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GUS DUR A Paragon of Pluralism and Democracy Photo courtesy of: www.vivanews.com

A week after his death, the Virginia, US-based First Freedom Center, a reputable institute that promotes understanding among different faiths, conferred Gus Dur with the First Freedom Award 2010. Gus Dur was cited for his services in advocating tolerance, pluralism and the protection of minority groups and for his campaigns against extremism.

JAKARTA (TPP) – “Former president Abdurrahman Wahid, or Gus Dur, passed away at Cipto Mangungkusumo Hospital at 18.40 local time on Wednesday, December 30, 2009,” his personal secretary Sulaeman announced on that fateful day. He is survived by his wife Sinta Nuriyah and their four daughters. The government immediately declared a week of national mourning on the demise of the former president. “I call on the entire Indonesian nation to hoist the Red and White flag half-mast for a week starting tomorrow (Thursday) to mourn over the demise of the country`s fourth president KH Abdurrahman Wahid,” President Susilo Bambang Yudhoyono said during a brief press conference later in the evening. “I urge Indonesians nationwide to pay him our highest respects,” he said in a nationally televised address. “I say this with prayers and hope that he is accepted at the side of God for his enormous service to the public, the nation and our beloved state.” Earlier, the President had been at Gus Dur’s bedside during the last moments of the latter’s life at the hospital. Across the country, prayers and vigils were held to mark Wahid’s death. His private residence in Ciganjur, South Jakarta, was filled with dignitaries and public figures wanting to pay their final respects. Although access to the residence was limited, hundreds of people waited and prayed outside in the street. Catholics and inter-faith charity agencies held joint inter-faith prayers on behalf of Wahid at the Cathedral, Bogor, West Java. Mgr Michael Angkur, leader

of Catholics of Bogor City, told Antara the prayers were followed by other interfaith leaders such as H. Zaenal Abidin representing Muslims, Darwin Darwaman Protestants, Johan Freinky Buddhists, I Wayan Suastika Hindus and Thung Uh Tjong followers of Confucianism. The leader of the interfaith congregation community in Bogor, which has an institutionalized friendship and communication medium known as Basolia, said Wahid’s death is a great loss for the Basolia activists, “as he had set a lot of examples and inspirations for harmonious relations among religious believers.” The next day the mortal remains of Gus Dur was flown in a Hercules C130 plane on Thursday morning to Jombang, East Java, for burial in a family grave-

ulemas (scholars) and educators, Abdurrahman Wahid forged his name as an ardent proponent of religious tolerance and moderate politics. His commitment to those causes remained strong throughout his life, earning him recognition both at home and abroad. He was the eldest grandchild of Hasyim Asy’ari, founder of Nahdlatul Ulama (NU), the country’s largest Islamic movement. Wahid joined the organization in the early 1980s as a member of its Religious Advisory Council. He gradually rose within the ranks and in 1984 he was elected as chairman of the NU, a position that he skillfully managed to keep, despite the disapproval of autocratic President Soeharto, for 15 years. Although he led a conserva-

yard. Accompanying the late Gus Dur in the plane were key members of his family. A second Hercules aircraft was also flown to carry other mourners. Not since the death of former President Soeharto has the demise of an Indonesian statesman drawn so much public and international attention. Although a scion of a respected East Java family of Islamic

tive religious organization, Wahid consistently maintained that faith was a personal matter. This drew criticism from Islamic circles but earned him the respect of non-Muslims across the country. When the Asian financial crisis began to hit in mid-1997 and gradually undermined Soeharto’s grip on the nation, Wahid allied himself with other prominent opposition figures, including Megawati Sukarnoputri and Amien Rais, who establish a re-

ENTREPRENEURSHIP

BUSINESS

TRAVEL

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Barriers in Entrepreneurship Development

Pangestu Urges Private Sector to See Upside of ACFTA

Garuda Wastu Kencana Majestic and Regal

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Indonesia needs a lot of entrepreneurs because they can make a great contribution to the economy. Therefore, efforts should be made to overcome the barriers so that entrepreneurship can be fostered.

Gus Dur’s two years as the fourth president of Indonesia were often tumultuous and confusing, but he held firmly to his principles. He was above all a voice of moderation at a timely

The nation will greatly miss one of its most distinguished citizens. Gus Dur walked among both the elite and the common person on the street. During his presidency, he opened the State Palace to people from all walks of life, and even when he was at the pinnacle of his power, he remained humble and down to earth.

THE ECONOMY

Rising political temperature has taken its first toll on reforms: The Finance Minister last month announced the government would delay raising electricity prices indefinitely (it was previously planned in January 2010), citing lack of political support.

form movement. He later endorsed the establishment of the National Awakening Party (PKB) in 1998 to accommodate NU’s political aspirations. In February 1999, the PKB nominated him as its presidential candidate and by that October he had deftly maneuvered himself to be elected as the country’s fourth president by the People’s Consultative Assembly (MPR). Remarkably, throughout the process he was almost totally blind and needed assistance to move around.

Under the FTA, China and the six founding ASEAN countries - Indonesia, Singapore, Thailand, the Philippines, Malaysia - and Brunei must cut tariffs on 90% of imported goods across 7,000 product categories.

Designed and built by Nyoman Nuarta, one of Indonesia’s most celebrated sculptors, the planners envisioned visitors arriving by plane observing the colossal statue as a warm greeting to Bali.

period in the wake of the collapse of Soeharto’s New Order regime. As Indonesia’s society is complex and pluralistic, he played a critical role in a bridging Muslims and Christians, as well as followers of other faiths. Of course, the fact that he was the spiritual leader (1999-2001) of Nahdlatul Ulama, the largest Muslim organization with 40 million members, made it easier for him to play a pivotal role in the nation’s political scheme of things. Gus Dur worked tirelessly over many decades to bring the traditionalists into the modern era, and his impeccable intellect, humor and cutting wit often disarmed critics. He was a champion of democracy and moderate Islam, and opened the way for today’s free and open society. Many acknowledged that what he had achieved was neither easy nor easily replicable. One of his important achievements was reforming NU and made it a staunch supporter of civil society. During the Soeharto era, Gus Dur never minced words and spoke out for what he believed was right and fair. He support-

ed the state ideology, Pancasila, to prevent radical elements in the Islamic community, as well as other religions, from assuming a place in society. Ethnic Chinese remembered him best as the person who supported minority groups and ended decades of discrimination against them. He declared Chinese New Year a national holiday and put an end to the ban on using Chinese characters in public. A towering figure on both the political and religious landscape, he held the stance that faith was a personal matter. He was also considered a champion of the interfaith dialogue, which allowed numerous religious groups to remain tolerant of each other. But his liberal ideas and sometimes erratic public statements often lead to controversy. His suggestion in 2000 that a 34year ban on Marxism-Leninism be lifted was met with strong opposition, as did his thought that Aceh be granted an East Timorstyle independence referendum. His conciliatory stance with Israel, with which Indonesia has no diplomatic relations, brought him the scorn of many Muslims. None of Gus Dur’s incomparable penchant for speaking out his mind was his open disdain for members of the House, whom he once likened to kindergarten children. The statement earned him their undying hostility and ultimately proved to be his undoing. They would eventually have the last word by rebuking him, allowing 2001 to impeach him in late July 2001. His desperate bid during those dark days to cling to power by declaring a state of emergency was ignored by his top ministers. The nation will greatly miss one of its most distinguished citizens. Gus Dur walked among both the elite and the common person on the street. During his presidency, he opened the State Palace to people from all walks of life, and even when he was at the pinnacle of his power, he remained humble and down to earth. A true patriot to the last, Gus Dur has earned his place among the great men and women this country has produced. His achievements will always be cherished and his memory will live on in the hearts of many. Wahid’s first moves as president included abolishing the Ministry of Information, which had long been Soeharto’s tool to control the media, and the noto-

riously corrupt Ministry of Welfare. Although he failed in his peace gambits in restive Aceh and Papua, he was credited with making the first approaches to settle the separatist conflicts through negotiation. One of Wahid’s last and highly reported public appearances was when he visited the Corruption Eradication Commission (KPK) office for more than an hour to declare his readiness to vouch for the innocence of two arrested (since then released) anti-graft officials. “I came to provide more support for their release from detention. I am prepared to put my name on the line in this case,” Gus Dur said after visiting the commission, known as the KPK. Gus Dur’s call for the release of suspended KPK deputy chiefs Bibid Samad Rianto and Chandra Hamzah came after several other national figures had also declared their belief that the arrests of the men were a mistake. The former president explained his visit was to show his support for the commission and urged all KPK personnel to keep working hard to eradicate corruption in Indonesia. President Susilo Bambang Yudhoyono will put proposals to name Gus Dur through the mechanism required by the law, a presidential spokesman said. In accordance with provisions in Law No.20/2009 on the conferment of titles and decorations,” Julian said. Under the law, the proposals would be taken up and discussed by a state honors council which had yet to be formed. The council would be made up of representatives of three main elements of society, namely the academic world, the military and the public at large. A week after his death, the Virginia, US-based First Freedom Center, a reputable institute that promotes understanding among different faiths, conferred Gus Dur with the First Freedom Award 2010. Gus Dur was cited for his services in advocating tolerance, pluralism and the protection of minority groups and for his campaigns against extremism. The award was slated to be handed over to Gus Dur on January 14. Previous awardees are former US Secretary of State Madeline Albright, former British PM Tony Blair and former Czech President Vaclav Havel.

The President Post

January 14, 2010

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Tribute to Gus Dur

In His Own Words Some of Gus Dur’s most memorable quotes: On religion

One of our most serious problems is that people misuse religion in pursuit of victory and triumph, which sadly often leads to interfaith conflict.

On democratic values in Islam

In Islam, democracy is not haram (forbidden) and is a compulsory element of the religion. Upholding democracy is one of the principals of Islam, which is syuro (assembly). There must no longer be anything to differentiate Indonesians based on religion, mother language, culture and ideology.

Criticizing fellow Indonesians

Seventy percent of our nation is saltwater, so why do we import salt? It’s okay being stupid, but should we also be unnecessarily be ignorant?

On the Jewish people

We can learn a lot from the Jews, but that does not mean we condone Israel’s position in relation to Palestine

On his partnership with then Vice

President Megawati Sukarnoputri This is an ideal team. The president can’t see and the vice president can’t talk.

On being asked to resign as president

I need help to step up, much less to step down.

On the House of Representatives

“

I am not worried about minorities dominating us. This concern arises from our own sense of insecurity. Muslims, possibly due to historical factors, are often haunted by feelings of defeat and weakness.

As Others Remember Gus Dur Syafii Maarif, chairman of Muhammadiyah Gus Dur is a phenomenal figure as he was adored by not only Muslims but also others of different faiths. He has been consistent in promoting pluralism. Goenawan Mohamad, prominentliterary figure

Sonny Keraf, former state minister of the environment (1999-2001) and lecturer at the Jakarta-based Atma Jaya University He encouraged Christians to become good Christians. He called on Papuans to maintain their unique cultural identity. He taughts us that practicing multiculturalism consistently and in its purest form is not a difficult exercise.

Gus Dur reached out to people outside his circle, especially the marginalized and the suspected, even former members of the Indonesian Communist Party (PKI), the Chinese minority, and adherent of Ahmadiyah. He did so with the determination based on principles not found in others.

I once dismissed the House of Representatives as a kindergarten, now I consider it a playgroup.

and the oppressed.

Prof Dr Abdul Munir Mulkhan, prominent Muhammadiyah figure It is difficult to find a replacement for Gus Dur, who always defended minority groups and the oppresed because of their different faith.

Benny G. Setiono, chairman and founder of the Association of Indonesians and Chinese (INTI)

Eep Saefullah Fatah, prominent intellectual and CEO of PollMark Indonesia

Gus Dur is a pillar of democracy, tolerance, pluralism and Indonesia’s diversity. He always stood at the forefront in defense of the weak

I cannot imagine democracy without associating it with Gus Dur. He filled a void that no one could ever been able to do.

Hasyim Muzadi, chairman of Nahdlatul Ulama (NU)

KH Said Agil Siradj, deputy chairman of NU

Since the 1970s Gus Dur has always come up with new ideas and thinkings that society found difficult to follow and grasp. He did so deliberately in order to enlighten NU members and to prevent them from behaving in an exclusive manner. Over time his religious thoughts developed into discourses on the state and humanity that gained international recognition.

become smart.

Gus Dur was a genius. He believed that religion is not meant to be a horizontal theology but values on life. This is the origins of his belief in pluralism, and as such he encouraged all NU members to Wimar Witoelar, public relations consultant with InterMatrix Communications

Gus Dur succeeded in launching the greatest reforms in Indonesia. Through his leadership and the support of many good people, Indonesia became an overnight leader in the promotion of pluralism, democracy and humanity. He is by all measures a hero.

The President Post

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January 14, 2010

Viewpoint

The Politics of Climate Change By DR Makarim Wibisono

Countries, including those of Annex 1 from the Kyoto Protocol, were unprepared to take concrete actions and would only like to issue political statements while hesitating to show their commitments in reducing greenhouse gas emissions.

fter the announcement of the Copenhagen Accord at the end of last month, many have reacted as to why the 15th Conference of the Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC) failed to adopt but merely took note of the Accord. The COP 15 meeting was deemed to not have socialized nor discussed in depth the Copenhagen Accord which resulted from the last minute negotiations among the 26 countries led by the Danish Prime Minister Lars Loekke Rasmussen. Why isn’t the substantive result optimal? Countries, including those of Annex 1 from the Kyoto Protocol, were unprepared to take concrete actions and would only like to issue political statements while hesitating to show their commitments in reducing greenhouse gas emissions. The resulting document is far from that achieved at Kyoto, which was concrete and manifested in a Protocol, and legally binding. Ironically, the Bali Road Map that was set up at the end of December 2007 contained a clear road map complete with substantive steps manifested into the Bali Action Plan. The journey which began in Bali was followed up by a meeting in Poznan, Poland, and was supposed to have climaxed in Copenhagen. In other words, had the COP 15 Meeting produced a binding international agreement, the world would still have time to ratify the treaty among the States Parties as to ensure that upon the end of the Kyoto Protocol in 2012 there would exist a legal regime with new commitments ready to replace it, avoiding a legal lapse in the commitment to reduce greenhouse gas emissions. Was the relative insignificant result arising out of Copenhagen due to the low concern in the world as to the consequences of inaction from climate change? The fact is that no country has challenged the scientific findings

nancial support is key for developing, and is highly related to approaches at, mitigation and adaptation. President Luis Inacio Lula da Silva of Brazil reminds us that “Developing countries are not begging for money and that this was not a bargain between those who have money and those who do not. The money needed by developing countries is to address the climate impacts that have been caused by the historical emission of developed countries.”

The Intergovernmental Panel on Climate Change (IPCC) meeting

Photo: www.ipcc.ch

“It is time to embrace the (Copenhagen) accord and take substantial steps and build a foundation where everyone will act or we can choose to delay. Parties have been falling back in the same divisions for years with the same state arguments months after months and decades after.” of experts pointing to the catastrophes resulting from global warming. A series of meetings of the Intergovernmental Panel on Climate Change (IPCC) led to practically undisputed evidence showing that if the world continues to maintain present day lifestyles and fails to take drastic steps to reduce greenhouse gases in the atmosphere, the earth will warm up by more than a scientifically significant 2 degrees Celsius in the year 2050. This temperature rise will result in the melting of the glaciers and of the mountain caps leading to rising sea levels, drowning islands accompanied by tsunamis and other natural disasters. In Copenhagen, President Susilo Bambang Yudhoyono has announced plans to reduce Indonesia’s greenhouse

gas emissions by as much as 26 percent (roughly 700,000 tons of carbon dioxide) in 2020 from the original plan. Nonetheless, the collective goal of reducing greenhouse gas emissions by as much as 80 percent in 2050 has been taken out from the draft Accord. Developed countries are expected to submit reports on their plans to reduce greenhouse emissions to the UNFCCC Secretariat on 31 January 2010. They can choose whichever baseline they like, in stark contrast to the Kyoto Protocol which instituted the 1990 baseline. Developing countries are expected to submit a plan containing Nationally Appropriate Mitigation Actions (NAMA) to the same secretariat, requiring further submission for international mea-

surement, reporting, and verification should they request technological assistance and international financing. In other words, the COP 15 Meeting in Copenhagen failed to produce the mandate envisioned in Article 7c of the UNFCCC: there is yet a solid agreement to ensure the reduction of greenhouse gas emissions, and there is no guarantee as to the existence of an effective mitigation scheme to be undertaken by the States Parties. And what is even more saddening, there is yet solid support for developing countries in embracing adaptation approaches requiring technology and large funding. Does this mean that the Copenhagen Accord is devoid of substance? The issue of acquiring solid fi-

Though a mere promise, the Copenhagen Accord mentioned new and additional resources to the amount of US$100 billion by 2020 (about US$30 billion is to be raised by 2010-2012) to support developing countries in their efforts at mitigation and adaptation. These funds are not mere grants but rather originate from the private sector and other investment capital base. Though ambiguously related to the Kyoto Protocol’s Clean Development Mechanism and Adaptation Fund, the Copenhagen Accord contains references to a Copenhagen Green Climate Fund and a Technology Mechanism. Moreover, at the behest of developing countries and China, the Copenhagen Accord maintains the principle of “common but differentiated responsibilities.” Many issues were yet to be resolved in Copenhagen as stipulated by the UNFCCC. That is why the COP 15 has extended the mandates to next year of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWGLCA) and of the Ad-Hoc Working Group on Further Commitments for Annex 1 Parties under Kyoto Protocol (AWG-KP). It is expected that the COP16 of the UNFCCC, to be held in Mexico in December 2010, will be able to bridge the differences between developing and developed countries. Chinese Prime Minister Wen Jiabao agreed that the Kyoto Protocol and the ensuing Climate Convention should serve

as the legal basis for international cooperation. He believed that developing countries ought to address climate change by not undermining the pursuit of sustainable development despite the disappointment faced by the international community arising out of the increase, and not the decrease, in greenhouse gases emitted by developed countries. Next year’s 16th Conference of the Parties of the UNFCCC in Mexico is expected to adopt a solid agreement on a climate change regime on the basis of four implementable pillars: mitigation, adaptation, technology transfer, and financial support. Though opportunity for an agreement awaits in Mexico, the international community needs to make sure that they will not be entrapped by the politics of climate change. The question posed by the late political scientist Harold Lasswell, “who gets what, when, and how?”, can easily manifest in negotiations in absence of a strong political foundation to engage in collective action. US President Barack Obama in Copenhagen best describes how well we as the inhabitants of this common planet have cooperated for our common survival in that “we have been imprisoned by two decades of international negotiations.” He added: “It is time to embrace the (Copenhagen) accord and take substantial steps and build a foundation where everyone will act or we can choose to delay. Parties have been falling back in the same divisions for years with the same state arguments months after months and decades after.” What we must do is clear. This impasse must be broken if humanity, and all other living creatures on this fragile planet, is to survive. Let Mexico be the last round of negotiations. The writer is a career diplomat and a former ambassador. He is currently lecturer at the distinguished Paramadina Graduate School of Diplomacy.

THE NEW PHENOMENON:

Social Control Through Social Buzz By Yanti B. Sugarda

The word “social” is derived from the western language, but its form in the Indonesian language is perpetually in transformation, reflecting the dynamism of the language and social life, where life is about social interaction and conformity.

The “Socialization” Paradox

he word “social” has always been heterogeneous in meaning. One uses this word to connote either “sociability”, “altruism”, or “pertaining to society”. In Bahasa Indonesia, when one is “social”, it means one is charitable, non-commercial. On the other hand, when the phrase “social being” (makhluk sosial) is used, it means a being that needs to be closely related to other beings. The word “social” is derived from the western language, but its form in the Indonesian language is perpetually in transformation, reflecting the dynamism of the language and social life, where life is about social interaction and conformity. In the Soeharto era, information has to be “socialized” to the people. “Socialization” is not only about fraternizing; it is about information dissemination in a topdown method, from the bureaucracy to the masses. This word has become generic and is currently widely used even in nonbureaucratic circles. Socialization is implemented through the use of mass communication tools. A number of Government policies and regulations have to be “socialized” to the public. The “three-in-one” (3 passengers in one car) traffic rule had to be socialized as much as the General Election voting procedures, among others. Currently, mass media communications, which is controlled

by media owners, is being challenged by the appearance of social media, controlled by the public. Social media is created by the new person-to-person communications technology such as mobile phones and Facebook.

past era. The mass media had a primary role in getting the campaign off the ground.

Social Development Programs

Indonesia has always been a hotbed of social issues. Social scientists flock to Indonesia from all parts of the world to observe, study, measure, research the social problems that exist, from the social effects of the tsunami to the social effects of politics, from domestic violence issues to social effects of avian flu, and from problems of poverty to illiteracy. Civil society expresses the interests of social groups and raises awareness of key issues in order to influence policy and decision-making. Programs are created in the effort to overcome part of the problems. National as well as international Civil Society Organizations (CSOs), including non-governmental organizations (NGOs), package these programs into short-term or longterm activities. In recent years, CSOs have been successful in shaping policies through advocacy campaigns and mobilization of people and resources. Almost all the government ministries have at one time or another, coordinated with CSOs to plan and implement social campaigns. Take for example, the widely effective Family Planning campaign of the

Who knows, in the coming years, we may even be fortunate enough to witness an equilibrium between development of the economy and politics as well as development of the social well-being of the nation.

In the hustle and bustle of political campaigning, the mass media also have their heyday. The use of ads during political campaigns sometimes surpass commercial ads in terms of volume/ frequency and expenditures. However, PSAs for other social development programs are fewer because of the budgets involved. Public service programs to signify the performance of the different government ministries are also campaigned through the use of PSAs. Each government ministry has a public message to convey through the use of media advertisements. The Ministry of Transportation would convey a message about the importance of safety in using public transportation, while the Ministry of Culture and Tourism promotes Visit Indonesia Year, The world of marketing has coined these campaign activities in the term “Social Marketing”. Social marketing is constantly evolving from “influencing ideas” to large-scale behavior change programs for social good, not only through mass media, but also through the use of social mobilization, i.e. mobilization of people and resources. It is not done on a vertical, topdown basis, but more on a horizontal, people-to-people basis. In principle, social marketing uses two approaches, the mass media campaign and the social mobili-

zation campaign. Catching up on the “social development” atmosphere, the business world has currently entered the era of corporate social responsibility. Businesses and corporations have come to realize that business would be more sustainable if they gave something back to improve the quality of life of the community or society at large. The company would thrive if it made the world a better place to live. Businesses, at least on the surface, are trying to become GCC (good corporate citizens) by having CSR (Corporate Social Responsibility) programs. Depending on the type of business, CSR programs now range from education to public health to environment to poverty alleviation. Emergence of New Social Control through Social Media

A new phenomenon presents itself. The open society and communications technology has escalated the strength of public opinion. The surge of people-power and human-rights movements have made the word-of-mouth social medium of the mobile phone, Facebook, and all other person-to-person gadgets, to be the powerful communication tool for social control and social pressure. Word of mouth social medium has the capability to create social buzz, the buzzing being so loud making it impossible not to be noticed by communities in society at large. Take the example of Prita, whose courage to raise

voice against Omni International hospital has mobilized thousands of supporters to raise coins worth hundreds of millions rupiahs through the social medium. The public has voiced their attitudes and opinions to champion the wronged underdog. New technologies in communications have created a social web of communities connected by social media. The soccer lovers, the bike-to-work communities, the batik lover communities are a few examples that may be found in Facebook, Twitter, Friendster. Traditional groups that are also targets are the “arisan” groups and the “pengajian” groups. These individuals seek other like-minded individuals to form their own communities. Within the network of the social media the public is empowered, in the process facilitating social control. We are living in interesting times, witnessing the transformation from a society once dominated by top-down, one-way communications into a society empowered by the use of social media capable of exercising social control. Who knows, in the coming years, we may even be fortunate enough to witness an equilibrium between development of the economy and politics as well as development of the social wellbeing of the nation. The writer manages Polling Center and Social Marketing Circle.

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January 14, 2010

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The Economy ECONOMIC BRIEFS ESDM revenue exceeds budget target

Zahedy Saleh

The Ministry of Energy and Mineral Resources (ESDM) disclosed that revenue from the energy and mineral resources sector in 2009 reached Rp235,3 trillion, surpassing the target of the 2009 state budget set at Rp230,2 trillion. Minister of Energy and Mineral Resources Zahedy Saleh in Jakarta last month said that the increase is Rp5, 1 trillion or 2.2% over target. “In 2010, the state revenue target of the energy and mineral resources sector is Rp211 trillion,” he said. Darwin also said that in 2009 the realization of energy and mineral resources sector investment remained high or close to 2008’s figures of US$19.9 billion.

PGN to supply gas to power plants in Sumatra The state gas distributor PT PGN will supply natural gas to state power company PT PLN`s power plants in North Sumatra and power plant in Talang Duku in South Sumatra in need of 150 MMBTU (Million Metric British Thermal Units) of gas. The plan was laid down in a natural gas sales purchase MoU for power plants in North Sumatra, and a natural gas sales and purchase agreement for the power plant in Talang Duku in South Sumatra with PT PLN here last month. Under the MoU, PGN agreed to channel natural gas from the Liquefied Natural Gas (LNG) terminal which will be built in Belawan for the needs of the electric power centers in North Sumatra.

Tourist arrivals in Bali exceed target

Tanah Lot, Bali

The number of tourist arrivals in Bali is likely to hit a record high of 2.1 million in 2009, well above the target of 1.8 million for the year, a tourism official said. “The number of tourist arrivals in the January-October 2009 period already reached 1.9 million,” Head of the Bali Tourism Ida Bagus said, adding that “Australia and Japan would remain Bali`s main sources of foreign tourists next year.” “Malaysia is a very potential market for Bali`s tourism. The neighboring state now ranks fifth as Bali`s source of foreign tourists,” he said.

Government sets aside Rp16.68 t for road repair The government is preparing a budget of Rp16.65 trillion for road and bridge repairs in 2010. Deputy Minister for Public Works Hermanto Dardak said here recently that of the 2010 year allocation, Rp1.34 trillion would be used to finance repair of 1,477 km highways in north Java. He said that the government would also allocate Rp373.26 billion for the repair of 1,186 km of Java`s central axis roads and Rp224.33 billion for the 1,132 km southern Java lanes.

Rp 1.34 trillion would be used to repair North Java highway

In Praise of FDI FDI is generally not well-liked in political circles; there is often firm opposition in the Parliament to give better treatment to foreign investment, and as such FDI inflow has stagnated for some time. By Atmono Suryo

GLOBAL FDI

n 2007 global foreign direct investments (FDI) reached US$1,833 billion, with the largest share going to developed countries. In Asia the bulk went to, respectively, China with U$83 billion, Hong Kong US$59 billion, Singapore US$24 billion and India about US$22.5 billon. They were followed by Thailand, Malaysia, Taiwan, Indonesia and Vietnam. World FDI flows is not expected to recover amid falling global spending, sharp decline in corporate profits, downward trend in commodity prices and weakening real estate prices in emerging economies. FDI in Asia

According to UNCTAD, Asia has managed to attract large amounts of FDI. In fact, Asia is a most preferred FDI destination, especially from large TNC’s (transnational companies). In 2007 FDI inflows reached the level of US$248 billion, a figure that is expected to further increase over the next three years. The region’s market growth is the most important factor that attracts FDI to Asia, followed by the availability of abundant and cheap labor force. In addition, the prospect of regional integration is another factor of importance to investors. FDI in Indonesia

With regards to private capital inflow in Indonesia, portfolio investment and FDI are more known than private bank lendings. Indonesia is a highly attractive country for the inflow of portfolio investment, as its stock exchange is one of the most active in Asia with high scores. This trend, however, is not the case with FDI. Aside from the poor investment climate, FDI has also its political problems. FDI is generally not well-liked in political circles; there is often firm opposition in the Parliament to give better treatment to foreign investment, and as such FDI inflow has stagnated for some time. FDI–Domestic Investment

FDI inflows in the 19942004 period were quite low (and slow) with an average of US$3-5 billion per year. It started to improve in 2005, reaching US$8.9 billion in 2005 and US$14.8 billion in 2008. An important point to note is that according to BKPM (the Coordinating Investment Board) and an article writ-

ten by Carunia Mulya Firdausy of the Ministry for Research and Technology, FDI plays a dominant role in total investment in the country. Over the last seven years FDI represents about 70% of total investment. It accounts for a much larger portion than domestic investment. In 2008 FDI accounted for 1,029 projects, with a realized investment value US$14.8 billion. Domestic investment accounted for only 239 projects worth Rp 20.3 billion (about US$1.36 million). In addition FDI has been able to contribute growth in a number of important economic sectors. It includes such sectors as transport, communications, machinery and electronics, motor vehicles and other transport equipment, as

Countries in Asia are already active and successful in their efforts to attract foreign direct investments. Indonesia cannot stay behind. Much work has to be done by the government and the private sector to improve the business and investment climate. well as chemical and pharmaceutical industries. Domestic investments cover among others plantations and food crops, rubber and plastic industries, construction, electronics industries and food industries. Investment needs

President Susilo B. Yudhoyono’s goal is to achieve 7% GDP growth and reduce poverty and unemployment by the end of 2014. To achieve the goals there will be the need to spend large amounts of investment. Last year FDI inflows reached almost US$15 billion representing over 80% of the country’s total investment of US$17.1 billion. It marked a significant rise over the previous year, when foreign inflows amounted to US$10 billion. The factors hindering the inflow of foreign investments are numerous. It includes such factors as economic and regulatory uncertainty, deficiencies in law enforcement, poor governance and infrastructure bottlenecks. The problem of corruption at various levels is also a main deterrent. IFC’s report on “Doing Business 2010” ranked

Indonesia at 129 out of 181 countries, far below other countries in the region. It reflects the issue of poor governance prevailing in the country. Need to boost FDI

There is no reason for Indonesia to lag far behind other developing countries in Asia. The country has the potentials to attract investments in portfolio investments, which are doing quite well, as well as foreign direct investment. The key problem for FDI is actually in the area of politics in addition to the poor investment climate. At this stage the political climate with all its ramifications is not conducive to attract FDI, especially from the West. Among the politicians there is the olddated fear of the emergence of

neo-colonialism. They are not aware of the changes taking place in this era of globalization. China and Vietnam have now become important centers of FDI. These international enterprises contribute to the development and modernization of said countries. Much foreign interests are coming to Indonesia from primarily non-traditional sources such as China, India, Qatar, Japan, South Korea, Malaysia, Taiwan and Singapore. They are taking up big projects in such areas as infrastructure, energy and resources development, as well as smaller business ventures in the area of trade, smallscale industry and tourism. However, there is a high probability that the investment situation in Indonesia may change,

and at the same time there is the urgent need for foreign investment to also bring in technology and access to the global economy. Countries in Asia are already active and successful in their efforts to attract foreign direct investments. Indonesia cannot stay behind. Much work has to be done by the government and the private sector to improve the business and investment climate. Not only in the center (Java), which has already attracted the bulk of FDIs but also in the vast outer regions that are potentially new centers of growth. The writer is a retired career diplomat and had once served as the Indonesian ambassador to the European Union (EU).

Statistics on direct investment realization, 1990 - february 28, 2009 Domestic Direct Investment

Foreign Direct Investment

YEAR Value (Billion Rp)

Project

Value (Million US$)

Project

1990

253

2,398.6

100

706.0

1991

285

3,666.1

149

1,059.7

1992

225

5,067.4

155

1,940.9

1993

304

8,286.0

183

5,653.1

1994

582

12,786.9

392

3,771.2

1995

375

11,312.5

287

6,698.4

1996

450

18,609.7

357

4,628.2

1997

345

18,628.8

331

3,473.4

1998

296

16,512.5

412

4,865.7

1999

248

16,286.7

504

8,229.9

2000

300

22,038.0

638

9,877.4

2001

160

9,890.8

454

3,509.4

2002

108

12,500.0

442

3,082.6

2003

120

12,247.0

569

5,445.3

2004

130

15,409.4

548

4,572.7

2005

215

30,724.0

907

8,911.0

2006

162

20,649.0

869

5,991.7

2007

159

34,878.7

982

10,341.4

2008

239

20,363.4

1,138

14,871.4

Jan-Feb 2009

2,628.3

176

1,970.9

Source: BKPM

The President Post

www.thepresidentpost.com

January 14, 2010

The Economy

THE INDONESIAN ECONOMY 2010:

The Fast-Track Scenario For Indonesia to be on the fast-track scenario, the nation would need large inflows of FDIs (foreign direct investment) that would bring in technology, create jobs and modernize the business sectors, as well as open access to the global market. By Atmono Suryo

Take-off

ndonesia’s economic perspectives suggest that 2010 would be a positive year. It could signal the beginning of Indonesia’s take-off stage as it takes on the fast-track scenario to achieve higher growth, stability and general prosperity—with the understanding, however, that the current trend of political squabbles are set aside. Continued political rows would sap the country’s energy, create disorders and distract the nation from attaining the goals of the country: welfare, justice and prosperity. Back on track

Compared to many other developing countries the Indonesian economy is moving ahead. Developments in 2009 show that the country is back on track, as the World Bank confirmed in its latest report on Indonesia. It has returned to near-pre-crisis growth rates, which have continued to rise since 2005, reaching a high level of 6.3% in 2007. There are still different estimates on GDP growth for the year 2010, but it is expected to be around 5.6% and may even be higher. The forecast for 2011 is upbeat: 6%. Indonesia is thus on its way to reach the 7% level needed to reduce unemployment and poverty.

public cry for “keadilan” or justice has become louder. But apparently similar developments are also happening in other countries. The problem of uneven distribution and imbalanced growth may become an increasing problem in this era of globalization. As can be seen from Figure 1, Indonesia experienced strong growth during the last few years, but suffered a decline in 2009 as a result of the recession. It is expected the main forces behind growth in 2010/11 will continue to be high consumers’ demand, increased investment and exports.

can now expect more inflows of direct and portfolio investments that will benefit Indonesia’s foreign exchange reserves, which have shown an increasing trend. The export sector is improving after suffering a serious downturn. The prospects for 2010 are still somewhat uncertain and depend on developments in the global market, particularly the Asian market, which has increasingly become significant for Indonesia. The preliminary forecast is that exports will grow by 5%. The export association within the Indonesian Chamber of Commerce and Industry even dares to predict that exports in 2011 will post a 15% growth. This “dream” shows that some exporting companies are optimistic certain export sectors can grow more rapidly if improvements are made,

Trade and Investment

In the external economic sector it is expected that in 2010 the current account will widen to 2% of GDP. In addition, one

“

Components

2008

figure 1: strong growth in the last two years %, y-o-y 8.0

6.32% 5.69%

7.0

6.14%

5.51%

%, y-o-y 7.0 6.0

4.90%

6.0

5.0

4.2%

3.0

2004

Mar Jun Sep Dec Mar Jun Sep Dec

2005

2006

2007

YoY Change by Quarter

Mar Jun Sep Dec Mar Jun Sep

4.0

3.0

Mar Jun Sep Dec Mar Jun Sep Dec

4.0

2008

2009

YoY Change (Annual - RHS)

Source: World Bank

figure 2: indonesia’s balance of payments Million USD

Million USD

4,000 2,000 0 -2,000 -4,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2004

2005

2006

Current Acc.

2007

Cap & Fin Acc.

2008

70,000 60,000 50,000 40,000 30,000 20,000

2009

Reserve Assets (RHS)

figure 3: Foreign direct investment

Million USD 8,000 6,000 4,000 2,000 0 -2,000 -4,000 -6,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2004

2005

2006

2007

2008*

2009**

Inflow (Equity & Loan Disb) Outflow (Equity & Debt Repayment) Total

2009

2010

III

Annual*

GDP Growth (%) (yoy)

6.1

4.5

4.0

4.2

4.4

4.3

5.0-5.5

Total Consumption

5.9

7.3

6.3

5.4

4.3

5.8

5.1-5.3

Household Consumption

5.3

6.0

4.8

5.1

5.1-5.3

Total Investment

11.7

3.5

2.6

4.0

4.6

3.7

8.5-8.7

Domestic Demand

7.4

6.3

5.3

5.0

4.4

5.2

6.0-6.2

Export

9.5

(-18.7)

(-15.5)

(-8.2)

(-5.4)

(-12.0)

8.1-9.0

Import

10.0

(-26.0)

(-23.9)

(-18.3)

(-6.2)

(-18.9)

10.8-11.1

*Bank Indonesia projection

As of 2010 there will be the urgent need for Indonesia to embark on “capacity building” to

The World Bank recently concluded that “Indonesia has emerged as a middle-income economy that is strong with increasing global standing”. The positive assessments indicate that in 2010-2020 the whole country should indeed be ready to take off and be on the fast-track. Indonesia should therefore not forfeit this golden momentum.

Macro-economy

In the Indonesian macroeconomic area, the important financial and monetary sectors are now in a better shape. The banking sector has been in good health, and the country’s financial markets have continued to expand. Inflation has been under control although prices for people’s daily necessities continue to rise. People’s confidence and purchasing power have been on the rise, as can be seen by the massive increase of motorcycles on the streets, the use of hand-phones, television sets, computers and other communication devices. This is seen even in remote places in the country. But, this phenomenon is not evenly spread, as huge segments of the population are lagging behind. As such, the

Capacity building

strengthen various sectors of the economy and to cope with the overall problem of increased competition not only in the area of imports but also exports and even services, which have increased at a rapid pace. All this would require large amounts of investments. President Susilo B. Yudhoyono stated that Indonesia would need to achieve an annual growth of 7% by 2014. This implies that there will be a need of Rp 2,000 trillion or about US$21.2 billion each year in the form of domestic and foreign private investment and government spending. In an interview, the new BKPM chief said that for the year 2010 the country is aiming at foreign direct investment of around US$15 billion. Enormous investments will be needed for large-scale infra-

structure projects as well as resources-based, value-added and creative industries which should become the country’s new pillars of growth. THE FAST- TRACK STAGE

For Indonesia to be on the fasttrack scenario, the nation would need large inflows of FDIs (foreign direct investment) that would bring in technology, create jobs and modernize the business sectors, as well as open access to the global market. Much has been said about Indonesia’s weaknesses (other countries such as China, India, Brazil, South Africa and Russia are all in the same boat). But in Indonesia this problem should not be overstated to become huge political issues; the rise of continued squabbles; dividing the country and the people to achieve the pos-

itive goals. With all its shortcomings, the country is called upon to enter a new brighter stage. It is most encouraging to observe the positive assessments of various international observers, institutions and many heads of states on Indonesia. The World Bank recently concluded that “Indonesia has emerged as a middle-income economy that is strong with increasing global standing”. The positive assessments indicate that in 2010-2020 the whole country should indeed be ready to take off and be on the fast-track. Indonesia should therefore not forfeit this golden momentum. The writer is a retired carer diplomat and was once the Indonesian ambassador to th European Union (EU).

fdi inflows to indonesian by origin: top three

Consumption factor

One unexpected component in Indonesia’s economic development is domestic demand and consumption. It has now been proven that countries with large populations are not doomed to remain poor. On the contrary, large populations increase demand and create large domestic markets which have their multiplier effects. Today, countries spend millions or even billions of dollars for stimulus programs to boost domestic demand. What is being shown by countries with large populations such as China, India and Indonesia is an interesting case: they have shown positive growth in the midst of a sea of countries with minus growth during the recession. These minus-growth countries suffered from falling demand, internationally as well as domestically.

particularly in the infrastructure sector. The import sector, however, is fraught with a great deal of uncertainties that raise concerns. There is the fear that with many free trade agreements around, the country will be flooded with import goods or become a world dumping ground. For example, the ASEAN-China FTA (free trade agreement) that took effect as of 1 January 2010. It has led to Chinese products to flood the domestic market. There is serious concern that various industrial sectors will be harder hit, causing large lay-offs. This is a problem that must be resolved soon.

2008

up to Q3-2009

Singapore

21%

14%

16%

10%

Japan

11%

20%

The President Post

January 14, 2010

www.thepresidentpost.com

The Economy

No Rate Hikes this Year? Rising political temperature has taken its first toll on reforms: The Finance Minister last month announced the government would delay raising electricity prices indefinitely (it was previously planned in January 2010), citing lack of political support. By Helmi Arman

Image: www.psdgraphics.com

Dec-09 (Actual)

Dec-09 (forecast)*

2.78

3.04

Headline CPI (% chg y-o-y)

Headline CPI (% chg m-o-m)

0.33

0.57

Dec-09 (Cons.) 2.92

0.50

Nov-09

Oct-09

2.41

Figure 1: Indonesia cpi inflation

Figure 2: Indonesia foreign trade monthly

1.3

14.3

1.0

12.5

2.57

-0.03

0.19

10.8

0.8 0.5

Headline CPI (% chg y-t-d)

Core CPI (% chg y-o-y)

2.45

4.28

3.04

n/a

2.92

4.38

2.45

2.48

4.29

4.57

Source: Bloomberg, CEIC, *Danamon estimates

0.33

The statistics bureau has announced that 2009 inflation was at 2.78%, which is close to all-time lows. As this year will see no change in electricity, fuel or LPG prices, the rebound of inflation will be milder than previously thought.

number of recent events have changed our expectations for 2010. Rising political temperature has taken its first toll on reforms: The Finance Minister last month announced the government would delay raising electricity prices indefinitely (it was previously planned in January 2010), citing lack of political support. There is still no clear picture as to how far or how long the ongoing Bank Century inquiry will go. However the government’s decision gives us a hint on how policymaking and reforms will be carried out: very carefully and slowly. In this regard, the phasing out of other price subsidies that were already on the table (e.g. fuel and LPG) is likely to be postponed as well. For the economy, the delays will have a temporarily favorable effect on inflation. The statistics bureau has announced that 2009 inflation was at 2.78%, which is close to all-time lows. As this year will see no change in electricity, fuel or LPG prices, the rebound of inflation will be milder than previously thought. Inflation may head closer towards 5.3% instead of the 6.7% we had predicted earlier. Accordingly, the BI rate could be held at the current level of 6.50% for a while longer (we had previously expected they would start to raise in March or early 2Q10). The probability of there being no rate cuts this year, in our view, is growing. Budgetary implications don’t look severe—for now

Of course, the delay of subsidy reform tends to raise subsidy expenses. Additional spending on electricity subsidies reportedly

Export Growth (% y-o-y)

could be close to Rp12tn per annum. This is equivalent to half of the planned increase in spending over the initial 2010 budget (the 2010 budget deficit was initially due to be raised from 1.6% to 2.0% of GDP to incorporate additional stimulus programs. Fortunately, we do not yet see significant risk of a swelling budget deficit and bond issuance forecast. The excess financing incurred from the 2009 budget was voluminous, as the budget deficit was realized at 1.6% instead of 2.4% of GDP. Presumably, the Rp38tn in excess funds could partly be used as a buffer to finance additional subsidy spending this year in case oil prices surge more than forecast. (The oil price assumption in the 2010 budget is US$65/bl).

All in all, we expect to see a bull-flattening of the curve in the near term. The writer can be reached at Treasury & Capital Markets, PT Bank Danamon Indonesia, Tbk, helmi.arman@danamon.co.id

Nov-09

Oct-09

Sep-09

Aug-09

11.3

13.5

-19.9

-15.4

Import Growth (% y-o-y)

-2.4

-12.1

-24.2

-21.2

Trade Balance (US$bn)

1.90

2.81

1.27

0.84

Source: Bloomberg, CEIC

% YoY

2,700

2,400

2,100

11.3

1,800

0.8

20 10

7.3

1,500

0.0

5.5

1,200

-10

900

-20

600

-30

300

-40

4.28

-0.3

2.78 3.8

-0.5

2.0

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

2009

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

BI Rate (%)

Headline Inflation (% y-o-y)

Core Inflation (% y-oy)

09 10 11 12 01 02 03 04 05 06 07 08 09 10 2008 Trade Balance (lhs)

Figure 3: IDR Sovereign yield curve

Figure 4: IDR bond term spread (1 - 14 yr) Hi: 15,0886

11.0

15,000 14,000 13,000 12,000 -8.14% 11,000

INDORB13.4 02/11 Corp 7.0200 INDOGB 10 09/24 Corp 10.6344

8.0 7.0

1266 vs 1266

Hi: 387.589447

-0.00 -0.10 -0.20

5Y 6Y

8Y 10Y

15Y

20Y

100

INDOGB 10 09/24 Corp - INDORB13.4 02/11 Corp 361.444702 Low: 10.71159

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 2010

30Y

Source: BPS, CEIC

SPREAD SUMMARY

Last Mean Off Avg Median 10,6344 StDev 10,000 Off Avg StDev Low: 10,4599 9,000 Percentile 8,000 High 03/18/09 Low 01/05/09 7,020 Low: 6,8900 38.80% 400 361.444702400 300 300 200 200

Hi: 12,2700

9.0

Yield Graph 1266 12/04/09 Indonesia Sovereign 1266 01/04/10 Indonesia Sovereign

-50

Import (cif)

Export (fob)

Source: BPS, CEIC

10.0

2009

Source: BPS, CEIC

361,445 289,762 71,6823 304,863 69,7191 1,03 90,80 387,589 10,7116

100 0

10 20 30 40 50

Source: BPS, CEIC

Indonesia: Selected Economic Indicators

Yield curve implications

Lower inflation is usually a cause to rejoice, unless it’s caused by a serious adverse event, which seems to be the case now. With subsidy reforms delayed, Indonesia will remain prone to abrupt administered price adjustments in case commodity prices surge. Refusal to bite the bullet now opens the possibility of there being a harsher price adjustment in 2011 or beyond. Yet for the yield curve, the delay in administered price adjustments may justify lower yields on short-end bonds. And given that term spread between long-dated and short-dated bonds is still wide (see Chart 4), we may also see action happening in the long end (>10yrs) of the curve.

USD mn

0.3

2008

House inquiry takes its first toll on reforms

9.0

3,000

2007

2008

2009

2010E*

2011E*

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

6.3

6.1

4.3*

5.2

5.9

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

6.0

9.1

3.4*

6.9

7.0

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

5.0

5.3

5.1*

5.0

4.8

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

9.2

11.7

3.9*

8.0

10.0

GDP (US$bn) — nominal

433

507

532*

635

708

1,925

2,227

2,309*

2,721

2,996

9.8

8.6

9.9*

9.8

9.5

Exports, fob (% y-o-y, US$ bn)

18.3

-19.0*

11.0

16.0

Imports, fob (% y-o-y, US$ bn)

15.4

36.8

-26.7*

15.8

18.0

Trade balance (US$ bn)

32.8

22.9

27.6*

26.5

28.8

2.5

0.1

1.8*

0.5

n/a

Central government debt (% of GDP)

35.1

32.0

29.9*

28.2

26.3

International Reserves –IRFCL (US$ bn)

56.9

52.1

65.7

74.9

85.0

6.2

5.4

9.4*

9.0

8.7

Currency/US$ (Year-end)

9,419

11,120

9,403

9,750

n/a

Currency/US$ (Average)

9,163

9,767

10,356

9,576

n/a

BI policy rate (% year end)

8.00

9.25

6.50

7.50

Consumer prices (% year end)

6.60

11.20

2.78

5.30

5.90

Fiscal balance (% of GDP; FY)

-1.3

-0.1

-1.6

-1.5

-1.0

S&P's Rating -FCY

BB-

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

Current account (% of GDP)

Merchandise import cover (months)

Other

Source: CEIC, *Danamon Estimates

The President Post

www.thepresidentpost.com

January 14, 2010

Entrepreneurship Photo: www.mustangdaily.net

Barriers in Entrepreneurship Development There are barriers that hinder the development of entrepreneurship, namely: myths, culture, and education system. By AB Susanto

he number of people choose to become an entrepreneur in a country is always relatively small. But it is they that play very important role in driving business to grow and economic development. Thanks to their contributions, millions of jobs have been created by the establishment of factories, service businesses, and numerous small and medium enterprises (SMEâ&#x20AC;&#x2122;s). This, in turn, reduces the poverty rate. Entrepreneurs also develop new markets by using creative ideas; try relentlesly to discover new sources of materials in developing their business; combine production factors such as natural resources, human resources, financial capital, skills, and knowledge to create various products and services; and introduce new technologies, new industries, and new products. The abovementioned activities contribute to the advancement of civilization and the quality of life. However, there are barriers that hinder the development of entrepreneurship, namely: myths, culture, and education system. Many people still believe in some myths related to the entrepreneur profession. Among the widespread myths are first, to become a successful entrepreneur, one

must come from a family that is successful in an entrepreneurial business. In reality, many entrepreneurs come from non-entrepreneurial families. Second, an aspiring entrepreneurship must have a strong capital base. Capital is important, but it is not the most important factor in achieving success in an entrepreneurial business. Most important things are ideas and creativity. Third, prior to starting an entrepreneural business, one must have work experience.

tions is not a reason to hold prejudice against all entrepreneurs. And fifth, life as an entrepreneur is not serene. In fact, life as an entrepreneur is confortable and easy. When asked the reason for opening their own business, an entrepreneur would surely give answers such as autonomy, control, and freedom. They will say that the jobs they do are pleasurable. They have the chance to utilize their strength and apply the talent and interest they have every day. They will ask other people to do their jobs they do not like or the jobs that they are not too capable of performing. Next is cultural barrier. Many people still do not consider being an entrepreneur an honorable profession. People feel more respectable by being an employee

not regard failure as part of learning process. . Another barrier is that the education system does not encourage much entrepereneurial spirit, although nowdays more and more educational institutions are introducing principles and concepts of entrepreneurship. In our education system, emphasis are always focused on the importance of technical skills and good academic achievements so that later, upon graduation, it will be easy to get a job, and not to become an entrepreneur. To promote and develop the entrepreneurial culture, collective efforts from various parties such as business sectors, government, and education institutions are required. One way is by encouraging many activities that are es-

Indonesia needs a lot of entrepreneurs because they can make a great contribution to the economy. Therefore, efforts should be made to overcome the barriers so that entrepreneurship can be fostered. Starting a new entrepreneural business does not depend on formal work experience. Fourth, business is a dirty environment filled with intrigues. For this particular point, the problem is left to each individual. There are still a lot of entrepreneurs who maintain high business ethics. On the other hand, we find many people who are not entrepreneurs but commit abusive practices and actions that harm others. The fact that there are entrepreneurs engaged in disreputable ac-

with clean appearance and steady income every month, which for some is regarded as a measure of oneâ&#x20AC;&#x2122;s success. To some people, being an entrepreneur is associated with a relatively small and unstable income, unstable working hours, and takes up more time and energy; things that are indeed experienced by many entrepreneurs when they start their businesses. This is contrary to the custom many in our society have: wanting to gain results and success instantly. Most of us also do

picially devoted to introduce business opportunities to the society. The central and regional governments need to be involved, However, along the implementation of regional autonomy, the role of regional governments is becoming more important because every region and location has its own uniqueness that can be capitalized as business opportunities. Developing entrepreneurial spirit among students, from the

elementary school up to the university, will shape positive views, aspirations, attitudes, and behaviors towards entrepreneurship. Education from the early age must be directed at building characteristics that support the development of the entrepreneurial spirit such as self-confidence, risk-taking, persistence, energetic, and persuasiveness. As part of entrpreneurship education, extensive publication around entrepreneursâ&#x20AC;&#x2122; success story must be done, be it through televisions, radios, magazines, newapapers or the internet. Publicity can also be done by giving awards to successful entrepreneurs, espicially the ones at a relatively young age, which, once again, should be published extensively, all with the purpose of attracting the interest of younger generation so that they do not feel hesitant in choosing the life of an entrepreneur. The government should also develop a favorable business climate such as an attractive taxation system, efficient and clean bureaucracy, transparency and trustworthiness, safety and security, a more flexible labor market, adequate infrastructure, efficient goods market, and easier acces to financial institutions. Without a favorable business climate, people will feel reluctant to start their own business. Indonesia needs a lot of entrepreneurs because they can make a great contribution to the economy. Therefore, efforts should be made to overcome the barriers so that entrepreneurship can be fostered.

The President Post

January 14, 2010

www.thepresidentpost.com

Education SBY Clears Mist, Urges Thorough National Exam System National exam should be made the primary system of evaluation but those who fail this shall be given a second chance to sit for another such exam. By Alci Tamesa

resident Susilo Bambang Yudhoyono (SBY) has cleared the mist over nation-wide high school exam—known in Indonesian as Ujian Nasional or UN— emphasizing that there must be a better system to thoroughly evaluate students’ end-of-study performance. The President issued the statement during a recent Cabinet meeting to which Minister of Education Prof. Dr. Muhammad Nuh presented the Government’s policy stance on national exam—a hot issue which has remained a public controversy since 2006. “We are aware that that some are for the national exam, but others are against it. Certainly there are opinions that deserve our attention, be it from students, or from any other party that cares about education. “That’s the reason why I need to hear the presentation by the Minister of Education on the kind of concept that we can develop to formulate a better policy regarding the national exam,” SBY said in a Cabinet meeting. Following the minister’s presentation, SBY noted that in the past some schools administered their own exams, instead of the centrally planned national exam, as the only yardstick for graduation, others combined the two

into what is called Ebtanas or end-of-study evaluation system. “I personally believe that national exam should not be seen as the sole yardstick for evaluation. It needs to be combined with other aspects,” SBY declared. The President explained that the Cabinet meeting discussed two options. First, national exam be made the primary system of evaluation but those who fail this shall be given a second chance to sit for another such exam. In the event the failed students still cannot pass the second round, they shall be given a

having access to higher education. The second option, according to the President, is to combine school-level exams with the centrally-planned national exam, similar to the Ebtanas mechanism applied some years ago. “But even if Ebtanas is what we aim to apply, still we need to study this more deeply. What is important to me is to make sure that the evaluation system shall be objective. If we wish to measure students’ performance thoroughly, we need to evaluate it thoroughly across their three-year period of study even though national exam shall be the main yardstick,” the President remarked. SBY emphasized that the national exam system must be a thorough and integrated concept applied in the right manner and not just a temporary response to current needs.

With this Government decision, it is safe to assume that the 2010 national exam—due to be held in March—shall proceed without any more hindrances, even though the Supreme Court has issued a verdict against it. third chance which is not part of the national exam but is a special short-cut program called “Paket (package) C.” This program is attended mainly by either dropouts or students who fail national exams. But when they pass it, they still have the right to enroll at any university across Indonesia. This way the Government hopes that there will be no more complaints about students not

The President’s stance has, however, been criticized by nongovernment educators including Elin Driana from the Education Forum, who said that the Government had only touched on technical aspects of the problem and has failed to address fundamental issues in the field. Elin said that every time the Government conducts the national exam, there are always vi-

Government Grapples to Solve Myriad Problems in Education The most urgent need today is to repair facilities that have been damaged by either natural disasters or other causes. By Alci Tamesa

ow that the controversy over national high school exam is over, the Government of President Susilo Bambang Yudhoyono (SBY) needs to direct all its energy toward solving a myriad of problems gripping the sector of education, analysts say. From 2004 when SBY took office until 2008, the main concern was on allocating 20 percent of the State Budget for education. This has been filfilled as of 2009 when the Government raised the allocation amidst heightened pressure from concerned circles.

Never since independence in 1945 has the sector of education received such proportion of national budget; that’s why SBY has been as of last year referred to as Indonesia’s “pro-education President.” But no sooner did he earn the reputation than a barrage of critical issues streamed in like a flood. The President, Vice President, and Minister of Education were sued in south Jakarta District Court through a class action which sought to annul the national exam. The plaintiffs argued that the Government had violated the hu-

man rights of many students because of the evaluation system which denied them access to higher education. The Government in vain appealed to the High Court as the court strengthened the earlier verdict. Due to this the Government filed for abrogation at the Supreme Court which issued yet a sterner verdict in favor of the lower courts. This forced SBY to conduct a special Cabinet meeting on the issue in early January. The President declared at the end of the meeting that he favored a better system of evaluation which may

President University, UNHAN Collaborate on Strategic Defense Program President University is set to open a new undergraduate program in defense studies in collaboration with the Defense University (UNHAN), pending issuance of a license from the Ministry of National Education in time with President University’s new academic year in May. When Prof. Juwono Sudarsono was Minister of Defense and Security, he raised the idea to open defense studies at university level. He believes such

studies, which are generally conducted by Lemhanas, the country’s national resilience institute, will enhance the country’s national resilience strategy. Commander of the National Armed Forces General Djoko Santoso will be approached to be the chairman of the advisory board of the defense study institute as he himself had initiated discussions on the need to promote defense studies at university level.

olations of rules, not to mention cheating and manipulations. In the process, many students fall victim to the evaluation system and are denied the right to good education. More tragic is the fact that, while the national exam is a way to standardize the quality of education—the questions are composed in Jakarta and distributed to schools in every corner of the country—there is a tragic discrepancy in the capacity and level of progress between one school and another. For instance, schools in Java may be well-prepared to face national exams but those in poor and remote areas are not. Those unlucky schools lack good teachers and do not have proper facilities such as library, internet connections, etc. Elin wants the Government to pay attention to such issues instead of focusing only on how the exam is going to be administered. But Minister of Education Prof. Nuh believes that whether or not anybody calls for improvement of the system, it is the Government’s duty to do so. The minister adds that if the national exam is perceived to be imperfect, it is the duty of every concerned educator to improve but not to scrap it, because the country somehow needs a mechanism with which to standardize education quality. With this Government decision, it is safe to assume that the 2010 national exam—due to be held in March—shall proceed without any more hindrances, even though the Supreme Court has issued a verdict against it.

either be in the form of an improved national exam or combination of the exam and school exams to better determine the success rate of every graduating student. As of that day, the controversy over the exam had apparently died down because of an announcement by Minister of Education Prof. Dr. Muhamad Nuh that the Government would administer the national exam in March 2010 as previously planned. The minister’s announcement was apparently aimed at clearing the confusion and worry among students and parents who had for months been kept anxious by conflicting mass media reports. But as the mist cleared away on Jan 8 following SBY’s nationally televised remark, educators began to question the Government’s seriousness in overcoming other challenges. The reason is that the Government has announced that during its 100 days in office it would implement priority programs to improve educational facilities and raise the quality of education at all levels across the archipelago. The most urgent need today is to repair facilities that have been damaged by either natural disasters or other causes. And there are thousands of damaged classrooms across the sprawling archipelago, not to mention the need Right: Prof. Dr. Ermaya Suradinata, Rector of President University, recently paid a visit on Commander of TNI General Djoko Santoso (right) to explain the goals of the defense studies program. Bottom: Key management personnel of President University pose together with Ermaya and Santoso.

MInister of Education Prof Dr. Muhammad Nuh giving a press conference regarding the Government’s policy on national exam

to provide related infrastructure including libraries, internet connections, etc. Another pressing need is improvement of the quality of teachers at a time when teachers’ colleges have either been closed down or transformed into faculties of another kind. The low welfare levels of teachers is another issue the Government needs to tackle promptly, educators say, because one cannot expect teachers to perform maximally if they have to get involved in moonlighting activities to augment their family budget. A more even distribution of qualified teachers is an issue that needs to be given priority as well. A lack of this is to blame for the discrepancy in the quality of education in that schools in remote areas have difficulty competing with those in urban areas. But perhaps a more pressing issue is the need to reorient Indonesian schools in such a way that they do not drift away from their core values. Indonesian schools are legally defined as institutions to “nurture complete human beings” in that all aspects of human potentials must be developed. In reality, however, schools are abandoning their core values and are focusing merely on development of cognitive skills in response to rising yet unpredict-

able market demand. This is the reason why Indonesian schools are becoming increasingly secular these days though this specific terminology does not fit a supposedly religious society. The SBY Government is fully aware of all these challenges and is apparently struggling to solve them. But given the nature and the magnitude of the problems and complications therein, it is safe to assume that the Government may not be able to solve all these problems during the next five-year period. Nevertheless, the President has set the right tone and direction for improvement of the overall education system. What is left to be done is consistency in executing policies in this sector. Senior Mentor of University of Pelita Harapan Prof. Dr. Adrianus Mooy has lamented the bureaucratic tradition of changing education policies every time a new minister takes office. This must be stopped to prevent what he described as “victimization of generations.” The hardest part of the Government’s job today is how to guarantee policy consistency in the sector of education while making all the necessary improvements to elevate the quality of Indonesia’s education in the global arena, analysts say.

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The hardest part of the Government’s job today is how to guarantee policy consistency in the sector of education while making all the necessary improvements to elevate the quality of Indonesia’s education in the global arena, analysts say.

Business BUSINESS BRIEFS BNI to hold rights issue

BNI 46 building

PT Bank BNI will issue new rights issues, “hopefully in the first quarter of 2010,” state-owned enterprises minister Mustafa Abubakar said in Jakarta recently. “The discussion has begun,” Mustafa said, without mentioning the sale value, adding that “it is still premature.” Regarding the plan to increase the number of shares offered if there is a large demand, Mustafa said it was not yet decided. “That would depend on the evaluation,” he added. However, BNI is estimated to hold “green shoe” shares at the 4% mark.

PTDI to deliver aircraft to Korea end of 2010 State aircraft manufacturer PT Dirgantara Indonesia (PTDI) is scheduled to hand over one of four CN-235/MPA (Maritime Patrol Aircraft) ordered by South Korea by the end of 2010, its chief spokesman Rokhendi told Antara in Bandung last week. He said the four CN-235/MPA planes were ordered by Korea under a contract signed in 2008 at a total cost of US$94.5 million, and would be completed in 2012. In addition, PTDI has also received an order for three CN-235/ MPA planes from the Indonesian navy under a contract signed in December 2009. PTDI is also still building three Supar Puma helicopters ordered by the Indonesian Air Force.

Pertamina to have new management board this week Minister for State Enterprises BUMN Mustafa Abubakar said the management lineup of the state oil and gas Pertamina would be completed in the third week of this month. Decision on the new members of the management board is still in the hands of an evaluation team, whose members are the State Minister for State Enterprises the Minister of Energy and Mineral Resources and the Finance Minister. The outcome of the evaluation will be brought to the President for further elaboration. The government is likely to maintain Karen Agustiawan as president director, and abolish the position of deputy president director, currently held by Omar S Anwar.

Bank capital ruling maintained at Rp 100 bn Bank Indonesia indicated it will still implement the regulation of a minimum Rp 100 billion capital for banks. “There are no fundamental changes,” said Bank Indonesia deputy governor Muliaman Hadad last week. According to Muliaman, if the regulation cited in the Indonesian Banking Architecture is implemented, no more than three banks would fail to meet the requirements. Muliaman is optimistic that all banks would be able to meet their targets by the end of this year. The Indonesian Banker Association chairman Agus Martowardojo has said that “what is important is that the bank is healthy, strong and efficient as reflected by the quality of assets and loans.”

China, India seen as threats to local drugs industry Head of the Indonesian Pharmaceutical Entrepreneurs Association Anthony C.H. Sunarjo has said that that the ASEAN-China free trade threatens the domestic pharmaceuticals industry. “Especially small- and medium-size companies,” he told Tempo last week. According to Anthony, China and India each could produce 10 million drugs at low prices. ”With the same cost we could only produce 100,000 drugs,” he said. “Our medicine production is still on a domestic scale,” he said. As such, Anthony explained, companies have already asked for a delay in implementing the ASEAN-China Free trade agreement.

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Pangestu Urges Private Sector to See Upside of ACFTA Trade Minister Mari Pangestu has urged all parties to look at the pact comprehensively as it could bring profits. JAKARTA (PP) – 0n concerns that the ASEAN-China Free Trade Agreement (ACFTA) implementation can cause many factories to close business and many people to lose jobs, Trade Minister Mari Pangestu has urged all parties to look at the pact comprehensively as it could bring profits. She said Indonesian companies had benefited from tariff reductions on several items since 2004 such as in the export of cocoa products and crude palm oil (CPO) to China. CPO exports to China were limited according to certain quotas before the FTA existed but it has now been scrapped, she said. She added that the FTA had also opened up the Indonesian market and attracted more investors as several products that were previously produced in China were now being produced in Indonesia. Meanwhile, statistics bureau (BPS) chief Rusman Heriawan said business sectors should start focusing on opportunities that lie ahead in the FTA instead of only whining. “Indonesia should not act spoiled in dealing with the ASEAN-China FTA. Indonesia should take advantage of the various opportunities it had to offer,” Rusman said during a press conference, adding that backing off from the agreement is not a solution. “We should grab the opportunities that can bring us benefit.” Deputy Trade Minister Mahendra Siregar said Indonesia can use the ASEANChina FTA momentum to attract foreign investors. “The ASEAN-China FTA is an opportunity to attract investment and the investment can be made into goods that can be exported to countries that are not members of the ASEAN-China FTA,” he said. He added that in the long term the ASEAN-China FTA can boost exports and therefore the government must immediately focus on the opportunities available. Mahendra said measures are needed to tap the opportunities. Aside from commodities, Indonesia can also rely on the electronic sector. “We should not look at it item per item. Some of our electronic products have even penetrated the Chinese market. Product-wise we have almost everything and we

Trade Minister Mari Pangestu said that the FTA had also opened up the Indonesian market and attracted more investors

should continue to diverse superior products,” he explained. The Trade Ministry in 2009 recorded 175 new local brands that can compete overseas and hopes to increase the number to 200 by the end of this year. Most of the new brands are food products while brands like Indofood, Wings and Maspion have penetrated the international market. The government has stressed that it remains committed to implementing the ASEAN-China Free Trade Agreement (FTA) that took effect on 1 January 2010 despite mounting pressures to delay the agreement. Although it has no plan to back off from the agreement, the government has notified the ASEAN Council of its intention to renegotiate tariff reductions on 228 items which it considers could hurt local industries. Trade Minister Mari Elka Pangestu said last week the government has informed the relevant party of its intention but there are processes that need to be passed through before the tariff reduction can be renegotiated. She said the government will follow all the processes and procedures.

ic Minister Hatta Rajasa said that the formal renegotiations would be held later this year. The ASEAN-China FTA applies zero tariffs on 6,682 tariff lines in 17 sectors, including 12 in manufacturing, and five in agriculture, mining and maritime sectors. To protect local industries from the negative impacts of the FTA implementation, the government has formed a team to evaluate the FTA implementation. The tasks of the team include improving the system by, for example, cutting red tape, protect local industries from the possibility of unfair competition and monitor the distribution of substandard goods. Meanwhile, the industry minister has said he was also likely to set tighter control through antidumping measures to prevent imported goods from flooding the domestic market unchecked. Apart from anti-dumping measures, the ministry issued mandatory SNIs on, among others, safety shoes, packaged mineral water, dry batteries and zinc-aluminumcoated steel in 2009. It is slated to mandate SNIs on cocoa powder and children’s toys later this year. In a related development, Agriculture Minister Suswono has proposed on tightening quarantine on fruit vegetable imports at entry points and has prepared necessary facilities in quarantines

Industry Minister MS Hidayat said Indonesia was willing to trade the postponing with something that will benefit China, while Coordinating Econom-

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across the country. The government would also maximize the implementation of sanitary measures — a WTO agreement on food safety and animal and plant health standards and issue mandatory SNIs on food. Meanwhile, Industry Minister MS Hidayat said the manufacturing sector could still see growth up to 4.55% despite the implementation of the ASEANChina FTA. “Sure, the ASEAN-China FTA has impacts but it will not be significant,” he said. Hidayat said the manufacturing industry can still post positive growth thanks to the huge contribution from the food and beverage sector, tobacco, printing, cement industry, and some metal industry. He is also optimistic that the textile industry can grow positively if supported by machinery restructuring program that would help boost the industry’s competitiveness. Under the FTA, China and the six founding ASEAN countries Indonesia, Singapore, Thailand, the Philippines, Malaysia - and Brunei must cut tariffs on 90% of imported goods across 7,000 product categories. The group’s newest members Cambodia, Laos, Viet Nam and Burma - will gradually reduce tariffs and must eliminate them entirely by 2015.

Private Investment, Export to Spur Nation’s Growth Chief Economics Minister Hatta Radjasa last week projected better export performance this year in line with the improving global economic condition. By Eka Putri

he government will rely on export and investment to achieve its 5.5%-5.6% economic growth target this year, a shift from government spending and consumption that have been the major driving force for growth in the past few years. Chief Economics Minister Hatta Radjasa last week projected better export performance this year in line with the improving global economic condition. He projected Indonesia’s exports to grow at 5.1% compared to last year. Hatta also projected a slightly higher growth in household consumption at 5.3% compared to last year’s household consum-

er growth target and expects a sound growth in government spending at a 9.3% pace. With higher export activities and domestic demand, Hatta projected imports to grow at 7.2% this year. With the global economic crisis bottoming out, he expects the business sector to start realizing their investment plans. The banking and financial crisis last year hit global demand, which caused businesses to lay off workers as they had to cut production. President Susilo Bambang Yudhoyono said the government plans to cut unemployment and poverty rates to below 8% and 13% respectively this year.

Data at the Central Statistics Agency (BPS) showed the unemployment rate stood at 7.87% in August 2009 and poverty rate at 14.15% in May 2009. People’s purchasing power is a major factor affecting the economy. Private consumption drives 60% of the economy, according to the BPS. Meanwhile, Finance Minister Sri Mulyani Indrawati said she was content with Indonesia’s economic achievement during 2009. She said the public had enjoyed stronger purchasing power and better welfare in line with the declining poverty rate, driven by lower inflation and stronger exchange rate. “2009 was not an easy year, but thank God, we were able to maintain the economy well and minimize the impacts of the global crisis,” she said. Mulyani added that Indonesia was still able to post growth as other countries took a hit from

the global crisis. “We were still able to keep various economic activities running, provide job opportunities and maintain development while at the same time hold the general election. 2009 was very challenging, but we were able to overcome the challenges and this is

remain strong and that production will be supported by the harvest season in March and April. The government has also said it will prioritize the development of the real sector to spur growth. Meanwhile, the central bank maintains its benchmark rate at

The government has also said it will prioritize the development of the real sector to spur growth. an extraordinary achievement,” she said. Mulyani hoped that 2010 will become a year of economic acceleration for Indonesia to improve public welfare by utilizing all economic resources and their instruments, both through infrastructure development, opening job opportunities, subsidies, improving the people’s income, education and health quality. Mulyani also said that demand in the first quarter of 2010 would

6.5% for the fifth straight month and projected no inflationary pressures within the first half of the year. Acting BI Governor Darmin Nasution said that the 6.5% BI rate would be conducive to support economic recovery, financial stability and bank intermediation. He added that inflation this year would be in line with BI’s estimate of between 4% and 6%. Mulyani said inflation could be triggered by increases in the

price of rice and other goods because of higher demand resulting from an improving economy. “What needs to be watched is the price of rice until April, before the harvest season,” she said. Central Statistics Agency (BPS) head Rusman Heriawan warned the government to anticipate rising prices of rice and sugar. “This will be a problem. We can import them, but if the prices are higher than the domestic ones, this is a problem. We need to be careful in managing domestic prices,” he said. Coordinating Economic Minister Hatta Rajasa said the government would improve the infrastructure to ease logistical costs, since the latter tend to cause inflation. Bank Indonesia Deputy Governor Hartadi A. Sarwono said supply should be increased to adjust to rising demand to prevent inflation. Last year, Indonesia only recorded 2.78% inflation, the low-

est rate in 10 years. BPS chief Rusman Heriawan attributed the low inflation to domestic economic recovery, global economic crisis and US dollar volatility. Rusman said inflation at below 3% had been projected by since the beginning of last year. “This is also because consumers saw everything was sufficient, and this helped keep consumer spending under control,” he said. Inflation in December 2009 was recorded at 0.33 %. Indonesia experienced deflation three times last year, in January, April, and November. Meanwhile, foreign exchange reserves reached US$66.1 billion at the end of last year and is expected to increase to US$76 billion this year. Acting BI Governor Darmin Nasution said the 2009 foreign exchange reserves had risen by US$12 billion from 2008, due to better export performance and fewer imports.

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10 January 14, 2010

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Business Private Sector Braces for Entry of Merged Drug State Companies Five SOEs are also slated to hold initial public offerings (IPO) this year, namely Pembangunan Perumahan (PP), Garuda Indonesia, Krakatau Steel, Perkebunan Nusantara (PTPN) III, and PTPN IV. Mustafa hoped to gain House approval for the plan and hoped to see more and more state companies listing in the bourse to raise capital. He said the first company to go public this year would be PP in January, followed by Garuda, also in the first quarter, and then KS.

State Minister/Head of National Development Board (Bappenas) Armida Alisjahbana last week said ministries or institutions that failed to fully absorb the infrastructure stimulus funds will get lesser budget allocation this year. “Based on the state budget law, the budget will be slashed according to the amount of stimulus funds that were not used,” Armida said. She cited an example that a ministry which only spent 97% of its budget will receive budget allocation that is 3% lesser this year. Last year, ministries and institutions only absorbed a total of Rp12.2 trillion or 94% of the stimulus funds provided by the government.

ministries with low absorption of stimulus funds but said it will first find out the cause. Low fund absorption is contributed by many factors, including uneven budget distribution to the regions.

Aside from the five SOEs, three state enterprises are also planning to issue global bonds this year and plan to use the proceeds to finance business expansion. “The three SOEs are Bank Mandiri, PLN, and BNI. They have reported their plan to issue global bonds in 2010,” he said.

Finance Minister Sri Mulyani said the government is preparing sanction mechanism for ministries or institutions that failed to fully absorb the funds. Members of the House of Representatives said they will also prepare a sanction for

Aside from sanctions, the House will also prepare ‘rewards’ for ministries or institutions that can spend the budget well. Legislators will also push for the remaining subsidy budget in 2009 state budget to be used as an additional budget to finance this year’s infrastructure develop-

The merger process of two state drug companies Kimia Farma and Indofarma will be completed by the first half of the year.

he State Ministry of State-owned Enterprises is determined to complete the merger process of two state drug companies Kimia Farma and Indofarma by the first half of the year. SOE Deputy Minister of Services and Other Businesses Muchayat said the merger is deemed urgent due to the fierce market competition. “We will force them to merge because the market is so competitive,” said Muchayat in Jakarta. Muchayat said that with the merger, both state companies will have a much bigger market compared to when they continue to run as separate entities. He added that both companies are generic drug producers and that the merger is expected to increase their turnover and improve their combined performances. Both state companies are es-

timated to have more than Rp4 trillion in sales in 2009, with Kimia Farma generating Rp3 trillion revenue and Indofarma with Rp1.1 trillion. Sales in both companies are way below that of other state giant drug maker Kalbe Farma, which is estimated to book revenue of Rp9 trillion in 2009. The ministry is also planning to merge three state enterprises that continue to ink losses, namely Industri Sandang Nusantara (Insan), Industri Gelas (Iglass), and BUMN Garam. Muchayat said the three SOEs will be merged to become Aneka Industri but added that this is still a plan. Muchayat said he has presented the plan to SOE Minister Mustafa Abubakar and that this was a form of a rightsizing measure that has been conducted by the ministry.

The three state companies have been suffering huge losses. Of the three SOEs, only Iglass has so far managed to improve its condition. The ministry had initially planned to liquidate Insan, but dropped the plan after it saw prospects for improvement. SOE Minister Mustafa Abubakar said late last year that the improving macro economic condition will boost investment in SOEs this year and projected a 10% investment growth compared to last year. “We want to see better performances next year,” he said at the time. He projected that the mining sector will post the biggest growth, supported by better prices in mining commodities and that the same will also apply to the telecommunication and banking sectors.

“Power Supply Problems Overcome by October” The electricity supply problems in a number of regions in Indonesia will be overcome by October 2010, Coordinating Minister for Economic Affairs Hatta Radjasa said here on Monday. “Outages in a number of regions will be overcome in the next 10 months,” he said in his evaluation of economic performance in 2009 and prospects for 2010. He said the state electricity company PLN would take steps to overcome electricity crisis in several regions by among others continuing the purchase of excess power of other companies. In terms of finance, he said, the government would improve PLN’s finance by increasing its funding to reach Rp30 trillion. The additional funding would be taken from the increasing margin from formerly five percent against the principle production cost (BPP) to eight percent. With the BPP in 2009 reaching Rp140 trillion an increase of one percent in margin would need Rp11.2 trillion. By increasing the margin from five to eight percent it means PLN’s margin would increase from Rp7 trillion to Rp11.2 trillion. “Based on one percent increase in margin PLN will be able to borrow up to Rp7 trillion and so

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The state electricity company PLN would take steps to overcome electricity crisis in several regions by among others continuing the purchase of excess power of other companies.

Hatta Rajasa Coordinating Minister for Economic Affairs

with an increase of three percent PLN’s debt capacity will reach Rp21 trillion,” he said. The rest, he said, would be covered with the government’s capital participation totalling Rp10 trillion. “The additional Rp30 trillion funds will make PLN healthy and at the same time able to overcome outages this year,” he said. As the government will not raise the electricity tariff the increased margin would be covered by subsidy hike. “We will discuss it with the House of Representatives,” he said.

PLN recorded that by October 2009, 11 of 24 national electricity systems suffered a deficit of power by 460.2MW. Only two systems operate under normal conditions and 11 others are on alert, he said. He said PLN categorizes its power system into three parts, namely normal when no outage occurs and operational reserves are bigger than the biggest unit of generators; alert when no outage occurs but the potential is there because operational reserves are smaller than the biggest unit of generators; and deficit when outages occur because power is smaller than the peak burden or transmission system is disrupted. Eleven systems detected to suffer a deficit are the southern part of Sumatra (198.3 MW), South Sulawesi (145.7 MW), the northern part of Sumatra (70MW), Minahasa (27.51 MW), Tanjung Pinang (7.4 MW), Palu (5.96 MW), Kendari (2.1 MW), Poso (1.71 MW), Sampit (0.8 MW), Ambon (0.56 MW) and Singkawang (0.16 MW). The systems that operate normally are Java-Bali and Bontang while the systems under alert are Bangka, Belitung, Batam, Pontianak, Lombok, Barito, Mahakam, Gorontalo, Kupang, Ternate and Jayapura.

Budgets with Low Stimulus Fund Absorption to be Slashed

The government experienced a budget surplus of Rp38 trillion last year, blamed mostly on slow budget disbursements as ministries and state agencies tend to spend most of their budget in the second half of the year.

ment programs. The government last year only used Rp45 trillion of the fuel subsidy funds from the Rp52.4 trillion that was allocated. Meanwhile, of the total of Rp99.9 trillion allocated for energy subsidy, only Rp94.5 trillion was used up, thanks to the lower Mean Oil Platts Singapore (MOPS) price throughout 2009. In response to the low budget spending, President Susilo Bambang Yudhoyono has also urged ministries and state agencies to start spending their budgets as early as possible, saying it was necessary to stimulate the economy, which is starting to recover from the global economic downturn. He said that all regulations on disbursement and procurement are ready and that there was no reason to delay disbursements. The government experienced a budget surplus of Rp38 trillion last year, blamed mostly on slow budget disbursements as ministries and state agencies tend to spend most of their budget in the second half of the year.

In Future, Foreigners May Hold Property Ownership The government is currently drafting a decree on foreign ownership on property, which is hoped to buoy up the country’s property sector. received many inputs to be included in the draft, for example, foreigners are only allowed to buy property at prices above Rp1 billion. This means that foreigners will only be allowed to buy property in the upper class, which is deemed necessary to provide opportunity for Indonesians who are in the medium to lower segment class to own a house. The ministry is also still un-

Foreigners will soon allow properties in Indonesia, as the government is currently drafting a decree on foreign ownership on property, which is hoped to buoy up the country’s property sector. Public Housing Minister Suharso Monoarfa said he has discussed the matter with the Coordinating Economic Ministry and State Secretariat and hopes that the decree can be issued this semester.

minimum of 14 days a year for five years for foreigners who own properties in Indonesia.

Suharso said foreign property ownership in Indonesia should not be looked at as merely from the consumer perspective but also from the investment point of view. “Many benefits can be gained from the measure, for example, it can help bolster growth in the property sector, boost tax income,” he said. Suharso said there are still many things that need to be discussed with many parties, for example, the form of ownership rights, what type of property, how long they are allowed to own the property and other related issues.

Neighboring countries such as Malaysia, Singapore and Vietnam have already opened their property market to foreigners.

He also said that the draft includes incentive which will enable foreigners to stay a

Public Housing Deputy Minister of Formal Housing Zulkifli Koto said the ministry has

“This is not meant to spoil foreigners or anything but if foreigners are allowed to buy Indosat, toll roads, why not property?” he asked. He also urged not to worry about foreign ownership in property because property cannot be moved around.

Suharso is optimistic that by opening the property market to foreigners, Indonesia would reap US$6 billion annually in investment potential and thus help spur investment growth in the country’s property sector. “Based on my calculation, we can at least get US$3 billion a year but the figure could double,” he said during a seminar recently.

likely to allow foreigners to own landed house but will allow them to own storey-building property from the fourth floor upward, adding that ownership for landed house will only be given in special economic zones. Zulkifli added that the ministry is also considering a policy requiring foreigners to employ at least two local workers in every property they own, a move which will also help reduce unemployment in the country. Neighboring countries such as

Malaysia, Singapore and Vietnam have already opened their property market to foreigners. Rich Indonesians have even become the target market in some of these countries. Meanwhile, the government has also changed the housing subsidy pattern, from interest margin subsidy and down payment to capital placement subsidy in the banking sector. The government is planning to place Rp3.1 trillion in banks that participate in the housing subsidy program in 2010. “The subsidy funds will be placed as a liquidity facility for construction or house ownership loan interest subsidy,” he said. Under this new scheme, bank loan interest rate for housing loan will be cheaper. The subsidy will be extended from five years to the full loan tenor, for example, 20 years. The government will provide 4% interest margin for the cheap funds and banks can set a 3% interest as provision and to cover overhead. This will enable the banks to apply only 7%-8% total interest on subsidy recipients, much lower compared to the commercial 12% interest rate.

ADVERTORIAL

Yakobus’s Midas Touch 1200% Profit In 5 Years As a confident entrepreneur, Yakobus Kusuma Hariyanto (39) has proven to his family and kin that he made the right decision to invest in Kota Jababeka and get additional income. It started when Yakob, a husband of Theresia Sri Sugiarmi, visited a housing exhibition in the World Trade Center in Sudirman, Jakarta. The exhibition was held by PT. Graha Buana Cikarang subsidiary of PT. Jababeka Tbk, which manages the residential sector in Kota Jababeka. Yakob bargained with a GBC salesperson for a house and eventually bought it at Rp. 7 million. At that time, Yakob, a father of 3 children, and his family owned a house in Tambun. However, Yakob decided to buy the new house, because of its cheap price and strategic location, near the toll road and provincial road. Owning two houses, Yakob decided to rent out his house in Kota Jababeka

and it has since then been tenanted. From rental income alone, Yakob was able to pay his loan over a period of 5 years. After 18 years, Yakob’s house was sold for Rp. 82 million. Yakob, a private worker who has dedicated himself to entrepreneurship, certainly decided to buy property in Kota Jababeka as an investment.

potential and strategic location that Kota Jababeka has to offer. While Yakob was in the process of securing a mortgage from the bank to purchase his house, the Asian financial crisis hit Indonesia, after which the Indonesian Rupiah lost 700% of its value against the US dollar. In fact, he had to deal with the creditor for making the down payment. Moreover, Yakob’s wife Theresia, thought that her husband was crazy and too determined. But, by his faith and motto of life “after bitter times, sweet times arise,” he was convinced that he was making the right decision for his family.

Before the monetary crisis occurred, PT. Graha Buana Cikarang offered Yakob a shop house. After Yakob surveyed the location, he bought the shop house and decided to turn it into a beauty salon. He was very dedicated and convinced he made the right decision, especially, because he realized the good market

Today, besides being an entrepreneurwhorunsabeautysalon, he is also supplies beauty products. It has been proven that the business he and his wife manage, runs particularly smoothly and successfully. Customers do not only come from the Jababeka area, but also from Lemahabang and Delta Mas, who normally come in the

afternoon and evening. After being asked about his interest to expand his business in Jababeka, Yakob confidently answered that he would buy another shop house in Pavilion Niaga shop house complex at Kota Jababeka. Actually, he sees big potential in house renting business in Cikarang because there live more than 600.000 employees from more than

1.500 foreign and local industries in Jababeka Industrial Estate, such as; Unilever, Mattel, Samsung, Kraft, etc. Yakob is currently working in one of the biggest ceramics industries in Indonesia, which is also located in Kota Jababeka, where he and his family currently reside too.

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January 14, 2010 11

Technology

The Changing Landscape for Software The bottom line is there is no magic bullet or free ride for the ultimate IT system By Michael Mudd

n recent years there has been much debate about standards in IT software, particularly as it relates to software that is produced and marketed commercially, referred to in this article as ‘commercial software’, and what is generally touted as ‘open source’ or ‘community software’, so named based on its business model. The latter has evolved from older standards that have been updated by the software community. It was popularised by Linus Torvalds who took Unix, a commercially developed software, and built upon its base to create Linux. The recent emergence of open source solutions, in particular on servers with popular programmes such as Apache and Send Mail, has further ignited the debate over the benefits of community software versus commercial (or proprietary) software. I believe that such a black and white world no longer exists — if it ever did.

Initially, it was envisioned by many that open source would predominate alongside major vendors such as Microsoft, Apple, Oracle, SAP and so on in commercial IT environments. However, upon reviewing the current extent of open source usage, the adoption rate has not yet eventuated as predicted. One factor that has partly contributed to the slower-than-expected uptake of community software is that it has not exceeded the utility value of commercial software as it was initially expected to. From a cost perspective, customers have the option of either paying “upfront” for commercial applications that have the support of the vendors that market them, or of using open source software, which means not paying an upfront fee, and then paying either “in-house” costs or the cost for a service provider to install, maintain and integrate the applications with legacy systems. Both have merits at the server end, but in general, the cost of

“

“Through my extensive experience in the industry... my conclusion is that there is a lack of focus on the end game — that this is not a win-lose scenario, but like politics, is a tradeoff that seeks the best workable solution based on the legitimate desires of each constituency.”

the latter business model is not as transparent as the former. Open source software often does not improve upon its total cost of ownership due to the unanticipated implications of supporting and maintaining the software, which often equates to similar cost to commercial software. The desktop environment has been challenging, particularly when it comes to interoperability issues given the vast installed commercial PC base. The marketplace is driving interoperability demands. As legacy systems and new systems increasingly need to interact, customers — whether government, businesses, or individual consumers — want all of their components to interoperate. In government, the tax authority’s computers should be able to speak to the department of motor vehicles. In business, headquarters in Mumbai should be able to seamlessly access documents cre-

ated in Madrid. Industry is responding by building products that are interoperable — and secure — by design. Through my extensive experience in the industry, speaking and interacting at numerous symposia, and being an observer to the ISO for JTC-1 – IT Standards and various sub committees that determine languages that enable interoperability, my conclusion is that there is a lack of focus on the end game — that

this is not a win-lose scenario, but like politics, is a trade-off that seeks the best workable solution based on the legitimate desires of each constituency. The reality of most modern IT environments is that they are made up of hardware and software from a myriad of vendors, that need to adapt to the reality of legacy systems and new innovations moving forward. All IT decision makers and their CxOs, both public and private, have in-

teroperability and security as a top of mind concern. The bottom line is there is no magic bullet or free ride for the ultimate IT system — but that by combining the proven backbone of commercial software with the best of community software, the constituents of the global IT ecosystem may be best served. Michael Mudd is the Director of Public Policy, Asia-Pacific, for the Computing Technology Industry Association (CompTIA).

About The Contributor Michael Mudd is the Director of Public Policy, Asia-Pacific, for the Computing Technology Industry Association (CompTIA). CompTIA is the voice of the world’s $3 trillion information technology industry. CompTIA membership extends into more than 100 countries and includes companies at the forefront of innovation; the channel partners and solution providers they rely on to bring their products to market; and the professionals responsible for maximizing the benefits organizations receive from their technology investments. For more information, visit www.comptia.org

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12 January 14, 2010

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Human Capital Personal Scorecards: How To Move The Appraisal Conversation From “Conflict” To “Collaboration.” Naresh Makhijani

A well formulated personal scorecard enables every individual to clearly understand their roles and responsibilities, as well as the capabilities needed to perform. As much as anything it is a job description and development plan rolled into one.

he dream of most President Directors is that everyone in the organization – from the top to bottom - understands how their day-to-day work helps deliver the strategic goals of the enterprise and therefore focuses their performance accordingly. It is our experience that the best way to realize this dream is through the implementation of a personal Balanced Scorecard. A personal scorecard typically comprises two sections. As with an enterprise scorecard (see Figure 1) it will include finan-

cial and non-financial objectives, measures and targets that are performance oriented and are shaped to assist the organization in the execution of its strategic goals. Alongside this, the personal scorecard should include a section on the individual’s own competency development with aligned measures, targets, etc. A well formulated personal scorecard enables every individual to clearly understand their roles and responsibilities, as well as the capabilities needed to perform. As much as anything it is a job description and development plan rolled into one. Despite the benefits, the research to support our book: “Managing Human Capital in Indonesia,” found that although fully 88% of study participants claimed to align individual performance with business strategy, just 22% of these did so through a personal Balanced Scorecard. Most respondents used conventional goal setting and the cascading of goals (Figure 2). Moreover, we found that even when individual scorecards are in place, they are not deployed properly or effectively. Scorecard objectives, etc are typically set at the beginning of the year, are not properly linked to business objectives and are only reviewed twelve months later (or at best af-

Krishnan Rajendran

ter six months). As with a conventional appraisal system, this performance evaluation is usually conducted by an immediate supervisor and is almost exclusively subjective. We strongly suggest that a personal scorecard should be made up of about 80% objective and 20% subjective metrics. Furthermore, the individual scorecard should be assessed at least on a quarterly basis and perhaps monthly or even weekly. More advanced organizations are putting the personal scorecards online with space for managers and others to enter into a virtual dialogue on performance to specified initiatives, enabling best practice sharing, managerial/co-worker coaching, tips and advice. We will now consider some examples of individual scorecards three organizational levels: First we look at personal scorecards for members of the executive team. Indeed, it is perfectly feasible to create a complete Strategy Map for the CEO (that shows the casual link between performance objectives within the four scorecard perspectives) and for any other executive committee member. This is because being at the highest level of the organization they can pull levers or order interventions that can dramatically alter performance to

James Creelman

strategic goals. Such an influence lessens as we drill inside the enterprise. Although it might make sense to include a financial measure of Return on Equity on the scorecard of a CEO or CFO, it will make little sense for a front line operator. Moreover, an Executive Scorecard essentially serves as a job description for a senior role, so is equally valuable for selection, or succession planning purposes. This provides a double win for the HR function, which will be responsible for facilitating and managing the personal scorecard process – firstly, they are ensuring that the CEO and other senior executives are focused on the high-level strategic objectives that they must influence, while also serving as a useful document for developing the senior leadership bench. The Personal Scorecard for the CEO of a US bank (which includes a Strategy Map) is shown in figure 3. Moving down to the middle management level, there are organizations that create individual scorecards that are broadly similar across roles. For instance, one Canadian financial services organization has created scorecards for all branch managers (it has more than a 1000 branches in Canada alone) that are iden-

tical in that they will consist of the four perspectives of financial, customer, operations and employee, and will be subjected to a common measurement process. For example, a branch manager’s scorecard includes a measure of satisfaction/engagement of branch employees. However, the goals and targets may change from region to region and perhaps branch to branch, depending on local requirements.

service and satisfaction with personal attention, then there is little they can do to influence this scorecard if the regional office has cut teller numbers, so forcing irritated customers to spend longer in queues. Personal scorecards can only be effective when the employee can personally influence the measures. The personal scorecard section that focuses on personal competency and development ensures that the individual is developing skills that they and the enterprise require. As well as being beneficial to the company it is also a useful mechanism for showing the individual how they are being developed by the organization – thus playing a part in reducing any hemorrhaging of talent. It is important to put in place a system that not only helps individuals understand the targets that they need to achieve but also the capability that they need to demonstrate.

Similar scorecards have been created for other levels, such as customer service managers, who are responsible for the operations of the branch. These scorecards include the objective from the “operations.” perspective of “effective facilities management”. A measure of this could be the management of ATM down time. As another example, a personal banking officer will have a measure of the number of contacts with key customers. At lower levels, such as for front-line operatives, companies typically create personal scorecards that comprise only the perspectives that the individual can influence. For instance, the Indonesian-based property developer Summarecon first came to the scorecard when seeking a way to better motivate employees and align their performance with the goals of the enterprise. This alignment was made through personal scorecards. On these scorecards, employees have accountability statements (see below) that have objectives and measures set against perspectives that they most impact.

The individual is not only shown “what” they must achieve, but also “how” they can achieve this. “The “what” comes from the creation of an individual scorecard. The “how” is provided by the identification of a set of competencies that are found to be related to the demonstration of “excellent” performance. Encouraging the individual to develop these competencies will also help to improve the organization’s capability, which will increase its ability to achieve its strategic objectives. A useful tool to use alongside the individual scorecard is a performance accountability statement. These statements define that nature of job, type of experience required, -10-12 major accountabilities, required competencies and key performance indicators.

And we cannot stress enough that personal scorecards can be severely de-motivating if they comprise objectives and measures that are beyond the control of staff. For example, if a teller in a branch is to be measured against a customer satisfaction score, and this is an aggregate of the speed of

For instance, as a real-life case example, a position for a HR di-

rector within a technology company listed a number of key competency requirements, which included: change management skills; internal consulting & diagnostic skills and working with multicultural work forces across 100 countries This was supported by a number of major job accountabilities, including: formulate and implement HR policies and procedures; Implement a suitable Human Resource Information system; ensure competency profiles are in place for all positions. In turn, amongst the major key performance indicators were: key employee retention; adequate training; employee motivation and productivity; leadership development When an individual scorecard is used as the appraisal system it provides none of the surprises, conflicts and de-motivating outcomes that are common in a conventional appraisal system – the individual scorecard is being tracked by manager and subordinate alike on an ongoing basis, with performance reviewed regularly. Unfortunately, our research finds that most employee evaluations are via traditional year-end appraisals (Figure 4). Amongst other shortcomings such a conventional approach rarely based on good data. The fact is, without data all there can be is conflict. Most appraisal systems lead to conversations focused on manager/subordinate conflict. A personal Balanced Scorecard, as with an enterprise scorecard, houses objectives, measures and targets that are based on good data – the manager/subordinate conversation shifts from conflict to strategic collaboration. This article is extracted from the book: Managing Human Capital in Indonesia: Best Practices in Aligning People with Strategic Goals (Azkia, Indonesia, 2009)

figure 1: An example Strategy Map: for a Banking organization

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Figure 2: How Individual Performance is Linked to Business Strategy

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Figure 3: First Commonwealth Bank Strategy Map and Balanced Scorecard for the CEO Strategic Objectives (from enterprise strategy map) Financial

Stakeholder

F2 - Grow Revenues

C1 - “FCFC Provides Financial Solutions. For Life”

Internal I2 - Optimize Product and Channel Opportunities Learning & Growth

I3 - Use the Preferred Way of Selling

“We will Have Employees Who Contribute To Our Communities

Individual Objective Enable key sources of revenue growth 1) investment offerings for the affluent segments 2) loan offerings for the commercial market Oversee the execution of the “onename” initiative and new brand image campaign

Identify targeted affluent and commercial relationships. Ensure account profile are developed.

Take an active leadership role in high profile civic organizations

Measure (per enterprise BSC)

Target(s)

• Revenue growth

• 2003 10%

• Acquisition, Development and

• TBD

• Sales Rate on Profiled Clients

• 2003 40%

Retention by Segment

• Personal Involvement in • 2003 Civic Activities 10%

Rating

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January 14, 2010 13

Tourism Borobudur III :

Bringing Borobudur to Cyberspace Bringing the Borobudur to Cyberspace” is aimed at creating global awareness of the Borobudur and its message, and to bring this awareness ultimately and quite literally into everybody´s pocket by using state-of-the-art interactive technology. By Dr. Titus Leber

hen I first visited the Borobudur as a participant to UNESCO´s “Silk Roads of the Sea“ expedition in early 1991, I underwent an experience that is probably shared by most visitors who arrive in steadily increasing numbers to the Borobudur. I was overwhelmed by the sheer grandeur of the building, which is the largest Buddhist monument in the world. Then, exploring its richly decorated galleries, I marveled at the multitude of carved reliefs, exhausting myself in circumambulating the temple a first time, and then a second time. But as it got hotter, soon my only wish became to make it to the top. From there I took a few snapshots of the breathtaking panoramic views surrounding the monument, with the stupas of the Borobudur in front of Mount Merapi as the background. I finally left with the impression of having experienced something amazing - without the slightest clue of what it really was that I had seen!

serenity on their sculptured faces, wondering and wandering on their quest for something beyond our physical world. They were obviously in a state of bliss judging by the sublime smiles they display, many of them in ecstatic adoration or prayer as if they were confronted with a glimpse of the Divine! Much later, when I had learned more about the Borobudur, it dawned on me that there existed a striking parallel between those who had erected the Borobudur some 1200 years ago and ourselves, children of the digital era, who climb the Borobudur armed with our digital picture snapping devices, I- phones and video cameras: I realized that we both belonged to civilizations striving to communicate in images, and that just the media, on which we try to preserve our images, were different: lava stone panels in the case of our ancestors, mega-pixel-streams and memory sticks in our case. The message is there; it only needs to be translated, transcoded, or converted, as we call it now.

There are 1460 narrative stonecarved panels in widescreen format, featuring over 10.000 characters with their most subtle emotions captured in timeless

So what were our forefathers trying to convey to us, when they underwent the tremendous effort of creating and arranging those pictures on the Borobudur?

ho hasn’t heard of Yogyakarta, the culture rich city of knowledge which is also popular for its local culinary dish “gudeg”? Its tourism destinations, which include the keraton or palace, Parangtritis beach and Candi Prambanan, are breathtaking and known worldwide. Almost four years ago on 27 May, 2006, a powerful earthquake measuring 5.9 on the Richter scale devastated most of the areas in Yogyakarta. The earthquake was felt even in Cilacap, Semarang, Solo, Surabaya, Malang and other surrounding areas and claimed thousands of lives, heavily damaging thousands of buildings, historical sites, including Bangsal Trajumas and the Candi Prambanan area. Several temples in Prambanan suffered heavy damages; it also caused Bangsal Trajumas in Yogyakarta keraton area to collapse. Other temples in Candi Prambanan area that were affected by the earthquake were Candi Plaosan, Candi Apit No.4 Sewu and Candi Lumbung. The biggest temples hit by the quake were Candi Wisnu and Candi Brahma, which have just been rehabilitated. Cracks were found on the stone component of the three temples The collapse was also coupled with ruptures on the top side and roofs of the temples. These damages have eliminated the esthetic value of the temples, destroyed the archeological data that threaten the actual functions of the temples needed for science and culture development, including its practical function for the tourism and economic sectors and the

Dr Titus Leber - author and director of Borobudur - Paths to Enlightenment.

Among scholars, there have been long lasting disputes on how to interpret the structure of the Borobudur: is it meant to be a representation of the Buddhist cosmology with its three realms? Or is its ground plan designed to reflect a giant cosmic “DiamondWorld” mandala, or maybe both? To me, child of the information age, the layout of the Borobudur is reminiscent of the way we design integrated circuits on computer chips, containing a vast array of instructions: a subtly encoded ancient message of wisdom and compassion, preserved for a modern world in need to decipher and decode it for its own benefit. After decades of assiduous research we have more or less managed to understand the content and meaning of most of the 1460 panels which ornate the Borobudur, and to attribute their iconographical details to their literary sources: the Lalitavistara (the description of the historical Buddha´s life), the Jataka, Avadanas and Jatakamala (tales of past incarnations of the Buddha in the animal realm and heroic

The Borobudur in cyberspace on an Ipod

The project I initiated with the generous support of the Government of Indonesia through Taman Wisata Candi Borobudur, Prambanan & Ratu Boko and its visionary chairman. S.D. Darmono, is called “Borobudur—Paths to Enlightenment”.

and compassionate deeds he accomplished in previous re-incarnations), and the Gandavyuha, which tells us about the spiritual quest of a young man in search of enlightenment. However, these stories in stone are readable only for those who know how to decipher this ancient symbolic language with its message of profound humanity and tolerance, which reaches far beyond any narrow boundaries of religious confession right into levels of universal validity for mankind. Although the Borobudur has been listed by UNESCO as a World Cultural Heritage site and is considered by many to be the eighth wonder of the Ancient World, the site still remains for a majority a blank spot on the world´s cultural map. How is this possible and how can this be changed? The project I initiated with the generous support of the Government of Indonesia through Taman Wisata Candi Borobudur, Prambanan & Ratu Boko and its visionary chairman. S.D. Darmono, is called “Borobudur—

Paths to Enlightenment”. It aims to awaken the Borobudur to its third phase of radiation, the first phase being the period of construction followed by centuries as an active place of pilgrimage and spiritual contemplation. and the second one being its rediscovery by Sir Stamford Raffles and putting it on the map of archeological wonders of the world through its restoration by UNESCO and the Indonesian Government. “Phase III—Bringing the Borobudur to Cyberspace” is aimed at creating global awareness of the Borobudur and its message, and to bring this awareness ultimately and quite literally into everybody´s pocket by using state-of-the-art interactive technology. Obviously, not everybody is equally prepared for this message, but the flexible nature of interactive media makes it possible to custom tailor the way in which we bring the Borobudur´s message to various target groups according to their specific capacities, thus following the Buddha´s advice on how to best disseminate his insights to individual groups with different cultural and spiri-

tual background. By offering not less than 15 choices on how to explore the Borobudur and its messages in a virtual manner, the project proposes to discover the Borobudur either in systematic ways, or at random, in a passive, guided narrative mode or in thrilling explorative ways, depending on whether one decides to follow ”The Pilgrim´s Path” or the “Enlightened Tourist´s Path”, or on whether one is well versed in Buddhism or illiterate. Even children will enjoy its fun by following the ancient Jataka fables with their vivid animal-characters. Furthermore, in this year of celebrating 60 years of Sino-Indonesian relations, a special section of “Borobudur—Paths to Enlightenment” will highlight the amazing – and so far widely ignored - spiritual bonds and cultural links which exist between the stories depicted on the Borobudur and Chinese cultures. As in ancient times, when only a huge effort of many from kings to simple stone cutters - made it possible to erect the Borobudur as one of the world´s

most impressive sanctuaries, it will be once again necessary for many helpers and benefactors to join hands to bring the Borobudur to its well deserved international radiance. Currently, an academic advisory board of leading national and international scholars is being formed and leading figures of Indonesia´s business community such as Dr. Tahir, Executive Chairman of Bank Mayapada, have already offered their generous support in bringing the Borobudur to the world and beyond - into cyberspace! Dr. Titus Leber is a filmmaker, author and film director from Austria. He graduated from the American Film Institute in Hollywood and is a former Research fellow of MIT´s Center for Advanced Visual Studies”. His works include several awardwinning music films and a number of large interactive cultural projects such as a 3D visit of the Louvre Museum in Paris and a monumental interactive biography of the Buddha, created under Royal Patronage in Thailand.

The Inauguration of the Rehabilitated Bangsal Trajumas Kraton Yogyakarta and Temples in Prambanan With the opening of the Candi Prambanan area for the public after the earthquake, the DIY local administration has prepared itself to offer much better services to both local and foreign tourists. By Ahmad Fathoni

prosperity of the local people. To revive the functions of the temples in the wake of the earthquake, UNESCO members such as Japan and Saudi Arabia have helped rehabilitate the Candi Prambanan. The Indonesian government also helped with the rehabilitation through the Coordinating Ministry of People’s Welfare.

This shows the government’s care in maintaining cultural heritage, especially in the DIY region with the on-schedule rehabilitation of Bangsal Trajumas in the keraton area which cost Rp2.5 billion and Candi Prambanan Rp1.2 billion on 15 December 2009. The inauguration took place on 4 January 2010 at the Yogya-

The government has declared 2010 as “Visit Musuem Year” and is targeting 7 million tourists. Conservation, protection, development and utilization of cultural heritage are part of the development priorities as culture is one of the three main development pillars of the DIY province aside from education and tourism. Huge amount of funds were needed to rehabilitate buildings heavily damaged by the earthquake. The government has allocated funds from the state budget to rehabilitate damaged historical sites although in limited amount.

karta Palace and was led by Culture and Tourism Minister Jero Wacik, Coordinating Minister of People’s Welfare HR Agung Laksono and DIY Governor Hamengku Buwono X, in an event attended by leading artists, writers and archeologists. On that occasion, the minister of culture and tourism said “the role of the local residents is very important in maintaining, protecting, taking care of, and preserving all historical sites in DIY,

especially in the newly rehabilitated Prambanan area because they are Indonesia’s priceless heritage not found in other parts of the world.” When journalists asked the minister on the cost to protect and preserve the historical sites, the minister answered that trillions of rupiah are needed to recover the historical sites that were taken by other countries during the colonial era or stolen by local residents due to their high economic values. He called on local residents to tip authorities if they had information on people stealing or damaging cultural heritage protected by the Indonesian government under the law. The government has declared 2010 as “Visit Musuem Year” and is targeting 7 million tourists. With the opening of the Candi Prambanan area for the public after the earthquake, the DIY local administration has prepared itself to offer much better services to both local and foreign tourists. On the same day, Agung Laksono and Jero Wacik, accompanied by local officials and businesspeople, visited the newly rehabilitated Candi Prambanan.

Awesome Foursome: (from left to right) DIY Governor Hamengku Buwono X poses with Coordinating Minister of People’s Welfare HR Agung Laksono, Culture and Tourism Minister Jero Wacik, and Chairman of Taman Wisata Candi Borobudur, Prambanan & Ratu Boko S.D. Darmono

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14 January 14, 2010

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Travel

Garuda Wastu Kencana

Majestic and Regal It will still be some time before GWK realizes its full potential, but in the meantime it is already showing the signs of the cultural colossus it is meant to be. Text and photos by Taufik Darusman

The cultural park provides attractions with supporting facilities such as Lotus Pond, which can accommodate some 7.000 people, the Festival Park, a 800seat amphitheater with first class acoustics, street theater and an exhibition hall. At present, the statue of Wisnu, the statue of Garuda and the hands of Wisnu are placed temporarily in three different plazas within the park. They were made in Bandung, West Java, and transported by sea piece by piece. “GWK is intended to educate, especially the young generation, about the importance of preserving and cultivating one of the world’s cultural heritage,” says Made, one of the guides who are always on hand at the premises to offer their on-the-spot service from dawn to dusk.

The statue and its pedestal are surrounded by more than 240 hectares of cultural park which was once an abandoned and unproductive limestone quarry.

The two 25-meter natural limestone pillars comprising the Gapura Batu at the entrance gate to the complex are carved with images taken from the Ramaya-

na, the mythical series of Indianinspired tales stories. A bas-relief carving on the gate depicts scenes from the wayang, the shadow puppet theatre. Adjacent to Wisnu figure is the Pahrayangan Somaka Giri, a sacred spring from which flows water containing a rich mixture of minerals. “The existence of the spring in arid limestone hills has no scientific explanation; as such it has become a place of pilgrimage and meditation,” according to Made. “The water is said to cure diseases, and is widely used by local spiritual people in rituals to invoke rain that would produce good crops.” It takes about an hour to cover GWK, depending how much time you allow yourself for stopping and viewing art in the museum, which features local contemporary works and is close to small shops selling pleasant and affordable food and drinks. Designed and built by Nyoman Nuarta, one of Indonesia’s

most celebrated sculptors, the planners envisioned visitors arriving by plane observing the colossal statue as a warm greeting to Bali. For now, Bali’s landmark would havee to remain the people’s hospitality and, of course, the island’s incomparable natural beauty. How to Get There

Head for the roundabout at Simpang Siur that takes you to Nusa Dua. After about 15 minutes, take the right turn to Uluwatu and follow it up the hill. Reprinted by permission from Garuda Inflight Magazine

“

Designed and built by Nyoman Nuarta, one of Indonesia’s most celebrated sculptors, the planners envisioned visitors arriving by plane observing the colossal statue as a warm greeting to Bali.

“

aruda Wisnu Kencana, or affectionately known as GWK, is a cultural park carved out of limestone in Bukit Peninsula, south of Bali. It is devoted to the Hindu god Vishnu, the source of wisdom, who rides on the back of Garuda, the mythical bird, heading towards Amerta, the symbol of perennial virtue. Made from more than 4000 tons of giant slabs of copper and brass, the statue of Vishnu is 23 meters high although the original plan was for a 146-meter gold plated Vishnu riding Garuda on top of an 11-storey entertainment complex. But further construction now proceeds at a snail’s pace due to the economic crisis of 1998 and later the bombings in Bali, which must have discouraged investors.

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January 14, 2010 15

Health Ginkgo Doesn’t Work: Are There Better Ways to Save Your Brain?

A Genetic Clue to Quitting Smoking

Just over a year after a study showed that the herb doesn’t prevent dementia and Alzheimer’s disease, a new study from the same team of researchers has found no evidence that ginkgo reduces the normal cognitive decline that comes with aging.

inkgo biloba has failed -- again -- to live up to its reputation for boosting memory and brain function. Just over a year after a study showed that the herb doesn’t prevent dementia and Alzheimer’s disease, a new study from the same team of researchers has found no evidence that ginkgo reduces the normal cognitive decline that comes with aging. Should you take ginkgo to slow down the effects of age on the brain? “The answer appears to be ‘no,’” says the lead author of the study, Steven T. DeKosky, M.D., the vice president and dean of the School of Medicine at the University of Virginia. In the new study, the largest of its kind to date, DeKosky and his colleagues followed more than 3,000 people between the ages of 72 and 96 for an average of six years. Half of the participants took two 120-milligram capsules of ginkgo a day during the study period, and the other half took a placebo. The people who took ginkgo showed no differences in attention, memory, and other cognitive measures compared to those who took the placebo, according to the study, which was published in last month’s Journal of the American Medical Association. DeKosky also led the 2008 study that looked at the effects of ginkgo on dementia and Alzheimer’s disease. Both studies are part of the larger Ginkgo

Evaluation of Memory (GEM) study, which is funded by the National Center for Complementary and Alternative Medicine and the National Institute on Aging. Ginkgo biloba is among the most popular dietary supplements for brain health. In 2007, Americans spent $107 million on ginkgo, which has been used for more than 1,600 years to promote mental acuity, says DeKosky. (Ginkgo has also been used to treat a range of maladies including asthma and ringing in the ears.) When ginkgo first became popular in the 1980s and 1990s, researchers and consumers alike were optimistic about the effects of ginkgo on cognition, but its reputation has suffered in recent years, says Joshua Steinerman, M.D., assistant professor of neurology at Montefiore Medical Center in the Bronx, New York. “Early studies seemed to show that there might be some cognitive improvement, but those were typically smaller studies and not as well designed,” says Steinerman, who did not participate in the current study. “More recent studies, including the GEM study, are large and well controlled, and have showed no consistent positive effect on slowing the rate of cognitive decline.” Even so, DeKosky says he and his colleagues were surprised to find that ginkgo failed to produce any benefit, given how long the herb has been used and how

Tips on Health Food Chocolate

The Kuna people of the San Blas islands, off the coast of Panama, have a rate of heart disease that is nine times less than that of mainland Panamanians. The reason? The Kuna drink plenty of a beverage made with generous proportions of cocoa, which is unusually rich in flavanols that help preserve the healthy function of blood vessels. Maintaining youthful blood vessels lowers risk of high blood pressure, type 2 diabetes, kidney disease and dementia.

Blueberries

In a landmark study published in 1999, researchers at Tufts University’s Jean Mayer Human Nutrition Research Center on Aging fed rats blueberry extract for a period of time that in “rat lives” is equivalent to 10 human years. These rats outperformed rats fed regular chow on tests of balance and coordination when they reached old age. Compounds in blueberries (and other berries) mitigate inflammation and oxidative damage, which are associated with age-related deficits in memory and motor function. Eat more blueberries with healthy blueberry recipes.

Fish

Thirty years ago, researchers began to study why the native Inuits of Alaska were remarkably free of heart disease. The reason, scientists now think, is the extraordinary amount of fish they consume. Fish is an abundant source of omega-3 fats, which help prevent cholesterol buildup in arteries and protect against abnormal heart rhythms.

Nuts

Studies of Seventh-Day Adventists (a religious denomination that emphasizes healthy living and a vegetarian diet) show that those

who eat nuts gain, on average, an extra two and a half years. Nuts are rich sources of unsaturated fats, so they offer benefits similar to those associated with olive oil. They’re also concentrated sources of vitamins, minerals and other phytochemicals, including antioxidants.

Wine

Drinking alcohol in moderation protects against heart disease, diabetes and age-related memory loss. Any kind of alcoholic beverage seems to provide such benefits, but red wine has been the focus of much of the research. ed wine contains resveratrol, a compound that likely contributes to its benefits-and, according to animal studies, may activate genes that slow cellular aging.

Olive Oil

Four decades ago, researchers from the Seven Countries Study concluded that the monounsaturated fats in olive oil were largely responsible for the low rates of heart disease and cancer on the Greek island of Crete. Now we know that olive oil also contains polyphenols, powerful antioxidants that may help prevent agerelated diseases.

Yogurt

In the 1970s, Soviet Georgia was rumored to have more centenarians per capita than any other country. Reports at the time claimed that the secret of their long lives was yogurt, a food ubiquitous in their diets. While the age-defying powers of yogurt never have been proved directly, yogurt is rich in calcium, which helps stave off osteoporosis and contains “good bacteria” that help maintain gut health and diminish the incidence of age-related intestinal illness.

many people swear by it. “We figured that if [ginkgo] was still in use and still endorsed by people -- even if it’s only your grandmother -- it probably does have some basis to it,” he says. The study’s findings don’t mean that people should stop taking ginkgo (as long as they do so in safe doses, under the supervision of a physician), says Steinerman. But, he adds, “I certainly wouldn’t recommend that anyone start it.”

is associated with maintaining cognitive function. Manage stress

Ginkgo may not be effective, but there are many other healthy habits you can try to help keep your brain healthy:

Staying as stress-free as possible is essential for maintaining your sanity in the short term, but it may also be important to your long-term brain function. “High levels of stress can kill nerve cells in the most important areas of the brain for memory,” says Steinerman. “Stress can actually accelerate cognitive decline and increase the risk for Alzheimer’s.”

Exercise your mind

Eat right

Activities that stimulate the brain -- such as learning a new language, playing brain-teasing games, or doing crossword puzzles -- appear to delay the onset of dementia, says Steinerman, although it’s still unclear if they can actually prevent or slow down cognitive decline. These activities can’t hurt, however, and many new brain games for computers and video-game consoles (such as Brain Age and Brain Challenge) provide more options than ever before. Exercise your body

The evidence linking physical activity with slower cognitive decline is convincing, says Steinerman. Animal studies have shown that exercise targets a part of the brain directly related to memory and aging, and other research suggests that even moderate exercise -- a weekly bike ride, say --

Diets that are good for the heart are also believed to have beneficial effects on the brain, says Steinerman. Research suggests that a diet rich in fish, fruits, vegetables, and healthy fats may promote brain health. A 2009 study in the Archives of Neurology, for instance, found that people who adhered most closely to the Mediterranean Diet had a 28 percent lower risk for mild cognitive decline than those who didn’t stick to the diet.

Make friends

Having a rich social life may help delay cognitive decline (although it may not reverse it). Studies have shown that “more social contacts and more social interactions [appear] to be present in people who [don’t] develop dementia,” says DeKosky. “Your number of social contacts [translates] into some kind of brain change” that affects your risk of developing dementia, he says. None of these habits is a silver bullet, however, and they are probably most effective in combination, says Steinerman. Researchers will continue to study the effects of supplements such as ginkgo in hopes of one day creating a drug to prevent and cure cognitive decline, says DeKosky, but in the meantime patients should incorporate habits such as these into their daily lives. “We’re working on the next generation of drugs,” he says, “[but] I think the brain can be strengthened by doing things other than waiting for a pill to take.” (health.com)

In a recent report published in genes in question, says Rose, but the Archives of General Psychia- in different forms, or versions, try, scientists describe for the first which either amplify or dampen time a set of genes, about 100 in their effects. all, that seem to predict how well “We’re going to see a lot more a smoker will respond to two dif- studies like this now, because the ferent types of quitting programs tools are there,” says Dr. Normal — nicotine replacement or bupro- Edelman, chief medical officer of pion (Zyban). the American Lung Association Nicotine-replacement meth- and a professor of preventive ods, including the patch, pill and medicine at Stony Brook Univergum, work by weaning the smoker sity. off nicotine gradually, usually over “It’s a wonderful first step, bea period of weeks or months. cause smoking cessation is a real Bupropion, on the other hand, problem — it’s not easy to quit.” is an antidepressant, which does Rose found that people with not contain nicotine; instead, it genes that more efficiently code works to curb nicotine cravings by for bupropion breakdown respond interfering with better to the drug, the reward cirwhile people with cuit in the brain, genetic variants where addictions that improve cell — to nicotine and communication other drugs, or — also called adbehaviors — are hesion — seem One way to reinforced. to have an easier boost the time overall in N a t i o n a l l y, quitting success quitting. That about 70% to makes sense, rate would 80% of smokers since addictive be to match say they want behaviors such to quit, but any as smoking are smokers with single attempt, deeply ingrained the right regardless of the in the brain, and quitting method, are strongly tied cessation is on average only to social and enprogram. 30% successful. vironmental trigOne way to gers. boost the quitting success rate would be to match That network of neural connecsmokers with the right cessation tions, once cemented, is tough to program. break. But having certain versions A team of researchers, led by of genes that facilitate neural flexJed Rose, director of the Duke ibility — easing the uncoupling University Center for Nicotine of certain brain connections and and Smoking Cessation Research, replacing them with new habits have begun doing just that. In their — could, says Rose, help people to new study, the scientists screened quit smoking more quickly. the entire human genome and “It may be that connectionteased out a profile of genes that forming genes are involved in the they think are involved in breaking formation of addictive behaviors nicotine addiction. Some of the and in the ability to learn new genes influence basic cell commu- behaviors that compete with and nication; others code for enzymes break the habit,” he says. that break down bupropion in the “These findings open up new, body. fascinating investigations into the mechanisms of addiction and how Everyone possesses all the different treatments may work.”

“

The President Post

16 January 14, 2010

www.thepresidentpost.com

Living Ways to Get Motivated for Change in 2010 10 Set smaller goals with smaller steps. Frame your goals positively. Get a resolutions buddy who can help you keep track of what you want to do. Be patient with yourself and don’t be overanxious.

o follow through on resolutions, it’s important to be realistic, specific, and accountable. Set smaller goals with smaller steps. Frame your goals positively. Get a resolutions buddy who can help you keep track of what you want to do. Be patient with yourself and don’t be overanxious. A new decade has just started, and you may be tempted to set a copious list of resolutions for yourself in order to broadly “make life better.” You may be thinking that you’ll jump in this year to reform everything from diet to relationships to personality. That, experts say, is the wrong approach. It’s great to want to make changes, but in order to actually accomplish your goals, they say, it’s important to be realistic, specific, and accountable. Here are 10 things you can do to help yourself stay in a mindset to make positive changes in the coming year:

Set smaller goals with smaller steps

Gradual small steps motivate people toward larger change, said Susan Nolen-Hoeksema, professor of psychology at Yale University and author of the new book “The Power of Women.” If you want to lose weight, for example, change small aspects of your eating pattern. Resolve to have a salad tomorrow for lunch, and then do that for a week. Write down the steps you want to take in a datebook to make it concrete, and reward yourself for making the individual changes, she said. Let’s say you want to work on being more optimistic this year. Nolen-Hoeksema recommends imagining what you would be like if you were optimistic. Imagine yourself going through a day at work if you were optimistic and confident, then write that down in great detail. Now, you have specific aspects of that ideal of optimism to work toward. Pick one thing that the optimistic you is doing that you’re not, and start working in that direction.

your goals 2 Frame positively

Despite the proven health risks of certain habits, such as smoking, thinking about a habit in the negative will not help you nix it. Studies have shown that it’s hard to get motivated about avoiding cancer, but easier to think about smelling better and saving money as reasons to quit smoking, Nolen-Hoeksema said. So, if you want to quit doing something, think about the positive aspects of not doing it. And make sure you reward yourself for sticking to the plan along the way.

Look at the pros and cons

If you’re on the fence about whether you should make a change this year, make a list of the benefits and costs. Pay attention to what’s driving you, she said. Sometimes it’s pain that motivates people to change, or a new phase of life, or new information, or a possible promotion. It helps to get clear about what you want to change and why you want to change it.

is supporting you in your endeavors, helps to keep motivation up. Having a new year’s resolution buddy who’s keeping track of your progress helps keep you accountable for what you’ve done. Planning for goals with someone can guide you in the path towards change, even if you don’t don’t accomplish everything in a single year.

Be specific

In marriage, it’s important to get realistic about what it is about your marriage that needs improvement. Then, spend some time keeping a diary and tracking what’s going right and what’s not, and come up with one thing you can do per week that would help the situation. The process of assessing the small actions you can take in the immediate future, and savoring the positive effects, can take a lot of pressure off and help you achieve larger goals, she said.

Know thyself

The start of the year is as good a time as any to take inven-

Get a resolutions buddy

Knowing that someone else is working toward similar goals, or

10 Reasons You’re Not Rich

any people assume they aren’t rich because they don’t earn enough money. If I only earned a little more, I could save and invest better, they say. The problem with that theory is they were probably making exactly the same argument before their last several raises. Becoming a millionaire has less to do with how much you make, it’s how you treat money in your daily life. The list of reasons you may not be rich doesn’t end at 10. Caring what your neighbors think, not being patient, having bad habits, not having goals, not being prepared, trying to make a quick buck, relying on others to handle your money, investing in things you don’t understand, being financially afraid and ignoring your finances. Here are 10 possible reasons you aren’t rich:

You care what your car looks like

A car is a means of transportation to get from one place to another, but many people don’t view it that way. Instead, they consider it a reflection of themselves and spend money every two years or so to impress others instead of driving the car for its entire useful life and investing the money saved.

You feel entitlement If you believe you deserve to live a certain lifestyle, have certain things and spend a certain amount before you have earned to live that way, you will have to borrow money. That large chunk of debt will keep you from building wealth.

You lack diversification

There is a reason one of the oldest pieces of financial advice is to not keep all your eggs in a single basket. Having a diversified investment portfolio makes it much less likely that wealth will suddenly disappear.

You started too late The magic of compound interest works best over long periods of time. If you find you’re always saying there will be time to save and invest in a couple more years, you’ll wake up one day to find retirement is just around the corner and there is still nothing in your retirement account.

You don’t do what you enjoy

While your job doesn’t necessarily need to be your dream job, you need to enjoy it. If you choose a job you don’t like just for the money, you’ll likely spend all that extra cash trying to relieve the stress of doing work you hate.

You don’t like to learn You may have assumed that once you graduated from college, there was no need to study or learn. That attitude might be enough to get you your first job or keep you employed, but it will never make you rich. A willingness to learn to improve your career and finances are essential if you want to eventually become wealthy.

You buy things you don’t use

Take a look around your house, in the closets, basement, attic and garage and see if there are a lot of things you haven’t used in the past year. If there are, chances are that all those things you

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purchased were wasted money that could have been used to increase your net worth.

You don’t understand value

You buy things for any number of reasons besides the value that the purchase brings to you. This is not limited to those who feel the need to buy the most expensive items, but can also apply to those who always purchase the cheapest goods. Rarely are either the best value, and it’s only when you learn to purchase good value that you have money left over to invest for your future.

Your house is too big When you buy a house that is bigger than you can afford or need, you end up spending extra money on longer debt payments, increased taxes, higher upkeep and more things to fill it. Some people will try to argue that the increased value of the house makes it a good investment, but the truth is that unless you are willing to downgrade your living standards, which most people are not, it will never be a liquid asset or money that you can ever use and enjoy.

You fail to take advantage of opportunities There has probably been more than one occasion where you heard about someone who has made it big and thought to yourself, “I could have thought of that.” There are plenty of opportunities if you have the will and determination to keep your eyes open. (Yahoo.com)

PUBLISHED BY Yayasan President University CEO & EDITOR IN CHIEF Ali Basyah Suryo CONTRIBUTORS Atmono Suryo Cyrillus Harinowo Hadiwerdoyo Naresh Makhijani Taufik Darusman Thomas W. Shreve Wuryastuti Sunario Vidya Dahlan

EDITORIAL & ADVERTISING/ CIRCULATION DEPARTMENTS Monica Siregar LAYOUT & DESIGN Mohamad Akmal

tory of yourself. What are your passions? What do you want to be doing better? Take the time think about who you are and how you want life to be. Real change happens because you yourself want it, not because others want it for you, experts say. If it’s something that doesn’t connect to you and truly relate to you, just because someone says you should do something, if it doesn’t resonate with you, it’s not going to be as helpful as something that truly fits you.

deeper 7 Examine issues

Sometimes there are problems that need to be addressed before people can move forward with the change they want. In some cases there are psychological impediments to making changes, Levine said. For example, some people fear failure so much that they unknowingly sabotage themselves. Self-esteem may also play a role -- some people don’t feel they’re worthy of being taken care of, he said. If you think that there are

deeper issues preventing you from moving forward in your life in some way, consult a mental health professional.

Don’t be overanxious

Having a long list of lofty resolutions can create anxiety, so choose anywhere between three and five overarching things to change. “Resolution” connotes a “passfail” ultimatum, so prefer using the word “goal.” Writing down your goals and how you plan to achieve them is a good way to beat anxiety.

Be flexible

Although you should be specific about what you want to do, sometimes it helps to broaden your vision of what you’re trying to accomplish. For instance, if you’ve been laid off from your job in the financial sector, it may not be immediately possible to find a similar position. But if you are on the job market, the broader goal might be to support yourself or your fam-

ily. Having a wider vision of what constitutes success can free you up to explore other options that do help with the central purpose. “Step back and say, ‘Is there any way I can achieve that bigger goal without getting fixated on the goal I had before?’”

your eye on 10 Keep the ball

Changing behaviors is especially difficult when other people around you encourage habits you’re trying to kick, or if you are under stress. For instance, if you’re a recovering alcoholic and having a bad day, it might be hard to resist if someone says, “It looks like you need a drink.” Know that there’s going to be some anxiety, but be patient with yourself. Take it one incident at a time, one day at a time. You have to deal with some negative consequences when you change, both internal and interpersonal, and environmental. You have to sort of get help dealing with those, and weather those storms. (CNN)