Jakarta goes Global

By Terry Lacey

(February 06, Jakarta, Sri Lanka Guardian) ASEAN deputy secretary-general Bagas Hapsoro said recently that as the Association of South Eastern Nations grows in power, Jakarta will become an international city and a South East Asian hub. And in a weekend journalists` workshop in Bogor on diversity, participants studied a survey showing that only 3 percent of Indonesians would object to having a Jewish neighbor. (The Jakarta Post, 01.02.10).

“Although the survey was done in 2006, I believe the numbers haven’t changed much,” said Saiful Mujani, chairman of the Indonesian Survey Institute (LSI).

“It`s odd because Jews are practically nonexistent here in Indonesia,” Saiful said.

The group least welcome next door were communists, with 60 percent of the population objecting to living next door to one, which Saiful explained was probably the result of prolonged indoctrination by the government of former president Soeharto.

But the astonishing thing is that even without a national reconciliation on the tragic upheaval that took place here almost half a century ago, in which over half a million people died, 40 percent of the population already decided by 2006, after only a few years of democracy, that they would not mind if they had a communist neighbor.

And of course Indonesia has not one, but three communist neighbors: the Lao Peoples Democratic Republic, Vietnam and China – and there lies an historical paradox.

For as with the United States, the great threat has now become the great savior, and without the support of the robust Chinese economy the US economy could not have been bailed out, and in Indonesia the electricity shortage would be far worse.

Chinese state banks and construction firms have played a key role in the Indonesian first 10,000 megawatt electricity construction program, based mainly on Chinese capital and coal-fired power station technology.

And Indonesia will still rely heavily on Chinese support as it continues with its next 10,000 MW power program, with China increasingly supplying capital and technology in support of renewable energy, at prices Indonesia can afford, and with improving quality, often based on joint ventures with US and EU firms.

Indonesia needs the private sector to invest at least $10 billion into its next 10,000 MW power program up to 2014, but needs more than $100 billion only for energy, oil and gas in the next ten years.

But with new ASEAN Free Trade Agreements (FTAs) with China, Australia, New Zealand and India, Bagas Hapsoro from the ASEAN secretariat expects a property boom with lots of expatriates moving into areas like Kebayoran Baru in Jakarta. “Many representatives are looking for offices in residences in the area surrounding the secretariat. The FTAs will make ASEAN and its secretariat much busier. And the world will look to Jakarta as an important city“.

Foreign Ministry spokesman Teuku Faizasyah agreed that the new ASEAN Charter which came into force in December will give Jakarta “huge leverage”.

“It will bring huge financial benefits to the Indonesian economy. It will also shape Indonesia´s changing role within the region and the entire world”. (The Jakarta Post, 01.02.10).

I recently discussed in Jakarta with a proverbial Jewish American lawyer who was quite fluent in Bahasa Indonesia, the coming expansion of legal work in commerce in areas like maritime activities. We concluded there is going to be a lot more trade and a lot more investment and that compared to droopy economies in the US and EU, Indonesia is the place to be.

Business is booming. Now is the time to invest in infrastructure, power, property, manufacturing and retail, and Indonesia is a lot more stable than the Middle East, (and some of its ASEAN neighbors).

And if Indonesia is to be the seventh biggest economy in the world by 2040, when the population is predicted to reach about 285 million, and the economy to overtake South Korea, the UK, Germany and Japan, then it will have to become even more cosmopolitan than it is already.

Teuku Faizasyah concluded, “Its time for us to think of Jakarta as an international city by defining it as the ` Brussels of the East ´”.

But with those 8-lane highways, skyscrapers, KFCs, MacDonalds, top five-star hotels complete with big bars and discos and mega-sized top-brand shopping malls containing sandy beaches, fun-fairs for the children and boats to sit in while you have dinner, Jakarta does not look like Brussels. Jakarta is starting to look and sound more and more like New York, but with more mosques and minarets, just like Jerusalem. But with more live bands and much better entertainment. On my life.

Unbelievable.

[Terry Lacey is a development economist who writes from Jakarta on modernization in the Muslim world, investment and trade relations with the EU and Islamic banking.]