Wednesday, June 15, 2016

Indonesia is The Next China, a Speech from Man of Ideas


Sejak Leap Up membantu project revamp website barunya Marketeers.com, tiap bulan saya berkesmepatan untuk membaca majalah Marketeers. Edisi Juni 2016 ini, topik utama yang dibahas adalah mengenai China 2.0, soal bagaimana perusahaan dari Tiongkok melakukan transformasi dari yang sebelumnya terkenal dengan harganya yang murah dan kualitas murahan, yang kini menjadi perusahaan yang harga terjangkau namun dengan kualitas bersaing.

Selain temanya sangat menarik, yang paling menarik buat saya adalah bagian rangkuman speech Pak Mochtar Riady di Jakarta Marketing Week bulan lalu. Saking sukanya, saya berkali-kali baca bagian itu. Karena suka, saya ingin menyalinnnya di sini, sehingga sewaktu-waktu bisa saya baca kembali dan pembaca Blog saya juga bisa membacanya. Speechnya sangat inisghtful dan positif! Silahkan disimak.

Indonesia is The Next China

Mochtar Riady, born Li Wenzheng, turns 87 in May this year. He is the founder of the Lippo Group, one of Indonesia's most powerful conglomerates. Born and raise in the Indonesian city of Batu, Malang, in a family from East China's Fujian province, he received his higher education from the erstwhile National Central university located in Nanjing, China in the 1940s. He moved to Jakarta in 1954 to pursue his dream of becoming a banker.

Mochtar Riady turned BCA from a small bank to the largest private bank in the country today, and later built his own, smaller private bank, Bank Perniagaan Indonesia which was merged with another bank to form Bank Lippo (in 2008, Bank Lippo merged with CIMB Niaga, and are known as PT CIMBN Niaga Tbk.). Many consuder him not as just a banker, but the best banker of his generation in Southeast Asia.

However, Lippo is now better known for its real estate investments than for banking. The group has even launched an e-commerce platform called MatahariMall.com that aims to be the number one online commerce portal in Indonesia.

This year, coming sixth on Forbes's Indonesia richest list with a fortune of $ 2.1 billion, he introduced an autobiography titled "Man of Idead" (Manusia Ide). The 336 page book chronicles Mochtar's early days, documenting how he began his business from scratch and crossed generations, industries, nations and cultures, armed only with ideas.

Mochtar Riady recently attended a celebration ceommermorating the 26th anniversary of Markplus,Inc, and gave a warm speech talking about the relationship between China dan Indonesia. Here is an excerpt from his speech, written by Saviq Bachdar from Marketeers.

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The relations between Indonesia and China have been ongoing for centuries and keep growing year after year. China has also been one of Indonesia's key major trading partners in recent years, serving as the country's largest export-import market.

Before we talk more about it, I would like to describe the whole situation today. We are facing three major changes. First, since January 2016, Indonesia is facing extensive regional integration in the form of ASEAN Economy Community (AEC), followed by the Trans-Pacific Partnership Agreement (TPP), which would help the country attract greater foreign investment to its shores and move away from nationalist economic policies.

It means that the world today is set to face the free 'competition' economy over the next few yers. The competition would allow a large numbers of produces to compete with each other to satisfy the wants and needs of a large number of consumers.

And the Second, we would enter the services-oriented economy in the next few years. Most of us will work with information rather than producing good. As we can see, the service economy sector has cast a tremendous impact on the US economy nowdays.

To leverage both of these situations, we must depend on Information Technology (IT). And it creatoes a new era callled digital economy, an economic system that is based on digital computing technologies.

If we talking about free competiton, we are talking about the comparison of production cost among countries. We know that the U.S, followong the Second World War and starting 1947, begang rapid invention on IT solutions, such as micro integration or electronic components.

Electronics is generally divided into two categories. One is analog an the other is digital. A telecommunication technology is reffered to as a example of analog technology. Meanwhile, all kinds of everyday electronic items that we use work using digital technology, such as computer. Now, computer and telecommunication can be combined into one, and that's the internet.

Thus, today, the US has transformed into an information society. In 1971, when I was in the US, I read Alvin Toffler's book, The Third Wave, and found it mesmerizing. Three years later, Alvin wrote another book titled Future Shock. One year later, an American author in the area of futures studies, John Naisitt, for the first time, released his book Megatrends. After that, Professor Peter Ducker wrote Post-Capitalist-Society.



Drawing from the concepts in these four books, we could conclude that the US had successed to move their economy from nothern states to the southern states. From Detroit to Sillicon Valley. Today, property price in Sillicon Valley is much higher than that of in New York. This is what acctually happened in the US.

"Indonesia could learn a lot from China when it comes to managing human resources and developing infrastructure"

As the US turned into an information society, the middle class in the country flourished, and the American wages began to increas. Therefore, the labor-intensive industries in the US began moving to the developing countries. During the time, Germany and Japan did the same.

These two countries, also metamorphosed into information societies, thereby having to move their labor industries out to other developing countries. The US companies went overseas to make product and component ship back to the US. They say that moving to cheap-labor-countries like Mexico, India and Indonesia has enabled the US industry to regain its world standing.

In the east. Four Asian Tigers, South Korea, Taiwan, Hong Kong, and Singapore moved out their labour industries to china and South East Asia, including Indonesia. We transformed ourselves from a traditional agricultural society to a modern industrial one. China today has already progressed from an agricultural society to an information society.

While we are talking about China, I remember in 1990, I was invited by the China goverment to visit Beijing. At that time, Beijing did not have a good infrastructure. Everything was so basic. Today, Beijing stands as the dazzling modern city and seat of power of one of the world's strongest economies.

At that time, I Also visited Shanghai with Mr. Sukamdani Sahid Gitosardjono (founder od Sahid Group), staying at a five-star Peace Hotel. What happened was we had to wait for almost four hours only to check in. When entered the hotel room, I found a lot of rats. I was surprised to see how the rats even got in there. That was what really happened in China 25 years ago.

Why did China build its country from Beiking, and not Shanghai? Beijing people are people if the past. What modern day Beijing today is was an ancient city called Yanjing. A decade ago, the population of Beijing was only 20.000. Most of them were fishermen. Beijing was like a white paper. It was easy for everybody to write a new story.

Here, we can understand that in order to build an ecnomy that involves 1.3 billion people, it can begin from small thing. Beijing is clearly undergoing massive transformation right now, from infrastrcuture, urban development economoy, to labor industry.

Indonesia could learn a lot from China when it comes to managing human resources and developing infrastructure. I believe, under President Mr. Joko Widodo's master plan, over the next ten years, we will experiences growth rate of 10% in GDP.

In the erly 2000s, China overtook the US as the world's largest receipient of foreign capital. This was what we called China's Great Victory. Today, I would like to say, ten years later, it will be time for Indonesia's Great Victory.




In the next ten years, either US President or China President, if they would like to talk about the world economy and world affairs, I can definetly say that President of Indonesia will be invited for the discussion.

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War biasa! War apa war apa? War biasa!
Disalin dari Majalah Marketeers edisi Juni 2016 (China 2.0: Our Turn to Copycat Them?). Like Marketeers di Facebook.

Cover photo dari Marketeers.com



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