished our presidential election this year, but as we usher to the year of 2010 and are gearing up to the next 2014 election we might well start considering about rejuvenation.

Yes, the bitter fact is that Indonesia still highly depends to the older generation up to present –public are fed up staring at the same old faces and are ravenous for having younger generations to replace them.

In this year of 2009, people like Firmanzah, Gumilar Rusliwa Soemantri, Anies Baswedan, Barack Obama, and Josep Guardiola have proven to us that young people are up against the challenge. In the next year of 2010, will there be more number of young people who emerge at various top levels just like last year? Or will this be the year of revelation for someone waiting in the wings to bring about the rejuvenation in Indonesia’s 2014 election?

This article was part of the limited edition copy of The Jakarta Post special report; Review 2009 and Outlook 2010