Indonesia Has Critical Role in Asean: Ginandjar Kartasasmita

Lippo Group deputy chairman Ginandjar Kartasasmita says Indonesia's democratic journey was a strong plus for the regional bloc, as well as for the wider Asia region. (The Peak Photo/A.A. Kresna)

By : Shoeb Kagda | on 10:48 PM June 02, 2016
Category : Business, Economy, Featured

Jakarta. Speaking on the sidelines of the World Economic Forum on the Association of Southeast Asian Nations in Kuala Lumpur, Lippo Group deputy chairman Ginandjar Kartasasmita said Indonesia's democratic journey was a strong plus for the regional bloc, as well as for the wider Asia region.

The nation of 250 million people is today widely praised as a model for other nations in the region who are transitioning from authoritarian rule to democracy.

The former cabinet member and senior politician also spoke on a panel discussion with the theme "Asean and the Big Picture."

"Indonesia, not only for Asean but also globally, has become a model of democratization," he told the Jakarta Globe. "Indonesia can also become a model for countries in Asean that have not been there, like Myanmar."

He noted that democracy and a free-market system were two sides of the same coin. While some centrally controlled systems have a semblance of free markets, Indonesia was a prime example of a developing nation that had achieved both democracy and allowed the free market to flourish.

Ginandjar added that democracy has allowed Indonesia to lay the foundations for sustained long-term economic growth and prosperity.

"History has shown that democracy, albeit with difficulties and problems, is the best system for a free-market economy and sustainable development," he said.

Ginandjar said many Indonesians were skeptical of decentralization when it was first introduced, but that the system, which transferred greater power to the country's regions, is working.

"The most important thing is that we are moving in the right direction and we are doing the right thing," the Lippo Group deputy chairman said.

Indonesia's stability and growth are critical to Asean's long-term future, Ginandjar said, because "if Indonesia prospers, Asean will prosper."

Indonesia's progress and prosperity will contribute to the region, especially as it moves towards greater economic integration. But Indonesia could also become a hindrance to the region's prosperity.

"For Indonesia, the priority for the economic side is connectivity," he noted. "How can we achieve connectivity physically between the producing regions and the consuming regions, between east and west."

"If Indonesia can reduce costs, then the cost in the value chain within Asean will also fall," the former Regional Representative Council (DPD) speaker added. "Not to mention supply chains as we all know that reducing barriers to supply chains is more important than limiting tariffs."

For this reason, Indonesia is committed to economic integration with the other Asean members.

"It's not only in words but we put it in our hearts. But at the same time, we need to acknowledge the reality," Ginandjar said.

He added that the movement of labor, for example, cannot be rushed, although movement of skilled labor should be welcomed.

"Many expatriates are welcomed in Indonesia, because they are people who are skilled, have knowledge and provide competition," he noted.

Ginandjar said Indonesia has one of the most open financial sectors in the Asean region but other members have not followed suite.

Although integration will proceed, governments have a responsibility to empower small- and medium-sized enterprises as well as protect the most vulnerable members of society.

And as the digital revolution gathers pace, there will be those in society who will be left behind.

"The role of the government in this time of change is to facilitate change, to manage the change wisely, not to hinder development or stand in the way of change," he said.

The second role of the government is to provide an economic safety net, not a social safety net, for those who are left behind by the digital revolution. This means that the government should be more informed and forward looking in its regulations.

The Jakarta Globe is affiliated with the Lippo Group.

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