My previous
post dealt with the question that was raised for us in the first phase of our
trip on the Indonesia side of Borneo, known as Kalimantan, but glossed over the
particulars of the trip. I’ll try to
cover that in a later post but for now let’s turn our attentions to the second
phase of the trip, our visit to Jakarta, AKA the big durian.
In Jakarta,
we met with leaders from three of the largest family-owned conglomerates in
Indonesia. Just a quick aside, the
biggest players in Indonesia are the massive corporations that certain families
have been cultivating for decades or generations. We met with Sinar Mas (the Widjaja family), Anindya
Bakrie who runs the Bakrie family’s media empire, and BCA (the bank run by the
Hartono family). We also gave some love
to the government as well, meeting one of the right hands of the President of
Indonesia, the Minister of Tourism, and one of the various Transportation
organizations.
From the
moment we stepped into the headquarters of Sinar Mas, it was clear that we had
left the dusty environs of the environmentalists of Kalimantan. While in Samboja Lestari (on Kalimantan) we
had met in old office buildings and outdoor patios, at Sinar Mas we met in a
massive boardroom with a full-wall monitor that mapped their operations across
Indonesia. Here, all of the figures we
met with were well-dressed, well-spoken (perfect English), and highly
accomplished. Sinar Mas is one of the
largest, if not the largest, producers of palm oil in Indonesia and you could
tell that they were cognizant of the perception of their industry. Their communications team gave us a pitch on
how Sinar Mas did no wrong and was really the best possible company you could
ever envision. On balance I think that
Sinar Mas wasn’t really a bad company.
They had some rules in place for themselves that weren’t bad. But really, I was struck by the idea that
they didn’t really have a choice but to play in the palm oil game as
aggressively as they could. They knew
that any lands they didn’t use for palm oil, someone else would. And, most likely, that other actor would be
more reckless / exploitive than Sinar Mas.
Yes, people can point fingers at them and yell about them buying up land
degraded by secondary actors for palm oil but what else could they do? If they refuse to buy that sensitive land, I
can assure that none one of their competitors would share the same
compunction. I was left with the
impression that the government needed to step up and enforce some legislation
with teeth.
After Sinar
Mas, we were able to get time with Anindya Bakrie, one of the richest men in
all of Indonesia. I personally didn’t
speak with him at all since he breezed in late to our lunch, trailed by his
entourage complete with movie camera, but he’s certainly an interesting
character that bears mentioning. I think
the jury is still out on Anin but most think of his dad as a rather corrupt
dude. He created the Bakrie empire and
then bankrupted it a few times over (according to Anin) before handing the
unprofitable media divisions to Anin. By
all accounts, Anin has done pretty well with it.
To round out
our corporate meetings, we met with BCA, one of the largest banks in
Indonesia. They had a very interesting
model and approach to banking that I’d be interested to hear others weigh in
on. Primarily, they focused on making
profits via transactions (i.e. as a payments processor) vs. via credit and
interest payments. I don’t know how much
of this was just marketing spin but our speaker seemed quite genuine. And, since he went to Stanford, I must assume
he was being honest. Then again, he did
claim that Antarctica was the largest continent… Hmm.
While his discussion of the bank’s operations was interesting, I most
enjoyed his thoughts on the government.
He readily acknowledged the problems of corruption in the government but
pointed to a new generation of leaders that showed promise of both talent and
integrity, a potent combination. He also
spoke about how his bank was fighting for certain practices that would
eliminate the potential for graft and corruption, like shifting to electronic
payments that would be more easily traceable.
In addition to
Sinar Mas, Bakrie, and BCA, we also met with some members of the government
that we had been hearing so much about. The
Minister of Tourism was interesting but her power was so limited that I’m going
to just focus on the right hand of the President, Pak Kuntoro (Pak just means
Mr.). This guy was a very interesting
fellow and the type of guy I would expect to see in a position of this
type. He was easy-going and
fly-by-the-seat-of-pants type of guy, or at least that is the impression that
he gave. He started out our meeting by
asking us for any questions we had. He followed
that up by ignoring the presentation his aide had put together for him. Clearly a smart guy (another Stanford grad)
and he had achieved noteworthy success rebuilding the Aceh region that was
devastated by the 2004 tsunami (and doing so without allegations of
corruption). However, what was most
notable about him was the silver lining of his aides. They hovered just over his shoulder looking
ready and competent. We met up with some
of them after and found them to be highly intelligent and passionate about Indonesia. I think they make up the second iteration of
those leaders that Armand Hartono of BCA spoke.
On the topic
of the government’s role in balancing development and the environment, the meeting
came up a bit short. Basically, the
process of decentralization that was undertaken after the Asian Financial
Crisis has taken all of the central government’s tools (at least according to
Kuntoro). This makes it very difficult
for them to control palm oil, oil, or coal production. Not a good situation and not one that the
central government seemed keen to attempt to wrestle back under its control.
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