Mari Pangestu: The Champion of Free Trade - The President Post

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B8 July 12, 2010 The President Post www.thepresidentpost.com Pictorial Events Breakfast Dialogue at The Financial Club Jakarta Photo: The President Post/Nandi Nanti The Financial Club held a Breakfast Dialogue on June 22, featuring Prof Dr Roy Sembel, MBA, professor in finance, Dean of Business School and Director of Graduate Programs UPH, who spoke on “Unconventional Strategy Under Uncertainty”, and Sari Wahyuni, PhD, Editor in Chief of The South East Asian Journal of Management Faculty of Economics, University of Indonesia, who presented “How to Increase Company Competitiveness in a Global Crisis”. Present on the occasion were prominent businessmen and professionals, among others Pandji Choesin, Krisnaraga Syarfuan, Bunardy Limanto, Leo Tanubrata, Lukman Arief, Irwan Habsjah, Pri Notowidigdo, Mike Nicholson, Karan Singh, and Sujuno Respati. USINDO Event Dr. Ir. Kuntoro Mangkusubroto, Head of the Presidential Unit on Development Monitoring and Oversight (UKP-PPP), led a stimulting discussion on June 25 at the Aryaduta Hotel Jakarta after he delivered his address “Ushering in Reform in Indonesia” and shared his experiences in instituting change and monitoring the Cabinet, and in ensuring delivery of its far-reaching development goals. The Opening of ASEAN Centre at Moscow State Institute of International Relations The ASEAN Centre was inaugurated in Moscow on June 15, 2010, in a ceremony attended by Minister of Foreign Affairs of the Russian Federation Sergey V. Lavrov, Deputy General Secretary of ASE- AN Sayakane Sisouvong, Rector of the Moscow State Institute of International Relations (MGIMO) Anatoly Torkunov, senior officials of the Russian foreign ministry and ambassadors of ASEAN countries accredited to Russia. Photo: The President Post/Nandi Nanti In his address, Lavrov pointed out that the project takes on a special importance in the context of the upcoming 2nd Russia-ASEAN Summit in Hanoi, Vietnam, this autumn. He said the Centre is set to become a successful platform for wide-ranging discussions on issues of development and multi-dimensional cooperation between Russia and the countries of Southeast Asia. “It will also help our societies Sergey V. Lavrov, Minister of Foreign Affairs of the Russian Federation. to learn more about each other,” he said. The activities of the Centre include organizing and holding joint academic and practical conferences, seminars, lectures and researches, and providing assistance in student exchanges and information work. Dr. Victor V. Sumsky, a renowned Russian specialist in Southeast Asia, was appointed as the Director of the Centre. The project is supported by the Russia-ASEAN Dialogue Partnership Financial Fund (DPFF), into which Russia makes regular voluntary payments from the federal state budget. Indonesia Australia Business Council (IABC) A farewell party for outgoing Australian Ambassador Bill Farmer and Elannie Farmer was held and attended by Australian Embassy staff members, Indonesian politicians and businessmen and diplomats from several countries. The CEO Reference The TV Program of Intellectual Business Community presented Dr. Mochtar Riady founder of Mochtar Riady Institute for Nanotechnology and Mochtar Riady Comprehensive Cancer Centre with host Dr. Bayu Prawira Hie. Present at the discussion among others were Ali Basyah Suryo, Alex Ibarat, Johnwei, Bunardy Limanto, Mochtar Riady, Dr. Boenjamin Setiawan, Dr. Bayu Prawira Hie, Sariputra Sumana Hawaiian Style Gathering A Hawaiian-style gathering was held by the Mercantile Athletic Club with the purpose of establishing a rapport among its members. Dinner, dancing competition, lucky draw & entertainment were the main features of the event, which was also attended by businessmen, representatives of embassies and many other expatriates. Among those present were Simin Bell, Sandra Tjahyakusuma, Paul Griffith, Nick Dyer, Sutara Martadisastra, FX Dharmasetiawan, Lily Leman, Ita Basuki Smith, Tety Artatie, Luc St-amour, Mira Marini, Frank Perry , Arief Faisal, and others.
The President Post Automotive Display until August 12, 2010 /// N0. 14 www.thepresidentpost.com SECTION C Automobile Industry Running in High Gear Despite Traffic Jams By Alci Tamesa In fact, according to Gaikindo’s projections, car production in Indonesia will continue to soar through 2015 in tandem with a steadily rising demand and rapid expansion of the size of middle and upper class segments of our society. The history of Indonesia’s automobile industry began in 1894 when a dealer named John C. Potter brought in a Benz Phaeton car for the Sultan of Solo. Potter was the first car dealer ever recorded in Indonesian history. After he’d brought the car in, more civilian cars entered the country to be used by Dutch and Indonesian public figures. According to a survey by Augustina Kurniasih from Mercu Buana University in Jakarta, all these cars were traded by foreigners. Only in 1938 did indigenous businesspersons have a chance to enter the business. RP Soenaryo Gondokoesoemo stepped in as an agent of General Motors in Yogyakarta that year, followed by Hasjim Ning in the 1950s, William Soeryadjaya, Syarnoebi Said and Soebronto Laras in the 1960s, 1970s and 1980s respectively. During those periods, the domestic automobile market was dominated by General Motors products under the brand of Chevrolet. Japanese brands entered the market in the late 1950s when domestic demand began to soar. The domestic automobile industry began to flourish in the (X 1000 unit) 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 Indonesian Automotive Market & Forecast 1997-2015 by GAIKINDO 387 58 Ô97 Ô98 Ô99 Ô00 Ô01 Ô02 Ô03 Ô04 Ô05 Ô06 Ô07 Ô08 Ô09 Ô10 Ô11 Ô12 Ô13 Ô14 Ô15 Political & Economic Crisis late 1970s when the government issued tough restrictions on importation of completely builtup cars. By 1976 the manufacturing industry had begun to thrive when the government enforced the policy obliging industry to use locally-made automobile components. As of late 1990s the government began to tax knockeddown car imports based on the extent to which locally made components were used. The aim 94 301 300 General Election 1999-2004 318 General Election 2004-2009 483 354 534 Domestic Fuel Price Increase in March & October 319 433 604 Global Economic Crisis 483 was to encourage the growth of domestic component industry. This policy has proven useful in the sense that Indonesia is now a good source of such automobile components as storage batteries, tires, suspension engines, car window panes, and various other products made by assembling units across the country. In 1996, then president Soeharto issued a presidential decree which instructed the Minister of 600 560 680 620 780 700 890 820 1,050 920 General Election 2009-2014 New Taxation Policy 1,250 OPT 1,000 NOR Industry and Trade, Minister of Finance and Chairman of Investment Coordinating Board to formulate a strategy for developing what was later known as Indonesia’s “National Car.” The aim was to have a car factory built, run and fully owned by Indonesian business entities which would produce their cars inside Indonesian territory. Under this plan, 20% of the national car’s components would be made locally in the first year, 40% in the second year, and 60% in the third year. This decree was strengthened by a government ordinance that exempted importers from luxury goods tax. PT Timor Putra Nasional (TPN) got the privilege to run the show to produce Timor sedans but this was short-lived as the company—it was owned by Soeharto’s youngest son Hutomo “Tommy” Mandala Putera— went bankrupt after Soeharto’s regime had collapsed. In 1999, a year after the fall of Soeharto’s New Order, the government issued an economic deregulation package which allowed importation of Completely Built-Up (CBU) cars. This was obligatory given Indonesia’s participation in APEC, AICO, and AFTA which required member countries to liberalize trade and curb entry barriers. Since then, competition in the automobile industry began to grow wild. But at the same time, the appreciation of the US dollar against the national currency rupiah as well as high import duties provided ample opportunity for local players to open automobile production companies. By the year 2006 it was known that more than 200,000 people had been employed in the industry which involved at least US$2.2 billion in direct investment. That year saw a national production capacity of 800,000 cars and trucks as well as 3 million motorcycles per annum. These were produced by more than 50 component producing groups of companies. Indonesia’s export of completely-built-up (CBU) cars began to soar that year to 30,975 units while that of completely-knocked-down (CKD) cars reached 105,917 units, not to mention 285,124 sets of components, according to a 2007 report of Gaikindo (the Association of Indonesian Automotive Industries). In fact, two years earlier Indonesia had begun to export Toyota Avanza to Thailand in CBU form and to Malaysia in the form of CKD. So it is not surprising why Toyota is popular in the domestic market even to date. Between 1997 and 2007 at least 321,543 cars were sold out in the local market annually. Only in 1998, when Indonesia was engulfed in a political turmoil that saw Soeharto’s departure from politics, did car sales drop by 500%. But by the year 2000, domes- continued on page C2
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