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SBY to Push for Consensus in Copenhagen DUBAI – President Susilo Bambang Yudhoyono said on Sunday Indonesia must be able to be part of a solution if the ongoing UN climate change talks in Copenhagen come to a standstill.

“I

have written to the Danish prime minister informing him of the Indonesian proposal and to offer an alternative in case of a deadlock. And he has given a positive response,” Yudhoyono said aboard a plane before making a stopover in Dubai en route to Brussels, Antara reported yesterday.

It is likely the Copenhagen meeting will be difficult with participating countries getting embroiled in heated talks, he said.

ing with European Union President Manuel Durao Barroso, has expressed his hoped that the EU would lift its ban on all Indonesian airline flights in 2010.

“I appreciate the fact that the ban on four Indonesian airlines has already been lifted in 2009.

I hope the lifting can apply to more airlines in 2010,” the president said at the EU headquarters on Monday morning local time.

The head of state said that the flight ban was one of the issues he had discussed at his one-hour meeting with the EU president.

“I predict it will become tough.

Many have pinned hopes on Indonesia to be part of the solution.

And I will be on standby and lobby for the meeting to reach a consensus,” he said.

“There have been requests from several countries such as Australia, Ukraine, and Norway to always communicate (with us). We are lucky that we are taken into account at a time when the Copenhagen meeting is under the shadow of failure,” he added.

On July 13, 2009, the EU lifted its flight ban on four Indonesian airlines, namely Garuda, Mandala, Premiair and Airfast.

It is now expected that the EU would also lift its ban on four other Indonesian airlines, namely Lion Air, Metro Batavia, Indonesia Airasia and Travira Air. In the meantime, the European Commission`s president said that the lifting of the ban was in the hands of the flight experts committee consisting of representatives from EU`s member countries.

Barroso congratulated Indonesia for its success in improving the quality and standards of its aviation safety. But what the EU would do next would depend on the assessment of its technical team in the field, he said.

RI to reduce gas emissions by 26% until 2020

In Jakarta, Forestry Minister Zulkifli Hasan said that Indonesia is committed to reducing its gas emissions by 26% in several phases until 2020.

“The forestry sector is expected to help reduce gas emissions to 14% in the first phase,” the minister said when declaring the formation of a National Forest Management Unit (KPH) at Taman Hutan Raya Ngurah Rai on Monday.

Present at the function were also Bali Governor Made Mangku Pastika, seven other provincial governors, and representatives of 23 districts where KPH branches would be set up.

Zulkifli said the remaining 12 percent of gas emissions was expected to be tackled by other development sectors concerned about environmental preservation.

He said Indonesia had a high sense of awareness and responsibility about reducing gas emissions, and this attitude was hopefully to be imitated by the developed countries.

“High awareness of all countries to reduce gas emission is necessary to save the earth from climate change problems,” Zulkifli said.

He said the Forestry Ministry`s work program for the next five years would be focused on forest preservation for the people`s welfare.

“It is in line with President Susilo Bambang Yudhoyono`s policy that development in the forestry sector should lead to stabilization of micro economics to support economic development.

The president visited Brussels (December 14), Paris (December 15) and Germany (December 16) and flew to Copenhagen for the climate change talks which will bring together more than 100 world leaders.

Yudhoyono, Barroso discuss flight ban lifting

The president, during a meet-

bali action plan key to success of climate change conference

Indonesia will be inundated by heavy floods that will affect around 150 million of its population living in coastal areas if the sea level rises by 80 cm as the temperature of the earth rises by 4 Celsius degree over the next five years.

President SBY in Brussels holds a joint press conference with EU President Manuel Durao Barroso

risks such as malaria and dengue fever.

“Frequency of forest fires will also increase, causing trees to be deprived from water,” he added.

Hatfull said the British government is committed to pushing countries in the COP-15 summit to agree on carbon emission reduction of 34% by 2020, adding that Britain is the first country with a legal framework that requires it to cut emission by 80% by 2050.

A study by the Asian Development Bank showed that Indonesia is most vulnerable to climate

A study by the Asian Development Bank showed that Indonesia is most vulnerable to climate change and Jakarta being most risky.

This condition will also lead to extreme weather condition that will cause rice production in Indonesia, China, India and Bangladesh to plunge by 30%, creating a new wave of food crisis.

This shocking revelation was made based on a study by British scientists commissioned by the UK government to create a map of what would happen if the Copenhagen climate change summit failed.

During the Modernisator Speaker’s Forum 10 “The Climate Challenge: Make or Break in Copenhagen?” in Jakarta on Monday, December 7, British Ambassador to Indonesia Martin Hatfull said climate change would affect all regions of the globe with some suffering worse than others.

“The climate change will affect fresh water availability. Serious drought will happen twice as often and this will impact crop productivity and food productions,” said Hatfull, adding that Indonesia would also witness the loss of coral reefs, growing health

change and Jakarta being most risky.

To minimize the devastating impacts of climate change, Indonesia will fight for the enforcement of the Bali Action Plan in Copenhagen, Denmark, said Communication, Information and Education Coordinator of National Council on Climate Change Amanda Katili Niode.

“It is important for Indonesia to see to it that countries meeting in Copenhagen reach an agreement to implement the Bali Action Plan,” said Niode.

The Bali Action Plan emphasizes mitigation, adaptation, technology and financing.

Presidential spokesperson Dino Patti Djalal said reaching an agreement in Copenhagen will not be easy.

“There are many challenges as we saw in Bali. Copenhagen will be very tough and there will be a lot of drama,” he said.

Indonesia’s head of delegation Rachmat Witoelar said in a press release that Indonesia will proactively lower emission by 26%

by 2020. The move is intended to push industrialized nations to make commitments and push other developing countries to voluntarily lower their emissions.

change,” he told reporters.

Sweden announced Thursday that it would donate 800 million euros to the “fast-start” financing fund.

Ambassador Hatfull said the Copenhagen agreement is very crucial to prevent various disasters.

“We cannot compromise with earth but we can compromise with ourselves in dealing with this matter,” he said.

Danish ambassador to Indonesia Borge Petersen said the Copenhagen summit should agree on issues that can be agreed upon, and not on what cannot be agreed.

Norway ambassador to Indonesia Eivind Homme said Norway aims to become a carbonneutral economy by 2030 by implementing simple programs such as power efficiency, gas use for transportation, encouraging the use of public transportation or bicycles and promoting environmentally-friendly lifestyle.

Negotiators at the climate change conference are also making good progress in the area of technology. Yvo de Boer, Executive Secretary of the UN Framework Convention on Climate

Meanwhile in Copenhagen, United Nations Secretary-General Ban Ki-moon said the outcome of the climate change conference will have reverberations on the future of humanity and the planet.

Over 100 heads of states and government, including Indonesian President Susilo Bambang Yudhoyono, US President Barack Obama and Chinese Premier Wen Jiabao, and more than 15,000 participants are set to take part in the event in the Danish capital, where nations are expected to wrap up agreements on an ambitious new climate change deal.

THE ECONOMY

EDUCATION

TOURISM

Prof. Dr. Ken Kawan Soetanto

Indonesia & Brazil: Emerging Countries to Watch

Dr. Anies Baswedan: The Rising Star

Fascinating Buleleng

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The World Bank rated them as among the 20 largest economies in the world; Brazil is 10th while Indonesia is 16th.

The current rector of University of Paramadina is Indonesia’s first and only representative in the list of Top 100 Global Intellectuals.

Change, told reporters that he sees an “emerging” agreement, with countries wanting to see a new technical mechanism, including an executive body overseeing technological development and transfer, result from the conference.

Further, he noted there is a growing consensus to set up a consultative network for climate technologies which would sup-

port developing nations’ efforts to take action on both adaptation and mitigation.

He also stressed that the Kyoto Protocol, whose first commitment period expires in 2012, must remain in force. Many developing nations have pointed out that the Protocol is the only legally binding instrument currently in force on climate change, he said.

China Supplies Over 50% of Funds to Build Power Plants JAKARTA (PP) – Funds required to build power plants able to generate 10.000 megawatts have been secured, said the deputy director of the state-run electricity company PT Perusahaan Listrik Negara (PLN), Rudiantara.

The value of the funds is US5.56 billion and Rp 23.2 trillion, or in total Rp 78-79 trillion. ”More than half of the financial requirement came from China. Of the required Rp 78 trillion, China has committed to provide US$4 billion (about Rp 40 trillion),” said Rudiantara. ”Funds have secured to underwrite power plants that can supply 10.000 MWs, mission accomplished,” said Rudiantara this week after signing six bank credit MoUs this week in Jakarta.

Also present at the occasion were Finance Minister Sri Muly-

ani Indrawati, PLN CEO Fahmi Muchtar, Bank Mandiri CEO Agus Martowardojo, BNI’46 CEO Gatot M Suwondo, BCA CEO DE Sutijoso, BRI CEO Sofjan Basyir, and the Ambassador of China to Indonesia Zhang Qiyue.

The bank credits were provided by Bank Mandiri, BCA, BNI and BRI. Rudiantara went on to say that up to November 2009, China has already disbursed US$1 billion or about Rp 10 trillion, “with the rest subject to developments in the project.”

The six MoUs covered funds from national banks and desig-

Ban expressed optimism that an immediately effective “robust” agreement, which includes specific recommendations on mitigation, adaptation, finance and technology, will be reached.

“Copenhagen can and must be a turning point in the world’s efforts to prevent runaway climate

INTERVIEW

Surabaya-born Prof. Dr. Ken Kawan Soetanto, Director of Clinical Education and Science, Research Institute CLEDSI, was interviewed by The President Post CEO/Chief Editor Ali Basyah Suryo (ABS). Soetanto holds four doctoral degrees which he obtained in Japan.

Photo: www.presidenri.go.id

Buleleng Regency, which in fact is a former kingdom, has nine sub-regencies, namely Tejakula, Kubutambahan, Sawan, Buleleng, Sukasada, Banjar, Busungbiu, Seririt and Gerokgak, all of which are distinctive and worthy of at least a short visit.

Sri Mulyani Indrawati: the government is also looking at building transmission lines.

nated for power plants in East Java, Riau Islands and West Kalimantan.

The bank credits were provided by Bank Mandiri, BCA, BNI and BRI. Indonesia suffers from power shortage but independent power providers (IPPs) such as Cikarang Listrindo, Argopantes and Bekasi Power Jababeka (25MW) help to alleviate the problem.

Sri Mulyani Indrawati said that the government is not only looking at building power plants but also its infrastructure such as transmission lines.

As BNI CEO Gatot Suwondo sees it, power plants are low-risk business projects with good prospects. ”The banking industry supports the government’s efforts to develop energy sources,” said Gatot.

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The President Post

December 11, 2009

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Viewpoint Reshaping the Global Economy There is increasing need to reshape the global economy not only in the area of finance and capital flows but also to strengthen the position of developing and emerging countries in order for them to also become pillars of growth of the global economy.

By Atmono Suryo

CHALLENGES AND OPPORTUNITIES

N

o sooner than the global economy is on the road to recovery than the world is confronted with a large number of complex questions on the basis of forecasts and predictions.

An issue that is set to come up concerns the new world which will emerge after the world recession is over. What will happen to the present trend of globalization and, by the same token, who would be given the task to lead the moves to reshape the global economy?

Current world trends indicate that we will be facing a different world with a different economic environment and different setting, unlike the one before the crisis. The spectacular rise of China in itself is already an indication of the forthcoming changes that will take place in the near future.

Globalization has brought immense changes in the global economy with all the good sides and weak parts. It is Joseph Stiglitz again who recently reminded us that America’s financial markets failed to do what they should have done – manage risk and relocate capital well. These failures have had a major impact all over the world.

Recent news in the media stated that more than 130 banks in the United States have been

closed. In this globalized world what happens in one country can have repercussions in other countries. This also happened ten years ago with the Asian financial crisis.

We are also being warned that globalization has not worked well.

Globalization did not work the way it was expected to, and instead it helped to spread the consequences of the failures of the financial markets and the meltdown of world trade and investment. The spread and contagion effects have become global trends which are too powerful for developing countries to cope.

There is increasing need to reshape the global economy not only in the area of finance and capital flows but also to strengthen the position of developing and emerging countries in order for them to also become pillars of growth of the global economy.

GLOBAL SOLUTION

It is rightly assumed that global issues such as the current crisis need global solutions. It also needs effective international coordination and cooperation. A restructured global economy will bring difficult challenges but also new opportunities.

The question is: will the United Nations be able to play the role to discuss and come up with global solutions? The answer would be in the negative. The U.N. has never been a strong institution in

the area of finance, trade and economics.

Although there are still differences of opinion about the G20, it is undisputable that it is the best forum as it includes eleven emerging countries, including Indonesia. The G20 has shown its ability to steer the world away from the sudd e n global downfall.

And withi n less than two years the global economy is now on the road to recovery. This

is quite an achievement in particular for the G20, which is assisted by international financial institutionssuchastheIMFandtheWorld Bank.

An important region to watch is Asia, which is now on the rise after it was hit hard by recession.

In the case of Indonesia, it was quite amazing to observe that throughout the global recession the country was able to stand firm and was not swept away by the global downturn.

In fact, to g e t he r with China and India, Indonesia is the third country in A sia

Considering the increasing importance of Indonesia in the world economic setting, the world community expects Indonesia to be an active global player.

which

posted positive growth amidst a world with negative growth and contractions. The impact of the crisis on Indonesia was, in a way, only marginal. This is due to its large domestic market and low dependence on exports of manufactured products.

Considering the increasing importance of Indonesia in the world economic setting, the world community expects Indonesia to be an active global player. Indonesia takes part in multilateral and regional forums such as the G20 and WTO to define world rules. In these forums Indonesia’s performance has been significant. In the real competitive world, the arena of global trade, investment and technology, Indonesia has shown consistent developments.

Global arena

As the world is on the road to recovery, many questions are coming up. The first question may relate to the reasons of the worst global downturn and its impact.

The global crisis has undermined the drivers of globalization, namely trade, FDI (foreign direct investment) and the private sector. All three have been hit hard and are now limping.

Asian Countries in G20

It will be noted that five Asian countries are members of the G20 namely China, Japan, In-

dia, South Korea and Indonesia—Asia is thus well represented in the G20.

It is quite a compliment for Asia that Managing Director of IMF Dominique Straus-Kahn recently surmised that in the process of reshaping the post-crisis global economy Asia would take a leading role.

The big questions would be, why Asia? Would Asia have the ability to play such a big role?

Which countries in this large continent should be involved?

What would be the advantages and the risks for the region to be in the lead in reshaping the global economy?

RESHAPING GLOBAL ECONOMY

Short-term Agenda • Stimulus programs • Market place • Exchange rates • Interest rates • Money flows • Defense against protectionism Long-term Agenda • Governance (the role of G20 and Asia) • Finance (financial system reform) • Investment (investment climate) • Balanced growth (diminish imbalances) • Production • Infrastructure (in particular Asia)

The President Post

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December 11, 2009

3

Interview An Hour with ABS

Ali Basyah Suryo CEO/Chief Editor The President Post

Prof. Dr. Ken Kawan Soetanto The following is a transcription of a QTV televised interview by The President Post CEO/Chief Editor Ali Basyah Suryo (ABS) with Surabaya-born Prof Dr Ken Kawan Soetanto (58), Director of Clinical Education and Science, Research Institute CLEDSI Soetanto holds four doctoral degrees which he obtained in Japan.

You have unique credentials and people would be interested to know why you went to Japan to obtain your doctoral degrees.

I never dreamed of learning something in Japan. As a matter of fact, I never dreamed of going to Japan. At the time I lost my schooling years for being a Chinese. Our school was closed down because of a political turmoil. I then worked in the family business. However, after several years I became so successful in expanding and enlarging the business, which was in computers and electronics and spare parts.

and I had to keep my promise to my fiancé.

One day, one of my customers came to buy something and my brother said he was a friend who was planning to go to Japan. He wanted to go to Osaka to study the language and study there.

That was when I saw an opportunity to go to Japan. I went to BCA and Panin Bank to ask whether they had Japanese clients. BCA introduced me to one of its Japanese clients who gave me an application form which I sent. But the real reason was because I was aware of the trends that technology was shifting to Japan.

I didn’t even have time to take a rest or have lunch because people kept lining up in front of our store. At the time business was running so well and money kept on flowing in, but after several months I became bored. I thought that life with money was interesting but that wasn’t enough. So, I decided I wanted to learn something and my goal was to study something related to electronics, electrical engineering. I learned to repair radios, tape recorders, TV sets by learning from books that I read at midnight till 3-4 in the morning. All were English textbooks which were very rare at the time. I started writing letters to order books even though my English wasn’t so good.

I wanted to achieve something, so I read and read. I bought books from outside. Unfortunately, they never reached me. So, I went to Pasar Turi, where they sold second hand books and looked carefully for books. I found books that I ordered but the trader said he had bought them from someone else. I decided to buy the books and learned something from it.

So you went to Japan and got your bachelor’s degree at 29 and a master’s degree at 31 years old.

Yes, it was really late and many people have made fun of me for that. But the thing is, opportunities do not come so easy to me. I didn’t have well-educated parents to support me. That’s why when I was able to save money to support myself for a year, I was already eight years behind. I became an undergraduate freshman at 27, an age when normal people would already have gotten their PhD. Why did I continue taking it? I thought nothing is ever too late and I have proven that now.

Why did I choose Japan? Because when I repaired something I always found Grundig, Siemens, Philips, all European products, and only a few from Sanyo, Hitachi or Toshiba. And then there was a small product called transistor radio, a technological advancement at the time because it transformed a tube to a transistor radio, and this was in 1969-1974.

I had a feeling that the technology would switch to Japan because people no longer liked big-size products as it was power consuming and expensive. So, I started to learn the transistor system technique by myself and saved money from doing repairs.

However, repair orders were also hard to come by. I had to go from door to door to offer repair services. Many rejected me because I did not have the expertise and because they were afraid that I might break their products.

But my family tried to make people understand that I was also a manager and that I was trying to help them. That was my experience in becoming a salesperson and on how to sell myself. From them I discovered I could repair and earned money which I saved for five years.

I started thinking about studying in Germany. Why Germany?

Because Germany offers free tuition fee, especially in medicine, engineering, technology and also due to the fact that it was an advanced nation. The problem was that my family didn’t allow me to go, especially my brother because he didn’t want to lose me. Then Japan struck my mind, especially when their radios, tape recorders became smaller in size. But then it was difficult to enter Japan unless you had Japanese blood or was married to a Japanese. I couldn’t possibly do that because at the time I was already engaged

You then continued your study to get a doctoral degree in engineering and applied engineering in 1985 but then took another doctoral degree in medical sciences. Why did you switch?

During my third year of undergraduate study I had a traumatic experience, a tragedy. Fire gutted my store. About 3000 to 4000 stores in Pasar Turi Surabaya were destroyed by fire that raged for four days. Because of the fire, I lost my family’s support to study. They asked me to return to Indonesia. I said that now I had the chance to study, I want to graduate and return to Indonesia to start my own institute, for example the institute of electronic something.

I needed the degree, so I decided to stay there. That was a turning point for me. I never gave up.

I found ways to support myself and paid for my tuition fee.

After getting a doctoral degree in engineering and medical sciences you got another doctoral degree in pharmaceutical sciences from the Science University of Tokyo and a doctoral degre in education in 2003. You seemed to be moving from one discipline to another.

I took the first doctoral degree because I liked electronics and computers. But my problem was I couldn’t get a job. I graduated from Tokyo Institute of Technology which was the best engineering university because it wanted to compete with MIT in the US. I had 10 paper journals which was more than enough to apply for a job. At the time PhD holders were only asked to submit thre journals to get a job, which means I was highly qualified for a job in Japan. Unfortunately, I never got any response and if I did, they would tell me that they were cutting their budget and asked me to wait or asked me to do something that the Japanese couldn’t do such as cook Chinese or Indonesian food.

I decided to become smarter than the Japanese and took a second doctoral degree in medical sciences because I wanted to help people. I decided to study at Tohoku University, the best medical university, and talked to my supervisor about it. At the time the

I never dreamed of learning something in Japan. As a matter of fact, I never dreamed of going to Japan.

The problem is they only offered me a position as associate professor which was lower than the position I was holding at the time in the US. But the caller insisted that I should take the offer and worked myself up the ladder later.

university had a joint program with Tohoku University. Professors of both universities liked me and they wanted me to stay so that I could contribute more journals. And because of that, they created a biomedical engineering study program supported by the Japanese government for 10 years.

I was lucky then, and when I

fourth option, which was to return home to Indonesia and work for him so that he could teach me to become a good banker. I didn’t accept the offer because I chose to go to America and it was a troublesome and interesting choice. I was 38 years old with three children, I didn’t have an American education background and I didn’t have any friends. I had

tion as an assistant professor with a salary of US$20,000 a year.

The pay was low because others would get between US$40,000 and US$45,000 for the same position. However, I saw that as an opportunity and seized it.

Later on I met a Japanese who offered me a job as assistant manager in Yokogawa, Japan, with a salary of US$7,000 per month,

These people wanted to collect data of Indonesian scientists overseas to support Indonesia as a rising country. The move was also supported by President SBY who inaugurated it to mark the 100th anniversary of the Youth Pledge Day last October. graduated in 3,5 years time I was sure that this time I would get a job because I was better than the Japanese. I started sending my resume but I still didn’t get any response. People then told me that I chose the wrong country because Japan was still closed to foreigners. Although the country is global in some areas, it is still closed in other areas.

I then talked to Mochtar Riyadi whom I met in Japan. He said Japan is a closed country, and that whoever you are, if you are not Japanese, you will not have a future there. Don’t ever dream of becoming a good professor there.

He also said, if you return to Indonesia you would probably become a lecturer all your life. He then said there was another option, going to the United States.

But he quickly said that at 38 years old with no savings, I would have no hope. He offered me a

no hope of becoming a scientist. I had to remind myself why I went to Japan, which was because I wanted to become a scientist in electronics. If I couldn’t become a scientist in Indonesia, I wanted to become a scientist or professor in Japan or in another country.

That was my dream.

My intention to go to the US was to get a position, whatever it was as long as I could feed my family. I started writing papers in English and sent them. It got accepted after going through a screening process.

When you moved to the States, did you expect things would be different there?

The first thing that came to my mind was that there was an opportunity there. When I asked for a job and none were available, I was referred to another person. I was offered a posi-

triple the salary of an assistant professor. He would also provide me with a three-bedroom apartment with a big living room. That would be a big break for me and my family. But when I spoke to an American professor he told me to choose the assistant professor job because I was working with the best professor in the world. I had to make a difficult choice. I finally chose to stick with the assistant professor job despite the low salary because I was a scientist.

I never regretted my choice because he was the godfather in my field. After a year in the US I found the job very challenging because I had to make proposals in English to get money which was very difficult for me. Then I received a call from Japan with a job offer. The caller said Japan can now accept me because I have worked in the US.

I notice you got your doctorate in education at Waseda University.

When I came back to Japan from the US, I was required to be a full professor and when I got the doctoral degree I was the youngest professor at 42. People could not accept the fact that a foreigner, especially an Indonesian, becoming a full professor at 42 in Japan. About 16 years later I learned that I was the youngest full professor both in Japan’s and Indonesia’s history. I was then sent to teach in Yokohama in an attempt to embarrass me. People told me that I came to the wrong university because it was the worst university in Japan as the students had no motivation to study.

Lecturers there were also reluctant to enforce discipline on the students because they could get fired if the students sent their rector a letter. However, that didn’t put me off even though I could have gone back to the US and get US$1.5 million for research. My reason to stick around was because I liked Asia and I liked Japan. I knew that Japan and Asia were going to play a big role in the 21st century.

You were also an advisor to the ministry of economics, trade and industry.

I was the first and the only foreigner then. After Japan lost to the US in World War II, the Japanese government formed a vision of what Japan would become in 10 years time and in one century. They chose me because of the “Soetanto Effect” that I introduced to Yokohama University; I was able to change the sluggish studying environment to a place where new stars and heroes were born. They called the phenomena the “Soetanto Effect”or “Soetanto Method” and it gained huge media attention.

I understand you are here at the invitation of Minister Muhammad Nuh to attend a conference. What subject are you going to present?

Two years ago the organizer formed Ikatan Ilmuwan In-

donesia International or Indonesian Scientists Community in Holland and Germany. There are about 50,000 Indonesians that study overseas. These people wanted to collect data of Indonesian scientists overseas to support Indonesia as a rising country. The move was also supported by President SBY who inaugurated it to mark the 100th anniversary of the Youth Pledge Day last October. This event is a workshop to follow up the establishment of the society that gathered about 20 representatives with reputations in other countries. I was on the list and I was quite surprised to know that I was the only full professor on the list. There was one assistant professor in the US who was recently promoted as associate professor, while others are assistant professors or just lecturers.

I notice you are also a motivational speaker and you were in Indonesia, China, Thailand, Europe, America and Japan.

Why would people come to you to follow your program?

I mentioned earlier that I was appointed as a supervisor in Japan’s “Vision for the 21st Century” and was the only foreigner in the team. In 2005, I spent six months at the Venice International University and used the Soetanto Method and was able to inspire the Italians and the Dutch.

I knew this could also work to inspire the Japanese, Chinese and Indonesians.

One day in 2005, in four days I visited 13 schools, including Islamic schools and Christian schools and inspired all of them, giving them their motivation to become something.

They call it the Soetanto Effect or the Soetanto Method?

Just by sitting next to me and listening to me they get a positive effect. Interestingly, this does not happen only to children but also to junior high school students, university students, businessmen. Suddenly they were reading something new; it was like a positive feeling. Some people say to me, “Soetanto, you have the power to change people”, but I said I don’t have the right to change people. I just show people how to build motivation from inside themselves so they could change themselves if they thought it was good for them. That’s why they call it the Soetanto Effect, which later became a method and is now called the Soetanto Method.

Interestingly, this is not education, it is something to change life but people say it is the Soetanto philosophy.

You are planning to publish a book, I understand?

Yes, it is about the Soetanto Effect or the Soetanto Method in the case of my Japanese students who thought they would never become successful, didn’t want to study but suddenly decided to change themselves. They changed drastically and became happy. If a person is happy they will not cause trouble.

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The President Post

December 11, 2009

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The Economy INDONESIA AND BRAZIL:

ECONOMIC BRIEFS

Emerging Countries to Watch

RI enjoys US$14.27b trade surplus Indonesia enjoys a US$14.27 billion surplus in its trade balance in the January-October 2009 period even though its exports during the period experienced a decline, a statistics official said.

“Our trade balance in October 2009 booked a a surplus of US$2.41 billion and in the JanuaryOctober 2009 period US$14.27 billion,” Head of the Central Board of Statistics (BPS) Rusman Heriawan said.

He said that the trade surplus increased over a year earlier, which stood at US$6.04 billion.

“The surplus in the January-October 2009 period is US$1.27 billion dollar, a two-fold Rusman Heriawan increase,” he said.

The accumulative value of Indonesia`s exports for January-October 2009 is US$92.03 billion, down 22.31 percent over the corresponding period a year earlier. Non-oil and gas exports in January-October 2009 reached US$78.24 billion, 15.13% lower than the September figure.

RI set to renegotiate FTA terms, conditions The government intends to renegotiate the implementation of the Free Trade Area in the Asean region and between Asean and China which would start on January 1, 2010, Hatta Radjasa, the economics coordinating minister, said.

“Indeed there are possibilities for us to think of to discuss the matter. The question is there a possibility for its postponement,” he said.

Several industrial sectors in the country have complained about the planned implementation of the free trade agreement between members of the Association of Southeast Asian Nations Hatta Rajasa (Asean) and China on January 1, 2010 as Indonesia was not yet ready to compete with goods from China.

A number of associations have asked the government to renegotiate the terms so that the imposition of the free tariff agreement on commodities be postponed.

Bappenas: Economy to grow at least by 4.4% Director of Macro-planning of The National Development Planning Agency (Bappenas), Bambang Prijambodo, said he believed the country`s economy would grow minimally by 4.4% this year.

“We believe fourth quarter growth would be higher than 4.4% as Bank Indonesia has predicted,” he said, “driven by private consumption and global economic improvement.”

He said in the fourth quarter the country`s exports were expected to continue to rise higher than in the previous quarter.

“The world`s economy is improving. Asian economies particularly India and China grew respectively by 7.9% and 8.9% in the third quarters,” he said.

The National Bureau of Statistics recorded the `s economy grew 4.23% in the third quarter. In the first quarter it grew by 4.45% but dropped in the second quarter to 4.04% and rose again to 4.2%.

Government to limit cigarette production The government plans to limit domestic cigarette production as of 2015 to around 260 billion pieces in line with its 2007-2020 Tobacco Product Industry (IHT) roadmap, an official said.

The director of tobacco and beverage industries of the industry ministry, Warsono, told Antara here last week, that .

He said cigarette production in 2008 was 240 billion and is expected to become 245 billion cigarettes in 2009.

Official data show that up to 6.1 million people including two million farmers are involved directly or indirectly in the tobacco/cigarette industry.

There are also 1.5 million clove farmers related to the industry and 600,00 workers in cigarette-making industry, one million cigerette retailers and one million workers in cigarette-related industries such as printing, advertisement, distribution and transportation services.

PLN to issue bonds worth Rp1.5t next year State electricity firm PT Perusahaan Listrik Negara (PLN) plans to issue Rp1.5 trillion worth of bonds consisting of bonds XI worth Rp1 trillion and sharia bonds IV worth Rp500 billion next year. The fixed rate bonds XI consist of series A and B, each maturing seven years and 10 years, according to the company`s prospectus published here on Wednesday.

The bonds XI will be offered at 100% of their principal value, and the coupon of the bonds will be paid every quarter. The yield of the sharia bonds will be paid every quarter. Nearly 50% of the proceeds from the bond issuance will be used to replenish internal funds spent on transmission projects this year, with the remaining to be used to finance similar projects in 2010.

PLN has appointed PT Mandiri Sekuritas, PT Bahana Securities, and PT Danareksa Sekuritas as bond issue underwriters.

The World Bank rated them as among the 20 largest economies in the world; Brazil is 10th while Indonesia is 16th.

T

EMERGING COUNTRIES

he world is changing, but there are different views on the shape of the new economic landscape. The current global recession may even speed up developments in the new world. It is expected that it will be different than the one before the recession, which was then for many decades dominated by a number of advanced countries.

Some months ago the prominent analyst Fareed Zakaria came up with his views in The Washington Post about the two worlds emerging in the global economy. As he noted: “ …, increasingly the story of the global economy is a tale of two worlds. In one there is only gloom and doom; in the other, there is light and hope”.

He further stated, “In the traditional bastions of wealth and power - America, Europe and Japan - it is difficult to find much good news. But there is a new world – China, India, Indonesia, Brazil – in which economic growth continues to power ahead …citizens remain remarkably optimistic about their future. This divergence between the once rich and once poor might mark a turn in history”.

Since the developing countries depend so much on advanced countries, there was the early notion that with the downfall of the economies in the advanced countries, the emerging economies of Asia and Latin America would collapse accordingly, at an even faster pace than the industrial countries. There was the view among observers in the west that Third World countries would not have an independent strength of their own.

Such views have now been proven to be wrong.

The economies of many emerging countries are registering significant growth. China is growing at a rate of 8%-10% in 2010-2011, while India is moving at a rate of 7.8%. Brazil and Indonesia are among the fastest growing countries in the world.

Consumer spending and retail sales continue to grow. Public confidence is on the high side and the mood is upbeat in China, Brazil and India, with the exception of Indonesia, which continues to be dragged down by political squabbles.

BRAZIL AND INDONESIA

There will be different assessments on Zakaria’s views on the emergence of two different worlds, in particular concerning his remarks that it might signal a turn in history.

Among the countries mentioned by Zakaria (China, India, Brazil and Indonesia) two, namely Brazil and Indonesia, share a great deal of similarities as well as showing marked differences.

the result that not much positive achievements could be gained.

By Atmono Suryo

BRAZIL

ECONOMIC PROFILE

INDONESIA

GDP US$ 1,540 billion (2007)

Official Exchange Rate

US$ 8,105 (2007) 5.4% (2007)

Per Capita

US$ 1,784 (2007)

Real Growth Rate

6.2% (2007)

Public Debt

33% of GDP (2007 est.)

Reverse of foreign exchange and gold

US$ 53.8 billion (2007)

43.4% of GDP (2007 est.)

US$ 178 billion (24 Dec. 2007)

US$ 418.7 billion (2007)

Budget $244 billion

Revenues

$219.9 billion (FY07 est.)

4.5% (2007) Reals per US dollar - 1.85 (2007 est.), 2.1761 (2006), 2.4344 (2005), 2.9251 (2004), 3.0771 (2003), 2.9208 (2002)

$88.21 billion

Expenditures

$95.41 billion (2007 est.)

Inflation Rate - Consumer Price Exchange Rate

6.6% (2007) Indonesian rupiah per US dollar - 9,056 (2007 est.), 9,159.3 (2006), 9,704.7 (2005), 8,938.9 (2004), 8,577.1 (2003), 9,311.2 (2002)

Source: Brazillian Embassy in Jakarta

Needless to say, Indonesia can learn a great deal from Brazil, a country which is in the take-off stage as described by The Economist in its special report: • Brazil and Indonesia are almost similar in terms of the large geographical size and population, economic structure and potentials to develop and grow; • Among the many developing countries, Brazil and Indonesia are in the category of high (or top) potential countries with significant natural and human resources; • The two emerging countries have been chosen as members of the influential G20 because of their specific assets and positions; • The World Bank rated them as among the 20 largest economies in the world; Brazil is 10th while Indonesia is 16th; • Brazil is firmly in BRIC (Brazil, Russia, India, China) while Indonesia and South Africa are often mentioned as upcoming countries in the grouping; • Brazil is one of the key political-economic countries in Lat-

INDONESIA - BRAZIL BILATERAL TRADE 2004-2008 (IN MILLIONS US$) YEAR

EXPORTS

IMPORTS

TOTAL TRADE

2004

329.83

442.0

771.83

2005

402.60

454.37

856.97

2006

626.13

515.15

1,141.28

2007

786.35

686.73

1,473.08

2008

992.70

1,375.39

2,368.09

Source: Central Statistics Agency

in America’ • Indonesia is a key country in ASEAN and has an important position in Asia • Brazil and Indonesia are both active players on the global scene, politically as well as economically ECONOMY AND BUSINESS

Private sector Apparently, one of the big differences between the two countries is among others in the area of economic policies, particularly with regard to the business sector. Brazil fully recognizes the importance of the private sector. Accordingly, their policies

are presently much focused on the development and strengthening of the private sector. They are giving the private sector a “free hand” to operate and such policy seems to be working well in Brazil.

On the contrary, the political mood in Indonesia is not necessarily business-friendly, especially towards big business and foreign investors. Large foreign companies and foreign investors, such as those in the area of mining, often complain that they are not welcomed in Indonesia. In many areas, the problem of distrust is prevailing in the country, with

Economic growth Brazil has been moving ahead very fast, not much hindered by politics and obstructing regulations. The private sector is the driving force. As The Economist notes, “forecasts vary, but sometime in the decade after 2014 – rather sooner than Goldman Sachs envisioned -- Brazil is likely to become the world’s fifth largest economy, overtaking Britain and France” .

There are also differences in real terms. When it comes to the size of the economy, Brazil’s GDP is much larger than that of Indonesia’s. Brazil’s GDP has grown from $1,540 billion in 2007 to $1,669 billion in 2008. (Indonesia’s is $594 billion, ort one-third of Brazil’s). Furthermore, according to The Economist, the GDP per capita in Brazil went up from $8,105 to $8,480 whilst Indonesia’s per capita is much smaller, at $2,440.

Foreign investment is pouring in despite the fact that FDI (foreign direct investment) in the world fell by 14%. Foreign direct investment in Brazil went up by 30%. Brazilian multinationals such as Petrobras (oil), Embraer (aircraft) and Vale (mining, and the second largest in the world) are performing well. These companies are spreading their wings to other countries, including Indonesia. Vale has bought the parent company of PT Inco that is based in Canada, Brazil’s biggest investment in Indonesia.

Economic challenges In the past Brazil and Indonesia have gone through difficult times (high debts, high inflation, low productivity and many others). Brazil, however, has been able to solve the problems with greater determination and with greater speed.

In Indonesia decisions are made too long and even longer to implement them. Worse, small problems can easily become gigantic. It took the country almost ten years to come out of the 1997 Asia Financial crisis.

Bilateral relations It seems that there are a number of complementarities between the two resources rich countries.

According to Ambassador Manuel de Lacerda of Brazil, (The Jakarta Post November 27, 2009) relations between Brazil and Indonesia are booming in terms of trade and investment. Bilateral trade jumped from $1.47 billion in 2007 to $ 2.36 billion in 2008 while in 2004 the figures were merely $771 million.

According to Brazilian sources, closer cooperation could be developed in the areas of bio-fuel, agriculture and forestry, tourism, climate change and industrial development (including the development of bio fuel industry in Indonesia). It would be of great benefit to the two countries if closer cooperation be developed.

The President Post

www.thepresidentpost.com

December 11, 2009

5

The Economy

Tapping Indonesia’s Resources

tail the unemployment situation in Indonesia during the period of 2005 to February 2009.

The unemployment rate has dropped from 10.26% in 2005 to 8.14% in February 2009, and is expected to go down further to 8% in 2010, or from about 10.8 million to 9.2 million in the same period.

It is important to tap human resources to become an important economic force, to achieve higher economic growth and larger prosperity for the country.

By Atmono Suryo

I

HUMAN RESOURCES

ndonesia has huge abundance of human and natural resources. With a population of some 237 million people and a yearly population growth of 1.3%, it is the fourth largest country in the world after China, India and the United States.

Large populations have their positive but also difficult sides.

Indonesia is the largest archipelago in the world with more than 17.000 islands spread over 1.8 million square kilometers. Due to communication and transportations problems many parts of the population are difficult to reach.

Consumption, investment and

exports are considered to be the engines of growth to the country. However, it seems not to be easy to relate human resources to development strategies. Yet, it is important to tap human resources to become an important economic force, to achieve higher economic growth and larger prosperity for the country.

Indonesia is facing complex population problems with far-reaching social and political implications. One of the main problems facing the country’s population is unemployment, which actually affects many countries in this recessionhit world. In this country unemployment is the “source of many

evils,” including terrorism and crime.

In addition, the country is confronted with the problem of poverty, which is not easy to resolve.

It will be recognized that unemployment, poverty and increasing inequalities pose the country with an undesired political and social situation which in turn hampers economic development.

The available solution at the present time is to increase economic growth.

UNEMPLOYMENT

Indonesia is still facing large unemployment problem due in part to the current global recession.

Table 1 shows in greater de-

TO TAP OUR HUMAN RESOURCES

It will be realized, however, that in addition to numerous population problems, the country also has the huge task to move ahead much faster than at the present rate. To that end Indonesia has to tap all available resources, including its vast human resources which are at present caught with the problem of unemployment.

But the time has come for the country to turn its large population into an important engine of economic growth. But the big question is, how can it be done and where to begin? Perhaps we should take a closer look at China and India which also have large populations and yet are able to achieve high growth of over 8%.

To look at the problem from more positive sides and in more simplistic terms, one could perhaps come up with the following arguments. Indonesia’s large population has brought a myriad of problems; including the problem of unemployment and poverty.

On the other hand large populations have also many of their pos-

TABLE 1: Population and Type of activity 2005, 2006, 2007, 2008, and 2009 Type of activity

2005 (Feb)

2005 (Nov)

2006 (Feb)

2006 (Aug)

2007 (Feb)

2007 (Aug)

2008 (Feb)

2008 (Aug)

2009 (Feb)

1

Population 15+

155 549 724

158 491 396

159 257 680

160 811 498

162 352 048

164 118 323

165 565 992

166 641 050

168 264 448

2

Labor Force

105 802 372

105 857 653

106 281 795

106 388 935

108 131 058

109 941 359

111 477 447

111 947 265

113 744 408

Labor Force Participation Rate

68.02

66.79

66.74

66.16

66.6

66.99

67.33

67.18

67.6

Working

94 948 118

93 958 387

95 177 102

95 456 935

97 583 141

99 930 217

102 049 857

102 552 750

104 485 444

Unemployment

10 854 254

11 899 266

11 104 693

10 932 000

10 547 917

10 011 142

9 427 590

9 394 515

9 258 964

Unemployment Rate

10.26

11.24

10.45

10.28

9.75

9.11

8.46

8.39

8.14

3

Not in Labor Force

49 747 352

52 633 743

52 975 885

54 422 563

54 220 990

54 176 964

54 088 545

54 693 785

54 520 040

Schooling

12 919 459

13 581 943

13 978 325

13 530 160

14 320 491

13 777 378

13 281 107

13 226 066

13 665 903

House Keeping

29 245 027

30 619 529

30 806 003

31 977 973

31 133 071

31 989 042

32 122 769

32 770 941

32 578 420

Others

7 582 866

8 432 271

8 191 557

8 914 430

8 767 428

8 410 544

8 684 669

8 696 778

8 275 717

*) Unemployment : Looking for work Establishing a new business/firm Hopeless of job and Have a job in future start Source: National Labour Force Survey 2005, 2006, 2007, 2008 and 2009

itive sides, among others: • During the global crisis, Indonesia’s huge population created huge demand consumer demand, which in turn expanded the domestic market. As world demand drops, large domestic markets are considered as an important asset • Countries are being advised to initiate stimulus programs to keep world demand afloat and help the world to recover as of 2010 • Big markets such as China and India as well as Indonesia have shown that they are among the few which have succeeded in maintaining positive growth as opposed to other countries, especially advanced countries, which face contractions • One of the main reasons is the very large consumption factor, which is an engine of growth.

(This is becoming an important development theory to watch.)

• As per capita income in Indonesia increases, so does its spending power. This functions as an additional stimulus factor to the economy • Indonesia is presently rated as a middle-income country, which implies that it presents new economic and business opportunities • Importantly, the middle income group has grown significantly in the country. The present preliminary estimate is about 10%; if it is correct it would mean that about 20 million are in the middle-income group • Even half of it, or 10 million people, is larger than the population of many countries in the world, including such countries as Singapore • Many members of the middleincome group belong to the young generation with better education. With the advances of technology, such as in the field of IT the large middle income group could become a source for leadership or executors to boost economic growth in various sectors of the economy • Technological tools which are easily available for society will be highly important instruments for the country’s hu-

man resources to accelerate improvements, modernization and to boost capacity building • There may be the need to adjust and reform the education and training systems to make it possible for the large human resources which belong to the middle income group to turn into a highly effective work force or the engine of growth for the country • The large middle-income group should strengthen the huge amount of SME”s (small and medium enterprises), which is an important pillar in the economy.

“A high level of entrepreneurship in every components of the nation can generate a domino effect for the social economy transformation of the country” Dr. Ciputra

One of the key factors in the use of Indonesia’s human resources is the development of entrepreneurs. According to Dr. Ciputra only less than 0.1% of the country’s population is in the category of entrepreneurs. Other countries have rates of 3%, 5% or even 10%.

Dr Ciputra calls for the development of some 4 million new en-

trepreneurs in the next 20 years, which means about 200.000 new entrepreneurs per year.

At the suggestion of Ciputra the President recently made the decision that the subject on entrepreneurship be included in the education system of Indonesia.

TASKS OF THE MIDDLE-INCOME GROUP

To assist in the strengthening of the private (business) sector to become an expanding source for job-creation in the various potential sectors • To enlarge on a massive scale the entrepreneurial class to cope with the growth of business and to be active in the areas of “capacity and creativity” building • In a seminar organized by The Financial Club, ICWA and EU, Dr Ciputra made an important statement as follows: “A high level of entrepreneurship in every components of the nation can generate a domino effect for the social economy transformation of the country” • Entrepreneurship is therefore the vital key to open the potentials in everyone, as Ciputra emphasized. Also, to enrich and boost people so that they can survive the long and winding road leading to prosperity and reach a better life.

This can create a difference for their community • Entrepreneurship skills are not merely vital to business but also to the government • Business entrepreneurs consist of: owner- entrepreneurs and professional entrepreneurs • Government entrepreneurs (such as Lee Kuan Yew) develop countries on a large scale and establish entrepreneurial governments • An entrepreneur uses resources in ways to maximize productivity and effectiveness Dr Ciputra’s philosophy should be supported and practiced with resolve by the Indonesian society with the purpose of developing a “New Entrepreneurial Indonesia”, to take the country to higher business echelons and to bolster Indonesia’s image in the international world.

6

The President Post

December 11, 2009

www.thepresidentpost.com

Education At University of Paramadina, ‘Small is Beautiful’

Prior to that he obtained a Master’s degree from the School of Public Policy, University of Maryland. This was after he had obtained an undergraduate title in Economics from Gadjah Mada University, Yogyakarta, where he was president of the Student Senate.

Paramadina is rising fast as an influential university in Southeast Asia as it has a vast storage of innovations, international orientation and best practices.

By Alci Tamesa

A

prominent university in Jakarta is set to become a trendsetter in the market, blending business and economic disciplines with managerial arts to produce what its rector describes as international-quality capable scholars.

The learning institution is none other than University of Paramadina, whose rector, Dr. Anies Baswedan, is indisputably the brightest rising star in Indonesia’s academic world.

Paramadina is rising fast as an influential university in Southeast Asia as it has a vast storage of innovations, international orientation and best practices.

Among the best practices is its Management and Business study program, which is increasingly gaining recognition for its uniqueness, in that it is a nearperfect blend of business studies and managerial arts—as defined and delivered by its teaching team comprised of experienced business practitioners and scholars.

Dr. Baswedan believes that size does not matter when it comes to contributing in concrete terms to Indonesia’s modernization drive.

“Small is beautiful,” he says, as he systematically leads Paramadina into global excellence.

He proves this by becoming Indonesia’s first and only scholar to have been included by Foreign Policy magazine in the list of its Top 100 Intellectuals of the World.

The university leadership says that the scientific aspect of the study program is proven by its orientation of preparing students to be able to make prompt and precise business decisions through a process of accurate analysis of data and facts. In this way learners will know how to minimize risks in a measured way.

Meanwhile, the creative aspect of the program is shown by its orientation to train students to

become highly-innovative in any kind of situation—students will have the self-confidence to make business leadership decisions.

Business educators say that this is a good blend of academic disciplines and leadership traits which promise to usher in a new gen-

eration of internationally oriented business scholars to influence Indonesia’s business and political decisions in the future.

The business school uses a student-centered curriculum where-

DR Anies Baswedan: The Rising Star

By Alci Tamesa

T

he University of Paramadina was founded by the late Dr. Nurcholish Madjid, a prominent Moslem scholar and public figure with international reputation.

Now that he has passed away, the right man to carry on with the mission is Dr. Anies Baswedan, the current rector who is Indonesia’s first and only representative in the list of Top 100 Global Intellectuals.

Anies Baswedan was born on May 7, 1969, the son of Prof. Dr. Aliyah Rasyid, lecturer at the State University, and Drs. Rasyid Baswedan, lecturer at the School of Economics of the Islamic University of Indonesia, both in Yogyakarta.

His grandfather, A.R. Baswedan, was a national independence fighter and one of the Republic of Indonesia’s founding fathers who once served as minister of information under President Soekarno.

Thanks to his background, Anies has since childhood emerged as a shining star and a role model at school. He reached his peak at Gadjah Mada University when he was elected General Chairman of the Campus Senate back in 1990s. This was the time when he earned a Japan Airlines scholarship to attend summer courses at Sophia University, Tokyo.

Even when he was at high school in Yogyakarta, he had already participated in the AFS Intercultural Program which sent him for a year to stay in Milwaukee, Wisconsin, USA. After graduating in 1995 from UGM, Anies worked at the the Inter-University Center of the Economics Study Institution where he was awarded a Fulbright scholarship to obtain the title of Master in International Security and Economic Policy from the University of Maryland.

While still on that campus, Anies was also awarded the William P. Cole III Fellow from the Maryland School of Public Policy, ICF Scholarship, and the ASEAN Student Award.

While still in the United

by students actively train themselves to become leaders in their respective fields of interest while teachers provide inspiration and direction toward formation of full-fledged business leaders.

Every interaction is based on simulation of actual business en-

vironment because teachers are well experienced in sharing their own success stories with the students.

The program has three areas of concentration, namely Marketing Management, Human Resources Management, and Financial Management. For each of these majors, the university regularly brings in business leaders whose vast experience enriches students’ knowledge and horizon.

Paramadina also holds regular schedules for its students to vis-

The current rector of University of Paramadina is Indonesia’s first and only representative in the list of Top 100 Global Intellectuals.

Photo: www.wikimedia.org

States, Anies also wrote many articles for the mass media and participated in various international conferences.

One of his brilliant articles, entitled Political I sl a m — Pre sent and Future Trajectory, was published in Asian Survey, a journal run by the University of California. Meanwhile, his analysis entitled Indonesian Politics in 2007: The Presidency, Local Elections and the Future DR. Anies Baswedan, Rector of University of Paramadina of Democracy was published

by BIES, Australian National stronger player in the Asia-PaUniversity. cific region, as tens of thouThis is probably one of the rea- sands of students are pursuing sons why the US Foreign Policy higher education and training magazine named him one of the in advanced countries, not to world’s 100 leading intellectu- mention over 4.5 million stuals in May 2008, after which the dents now in over 2,600 camDavos-based World Economic puses across the archipelago Forum chose Anies as one of the and millions more entering Young Global Leaders in Febru- universities each year. ary 2009.

As a comparison, the number of Indonesian students Anies briefly stepped into on local campuses as of this “practical politics” by becoming month is much bigger than the the moderator in the 2009 pres- total population of Singapore. idential debates which saw Susi- So when they graduate and lo Bambang Yudhoyono take on join graduate scholars returnpresidential candidates Megawa- ing from abroad in the next ti Soekarnoputri and Jusuf Kalla. decade, they will exert considHe was probably not very hap- erable influence on the busipy about the occasion as the pres- ness and socio-political map idential candidates kept comple- and raise the country’s reputamenting, instead of challenging, tion as a center of excellence in each other during the nationally many fields. broadcast event although he had provoked the debate by raising In his view, Indonesia has a contentious issues. bright future now that schools In the realm of academia, An- are benchmarking with worldies has gained more recognition class universities abroad and overseas. In the realm of politics, are applying many of their best his name is often mentioned as a practices at home. possible candidate for presidency This explains why Paramain the future. dina University devotes much President Susilo Bambang attention to the issue of human Yudhoyono’s inclusion of Anies resources management. in the Team of Eight is a testaOn another level, Anies is the ment to the Paramadina rector’s husband of Fery Farhati, M.Sc, integrity. and they have three children— Anies believes that in the future Mutiara Annisa, Mikail Azizi Indonesia will emerge as a much and Kaisar Hakam.

In order to realize the idea, Paramadina has brought in talented scholars who graduated from famous universities at home and abroad. The rector, Dr. Baswedan, is himself a famous graduate of the University of Northern Illinois where he obtained a Ph.D. after presenting his thesis on “Regional Autonomy and the Nature of Democracy in Indonesia.”

it companies in various lines of business, enabling students to enrich what they have learned on campus.

Business workshops, seminars, scientific projects and related practices are part of a good academic tradition that have contributed to Paramadina’s rising reputation as a university to be reckoned with in ASEAN countries.

Paramadina is a pioneer in anti-graft studies, having included in the curriculum a compulsory subject called Antikorupsi which students take right from the start of their academic journey.

To obtain an undergraduate title, students are required to gather 144 credit points including six for an end-term thesis and three for on-the-spot business practice.

The length of time needed to accomplish this is three and a half years, instead of four years that is usually needed for the same title in other universities.

This shorter time frame attracts many Indonesian students who wish to finish quickly but at the same time are equipped with a convincing level of knowledge and expertise to step into the job market.

Details of the Curriculum

Anies believes that a scholar must have a combination of academic backgrounds. He is now translating that belief into reality in Paramadina, and this can be seen in the mixture of disciplines in the curriculum.

In the first semester, for instance, students learn Sociology, Politics, Basic Principles of Business, Statistics, Business Mathematics, Introduction to Economics, Introduction to Accounting and Introduction to Information Technology.

Study, Taxation, Operational Research, Managerial Economics, Cooperatives Economics, and Managerial Accounting.

During the second short semester, students can attend History and Philosophy of Science, State Ideology Pancasila as well as civil education courses.

In the fifth semester students take Strategic Management, Entrepreneurship, International Business, Research Methodology, Science of Bank and Financial Institutions, and Informatics Management.

The sixth semester comprises such courses as International Financial Management, Analysis of Financial Reports, Investment Management, Advanced financial Management, Marketing Communication, Consumers’ Behavior, International Marketing Management, Strategic Marketing, Organizational Culture, Management of Change, and other unique subjects.

During the third short semester students participate in on-thejob (in-house) programs prior to presenting their academic theses.

In the second semester, students take Business Organizations’ Theories and Behaviors, Principles of Management, Statistics, Macro-economics, English, and Intermediate Accounting.

Meanwhile, short semester courses include Religion, Indonesian Language, Anticorruption, Legal Aspects in Business and Intermediate English.

But what is more impressive is the composition of Paramadina’s teaching staff, which includes graduates from Georgetown University, University of Southern California, University of Northern Illinois, University of Melbourne, Antwerp University of Belgium, and all the top universities in Indonesia.

It is because of these facts that Anies Baswedan in confident that Paramadina will soar far above the storm of global academic competition despite its relatively small size.

Financial Management is a compulsory subject in the third semester as are Human Resources Management, Marketing Management, Operational Management, Development Economics, and Advanced Accounting.

Risk Management is a compulsory subject in the fourth semester as are Business Feasibility

He plans to maintain the university’s current size in order to focus on the enhancement of its globally-oriented quality. He keeps saying that in Paramadina “small is beautiful”. In reality, Paramadina is bigger than the sum of its part as its reputation in the global education map keeps soaring.

The President Post

www.thepresidentpost.com

December 11, 2009

7

Education

Education and the Economy The educational policy of any country is directly related to its level of economic development and needs. Countries should have sound and pragmatic policies.

G

By Edward Lee Chairman of the Board of Governors of the President Executive Club

overnments around the world continue to grapple with the question of how to make their educational systems more effective in meeting the political, economic and social needs of their countries. Educational solutions evolve with time and circumstances—there is no universal model. There are, however, common threads among the seemingly disparate systems. One of these, the linkage between education and the economy, is often neglected.

When Singapore was expelled from Malaysia in 1965, it lost its hinterland. The future looked grim. For a tiny island-state with little natural resources and population of two million people, the immediate challenge was survival. Unemployment was nearly 14 per cent. Social unrest loomed ominously on the horizon. The situation became more severe when in 1968 the British announced the closure of its military bases which employed many Singaporeans. The Dutch economist, Dr. Albert Winsemius, who was an economic adviser to the government, depicted Singapore as “walking on the razor’s edge.”

Creating jobs was a top priority. Industrialization was the only option. Singapore was desperate for investments and factories. In those days, even a commitment by an investor to produce mosquito repellant coils (obat nyamuk) was welcomed. In his memoirs, Mr Lee Kuan Yew recounted how the Chairman of Marks and Spencer’s suggested to him that Singaporeans should make fish-

hooks for trout fishing because they have nimble fingers.

From these small beginnings grew other labour-intensive industries such as soft-drinks, toys and garments. Industrialized countries like Japan, France and Germany helped Singapore establish technical training facilities. Later, more polytechnics and vocational training institutes produced thousands of workers for the factories.

should have sound and pragmatic policies. They should shun considerations such as historical practice or mere prestige. For instance, it would be foolhardy to produce too many unemployable engineers when the economy needs more skilled technicians.

Many countries face the problem of graduate unemployment.

In the UK, they discovered unemployment among graduates in 2003 was 6 per cent higher than

ria in Australia have introduced a performance-based compensation scheme. There is a general consensus that ICT (Information and Communication Technology) can be used more widely to enhance teaching and learning.

Participants at the Roundtable agreed that in the face of rapid changes there was a degree of unpredictability as to what knowledge and skills an educated person would need in 10-20 years.

Indonesia, in allocating 20 per cent of its budget to education, can transform its educational system to meet the urgent needs of its fastgrowing economy and harvest the fruits of its full potential.

When Singapore moved from labour-intensive to higher valueadded industries like electronics and biomedicals, the educational system was revamped to produce better skilled workers. Today, more than half of the students pursuing post-secondary education go to polytechnics and vocational training institutes. This restructuring has received international accolades. In 2007, the John F. Kennedy School in Harvard bestowed the ITE (Institute of Technical Education) with the Harvard-IBM Innovations Award for Transforming Government. The panel of experts felt that the ITE experience could be replicated in other countries.

But it is wasteful to follow blindly. The educational policy of any country is directly related to its level of economic development and needs. Countries

the national unemployment rate.

Similarly in China, 1.2 million of the 4.1 million graduates in 2006 were uncertain whether their degrees were marketable. The key is not the number of graduates but the quality of their degrees and whether they are relevant to the economy.

In a globalised economy, the only constant is change. Governments are learning how to cope with the flux. The thrust of the International Education Roundtable in Singapore in July 2009 was “how good education systems can become great in the decade ahead”. Alberta in Canada is shifting from an industrial to a knowledge economy focus.

China’s reforms are aimed at realizing its development goals of 2020. To attract and motivate the best graduates in the teaching profession, Singapore and Victo-

budget for technical and vocational training. Large companies like Reliance, Tata and Infosys are having more in-house training programmes.

Developed and developing countries alike have some critical choices to make their educational systems more market-relevant, and to deploy their resources more optimally to ensure successful execution. No size fits all, of course, but there is a renewed stress on the fundamental nexus between education and economic development. Indonesia, in al-

locating 20 per cent of its budget to education, can transform its educational system to meet the urgent needs of its fast-growing economy and harvest the fruits of its full potential.

The writer was Singapore’s Ambassador to Indonesia, 19942006. The views expressed here are personal.

The Report of the International Education Roundtable, Singapore, 7 July 2009 is available at www.mckinsey.com/locations/ southeastasia/knowledge Photo: www.conaplin.com

The Co-chair of the Roundtable, Sir Michael Barber, Head of Global Education Practice at McKinsey, introduced a formula for the curriculum for a well-educated person: Well-educated = E(K+T+L) E is Ethical underpinning, K is Knowledge, T is (Critical) Thinking, and L is Leadership.

Language and technical skills are essential and highly soughtafter in international trade and business. More people in China are learning English because of its usefulness globally. Singapore’s Ministry of Education is looking for ways to make the learning of Mandarin more interesting, and to raise the standards of spoken English. Both public and private sectors are responding. In India, the government has doubled its

Many countries face the problem of graduate unemployment.

8

The President Post

December 11, 2009

8

www.thepresidentpost.com

Pictorial Events Heritage of Percussions J

ababeka Multi-Cultural Centre and Movieland held the Heritage of Percussion event on Saturday 21 November 2009. The event featured percussions from Japan, India, South Korea and other countries.

Interactive angklung show and marching bands by students of Universitas Indonesia and traditional percussions from Papua, Madura, Timor, and Bali enlivened the event. This second international cultural event in Jababeka also showcased the Barongsai (traditional Chinese dragon dance) Show and international food bazaar with stands set up along the road.

The Study Program of Public Relations of President University aims is to guide the Public Relations industry on what it takes to prepare the next generation of leaders in globally integrated organizations in this millennium era.

By Hendra Manurung

“T

here are people who deal with trust issues all the time.

Therefore, we’re in a good position to address them”. (James Murphy, Global Managing Director of Communications for Accenture) The Study Program of Public Relations of President University aims is to guide the Public Relations industry on what it takes to prepare the next generation of leaders in globally integrated organizations in this millennium era.

Vatican Cardinal Visits Borobudur Temple

A

delegation from Vatican led by Cardinal Jean Louis Taurant, a doctor on church law from the Gregoriana Roma University, visited the Borobudur Temple on 30 November 2009.

During the visit, Cardinal Taurant stressed the importance of fostering interfaith dialogs, saying that “Building trust for social

PR & VCD Students Attend MTV Indonesia Awards 2009

justice, a concept which underlines the importance of holding dialogs between different faiths, is not an option but a necessity to determine the future.” “Interfaith dialogs can be achieved through sincerity and good education,” he said.

During the visit, Cardinal Taurant and his entourage also paid a visit to Sri Sultan HB X.

“Think Big, Start Small, Move Fast” Book Launching

S

.D. Darmono, Founder & CEO Jababeka, launched a new book “Think Big, Start Small, Move Fast” on Thursday, 10 December 2009 at Jababeka Golf & Country Club.

Present at the function were prominent guests General Djoko Santoso, Cosmas Batubara, Giri Suseno, and M. Sobari.

Elbert Van, Moh. Rizki, Putri K., Yoana R., Andi Progo, Hilda R., Gratia E., Baruy K., Naomi S., Syahrul D.K., Hikhe H., Elena R.S.H., Maya M., Annisa Q., Ratih M., M.N. Rinaldy, Winne, Lia Manda B. accompanied by Mr. Sendy Widjaja, Ms. Widya, Mr. Yan Riadi, Mr. Hemi Wahyu Nugroho and Mr. Hendra Manurung.

The event was held at 8 pm on Wednesday at the Indoor Tennis Arena Senayan, South Jakarta.

The reputation of organizaEntry was free for MTV Intions is increasingly challenged donesia Awards 2009, which in this age of rapid response. featured celebrities with inCommunicators need to be ed- spiring performances by Agucated and trained in order for nes Monica, Ungu, RAN, KOTAK, T2, AFGAN, PEE them to perform effectively.

Corporations seek a better WEE GASKIN, Sherina, Alreputation for exa, Superman Is a variety of Vidi reasons and The management of Dead, A ldiano, MTV IndoGLOBAL TV invited Ariel, Luknesia Awards man, Uki, 2009, an event around thirty Public and Reza. which was orRelations and Visual “We hope to ganized by raise univerGLOBAL TV Communication sity students’ and MTV InDesign students level of apdonesia, has with five lecturers preciat ion demonstrated that they posfor Indoneand staff members sian songs,” ses the skills to attend this a spokesand knowledge areas reman for the spectacular event. organizers,” quired by Yocki said. modern meAmong the celebrities that dia industries.

Nowadays, good communi- took part in the event are Ascators operate within Thomas mirandah, Pevita Pearce, Friedman’s ‘flat world’, work- Imelda Lubis, Marsha Timing outside national borders for othy, Sandra Angelia, Olla global corporations with new Ramlan, Chika Jessica, Atiqah rules of engagement. We also Hasiholan, Tika Putri, Arumi live in an information age that Bachsin, Syahrini, Ayu Shita, Ratna Galih, Nadia Saphira, is more complex than ever.

Jessica Iskandar, Olivia Jensen, The MTV Indonesia Awards and UDW Dancer.

“The event also featured a 2009 took place in Jakarta on November 25, 2009, to raise spectacular performance by public appreciation of Indone- Agnes Monica as Best Fesian pop songs in Jakarta, na- male Artist of MTV Indonesia Awards 2009 at the conclutionally and globally.

The management of GLOB- sion of the event. It shows that AL TV invited around thir- Music and MTV have become ty Public Relations and Visual a favorite lifestyle for university Communication Design stu- students,” the organizer said. dents with five lecturers and staff members to attend this Hendra Manurung is a spectacular event.

Lecturer of Communications The students are: Annisa and Public Relations Studies Dwijayanti, Giska M.R, Lilis in Fac. Communications at H., Cynthia V.D., Agusman, President University, Kota Aulia P., Nguyen Quoc Thinh, Jababeka, Cikarang, Bekasi Moh. Shihab, Ambrosiana C., 17550, Indonesia.

PFN to Build New Studio at Jababeka Movieland

By Eka Putri

S

tate-owned film company Produksi Film Negara (PFN) aims to tap the huge movie industry potential in the country by building a new studio equipped with the latest technologies in Jababeka Movieland next year.

To realize the plan, PFN signed a memorandum of understanding (MoU) with Jababeka Movieland on Friday, December 4, under which terms it will become an anchor tenant and to jointly market and promote PFN films and programs.

“Jababeka offers a huge market potential that can be explored by PFN. The Jababeka industrial estate is occupied by some 1,400 companies from 27 countries that would need above-the-line promotion, and these are our potential market,” said PFN President Director Eddy Noor.

He said PFN’s current studio at Jalan Otista, Jakarta, is no longer sufficient to keep up

with developments in the movie industry.

The company is now in discussion with another state-owned company to manage its idle assets and turn them into profits.

PFN owns 2.3 hectares of land in Otista and several other assets worth Rp 250 billion.

“We are trying to make use of our assets to generate money to finance our studio project,” he said, adding that the cooperation is subject to the shareholder’s approval, in this case the state minister of state enterprises.

Jababeka President Director Setyono Djuandi Darmono hoped that PFN’s plan to move its movie production activities to Movieland will be followed by other movie producers.

He said so far 25 movies and TV series have been produced in Movieland since its inauguration in August last year by Trade Minister Mari Elka Pangestu and Tourism and Culture Minister Jero Wacik.

“Everything that a movie pro-

duction needs is available here.

Kota Jababeka has 450 factories, 2000 units of houses, 35 high schools, both private and state run, 8 hospitals, and a golf course that can all be used for movie shooting purposes. We can even provide actors because we have the President Film Academy at President University that has forged cooperation with many foreign parties,” said Darmono.

“We also have a hotel and apartments to accommodate production crews and actors that will help producers to cut production costs because it will help them safe a lot of time to gather people involved in the production to arrive at the shooting locations. However, we lack producers making movies and TV programs here. We hope PFN’s plan to concentrate its production activities here will also be followed by other producers.”

Movieland is envisioned to be the first one-stop film and TV industry center in Indonesia. It is a fully-integrated movie industrial

estate with facilities available in the 5600- hectare Kota Jababeka, approximately 30 hectares of which are dedicated to movie industry activities.

Jababeka has spent Rp 3.6 trillion to build Movieland Indonesia. The area now also has a theme park called The Warrior.

Darmono added that Movieland has also developed cooperation with production house Multivision, which plans to build a movie laboratory.

“We don’t have a lab, so Multivision plans to build this but talks on this are still in progress. We also still don’t have warehouses for costumes and furniture, otherwise everything else is in place,” he said.

Furthermore, Darmono said

that while electricity in Jakarta often disrupted, that is not a problem in Movieland as Jababeka has its own power plants.

Aside from building a studio and the cooperation to market and promote PFN products, both parties are currently collaborating on producing two movies called “Movieland” and “Medical City” at Movieland.

Noor explained that PFN is a profit-oriented movie company that emphasizes producing nation character- building movies.

“We will not produce horror or sex movies. We used to produce two colossal movies a year such as “Serangan Fajar”, “Jenderal Kancil”, “Kereta Api Terakhir”, and “Pelangi di Nusa Laut”.

Meanwhile, Darmono said

the movie industry is a powerful tool to build the country’s image, to promote culture, products and explain the country’s security condition to the world. He said Indonesia has been experiencing unfair media exposure and has been perceived as a country that is not conducive for investment.

He added that movies are more effective than print media for promotion as many people like to watch movies.

“Indonesia lacks promotion and this resulted in a negative perception about Indonesia. We need a strong movie industry to change world perception that the country is not investmentfriendly and that the people here are unpleasant because there are terrorists here. This needs to be

changed,” he said.

Darmono said a movement to produce as many movies as possible is needed to show the real condition of the country, and he hoped that the government would pay more attention on the movie industry because “it is an effective marketing and promotion tool that could benefit the country.”

“Individually, we feel safe in this country. To change perceptions we need to make a movement to produce as many movies as possible. We should have our own TV channel like CNN, or CCTV in China, or Singapore’s Channel Asia that can be watched worldwide,” he said.

Business BUSINESS BRIEFS Petrokimia Gresik books Rp1.18t profit PT Petrokimia Gresik`s profit until November 2009 reached Rp1.18 trillion from sales totaling Rp14.2 trillion.

“This year`s profit is higher than last year`s Rp 783.1 billion,” its president director, Arifin Tasrif told Antara here recently.

He said the profit hike was driven by the company`s development efforts, including its operations of NPK Phonska III fertilizer plant that produces up to 600,000 tons of fertilizers a year.

He said PT Petrokimia Gresik`s fertilizer production from Phonska I, II, III, NPK I,II and III reaches 2.2 million tons a year, meeting the Ir. Arifin Tasrif target of national supply for 2010.

“The average production reaches 450,000 tons or 1,600 tons a day while production of sulfate 150,000 tons, Phonska 1,4 million tons and ZA 70,000 tons,” he said.

The plant development projects include the development of Urea II amoniac plant with a capacity of producing 660,000 amoniac and 570,000 tons of urea a year.

BTN to sell shares at Rp800/unit State-owned Bank Tabungan Negara (BTN) plans to sell its shares at the Indonesia Stock Exchange on December 17, 2009 at a price of Rp800 per share, vice president director Evi Firmansyah said.

“The number of shares to be issued is 2.36 billion,” she said, “with proceeds to be used to strengthen the company`s capital for future expansion.”

The number of shares to be sold comprises 27.08% of the bank`s shares with 24.48% of it for the public and 2.60% for the MSOP program.

The price offered is between 1.5 and 2.2 of the book value, namely Rp750Rp1.100 per unit.

She said the roadshows had been successful not only here but also in Singapore, Kuala Lumpur, Hong Kong, Frankfurt, Amsterdam, London and Edinburgh.

Pertamina E&P to invest US$924 m in 2010 PT Pertamina E&P, a subsidiary of Indonesian state oil and gas company PT Pertamina, said it will invest Rp8.6 trillion (US$924 million) in capital expenditures next year, mostly for exploration.

Pertamina E&P will drill 110 wells including 30 exploration wells and 80 development wells, its President Salis A Aprilian said yesterday.

Salis said the company hopes to increase its daily crude oil output to 128,000 barrels in 2008 from an average of 125,500 barrels this year. Its gas production is also expected to rise to 1,100 mmscfd from 1,040 mmscfd this year, he added.

Sasol to study US$10b coal-to-liquid project The government and Sasol, the world’s largest synthetic fuel producer, recently signed a preliminary agreement to study the viability of developing a coal-to-liquid facility project in Indonesia with an estimated cost of over US$10 billion.

The technology could help unlock Indonesia’s abundant coal reserves and would improve energy security by reducing dependence on imported fuels, said Gita Wirjawan, the head of the the investment board (BKPM), Antara reported.

Indonesia has become a net importer of oil but it has one of the largest coal reserves in the world. Sasol said if the project may produce approximately 80,000 barrels of high quality ultra clean transport fuel in Indonesia.

She said the roadshows had been successful not only here but also in Singapore, Kuala Lumpur, Hong Kong, Frankfurt, Amsterdam, London and Edinburgh.

Multi Bintang acquired by APB Asia Pacific Breweries Limited has signed a deal to acquire 68.5% of brewer PT Multi Bintang Indonesia at a price of Rp2.23 trillion (US$240 million).

Chief Executive of Asia Pacific Roland Firmez said he signed the sales and purchase agreement yesterday with Heineken International BV, which owned 75% of Multi Bintang.

The price of Multi Bintang shares surged 14.04% to Rp199,000 after the signing yesterday, Bisnis Indonesia said.

9

The President Post

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Display until December 24, 2009 /// N0. 05

November Deflation: How Come?

Disinflation is likely the result of currency appreciation and not due to weak domestic demand.

By Helmi Arman

N

ovember’s headline CPI inflation came in at 2.41% y-o-y, down from 2.67% in October, a figure that is significantly below our expectation and consensus.

Meanwhile, food prices declined further, with prices of items such as poultry likely to have dropped to levels lower than before the Ramadan fasting season. Core inflation also surprisingly declined again to 4.29% from 4.57%. Most notably, processed foods experienced disinflation.

The declining trend in inflation may appear counterintuitive at first, given that the economy has started to recover. The most probable explanation for this may lie with the rupiah, which has strengthened both against the dollar and on a trade-weighted basis.

Reported declines in the domestic price of corn, which is used for animal feed, may have also contributed to the poultry deflation.

The most probable explanation for this may lie with the rupiah, which has strengthened both against the dollar and on a trade-weighted basis.

Meanwhile, trade data was also released showing the trade surplus doubling to $2.4bn in October compared to the previous month. Non-oil and gas exports miraculously turned positive year-on-year (10%).

This was caused by a surge in exports that seems difficult to explain. The numbers show a 57% jump in exports to Japan, but its industrial production index doesn’t appear to have risen strongly enough to justify such a rapid rise in demand for imports.

Our initial assessment on this is that the October export number is probably distorted by statistical issues, either an expansion in coverage or a carry over from previous months.

Separately, October also saw a sturdy rise in imports. But

contrary to exports, the import numbers still look reasonable.

Imports were up 11% month on month, an increase that continues to be broad-based across merchandise categories, which in our view is a natural symptom of the economic growth recovery.

Policy implications

We think BI is still likely to hold its policy rate at 6.50%. Disinflation is likely the result of currency appreciation and not due to weak domestic demand; therefore rate cuts are not warranted.

Nov-09 (Actual)

Nov-09 (Forecast)*

Nov-09 (Consensus)

Oct-09

Sep-09

Aug-09

Headline CPI (% chg y-o-y)

2.41

2.67

2.70

2.57

2.83

2.75

Headline CPI (% chg m-o-m)

-0.03

0.22

0.20

0.19

1.05

0.56

Headline CPI (% chg y-t-d)

2.45

2.71

2.69

2.48

2.28

1.22

Core CPI (% chg y-o-y)

4.29

n/a

4.47

4.57

4.86

4.84

Source: Bloomberg, CEIC, *Danamon Estimates

We maintain our view that the BI rate will eventually rise by a total of 100bps next year starting Mar10.

The writer is economist of Treasury & Capital Markets, PT Bank Danamon Indonesia, Tbk

Aug-09

Jul-09

Export Growth (% y-o-y)

10.1

-19.9

-15.4

-22.7

Import Growth (% y-o-y)

-11.8

-24.2

-21.2

-32.5

Trade Balance (US$bn)

2.42

1.27

0.84

1.00

Source: Bloomberg, CEIC

Chart 2: Indonesia Foreign Trade: Monthly

1.3

14.3

1.0

12.5

0.8

10.8

0.5

9.0

0.3

-0.03

0.0

4.29

-0.3

2.41 09 10 11 12 01 02 03 04 05 06 07 08 09 10 11 2008

Sep-09

He can be reached at helmi.arman@danamon.co.id

chart 1: Indonesia CPI Inflation

-0.5

Oct-09

2,700

USD mn

% YoY

2,400

30

2,100

10.1

1,800

1,200

5.5

-11.8

900

BI Rate (%) Core Inflation (% y-oy)

-10 -20

600

-30

2.0

300

-40

0

09 10 11 12 01 02 03 04 05 06 07 08 09 10 2008

Headline Inflation (% m-o-m, lhs)

10

3.8

2009

Headline Inflation (% y-o-y)

20

0

1,500

7.3

40

2009

Trade Balance (lhs)

Source: BPS, CEIC

-50

Import (cif)

Export (fob)

Source: BPS, CEIC

Indonesia: Selected Economic Indicators 2006

2007

2008

2009E*

2010E*

National Accounts Real GDP (% y-o-y)

5.5

6.3

6.1

4.3

5.2

Domestic demand ex. inventory (% y-o-y)

3.7

6.0

9.1

3.4

6.9

Real Consumption: Private (% y-o-y)

3.2

5.0

5.3

5.1

5.0

Real Gross Fixed Capital Formation (% y-o-y)

2.9

9.2

11.7

3.9

8.0

GDP (US$bn) — nominal

364

433

507

532

641

1,641

1,925

2,227

2,309

2,744

10.3

9.8

8.6

9.9

9.8

19

14

18.3

-19.0

11.0

6.3

15.4

36.8

-26.7

15.8

29.7

32.8

22.9

27.6

26.5

GDP per capita (US$) — nominal Open Unemployment Rate (%)

External Sector Exports, fob (% y-o-y, US$ bn) Imports, fob (% y-o-y, US$ bn) Trade balance (US$ bn) Current account (% of GDP)

3.0

2.5

0.1

1.8

0.5

Central government debt (% of GDP)

39.2

35.1

32.0

29.9

28.2

International Reserves –IRFCL (US$ bn)

42.6

56.9

52.1

64.8

71.1

4.5

6.2

5.4

9.4

9.0

Currency/US$ (Year-end)

9,020

9,419

11,120

9,600

9,750

Currency/US$ (Average)

9,143

9,163

9,767

10,350

9,675

BI policy rate (% year end)

9.75

8.00

9.25

6.50

7.50

Consumer prices (% year end)

6.60

6.60

11.20

4.00

6.70

Fiscal balance (% of GDP; FY)

-1.0

-1.3

-0.1

-1.9

-1.0

S&P's Rating -FCY

BB-

BB-

BB-

BB

BB

Merchandise import cover (months)

Other

Source: CEIC, *Danamon Estimates

The President Post

10 December 11, 2009

www.thepresidentpost.com

Business VP Boediono Calls on Investors to Join in Developing Nation To meet all the development funding needs the government needed the support of all parties, both domestic and foreign investors.

By Eka Putri

Vice President Boediono has called on both domestic and foreign investors to join the government in mobilizing Rp20 trillion per year in funds to step up the pace of national development.

“It is quite a huge amount so it cannot be met from the state or regional budgets. Therefore external support is also needed to reach the target of national development,” the vice president said at a conference on the government`s mid-term national development plan (2010-2014) here last week.

Boediono also said to meet all the development funding needs

the government needed the support of all parties, both domestic and foreign investors.

“To make national develop-

Boediono said.

He said the national economy was relatively safe as the glob-

“I am certain that we will be able to lower the poverty rate percentage from 14.1% this year to 8-10% in 2014 if we wisely make use of our existing potentials,” Boediono said. ment a success, the government needs the support of all parties, domestic and foreign investors who can cover the funds deficit,”

al economic crisis did not have a significant impact on it.

“We still have a strong economic structure and the oppor-

tunity to develop financial sector in spite of global financial crisis.

And that is a good potential for us to step our our national development program,” the vice president said.

“From 2000 to 2009 the poverty rate has been below 20% and in 2009 alone it was slightly above 10%,” the vice president said.

Boediono, an Australiantrained economist further said that the poverty rate continues to drop dramatically since 1990 continued, from 60% to 14.1% in 2009.

Boediono said the figure could continue to be reduced because Indonesia had the potential to overcome poverty with its good structure of economic development and government programs for people`s welfare.

“It is a historic record because the number of poor people continues to decline rapidly since 1990, although it edged up slightly in 1998 as a result of the national economic crisis,” the vice president.

“I am certain that we will be able to lower the poverty rate percentage from 14.1% this year to 8-10% in 2014 if we wisely make use of our existing potentials,” Boediono said.

According to the vice president, the poverty rate in 2000 to 2009 was recorded at below 20% or slightly above 10%.

He called on regional governments as field coordinators to pay serious attention to the people`s welfare so as to reduce the poverty rate significantly.

Elections Key Factor in RI’s 2009 Economic Growth

By Eka Putri

The Indonesian Bankers Association (IBI) Chairman, who is also Bank Mandiri President Director, Agus Martowardojo, attributed the country’s economic growth to the recent legislative and presidential elections, saying that the drop in exports did not have much impact on the economy because of its low contribution to the economy.

“The economy was able to grow by 4.3% because Indonesia does not depend too heavily on exports,” Martowardojo said during a discussion in Jakarta, Wednesday (09/12).

The government is confident that the economic growth would reach 4.3% at the end of this year.

The government initially projected the economy to grow at only 2-2.5% but later made a major revision.

Martowardojo said contribution from the real sector to the economy this year was small.

He also blamed the low demand for bank loans this year on the sluggish real sector.

“The engine growth to the economy was the elections. Another important factor to the success in achieving a positive economic growth of 4.3% was the strong banking industry, not the real sector,” he elaborated.

The government projected the economy to grow at 5.5% next year.

Finance Minister Sri Mulyani Indrawati said the telecommunications, trade, construction, transportation and agriculture sectors will remain as growth engines next year.

“Growth in the agriculture sector is expected to remain stable at 3.5% and as such we can say that the macro economic growth in 2010-2014 will also be driven by investment and exports,” she said.

Mulyani predicted inflation to be below 3% and the rupiah exchange rate at 9,500-10,000 per US dollar at the end of this year.

She also predicted that inflation in 2014 at 5% plus minus 1% in line with oil price hike expectation.

Economist Faisal Basri dismissed Mulyani’s next year growth projection as a pessimistic target, reflecting what he said to be the government’s lack of will to work harder.

Basri said there are many indicators that show the global economy would recover next year, as reflected in exports, for example.

“My growth projection for the economy next year ranges between 5.4-5.9%,” he said during the Outlook 2010 seminar in Jakarta, Thursday (10/12).

He said Indonesia could achieve a 6% growth in 2010 if the government was willing to work extra hard by completing the National Single Window (NSW) policy and to consistently operate Tanjung Priok and three other ports around the clock and bolstering the ports’ productivity.

“To achieve the economic growth target, the NSW policy should be implemented, the Tanjung Priok port must operate 24 hours, and the productivity of ports have to be increased. If all of that is implemented, Insya Allah we will achieve a 6% growth.

We should be ashamed if growth only rises to 5.5%,” Basri said.

Furthermore, he added that growth in the manufacturing industry is still needed to create a healthy economic growth and that the sector should grow by at least 3.5-4% next year, up from 1.3% this year.

Manufacturing industry growth is supported by among other things Foreign Direct Investment.

“The country needs around Rp2,900 trillion investment per year and from the total, the banking sector is expected to contribute Rp400 trillion. During the January-September period, Indonesia only recorded a net FDI of US$1billion. We hope the figure can reach at least US$10 billion next year,” he said.

Meanwhile, Martowardojo hoped that the real sector could move more expansively next year with the support of a healthy banking industry to overcome poverty and unemployment problems.

He said to achieve an optimum growth of 6.3%-6.9% throughout 2009-2014, some Rp 2910 trillion is needed to move the economy. From the total, the banking sector can provide up to Rp 959 trillion.

He added that the government should prioritize its development programs on infrastructure, food resilience, energy, transportation and industry revitalization to boost the real sector’s performance. ”The banking sector can optimize its role on two main aspects, financial intermediation to achieve proper margin and improve risk management to maintain trust from stakeholders,” he said.

Earlier, BNI Chief Economist Tony Presetiantono said there are two key factors to achieving growth, namely political stability and positive economic growth.

He said the two factors have effectively boosted the economic growth in the third quarter of this year with non- performing loans still under control and bank capital adequacy ratio at 17.7%.

The President Post

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December 11, 2009 11

Mining Coal: An Indonesian Success Story Indonesia has been the world’s largest exporter of seaborne thermal coal (in volume terms) since 2005, and the Indonesian coal industry has a good safety and environmental record. More than 95% of the commodity is thermal coal.

By Scott Merrillees

I

ndonesia’s coal production has more than trebled between 2000 and 2009, from 76 million tonnes to a forecast 230 million tonnes, of which just over 75% is exported.

National export revenues reached US$9 billion in 2008, with coal mining royalties exceeding US$1.3 billion last year.

However, the success of coal has not been repeated elsewhere in the indonesian natural resources sector.

Indonesia has been the world’s largest exporter of seaborne thermal coal (in volume terms) since 2005, and the Indonesian coal industry has a good safety and environmental record. More than 95% of the commodity is thermal coal.

panies have also successfully tapped international bond markets in 2009, as shown in the Table 1.

Indonesia’s coal export destination profile has changed significantly over the past five years.

China and India now the largest export destinations overtaking Japan and Taiwan (Figure 3).

ISSUES AND CHALLENGES FOR THE INDONESIAN COAL SECTOR

Domestic Market Obligation (DMO) ­Exports likely to be capped at 150 million tonnes (MT) from 2010. ­How will DMO be allocated across all producers? ­How will DMO coal be priced? ­For 2010,

figure 1: INDONESIAN COAL PRODUCTION AND EXPORT AND DOMESTIC SALES 2000-2009E million tonnes 250 200 150 100 50 0 2000

2001

2002

Total Production

2003

2004

2005

2006

Total Exports

2007

2008

2009E Year

Total Domestic

and explosives. ­This will especially become critical as average coal quality in Indonesia continues to decline.

Infrastructure challenges for smaller producers and “want to be” producers ­Most smaller producers and new entrants into the Indonesian coal industry underestimate the cost and issues involved in developing or gaining access to infrastructure. ­But the larger players generally have their own high quality roads, coal handling terminals, ship loaders and other key infrastructure. Indeed, it is usually easier and faster to build in Indonesia than in Australia.

Coal Bed Methane (CBM) ­Some excitement and activity in this space in Indonesia over the past two years but nothing yet in production. ­Regulatory environment follows oil and gas law, not the mining law. ­Not yet clear whether the geology of Indonesian coal deposits will make CBM a viable and competitive source of energy in the future.

Greenhouse Gas Emissions and Emissions Trading ­Regulatory environment beginning to evolve in numerous countries including the Carbon Pollution Reduction Scheme

(CPRS) in Australia and Carbon Capture and Sequestration (CCS) initiatives in the USA. ­Perhaps the biggest single issue facing the global coal industry in the next decade.

M&A Activity in Indonesian Coal ­Regulatory divestment requirements for First Generation CCoW’s have now all been completed so this source of M&A ac-

Tata Power). ­At the “small end of town” (including greenfield), there has been frantic activity particularly from domestic Indonesian investors as well as from Australia and India. Interest from China and South Korea has also been evident. We fear that some of this will end badly as there seems to be a “buy first and ask questions later” approach with some inves-

Decree 28 requires mining contractors to obtain an IUJP (Mining Services Providers Licence) that is only valid for 3 years. This raises issues about the ability of mining contractors to commit to long-term projects and make large investments in fleet. tivity has ended. ­But significant M&A activity is still underway. At the “big end of town”, this includes the on­going sales processes for 90% of Berau and 25% of BHP Billiton’s seven coking coal CCoW’s (the so­called “Maruwai” concessions). BUMA ( a leading mining contractor) has also just recently changed hands. ­At the “big end of town”, the largest foreign investors have been from Thailand (ITM by Banpu and Straits Asia by PTT) and India (KPC and Arutmin by

tors proceeding without adequate resource verification nor thorough examination of infrastructure and regulatory issues. ­Foreign investment in Indonesian coal is often just as motivated by securing long-­term off­take arrangements as it is by investment returns.

With the new mining Law and Decree No. 28 there are numerous issues for existing CCoW and KP holders but key ones include: • Harmonization of CCoW’s with the new mining law is re-

Source: Energy Publishing and ANZ estimates

Table 1: Indonesian coal related companies have successfully tapped international bond markets in 2009

figure 2: FORECAST COAL PRODUCTION AND EXPORT AND DOMESTIC SALES 2010-2025

Name

million tonnes 400 350

Rating

50 0 2010F

2015F Total Production

2020F Total Exports

2025F Year

Total Domestic

Source: Indonesian Ministry of Energy and Mineral Resources

At ANZ we divide Indonesian thermal coal producers into two categories: • Those producing more than 5 million tonnes per annum— 11 companies that account for 87% of national thermal coal production • Those producing less than 5 million tonnes per annum— dozens of companies almost all producing much less than 5 million tonnes per annum But the Indonesian coal industry is not just the producers.

There is also a vibrant support and services sector: • Mining contractors­: the main ones being PAMA PERSADA, BUMA, THIESS, LEIGHTONS, SIS AND PETROSEA • Tugs and Barges, shipping and other logistics • Mine to Port Infrastructure

if production is forecast to be 240 MT and exports capped at 150 MT, then the implication is that 90 MT will be available for the DMO. ­However, domestic coal consumption for the first nine months of 2009 was only 34.5 MT. So will 90 MT actually be needed in 2010? Will the new coal fired power plants come on line quickly enough to absorb this additional coal?

Indonesia’s average coal quality is declining as production increases ­Indonesia is transitioning from being a predominantly BITUMINOUS to predominantly SUB­ BITUMINOUS producer. ­The majority of new coal projects are SUB­BITUMINOUS with average kcal of 5,250­5,750 GAR. ­But perhaps less of an issue with the rise of Chinese and InAfter all, coal is a logistics busi- dian demand as China and India ness. It is not enough just to have happily taking this coal. a mine.

Increasing quantities of SUB­ The increased number of In- BITUMINOUS and low rank donesian coal coals, howevproducers lister, provide oped on the Inportunities for After all, coal is a donesia Stock coal upgrading Exchange technologies logistics business.

It has improved in Indonesia. is not enough just to Bayan’s joint-­ transparency and strengthventure with have a mine. ened the capWhite Energy ital base of (“Kaltim Suthese compapacoal”) is curnies: ­ITM, ADARO, INDIKA rently leading the way in Indoneand BAYAN have all listed in the sia. past two years. ­Coal producers are among the Controlling Production Costs largest companies by market cap­Average cash cost of producitalisation listed on the Indonesia tion (including royalties) is now Stock Exchange. ADARO is 8th, around US$ 45 per tonne for maBUMI 10th, PTBA 16th, ITM jor Indonesian producers. This 18th and UNITED TRAC- has doubled over the past deTORS (owner of PAMA PER- cade.

SADA) is 9th. ­Factors have been rising average stripping ratios and higher Indonesian coal-related com- prices for oil, tyres, spare parts,

The writer is Head of Natural Resources ANZ - Southeast Asia.

He can be reached at: scott.merrillees@anz.com

23.4 19.3 14.5

Oct

800

7.625

B2/B+

Oct

230

9.75

BUMA*

Ba3/BB-

Oct

315

11.75

1.1

BUMI

Ba3/BB-

Nov

300

12.00

2004

Source: Daniele Barberis (“Negotiating Mining Agreements”)

16.5

16.6

Ba1/BB+

250

100

Coupon (%)

INDIKA

* Mining Contractor

150

Amount (US$ million)

contractor so that neither the mining company and the contractor have shares in each other. There is another layer of ownership between the mine owner and the contractor so that the mine owner does not directly own shares in the contractor.

• Decree 28 has a clear “Indonesia First” theme with mining companies required to prioritize “Local” contractors over “National” and “National” over “Other”. “Other” includes contractors with any foreign shareholding at all. A listing on the Indonesian Stock Exchange might not qualify a foreign owned mining contractor to be deemed “National” as was earlier hoped.

• Decree 28 requires mining contractors to obtain an IUJP (Mining Services Providers Licence) that is only valid for 3 years. This raises issues about the ability of mining contractors to commit to long-term projects and make large investments in fleet.

Nevertheless, there is a threeyear grace period until 30 September 2012 for transition to the requirements of Decree 28.

figure 3: China and India now the largest export destinations overtaking Japan and Taiwan

ADARO

300

200

Date

quired but not all implementing regulations have yet been issued. The legal question arises as to whether the new mining law can be imposed on CCoW’s anyway? But the most likely scenario is that CCoW holders and the government will find an acceptable middle ground.

• Decree 28 creates a new relationship between mine owners and their contractors. Mine owners must mine their own coal, load their own coal and handle their own coal seam related blasting. But other functions including overburden removal and transportation can still be contracted out, and mine owners might not need to own their own mining equipment. They might be permitted to lease it from their existing contractor(s). ­But clearly mine owners can no longer just be passive owners. ­Also particular issues for First Generation CCoW’s with regard to ownership of fleet.

• Decree 28 prohibits mine owners from using affiliated or subsidiary mining contractors. ­But the decree seems to only prohibit situations where the mine owner is a direct shareholder in the mining contractor. Indirect structures might still be allowed such as a holding company owns the mine and the

1.1

9m2009

China (%)

2004

11.0

9m2009

India (%)

2004

9m2009

Japan (%)

2004

9m2009

Taiwan (%)

The President Post

12 December 11, 2009

www.thepresidentpost.com

Human Capital HR’s Three “Must-dos”,

for Developing a Skilled and Competent Workforce

Naresh Makhijani

High-performing HR departments make this happen through three ‘mustdo’ interventions: competency-based human resource management; training; and coaching. Each has separate, but mutually reinforcing roles.

P

erhaps the key responsibility of the Human Resources (HR) function is to facilitate the development of the skills and competencies that the enterprise requires to win in the marketplace. High-performing HR departments make this happen through three ‘must-do’ interventions: competency-based human resource management; training; and coaching. Each has separate, but mutually reinforcing roles.

Must do number one “competency-based human resource management,” provides the overarching framework for aligning employee skills and competencies with strategic goals. As a simple definition it represents a common organization-wide framework of competencies that provide the means for making sure that employees are selected, evaluated, developed, promoted and rewarded based on the competencies required for organizational success. In short, competency-based management ensures that employee development is hard-wired to the enterprise’s strategic agenda.

At the heart of this framework, of course, are “competencies.” As a definition of what can be quite a wooly concept: A competency is a personal characteristic that is proven to drive superior job per-

Krishnan Rajendran

formance. It describes what top performers do more often with better results than their average counterparts. Competencies establish a causal link between certain behaviors and the achievement of success. They describe what makes people effective in a given role.

A competence, therefore, has job-related technical skills, such as engineering proficiency or computer skills (a hard dimension) as well as attitudinal and human characteristic components, such as achievement, motivation or empathy (a soft dimension).

To bring together hard and soft skills, organizations should deploy competency modeling techniques that identify, develop and measure those competencies that are strategically critical to an organization.

According to a Human Capital Institute, a competency model should: • Ensure that training and development opportunities are aligned with organizational values and strategies.

• Make the most effective use of training and development time and dollars • Provide a framework for ongoing coaching and feedback • Enable a shared understanding of what will be monitored and

James Creelman

measured • Focus and facilitate the performance appraisal discussion • Provide a means to gather information about a person’s behavior on the job.

The first step in creating a competency model is the identification of the competencies required for high performance within key positions in the organization.

And this not just about leadership. For a pharmaceutical company, for instance, these competencies might be about excellence in research and new product development. Armed with this information HR must then strive to remove and identified competency gaps through focused and effective selection and/or training and development.

Indeed HR must identify performance criteria for individuals and work units that are important to the success of the organization; key to this is identifying individuals and work units that meet, exceed, and fall below the performance criteria.

The following activities are important to do in the development phase for a competency model to work in an organization, according to the Human Resource Institute.

• Administer a survey and/or conduct focus groups to in-

clude a wider population and test the degree of relevance and importance of the competencies to the job • Analyze survey or focus group and refine the model • Validate the model: administer a 360-degree questionnaire to validate competencies that correlate with exceptional performance. Aggregate the competencies by performance level (above, at, and below) • Finalize the model - review the model with subject matter experts for each specific work role or job profile for final approval and implementation An important element of any competency model is the ability to both assess and measure behaviors. Most notably with regard to “soft” competencies, it is critical that employees are demonstrating the correct behaviors.

HR should do this through the systematic identification and usage of behavioral indicators.

Consider a supervisor as an example. Conflict management might be a required competence.

Behavioral indicators might include: Recognizes the potential for conflicts, confrontations, or disagreements; resolves conflicts, confrontations, or disagreements in a constructive manner and addresses formal and informal complaints from employees.

Once the HR organization has developed robust competency models, it then becomes much easier to design and deliver effective training modules. It becomes easier to identify which hard and soft skills must be developed and protected.

Training a is HR’s “must-do,” number two and we define this as ‘”planned effort by an organization to facilitate employees’ learning of job-related competencies’’ The goal of training is to “enable the employee to master the knowledge, skills and behaviors and apply them to his or her daydo-day activities.”

Based on the field experience of OTI senior consultants, the following four step process is useful for ensuring that training meets the performance needs of the enterprise.

1

Analyse established goals Firstly HR leaders must be fully cognizant of the strategic goals of the enterprise.

By closely analysing each goal it becomes possible to identify which competencies that are re-

quired by current and/or the future workforce to reach that goal.

The next sub-step is to conduct a thorough appraisal of current competency levels to identify any gaps.

2

Develop training strategies With competency gaps identified, the next step is to determine the type of training that is required to close the gaps. Organizations should also carry out a return on investment analysis to ensure that the anticipated benefits from the training outweigh the projected costs.

Possible non-training interventions should also be considered.

3

Integrate training to strategic plans At this stage it is important to relate the training goal to existing goals in the strategic business plan. How training goal accomplishments will be measured must also be understood along with the tasks and resources required to implement the training.

4

Evaluate training effectiveness Stage four is where there is a thorough evaluation of the success or otherwise of the training interventions. The analysis looks at whether the training goal was achieved and, if so, whether the cost of doing so was appropriate. Most importantly is whether accomplishing the training goal helped achieved the related strategic goal.

To following checklist provides useful guidelines for successful training: • Link training content to work functions and day-to-day operations • Include everyone in the process • Be flexible when/where training happens • Use a variety of training methods • Consider on the job training • Provide ongoing feedback • Measure the results Coaching is a further HR facilitated intervention to improve and focus the work of an employee and is our “must-do,” number three. “Facilitated,” is an appropriate word as coaching can only be delivered by a functional superior and not by HR. It is our observation that some Indonesian organizations are beginning to realize the importance of coach-

ing and are sending their managers to be trained in coaching techniques, but this is still only happening in the minority of cases.

As a definition, coaching is a ‘personal discussion between the manager and individual concerned’. Effective coaching helps a subordinate to integrate with the organization and to develop a sense of involvement and satisfaction. The following are key components of successful coaching: It requires a general climate of openness and mutuality. Some degree of trust and openness is essential. If the organization or the unit in which the subordinate works is full of tension and mistrust, coaching will not be effective.

A helpful and empathetic attitude on the part of the manager is required. The manager as coach must approach the task as an opportunity to help, must feed empathy for the subordinate being coached, and must be able to convey helpfulness to the subordinate.

There must be the establishment of an effective dialogue.

Coaching is collaborative rather than prescriptive. It is based on the subordinate’s achievement of performance goals set in concert with his or her manager.

A focus on work-related goals is of paramount importance: Workrelated goals should be the exclusive concern of a coaching effort; attention should only be given to behaviours and problems that directly relate to the subordinate’s achievement of those goals. During the course of the discussion, issues that are not work related may arise; but when this happens the manager should refocus the dialogue on improvement in the organizational setting.

Avoid discussions about salary, raises and other rewards. The purpose of coaching is to help the subordinate plan improvements in performance, and discussing the linkage between performance and rewards may interfere with this purpose.

Those HR organizations that master these three ‘must-dos’ will be well-placed to develop employees that can help Indonesian firms win in local, regional, and increasingly global marketplaces.

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

The President Post

www.thepresidentpost.com

December 11, 2009 13

Tourism

FASCINATING BULELENG Text and photos by Taufik Darusman

Buleleng, on the northern stretch of Bali, is often seen as the other side of the island in terms of culture and landscape.

I

f you think Buleleng is not on a par with tourists’ most-favored Bali destinations such as Jimbaran, Nusa Dua, Ubud or Sanur, wait until you see what’s in store there.

Buleleng, on the northern stretch of Bali, is often seen as the other side of the island in terms of culture and landscape.

The regency is a melting pot of cultures that coexist in an exemplary peaceful mode amidst a mountainous terrain and sandy beaches.

Singaraja, the regency’s capital city, for example, is home to Hindus, Moslems and Chinese, all of whom boast interesting and intricate places of worship located within close proximity to each other.

In the city, a well-maintained Chinese temple with timehonored red tiles stands erectly, a proud witness to the ethnic group’s strong trading presence and influence in the past.

Singaraja is about a two-hour’s drive from Denpasar heading northward. Passing the hill-resort area of Bedugul, one breathes in

the fresh and clean air amidst compelling views of Lakes Bratan, Buyan and Tamblingan, making the car drive a memorable moment.

Be prepared, however, of the torturous snaking, narrow roads that test your driving skills (and your threshold of car-sickness).

But the soothing sights of coffee, palm and clove plantations, as well as the ubiquitous roadside resting places where you can consume duren at unbelievably low prices, are bound to compensate for the terrestrial hardship.

“

Buleleng Regency, which in fact is a former kingdom, has nine sub-regencies, namely Tejakula, Kubutambahan, Sawan, Buleleng, Sukasada, Banjar, Busungbiu, Seririt and Gerokgak, all of which are distinctive and worthy of at least a short visit.

Travel industry players agree that Buleleng is poised to welcome more visitors in the future, as it has markedly improved public facilities and made the area greener.

Buleleng has no less tourist attractions than, say, Denpasar has to offer. The regency is a treasure trove for those inclined towards agri- and eco-tourism—one can feast on its terraced rice fields and at the same time enjoy its fascinating sunsets.

Its marine tourism matches that of southern Bali’s, with Lovina beach resort area and Menjangan Island as your best bets.

Lovina is the ideal place for snorkeling, diving, sailing and fishing, as well as for watching – and even mingling – with dolphins. The quite beach resort area and its surrounding areas are also famous for its aquatic inhabitants and incredible marine life. This is also the site where you can hire a boat and head towards make-

shift fish markets in the middle of the sea.

Menjangan Island is inhabited by some 6.000 people of different faiths, mostly Islam and Hindu.

And yet, they coexist remarkably well in full tolerance.

Buleleng was founded as a kingdom by Gusti Panji Sakti, who ruled in the late 16th century and is commemorated as a heroic ancestor-figure who expanded the power of Buleleng to Blambangan on East Java.

The Dutch colonial power attacked and conquered the then powerful Buleleng in the 18th century, and incorporated it in the Dutch colonial system.

In 1929 a descendant of Sakti, the renowned scholar Gusti Putu Jelantik, was appointed regent by the Dutch, and his son and successor was the well-known novelist Anak Agung Nyoman Panji Tisna.

In 1949-50 Buleleng, like the rest of Bali, was incorporated into the Republic of Indonesia, but Dutch traces remain abound, especially in Singaraja, the colonial power’s capital.

When the Dutch first came to Bali, they actually entered the northern part of the island, and not the south, which most European artists prefer in the early 19th century. This explains the prevalent Dutch atmosphere, in the forms of old office buildings and mansions, in Singaraja.

And this also explains why the majority of foreign tourists found in Buleleng come from The Netherlands.

A friend of mine who is in the travel business, amazed by the presence of many foreign tourists in Buleleng, was curious as to why they were there and not in such familiar places as Nusa Dua or Sanur.

He approached a young couple who were having breakfast at one of the star-rated hotels, and was told that they came from Amsterdam.

“We’re here to dive, as this is the best place in Bali in terms of marine tourism,” said the male part of the duo.

“It’s also much quieter here, much more laid-back, with none of the hustle-bustle you won’t be able to avoid in such areas as Kuta or Sanur,” his partner added.

Buleleng Regency, which in fact is a former kingdom, has nine sub-regencies, namely Tejakula, Kubutambahan, Sawan, Buleleng, Sukasada, Banjar, Busungbiu, Seririt and Gerokgak, all of which are distinctive and worthy

Top The view of the coast of North Bali as seen from a boat sailing in Bali Sea Above Visitors are allowed to hire these colorful boats at reasonable rates; Sunset at Lovina Beach Opposite Buleleng offers resorts that are secluded and comfortable

of at least a short visit.

And all of which are, as the Dutch lady asserted, “quite and laid-back.”

How to Get There

By car from Denpasar, you head north either by way of Tabanan and Seririt or go to Bedugul upwards.

Other Interesting Places to Visit

• Banjar Hot Spring 10km west of Lovina beach and surrounded by a bamboo jungle.

• Celukan Bawang 40km of the main coast of Singaraja, where you’ll catch sight of beautiful Bugis schooners.

• Gedong Kirtya Ancient Balinese letters in form of chronicles written

on palm leaves stored in a building built in 1928.

• Gitgit Bali’s most spectacular 45meter waterfall.

• Jagaraga The stronghold of Gusti Ketut Jelantik and his army who defied two large and wellarmed Dutch expeditions in 1846 and 1848. A number of temples are found here, the most impressive being Pura Dalem.

Places to Stay

• Menjangan Resort • Bali Handara Hotel • Bali Lovina Beach Hotel • Bali Taman Beach Hotel • Puri Bagus Lovina • Waka Gangga Resort Reprinted by permission from Garuda Inflight Magazine

The President Post

14 December 11, 2009

www.thepresidentpost.com

Technology Developing an Interoperability Ecosystem

tional trade agreements, such as Technical Barriers to Trade, limit the degree to which participating governments can mandate standards, to the extent that the standards may impact foreign trade.

Notably, the U.S. has a strong preference for market-developed standards and promotes this preference as a matter of both domestic law and public policy and foreign trade policy. Finally, in contrast to the IT industry at large, government rarely has the resources to fully understand the technology marketplace and is not likely nimble enough to respond to the rapid pace of change in market conditions and innovation; therefore, the risk of government failure is significant.

“Government failure” is where government steps in to ‘remedy’ a perceived market failure, but the government action fails to accomplish the government’s goals.

Economist Victor Stango observed: “a policymaker may resolve uncertainty more quick-

Stacy Avery Baird describes the five facets of the interoperability ecosystem and offers insight into a constructive role for government in facilitating each aspect individually, as well as in promoting the interoperability ecosystem as a whole.

By Stacy Avery Baird

I

What Is Interoperability?

nteroperability, simply put, is the ability of people, organizations and systems to interact and interconnect to efficiently and effectively exchange and use information.

In today’s increasingly heterogeneous information technology (IT) marketplace, technical interoperability is an important feature for IT products and services.

The ability to achieve meaningful technical interoperability, however, largely depends upon the health and stability of the broader “interoperability ecosystem”. Thus, technical interoperability must be pursued alongside the often more complex and challenging goals of organizational, legal and public policy, and semantic interoperability.

So too, a successful implementation may need to address political, economic, or cultural barriers to interoperability.

“The ability to achieve meaningful technical interoperability... largely depends upon the health and stability of the broader “interoperability ecosystem”.

As is the case with a wide range of industries reliant on IT, interoperability is of critical importance to implementing egovernment solutions. It reduces redundancy within systems and is necessary to facilitate interand intra-organizational collaboration and information sharing.

Broad interoperability facilitates operational and economic efficiencies by making it easier to integrate systems from a variety of vendors, thus permitting information to flow more efficiently across systems. These efficiencies translate to substantial overall economic efficiencies and improved utility. Furthermore, the practical realities of globalization drive the need for greater interoperability between the services and products that traverse across national borders.

The fact that, today, both developed and developing countries alike have access (and the ability to contribute) to new technologies makes interoperability, in all its forms, increasingly significant in the global IT marketplace.

This is illustrated by the fact that multi-national companies now heavily rely on interoperability between and among their various systems for design, manufacturing and distribution, irrespective of geography.

The increasing demand for interoperability as a feature in some products is being fueled by another trend. As Chesbrough describes, for many years, the IT industry relied on a “closed innovation” model, i.e., all research and development occurred within the walls of a company and was commercialized and supported exclusively by that company. Businesses were guided by the principles of hiring the best and the brightest, inventing first to assure they brought innovative new products to the market first, and controlling their intellectual property so as to exclude all competitors.

Over the last two decades, however, there has been a paradigm shift to “open innovation”. Open innovation assumes companies should use outside ideas as well as internal research, and should use external avenues to the market to advance their own technologies

A discussion at Lee Kuan Yew School of Public Policy on the subject of Interoperable Government

and maximize value from internal research and development.

Open innovation was born out of the recognition that a company can no longer expect to retain the largest share of the smartest people and thereby consistently produce the most innovative ideas, but rather, it needs to look outside its walls to innovation being developed by others. Businesses realized that rather than relying on intellectual property to exclude others from the market in which they dominate, intellectual property transactions (licensing, co-development, etc.) could be the key to beneficial new relationships. With these and other changes in behavior such as the emergence of multiple successful business models, the IT industry has flourished and innovation comes at unprecedented pace. Indeed, interoperability has become a core characteristic of a strong, modern global IT industry.

1. The Interoperability Ecosystem

Expanding on the early categorizations such as those by Arms (2002) and more recently the European Commission (IDABC, 2004), the term “interoperability ecosystem” encompasses the interoperability, information exchange and collaboration among people, organizations, and systems.

There are five facets to the interoperability ecosystem: (a) technical interoperability, “The ability of a system or a product to work with other systems or products without special effort on the part of the customer;”’ (b) organizational interoperability, the organizational structure and the business goals and processes of an enterprise that facilitate efficient collaboration and information exchange; (c) legal and public policy interoperability, the law and public policy that facilitates information exchange and other aspects of interoperability; (d) semantic interoperability, meeting the need that all participants and devices ‘speak the same language’ and understand each other; and (e) the impact of different political, cultural, and economic paradigms.

2. The Role of Government and the Interoperability Ecosystem

Government has a critical role in facilitating healthy interoperability ecosystems in both govern-

ment and private sector contexts.

A healthy government interoperability ecosystem is essential to efficient, modern government operation. It allows government to gain efficiencies by facilitating collaboration and eliminating redundant services, business processes, data, and infrastructure.

The result can be better, more efficient service to citizens in almost all areas of government service, including better healthcare, education, emergency services, and national defense.

A healthy interoperability ecosystem in the private sector enables innovation for users and, importantly to government, greater trade opportunities and industrial and economic development. A healthy interoperability ecosystem is also essential in the current “open innovation” marketplace. Interoperability underlies the ability of companies to work together, exchange intellectual property, and build business and technical relationships; these relationships cross borders and cross industry sectors well beyond the IT industry.

ry roles government can play is to support research in these areas of the interoperability ecosystem in the contexts of both the effective implementation of e-government and to industrialization and economic growth.

2.1 Technical Interoperability Technical interoperability is defined as “the ability of a system or a product to work with other systems or products without special effort on the part of the customer”. It is typically the easiest aspect of the interoperability ecosystem to accomplish and it is among the highest priorities for industry. Indeed, interoperability between modern technologies is often a far simpler task than during previous eras of technological evolution wherein inventors were limited by physical characteristics and mechanical interactions.

For many years, industry has been pursuing technological convergence between previously autonomous technologies (e.g., computing, consumer electronics, broadcast and telecommunications). Furthermore, users

“Government should take a keen interest in developing healthy interoperability ecosystems and recognize that by doing so; it will directly benefit its citizens and economy as a whole.”

It is in government’s interest to foster this business environment and encourage the economic development that can be derived from these market conditions. Thus, government should take a keen interest in developing healthy interoperability ecosystems and recognize that by doing so; it will directly benefit its citizens and economy as a whole.

To these ends, an interoperability ecosystem benefits most when the stakeholders leverage their core competencies. The information technology industry is appropriately most capable in developing and promoting technical interoperability. Governments (as well as non-governmental organizations and transnational institutions) are often in the best position and most able in promoting or directly facilitating other facets of interoperability and promoting the concept of an interoperability ecosystem generally. I will note at the outset that one of the prima-

have increased their demand for interoperability as they integrate previously disparate IT systems and otherwise pursue greater information sharing and collaboration. These facts, combined with recognition of the significance of open innovation to the modern IT marketplace, evidence the degree to which industry has placed heightened emphasis on technical interoperability and has done so with remarkable achievement.

As described in The Government at the Standards Bazaar, there are several significant reasons government should be reluctant to intervene in the marketplace as to technical interoperability, particularly by mandating technology standards.

First, the marketplace has many well-developed, longstanding means of facilitating technical interoperability, including many approaches to developing standards. Second, interna-

Photo: Microsoft

ly than would be the case in a standards war but also might be more likely to choose the ‘wrong’ standard.” Government failure is more likely when a market is new and volatile as is the case with the current IT market given the rate of innovation as exemplified in the areas of the Internet, mobile computing and wireless connectivity. Besen and Johnson observe that when industry is in a period of high innovation and volatility, the likelihood that a government standard will result in inefficient and/or artificial technological decisions is particularly acute.

Industry and government should work in parallel to apply their respective capabilities to create a healthy ecosystem for efficient, meaningful interoperability. Industry has long been successful at developing the technologies to facilitate technical interoperability. Government’s strengths lie in addressing the more challenging aspects of interoperability that have broader implications: the political, legal, public policy, organizational and cultural influences.

2.2 Organizational Interoperability To achieve interoperability across an enterprise (or among enterprises), an enterprise, whether private or public sector, must be designed to facilitate efficient interoperability. This requires appropriate mission descriptions, business goals, business processes, and organizational structures (including the management structure) to enable and encourage collaboration and information exchange. Barriers to interoperability may be a result of distinct and contradictory goals and missions of the various components of an enterprise or embodied in internal business processes, operational rules or even under law.

A management hierarchy may by its nature preclude efficient communications and discourage collaboration and information sharing. Furthermore, companies in autonomous industries or sectors may be unwilling or reluctant for practical reasons, such as competitive advantage or preservation of trade secrets, to interact with enterprises with which interoperability may be sought.

Meaningful interoperability demands buy-in by all who manage and work in the enterprise.

As the lines between compo-

nents of an enterprise are erased (or new lines of communication are drawn), individuals, like the enterprise itself, need to adapt.

There are many reasons workers may be reluctant to adapt to and adopt changes required to make meaningful interoperability for an enterprise. As to management, one common rational for such behavior is the interest in maintaining current employment requirements and structures, workflows and processes, and revenue streams that are based on the existing organizational practices. With the introduction of interoperability, practices may be altered or eliminated and employees may have to identify new means to measure productivity, transition the old revenue streams and methodologies to the new processes and organizational structure, or identify new revenue streams. Indeed, for successful adoption of interoperability to occur, it is incumbent upon management to identify and develop new revenue streams and reallocate resources to best facilitate and take the greatest advantage of interoperability.

In some cases, and potentially at any level of the administrative hierarchy, workers may feel threatened by their newly realized interconnectedness. A worker may see the new level of interaction with others and the sharing of information as a threat to, or loss of, control of their work product or what had previously been proprietary information or information for which they had responsibility to protect for specific uses.

Workers may not have the skills to effectively undertake the imperatives of interoperability and to do their job within a new organizational structure, with new processes and systems. As a part of addressing organizational interoperability, an enterprise must address these workplace issues to engender management and worker buy-in to the concepts and implementation of interoperability. As part of implementing interoperability, the enterprise must adopt the appropriate rules, guidance, management instruction and training to assist workers in developing the perspective, behaviors, skills and psychological comfort level needed to facilitate meaningful interoperability.

When industry is in a period of high innovation and volatility, the likelihood that a government standard will result in inefficient and/or artificial technological decisions is particularly acute.

Of course, any government enterprise would have to consider the aforementioned issues to implement interoperability. However, more broadly, governments can be of enormous benefit in this area by developing or funding research to identify and validate reforms and appropriate organizational structures, explore incentives to encourage organizational interoperability, and provide a forum to oversee and advise on organizational industry, or cross-industry interoperability including progress monitoring, assessment, and validation.

2.3 Legal And Public Policy Interoperability Interoperability may inherently implicate the sharing of personal, financial, or other sensitive information or may involve government agencies or regulated industries. In some areas of interoperability, intellectual property law may come into play, such as the use of copyrighted works in library systems or educational institutions. Tax law may also be implicated in regard to commercial electronic transactions. For example, in the context of healthcare IT, government may need to harmonize insurance regulations, regulations on healthcare providers, consumer protection laws, and other privacy protections.

Another example arises in regard to national drivers’ licenses or national I.D. cards.

Government will play a key role in developing public policy (e.g., addressing privacy concerns, constitutional issues, identity protection, benefits to domestic and national security) and revising the laws as appropriate. A third example can be found with regard to government procurement policies. Government can enhance

market flexibility to address technical interoperability by assuring policies are technology neutral and based on objective criteria for the best business case.

A final example is in regard to IP protections. In the current market environment of “open innovation,” the market is meeting users’ needs through many different business models that are substantially driven by IP-based transactions. Government should adopt and enforce strong intellectual property protections as part of their long-term economic development strategy.

2.4 Semantic Interoperability To achieve interoperability, there must be semantics and syntax that can be understood by the entire interoperable system for the purpose of organizing and accessing information, and by all users to avoid confusion or errors and ensure consistent results.

Where appropriate, government can work with industry, non-governmental organizations, and user communities to identify and resolve semantic interoperability issues by providing a forum for agreements, funding (e.g., grants, project funding through legislation and appropriation, etc.), technical expertise, and national leadership. Government can also undertake or fund research to support private and public sector efforts to develop semantic interoperability.

2.5 Effect Of Different Cultural, Political, And Economic Paradigms Substantially differing cultural, economic, and political paradigms may influence the willingness and ability of nations (and their governments) to develop the frameworks and policies necessary to interact with one another. Prevailing precepts, norms and perceptions that define a culture, and the political goals and dynamics of the society’s government may influence the approaches a government, industry, or enterprise applies to solving an interoperability problem.

Governments are best positioned to work together to benefit the welfare and prosperity of their citizens and the economic development that can fuel that prosperity while concurrently advancing the global economy through a healthy interoperability ecosystem. As an example, typically, governments and industry prefer to adopt globally accepted international standards.

However, to achieve domestic economic goals, a government may enact laws to favor standards that incorporate domestic technologies. They do so with the intent of giving advantage to domestic companies entering the international market. But such a standards strategy can result in competitive disadvantage for the country. For example, it may become difficult for a multinational corporation to build facilities in or outsource work to a country that adheres to standards that differ from globally accepted standards. Governments can work together with industry to better understand the implications of adopting these strategies.

Governments are best positioned to lead efforts to reconcile the differences in cultural, economic, and political norms and priorities by identifying and acknowledging the mutual interests at stake (e.g., interoperability, local economic development, and a strong global economy) and then building on those mutual interests.

3. Conclusion

In the same way that market participants bring unique competencies, expertise, and spheres of influence, government has an important role in the creation of healthy interoperability ecosystems. Governments should resist the demands by companies for mandatory technical standards that they claim will provide a “quick fix” to produce meaningful interoperability.

By focusing instead on areas where government can be particularly effective, e.g., on the more challenging aspects of organizational, legal and public policy, and semantic interoperability, and on bridging cultural, economic, and political differences that can create barriers to interoperability in all its forms, governments can improve the overall health of the greater interoperability ecosystem (including the ability of the IT industry to further enhance technical interoperability) and, by extension, the prosperity of their people and the growth of their local economies.

The President Post

www.thepresidentpost.com

December 11, 2009 15

Health HEALTH TIPS

4

Surprising Signs You’ll Live a Long Time

We all know the obvious ways to add years to your life: Don’t smoke, eat your veggies, wear a seat belt (even in the backseat).

But there are other, lesser-known habits and attributes that can help you live to a ripe old age.

Photo: www.thecprschool.com

In Cardiac Arrest, Think ‘Stayin’ Alive’ The one-minute PSA from the American Heart Association instructed listeners, in the event of cardiac arrest, to perform chest compressions very hard to the beat of the 1970s Bee Gees song “Stayin’ Alive.”

D

ebra Bader was taking a walk in the woods with her 53-year-old husband one morning when suddenly he collapsed. At first she thought the situation was hopeless.

“I looked at him and said, ‘He’s dead,’ because he wasn’t moving or making any sounds at all,” Bader remembers.

“But I pulled the cell phone out of his pocket and called 911, and then a public service announcement I’d heard on the radio popped into my head.”

The one-minute PSA from the American Heart Association instructed listeners, in the event of cardiac arrest, to perform chest compressions very hard to the beat of the 1970s Bee Gees song “Stayin’ Alive.”

When someone suffers cardiac arrest, as pop singer Michael Jackson did, the heart stops functioning completely, and brain death begins within four to six minutes if the victim doesn’t receive help.

“I sang the song and gave directions to the EMTs at the same time. It was like, ‘Stayin’ alive, stayin’ alive -- take a right here, take a left here -- Stayin’ alive, stayin’ alive -- take this path down here -- Stayin’ alive, stayin’ alive,’ “ Bader remembers.

For 15 minutes Bader, who had never taken a CPR class, pumped her husband’s chest until the ambulance arrived and the EMTs delivered a shock to his heart with a defibrillator. Christopher Bader survived, but 95 percent of people who go into cardiac arrest die before they get to the hospital.

Bader says doctors at the hospital where her husband was treated have an alternative song.

“They told me they do CPR to ‘Another One Bites the Dust,’ which also has about 100 beats per minute,” Bader says.

“Doctors have kind of a dark sense of humor.”

“She’s a real hero,” says Dr. Kenneth Rosenfield, Bader’s cardiologist at Massachusetts General Hospital.

So does Bader like the song “Stayin’ Alive”?

Bader says she was surprised you can save someone in cardiac arrest without doing mouth-tomouth resuscitation.

“And the fact that you have to deliver the compressions that fast was news to me. It’s certainly different than what I learned as a Girl Scout back in 1968,” she says.

Many people are under the misconception they need formal training to help someone in cardiac arrest, says Allyson Perron, advocacy director for the American Heart Association in Massachusetts. She says while it’s best to take a CPR class (they last about three and a half hours), just doing chest compressions can get a person’s heart going again.

“We still encourage full CPR with mouth-to-mouth if you can do it, but doing what you can is better than doing nothing at all,” Perron says.

“There are tragedies when people don’t know what to do. A high school boy went into cardiac arrest in Massachusetts in December, and he died because no one on the scene knew what to do. Sadly, we hear these stories a lot.”

The heart association started the “Hands-Only CPR” campaign last year, encouraging people to deliver chest compressions 100 times per minute.

The song “Stayin’ Alive” has about that many beats per minute.

Photo: www.qcredcross.org

“I do now,” she says. (CNN)

1

YOU SKIP SODA (EVEN DIET)

I finally kicked my diet cola habit in my 20s, a good thing too, because scientists in Boston recently found that drinking one or more regular or diet sodas every day doubles your risk of metabolic syndrome-- combination of conditions that increase your chances of heart disease and diabetes. The exact culprit isn’t completely understood, but it could be the caramel color added to colas and other dark sodas, which increased the risk for metabolic syndrome in animals.

Experts also speculate that exposing your tastebuds to the sweet fizzy flavor of soda conditions you to crave sugary foods, which can lead to weight gain.

Whatever the reason, it’s an easy enough habit to quit. Club soda (sodium free, of course) with a splash of juice satisfies the fizz craving with just enough sweetness.

For a good alternative, try Sassy Water.

2

YOUR LEGS ARE STRONG

Lower-body strength means you also have good balance, flexibility, and endurance. While you probably care more about how your legs look in a mini and a pair of knee-high boots right now, as you get older those attributes reduce your risk of falls, injuries, and hip fractures, all of which are associated with declining health in older folks.

So do some squats, lunges, and stair climbing to look good now-- and be strong and healthy later. It’s win-win! Get up to

10 pounds lighter and take 10 years off your body with this workout.

3 4

YOUR MOM HAD YOU YOUNG

If she was under age 25, you’re twice as likely to live to age 100 as someone born to an older mom, according to University of Chicago scientists. The reason, they suspect, is that younger moms’ best eggs go first to fertilization, which may mean healthier offspring.

YOU EAT AND DRINK PURPLE THINGS

Red wine, concord grapes, blueberries (okay, not quite purple, but close enough) all get that deep rich color from polyphenolscompounds that reduce heart disease risk and may even protect against Alzheimer’s disease, according to new research.

So crack open a bottle of Pinot (don’t overdo it), snack on some grapes, or make a blueberry pie and ponder all the years that lie ahead. Talk about happy and healthy! Get healthy with these great recipes.

The President Post

16 December 11, 2009

www.thepresidentpost.com

Lifestyle

S S E N I P IS A PROCESS P HA Happiness is not a goal — It’s a process.

Though many people think happiness is elusive, scientists have actually pinned it down and know how to get it.

I

f recent scientific research on happiness -- and there has been quite a bit -- has proved anything, it’s that happiness is not a goal — It’s a process.

Although our tendency to be happy or not is partly inborn, it’s also partly within our control.

And, perhaps more surprising, happiness brings success, not the other way around. Though many people think happiness is elusive, scientists have actually pinned it down and know how to get it.

For years, many in the field of psychology saw the science of happiness as an oxymoron.

“We got no respect,” says Ed Diener, a professor of psychology at the University of Illinois, who began studying happiness in 1981.

“Critics said you couldn’t study happiness because you couldn’t measure it.” In the mid-1990s, he and a few other researchers started to prove the naysayers wrong. As a result, Americans now have an abundance of consumer books, academic articles, journals and associations to help them find happiness.

“Many of us have material things and our basic needs met, so we are looking for what comes after that,” says Diener, co-author with his son, Robert Biswas-Diener, of the forthcoming “Happiness: Unlocking the Mysteries of Psychological Wealth.”

“Materialism isn’t bad. It’s only bad if we use it to replace other things in life like meaningful work, a good marriage, kids and friends. People are recognizing that those who make money more important than love have lower levels of life satisfaction.”

In recent months, the following titles have hit bookstore shelves: “What Happy Women Know,” “The Happiness Trap,” “The How of Happiness: A Scientific Approach to Getting the Life You Want” and “Happiness for Two.” Christine Cardone, executive editor of psychology books for Wiley-Blackwell, whose titles include Diener’s forthcoming book, points to 2000 as the tipping point: Happiness science began to mushroom and flood society with new, positive ways of thinking. That year, Martin Seligman, then-president of the American Psychological Assn., started the positive psychology movement, which focuses on what makes people mentally healthy. That concept got out to the media, spawning more interest and research.

Meanwhile, neuroscientists were discovering better ways to measure what’s going on in the brain.

“Popular interest in happiness is only one driver,” says Seligman, a psychology professor at the University of Pennsylvania and director of the Positive Psychology Center there.

“The books are coming out because the science is coming out.”

Academic publications have enjoyed a similar boon. Between 1980 and 1985, only 2,125 articles were published on happiness, compared with 10,553 on depression. From 2000 to 2005, the number of articles on happiness increased sixteenfold to 35,069, while articles on depression numbered 80,161. From 2006 to present, just over 2 1/2 years, a search found 27,335 articles on happiness, more than half the 53,092 found on depression.

The field of happiness also now has its own publications -the Journal of Positive Psychology and the Journal of Happiness

Studies -- and its own professional organization, which Diener started last year. The International Positive Psychology Assn. for academics and scholars already has 3,500 members.

The trend shows no signs of slowing. Sonja Lyubomirsky, a professor of psychology at UC Riverside and author of “The How of Happiness: A Scientific Approach to Getting the Life You Want,” believes that’s because happiness is like the Holy Grail.

“People around the world want it. If you ask people what they want for their children, they’ll say for them to be happy. It’s in our Declaration of Independence. It matters to and affects everyone.”

Among the major findings of the last decade is that the pursuit of happiness is a worthy cause, Diener says. “Happiness doesn’t just feel good. It’s good for you and for society. Happy people are more successful, have better relationships, are healthier and live longer.”

“

Seligman adds, “We’ve learned in 10 years that happy people are more productive at work, learn more in school, get promoted more, are more creative and are liked more.”

Seligman adds, “We’ve learned in 10 years that happy people are more productive at work, learn more in school, get promoted more, are more creative and are liked more.”

And if that doesn’t make you happy, here’s more happy news: Around the world, happiness is on the rise.

Beyond your genes

Great if you happen to be one of the people born happy, right?

Not exactly. Another major finding is that about half of our tendency toward happiness is genetic, while the rest is controlled by the individual.

Lyubomirsky and her colleagues analyzed studies on identical twins and other research and came to the conclusion that happiness is 50% genetic, 40% intentional and 10% circumstantial.

“Half of your predisposition toward happiness you can’t change,” she says. “It’s in your genes. Your circumstances -where you live, your health, your work, your marriage -- can be tough to change. But most people are surprised that circumstances don’t account for as much of their happiness as they think.”

Life circumstances don’t result in sustained happiness, she said, because we adapt. That new car, promotion or house feels great at first. Then we get used to it. An old but often-cited study found lottery winners were no happier than control groups after a year.

That doesn’t mean that getting out of a bad job or a terrible marriage won’t give your happiness a boost.

But sustaining that good feeling requires something else: deliberate control of how you act and think. That’s the 40% inten-

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tional part that Lyubomirsky and others are most interested in.

In her research, Lyubomirsky led controlled studies to determine what behaviors positively affect happiness, and has come up with at least 12 strategies that measurably increase levels. For instance, one strategy she’s tested is the practice of gratitude. In her gratitude study, she had a group of 57 subjects express gratitude once a week in a journal. A second group of 58 expressed gratitude in a journal three times a week. And a control group of 32 did nothing.

At the end of six weeks, she retested all three groups and found a significant increase in happiness in the first one. (The participants who journaled three times a week showed less change, perhaps because the exercise didn’t feel as fresh, she theorized.)

She and other researchers also recommend practicing forgiveness, savoring positive moments and becoming more involved in your church, synagogue or religious organization.

“Not every strategy fits everyone,” she says. “People need to try a few to find which ones work.”

Although Lyubomirsky likes to let people define happiness for themselves, clinically, she describes it as “a combination of frequent positive emotions, plus the sense that your life is good.”

Seligman, who has written several books on the subject, including the bestselling “Authentic Happiness,” says it’s the pursuit of engaging and meaningful activities. By engaging, he means being in a state of flow or “at one with the music.” You get so absorbed in what you’re doing that you lose track of time. But one person’s flow is another person’s torture. What puts you in a state of flow is usually an activity that uses your strengths and talents.

It’s even better when it’s part of your work.

societies is constant. His research concluded that significant and enduring changes in happiness can occur not only for individuals, but also for entire societies.

The study, which Seligman calls the best he’s seen on happiness in five years, analyzed polls taken from 1981 to 2007 by the World Values Survey. The surveys consisted of 88 countries containing 90% of the world’s population, and measured happiness and overall life satisfaction.

Among the 52 countries that completed all the surveys over the 17-year period, happiness rose in 45 of them, or 86%. In six countries, it declined, and in one (Australia), levels showed no change.

Overall, happiness increased 6.8 percentage points.

Inglehart credits economic development, democratization and increasing social tolerance for the happiness bump. Economic gains that bring more food, clothing, shelter, medical care and longer life can result in a substantial increase in subjective well-being for poor societies, he says.

But once a society reaches a certain threshold, further economic growth brings only minimal gains. Among the richest so-

“Meaningful” would be using what you’re best at to serve others or to participate in a cause that’s bigger than yourself. (To find out what you’re good at, or your strengths, Seligman offers a free survey on his website, www.authentichappiness.org.)

“Your purpose doesn’t have to be giant,” says Dan Baker, a psychologist who founded the life enhancement program at Canyon Ranch in Tucson and is the author of “What Happy Women Know.”

“If you’re 17, your purpose can be getting into the college of your choice. When you’re a parent, it can be getting your kids off to school safely and prepared for each day. You don’t have to adopt a Romanian orphan or build a church in Chile.”

What happiness isn’t, Diener adds, is getting everything right in your life. “A man might think, ‘If I get the right education, the right job and the right wife, I’ll be happy.’ But that’s not how it works. For instance, once basic needs are met, the effects of income on happiness get smaller and smaller. That’s because happiness lies in the way you live and look at the world.

“If you have no goal other than your personal happiness, you’ll never achieve it. If you want to be happy, pursue something else vigorously and happiness will catch up with you.”

External factors

Although happiness is largely up to the individual, new research shows that what’s going on around you -- specifically how much personal freedom you have -- also plays a role.

In a paper published in the July issue of Perspectives on Psychological Science, lead researcher Ronald Inglehart, a professor of political science at the University of Michigan, refuted the longheld belief that happiness among

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cieties, increases in income are only weakly linked with higher levels of subjective well-being.

While economic growth helps promote happiness for some, democratization and rising social tolerance contribute even more. Democracy provides more choice, which promotes happiness. Support for gender equality and tolerance of people who are different from oneself are also strongly linked, not just because tolerant people are happier, but because living in a tolerant society enhances everyone’s freedom, Inglehart says.

The fact that happiness and our understanding of it are on the rise bode well.

“In the future, more people will understand the nature of happiness and its process,” Baker says. “They will understand that they have to take an active role if they want it.”

Apparently, more people around the world are getting that message. “It’s true,” Seligman says. “We’re happier. And more happiness in the world is a great thing.” health@latimes.com

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