Indonesia an overlooked opportunity

Ian Satchwell of the Australia Indonesia Business Council. Picture: Marie Nirme Source: The Australian

 

“I LIVE in Perth. Of the ten closest cities, seven are in Indonesia and only three are in Australia,” says economic strategist Ian Satchwell.

Geography, career, personal passion and economic analysis are all elements in the vision that Satchwell brings to his new role as president of the Australia Indonesia Business Council.

“We’re neighbours, we’re the two largest economies in Southeast Asia, we have great, latent economic complementarity – and yet the business relationship is way underdone,” he says.

“I like to see underdone relationships in business as market opportunities.”

Satchwell, who first encountered Indonesia as a backpacker 35 years ago, is excited by its rapid transformation and potential.

“[Yet] Australia is under investing in Indonesia, relative to its potential and relative to other countries. One of the largest investors is Great Britain,” he says.

With a background as an adviser on infrastructure, resources, trade and investment, Satchwell has not long finished a six month stint with Indonesia’s Ministry of Trade. The idea, made possible by a program under the Asia Pacific Economic Co-operation forum, was to work on economic governance.

Better governance would help pave the way for much closer co-operation as Australia and Indonesia try to make more of the complementary opportunities of economy, demography and geography.

But there is a gulf between the elites who pursue an enthusiastic engagement with Indonesia and the state of public opinion.

Even as Australians travel in record numbers to Bali, popular attitudes to Indonesia here “remain mired in distrust and suspicion,” according to the latest Lowy Institute survey.

In our schools, Indonesian is an endangered language. Despite hints of recovery in student numbers in some universities, the story of Indonesian language study has been one of decline over the last decade. If linguistic and cultural links are weak so, too, the interest of Australian business in Indonesia seems modest when compared with the scale of opportunity.

Last week foreign minister Kevin Rudd issued a “wake-up-to-Indonesia” call to business.

“There is a grave danger that corporate Australia misses the boat,” Mr Rudd said in Jakarta after talks with Indonesia’s new Trade Minister, Gita Wirjawan. “There’s a grave danger for corporate Australia that this passes us by.”

Mr Rudd said Australian business already had given a head start in Indonesia to the South Koreans, Malaysians, Singaporeans and potentially the Chinese, as Jakarta correspondent Peter Alford reported in The Australian last week.

Mr Rudd urged Australia’s top 100 company boards to meet at least once a year in Jakarta “just to open their eyes to the new reality”.

“Frankly, I think they would see the scale of what is happening here,” he said.

That sense of scale was well captured by trade minister Craig Emerson when he addressed a regional business forum in Bali last year.

“It’s worth contemplating for a moment that by 2030, less than 20 years away, the Indonesian economy is set to be in the Top 10, and somewhere between the fifth- and eighth-largest economy in the world,” he said.

“If Indonesia continues to grow at the rate used in the IMF’s latest five-year forecast, its economy will roughly double in size over the next decade.

“This means that from half the size of Australia’s economy just three years ago, Indonesia’s economy will match Australia’s by around 2025.

“If you are contemplating investing in Indonesia, you are making the right decision. Whether you are Indonesian investors or Australian investors, this is the place to be.

“It is a giant of an economy, with the fourth-largest population on earth. Australia’s nearest neighbour; right here on our doorstep.”

All of which amounts to an argument for Australians to take notice of Indonesia when they make choices about education and career.

Satchwell says: “I’ve spoken at schools about this – the future economic potential is such that there is a very strong business case for parents to encourage their children to study Bahasa Indonesia [the Indonesian language]”.

“It’s not just the language skill, it’s also the cultural understanding that you gain through language study”.

He concedes that Australian business often gets by in English.

“But it is a great advantage to have people who can speak the language and therefore can interact informally with the people with whom they’re doing business,” he says.

“As we all know, relationships are everything in business and in particular in Asia.”

Satchwell’s son, Matthew, is one of those who has grasped the Indonesia opportunity.

A graduate in Asian studies and commerce from the University of Western Australia, Matthew spent a semester at Gadjah Mada University in Yogyakarta, taking part in an immersion study program run by the Australian Consortium for In-Country Indonesian Studies.

Now he has an internship in Jakarta as the first foreigner taken on by an Indonesian company.

Satchwell says: “There’s quite a number of young Australians now in Jakarta, working in the law, in banking, in mining, in a whole range of areas.”

The career promise is there but more needs to be done to link up young professionals trained in Asian studies with job opportunities in the region.

This is why Satchwell’s business council has lent its support to a new networking group, theAustralia Indonesia Youth Association, set up by recent graduates of Indonesian studies at the Australian National University.

“We thought we could create a hub for people in the early stages of their career or in their final years of university,” says Fe Donaghue, one of the founders.

“It’s all about being able to connect people with jobs where they can use the skills they gained at university.”

The association staged its first event – a get-together for young professionals – in Jakarta yesterday evening and more than 100 people were expected.

Just as it’s possible to underestimate the difficulty of translating Indonesia expertise into a career, Satchwell acknowledges the risk of offering too rosy a picture of Indonesia’s transformation from military kleptocracy to novice democracy. Many Indonesians complain it is corruption that has been democratised.

“If the average person in the street just shrugged their shoulders and said, well, yeah, that’s part of Indonesia, you’d be worried,” Satchwell says.

He says the newfound freedom of Indonesia’s very robust press – “They have slightly different libel laws to us” – has exposed a lot of corruption and galvanised public condemnation.

“I might sound like a ‘peace in our time’ person but I take some comfort from the reality that the average Indonesian is just sick of corruption – and wants something done.

“Indonesia is on a journey. That said, it’s on a very positive trajectory of change.”

One potential big change for both countries is the Indonesia Australia Comprehensive Economic Partnership, a mouthful of a name to signal that it is no garden variety trade agreement.

In November 2010 prime minister Julia Gillard and president Susilo Bambang Yudhoyono agreed to start negotiations towards IA-CEPA, as it’s styled.

The countries are still in talks about how negotiations might be handled.

Satchwell says the agreement will have three pillars.

First, liberalisation of trade in goods and services, the latter being especially significant for Australian business. Second, freeing up investment.

And third, economic co-operation, involving an attempt to build the capacity of Australia and Indonesia to do business with each other, as well as to do business together into third countries.

There could be work on developing joint supply chains, overcoming market failure and improving economic governance.

(Another example of this attempt by Australia to link overseas aid more closely to sustainable economic activity is represented by the new International Mining for Development Centre at the University of Western Australia. This joint venture involves AusAID. Satchwell is interim director.)

He says IA-CEPA “goes beyond simple two way trade and investment into looking for joint opportunities for business in both countries to work together to maximise the complimentarity of the operating environment in each country and also to develop joint supply chains to other nations”.

Take dairy. “As with Asia more generally, Indonesia is a rapidly growing market for dairy products as people come more wealthy,” Satchwell says.

“Western Australia actually supplies fresh milk into parts of Southeast Asia – I used to drink it in Jakarta.

“There’s a limit to what we can supply but we’re very good at biotechnology, herd management and dairy supply chains.

“Indonesia has got plenty of biomass to feed cows, Australia has got limited land on which we can sustain a competitive dairy industry.

“Working together we can build a market in Indonesia that is supplied both from Australia and Indonesia and then over time, there might be certain diary products that can be supplied into other countries.”

Satchwell sees similar opportunities to draw on respective strengths of the two economies to do business and enlarge markets in beef, mining and major project construction.

Australia also has expertise and services that Indonesia can put to work as it proceeds down the path of development.

“Indonesia has a massive infrastructure deficit,” Satchwell says. “It needs to spend over the next decade something of the order of $US 200 billion on infrastructure of all kinds, be it roads, rail, ports or airports. And it needs to make its infrastructure smarter.

“Australia is well placed to be servicing Indonesian infrastructure needs with expertise in public private partnerships, with expertise in institutional arrangements in operating toll roads, for example, with expertise in planning infrastructure, in design and construction and operation, particularly using smart technologies.”

It makes sense for government leaders such as Rudd to remind Australian business not to overlook the opportunities emerging in the archipelago-nation to our immediate north.

Yet Rudd’s remarks prompted what is probably an unwelcome reminder from Stephen Grenville, an economic consultant who used to work for the old Department of Foreign Affairs.

“While the Minister is urging businesses to act, his department’s travel advisory is telling them not to even set foot in the place,” Dr Grenville says in a post last week for the Lowy Interpreter blog.

“The opening line is: ‘We advise you to reconsider your need to travel to Indonesia, including Bali, at this time due to the very high threat of terrorist attack.’

“Most traveling Australians just ignore the advisory [but] for Australian businesses (or, for that matter, government departments and universities) to ignore the advisory is altogether different.

“If something happened to an employee while on business in Indonesia, the legal consequences for the firm of ignoring the advisory would be very serious indeed. In practice, it is a major non-tariff barrier to trade.”

The other obvious rejoinder to Rudd is that Labor in power has yet to translate the rhetoric of Asian literacy into anything resembling an educational reality.

 

 

http://www.theaustralian.com.au/higher-education/indonesia-an-overlooked-opportunity/story-e6frgcjx-1226246641217

 

 

I am personally excited with what was being shared on the article above, and I think it’s a good move for both countries to joint hands and work together in pushing up the economy in Asia (and this is a great time to do that too). What do you think? Share your thoughts with us, and let me leave you with the statement from the article above.

“Indonesia is on a journey. That said, it’s on a very positive trajectory of change.”

 

Cheers!

 

Another Upgrade if Indonesia Can Jump Hurdles: Fitch

Indonesia could achieve another rating upgrade if it can tackle problems with infrastructure, crack down on rampant corruption and prepare measures to mitigate external shocks, says Fitch Ratings, which last month raised the nation’s sovereign rating to investment level.

“There are some weaknesses that Indonesia needs to address for a further upgrade, such as structure issues and external finances,” Philip McNicholas, Fitch Ratings’ director for Asia-Pacific sovereigns, said at an event in Jakarta on Tuesday.

“These factors are both low relative to its BBB peers,” he said. Thailand is rated BBB, Fitch’s second-lowest investment grade.

Fitch raised Indonesia’s long-term sovereign debt rating to BBB-, the lowest investment grade, from BB+ on Dec. 15, citing the country’s robust economic growth, prudent fiscal and monetary policies. The outlook is positive, which means that Indonesia is inclined for a rating upgrade.

McNicholas said that a further upgrade may take place in the next 12 to 18 months but added that there were ways to accelerate a rating upgrade.

Indonesia needs to deal with problems in infrastructure development and boost per-capita income, which in turn would lead the country to have more state revenue, he said.

Lack of infrastructure spending has been holding back the economy from growing faster. Fitch forecast Indonesia’s economy to expand by 6 percent this year, which is lower than the 6.3 percent growth estimate by Bank Indonesia.

Gita Wirjawan, trade minister and head of the Investment Coordinating Board (BKPM), acknowledged that infrastructure and land acquisition issues were obstacles to Indonesia’s economic growth.

However, Indonesia’s prospects outweigh its infrastructure problems, he said at a Jakarta Foreign Correspondents Club luncheon in Jakarta on Tuesday.

“Korea had been crazy aggressive, with or without the land issues and infrastructure development. They are willing to take risks before the problems are fixed,” Gita said, referring to South Korea’s top steel maker, Posco. The company in 2010 inked a $6 billion deal with Indonesia’s state-owned Krakatau Steel.

McNicholas said that state revenue in Indonesia — Southeast Asia’s largest economy — accounted for about 15.9 percent of the country’s gross domestic product in 2010. That ratio is estimated to have increased to 17 percent in 2011, he said.

“Overall, this is in line with countries like India and the Philippines. However, this level is still way below the median of the BBB group,” he said.

He noted that the ratio among countries with a BBB rating stood at 33 percent.

Indonesia also needs to crack down on corruption, McNicholas said. He said it was important that corruption cases that caught the public’s attention in the past few years “were not swept under the carpet” and that such cases were brought to trial.

Indonesia’s financial market should be prepared for external liquidity shocks caused by the European debt crisis, he said.

“If Europe becomes worse, investors will go to back to dollar assets, which will not be good for the rupiah,” said Harry Su, head researcher at Bahana Securities.

Finance Minister Agus Martowardojo said in his key note speech at the finance event that authorities have prepared safeguards for a sudden shock in the global market.

“Crisis management protocols” have been prepared to counter shocks in financial and capital markets, he said, and that a “bond stabilization framework” will mitigate any impact of a sudden flight of capital from overseas investors.

Agus said that Bank Indonesia’s large amount of foreign reserves have also helped buffer the capital outflow as international investors retreat from the local market. The central bank currently has $110 billion in reserves.

“The upgrade to investment grade is part of recovery process but also evidence of a lot of changes in policies over the last couple of years and trajectory of growth is stable,” said Andrew Steel, head of Asia-Pacific corporate ratings at Fitch.

However, with only the lowest level of investment grade at BBB-, “it is still early for investment,” he said.

Some fund managers have policies in place that require having the second-lowest investment grade before they will invest in a country, Steel said.

 

http://www.thejakartaglobe.com/business/another-upgrade-if-indonesia-can-jump-hurdles-fitch/491967?utm_source=newsletter&utm_medium=email&utm_campaign=jgnewsletter

 

 

What’s your take on this? What do you think are the other things or issues need to be solved for the rating to be upgraded? I had a conversation with the peers from one of the MNC Bank few weeks ago, and they strongly believe the upgrade on the rating will eventually come in the first semester of 2012. Therefore many banking products will also be supported from that upgrade and interest rate will also be eventually lowered again in the first semester of 2012. What’s your personal view on this? I personally think it will happen in 2012, but am not too sure if it will be in first or second semester. What say you?

 

Cheers!

Foreign Investment in Indonesia Predicted at 19.2 Billion US Dollars

JAKARTA, KOMPAS.com – Bank Indonesia has estimated that foreign investment (PMA) in 2012 would continue to increase due to the improved investment climate in Indonesia which was marked by the increase in Indonesia’s rating to investment grade.

“We estimate it may reach 19.1 – 19.2 billion US dollars, higher than last year’s 18.7 billion US dollars,” Deputy Governor of Bank Indonesia Halim Alamsyah said in Jakarta Thursday.

In the meantime foreign investment in portfolio like shares and bonds may decline from 5.8 billion US dollars to 3.7 billion US dollars, in relation to the worsening economic condition in Europe and risk factor relating to Indonesia’s condition which has not reached the AAA category.

“While already reaching an investment grade, at the portfolio foreign investors would not dare to come to Indonesia,” Halim said.

Bank Indonesia Governor Darmin Nasution said that the growth of world economy would be lower than consumption in the advanced countries which would be stagnant and unemployment would be high. This will effect the exports of developing countries, while the global financial market is still in a confusion with the continued crisis in Europe causing liquidity in the financial market to continue to remain tight with increasing risks.

In addition, the global financial market is also facing possible rating declines in a number of countries in Europe triggering negative sentiments. with regard to prices, global inflation pressures have been declining along with declining international commodity prices.

Under such developments, in anticipation of the effects on the weakening global economy amidst the declining inflation, global monetary policy responses had been accommodating. Domestically, Darmin believed Indonesia’s economy growth in 2011 had been quite firm in line with the well maintained macro-economic stability and financial system.

Economic growth in the fourth quarter of 2011 may reach 6.5 pct, with the support of the still strong household consumption and investment with exports still being maintained although rather sluggish. In the entire 2011, economic growth may still reach 6.5 pct, higher than the previous year’s 6.1 pct.

Production wise, the sectors which may function as the main boosters of economic growth are industry, transportation, communications, trade, hotels and restaurants.

 

 

http://english.kompas.com/read/2012/01/13/16583129/Foreign.Investment.in.Indonesia.Predicted.at.19.2.Billion.US.Dollars

 

 

Are you guys ready to invest? Here’s your new destination in this era! Would you invest? Do you think Indonesia will still grow at this rate and even exceed the expectation? Share us your thoughts!

 

 

Cheers!

Indonesia Earmarks $436m for More Natural Gas Stations

Serpong/Bandung. The government plans to make gas fuel available at 110 new gas stations in Java this year at an estimated cost of Rp 4 trillion ($436 million), in a bid to encourage private car users to convert their fuel to natural gas.

“The government is serious about developing gas fuel transportation,” said Widjajono Partowidagdo, the deputy energy and mineral resources minister, adding that 19 of the new stations will be built in Jakarta starting in April.

“At first we expect [state oil and gas firm] Pertamina to carry out these projects, but later I hope that private gas pump operators will also participate,” he said.

The government is trying to encourage drivers to fuel their cars with natural gas after it announced a plan to prohibit private car owners from using Premium fuel, the widely used, low-octane fuel that receives state subsidies. Alternative fuels include higher octane gasolines Pertamax and Pertamax Plus, which are more expensive and not subsidized.

The Premium prohibition will begin on April 1 in Java and Bali, though public transport vehicles and motorcycles will be exempt.

The regulation will also go into effect in Sumatra and Kalimantan in the second half of 2013, Sulawesi in the first half of 2014, and Maluku and Papua in the latter half of that year.

The government has quickly increased the availability of non-subsidized fuel in the past year. In March 2011, only 35 percent of the nation’s 4,667 gas stations were equipped to sell Pertamax, but now the government claims that 80 percent of them are ready to sell the non-subsidized fuel.

Jero Wacik, the energy and mineral resources minister, said the government has also provided 250,000 converter kits that can shift fuel use from gasoline to processed natural gas, including liquefied gas for vehicles (LGV) or compressed natural gas (CNG).

Even so, critics say Indonesia lacks enough gas fuel stations.

CNG is only sold at 10 fuel pumps nationwide: six in Jakarta and the rest in Palembang, South Sumatra, and Surabaya, East Java. It costs about Rp 40 billion to build a new CNG station.

Widjajono said the estimated cost of building LGV stations was much lower, at about Rp 1.5 billion per station, because unlike CNG stations, they can be attached to existing petroleum gas stations.

Currently, Premium fuel is sold at Rp 4,500 per liter, while the price for Pertamax and Pertamax Plus fluctuates at around Rp 8,000 to Rp 9,000. In contrast, Jero said, LGV will sell at Rp 5,600 per liter of oil equivalent and CNG will sell at Rp 3,100 per liter.

“I still can’t predict the impact of the prohibition [on private cars using Premium], but most likely it will hurt middle-income car users,” said Sudirman Maman Rusdi, the chairman of the Indonesia Automotive Industries Association (Gaikindo).

A lack of infrastructure, he added, will pose a problem for the fuel conversion program, as will the price of converters, which will cost from Rp 11 million to Rp 14 million per unit according to Jero’s estimates.

“That will deter people’s desire to convert,” said Sudirman, who is also the president director of Astra Daihatsu Motor, the local distributor for Japan’s Daihatsu cars..

Dahlan Iskan, the state enterprises minister, said he could not guarantee that the government would subsidize the cost of the converters.

However, he met with state firms in strategic industries on Thursday to examine whether they might also be able to produce converter kits, in addition to the 1 million converters that the government plans to produce.

State aircraft maker Dirgantara Indonesia, train equipment maker Industri Kereta Api, telecommunication equipment maker Industri Telekomunikasi Indonesia, and military equipment and explosive maker Pindad are expected to join the program.

 

http://www.thejakartaglobe.com/business/indonesia-earmarks-436m-for-more-natural-gas-stations/490920

 

 

Here’s one of the first development plans for Indonesia. If you are thinking of jumping into the industry or already a player in the industry, my take is you have to seriously looking at the development of gas fuel. What’s your take in this? Share it with us.

 

Cheers!

 

A Boost for Indonesian Tech Start-Ups

During a gathering of local tech start-ups in Jakarta last month that saw entrepreneurs discuss the business outlook for 2012, a troubling theme emerged.

While the trends emerging from Indonesia’s tech industry were exciting, including new developments in music distribution and gaming, many of the country’s tech start-ups were failing.

Of course, the risk of failure defines a start-up. Indonesian technology entrepreneurs, like their peers around the world, are eager to roll the dice and try to realize the potential of the country’s market. Broadband Internet use has reached 30 million people and there are now 200 million activated mobile phone numbers in Indonesia, and it’s growing.

But Indonesian entrepreneurs need more than just the courage to gamble on a start-up if they hope to compete with global businesses.

Enter Ryu Kawano, a Harvard Business School student, and Aldi Haryopratomo, a Harvard Business School alumnus, who hope to bolster the local technology business community. The young entrepreneurs have initiated a two-day event called “BOOST: From the Valley to Indonesia,” where speakers from Silicon Valley and Japan will share their insight and experience. The event is scheduled to take place next Tuesday and Wednesday at InterContinental Hotel Jakarta.

The conference will discuss some of the typical problems facing start-ups, such as how to value a new business, as well as how to develop a product and market and finance it.

Boost aims to share knowledge with and increase networking among existing tech start-ups in Indonesia to provide the tools to expand their companies. The conference will be divided into a general lecture as well as a closed workshop.

Keynote speaker Akimitsu Sano will reveal how he grew his recipe community start-up, Cookpad, and took it public. Sano will offer tips to blossoming start-ups and discuss initial public offerings.

The list of scheduled speakers also includes Brent Hurley, the co-founder of YouTube, and Ian McFarland, who worked for Friendster in the early days of social networking and is now the chief technology officer at Digital Garage.

There are also scheduled speakers from the Indonesian technology industry, including Andy Zain, a founder of MobileMonday Indonesia, Antonny Liem, the CEO of the investment firm Merah Putih Incubator, and Nanda Ivens, director of Edelman Digital, a prominent Indonesian digital consultancy.

Tokyo-based venture capitalist Tatsuo Tsutsumi of GREE Ventures Partner, a leading investment firm in Japan, is also scheduled to talk at Boost. Tsutsumi has been studying Indonesian start-ups, and has suggested entrepreneurs study company benchmarks.

“Basically, Indonesian start-ups already have their own business ideas,” he said by e-mail. “By studying the United States and Japan’s Internet businesses, they can take a short cut and avoid failures,”

Tsutsumi emphasized that start-ups should not worry about their revenue at the early stages. “Problem identification and market size are more important,” he said.

As a venture capitalist, Tsutsumi expects start-ups to be able to explain a few basic things, such as the problems they confront and the corresponding solutions, who should settle the problems and the potential users or clients. These are the fundamental questions that Tsutsumi asks start-ups in Japan and China.

“If they can answer these simply, I would consider investing,” said Tsutsumi, who has more than a decade of experience in early stage tech investments.

Tsutsumi, who heads an overseas division of GREE, said the company planned to expand into the Indonesian markets this year. In fact, GREE is interested in a business alliance with Indonesian start-ups. His sponsorship of the Boost conference is also a strategy to introduce his venture capital firm to the Indonesian Internet community.

Ryu and Aldi emphasize that Boost is a nonprofit event, and prefer to call themselves volunteers. In fact, none of the speakers will be paid for their time. In return, however, Boost will pay for the cost of their trip to Jakarta along with a short excursion to Bali.

Aldi and Ryu call Boost a conference of entrepreneurs and investors for entrepreneurs and investors.

“We are basically using our networks from Japan and Silicon Valley, and none of these speakers are being paid to speak at Boost,” Ryu said.

“This is to promote Indonesia to the international tech community,” Aldi added.

The Boost general lecture will be open to the public for an admission fee of Rp 1 million ($110) for two people, while the workshop will be limited to 40 selected start-up groups handpicked by the Boost organizing team. A pre-event at Binus University on Monday featuring Hurley of YouTube will be free to the public.

Ryu said he expected the conference to be a useful networking event for Indonesians. He hoped it would end with further collaboration between the speakers and participants, and increase the survival rate of Indonesian start-ups.

 

http://www.thejakartaglobe.com/lifeandtimes/a-boost-for-indonesian-tech-start-ups/490852

 

And we’re back!! This is our first post in 2012, and I am so excited about this year, aren’t you? Here’s a good article to start your year with (I can’t say “day” as it is already mid of January). How many are you are technopreneurs and living in Indonesia? Do check out the event mentioned in the article above as I think this would be a great place to learn and build up your connection and network with the right people or the right groups. What kind of resolutions have you made for 2012? What kind of businesses you’d like to build in 2012? What’s your prediction of 2012’s economy? What would be the “main guy” in the year? please don’t think that the world will end in 2012 and you don’t feel like doing anything because you think the world is gonna end anyway. Share your thoughts with us!

 

And hey, if you’re going to the event, let’s meet up! I’ll see you there!

 

Cheers!

Five Lessons To Do What You Love…And Succeed

Entrepreneurs come from all over the world, but most share an innate passion for questioning the constraints of ideology and discipline, and identifying practical solutions to problems by combining ingenuity, resourcefulness, and dogged determination.

You Never Know Where a Good Idea Is Going to Come From.

I’m fascinated by the different types of people I meet in the world and the way their personalities show in what they do. People with passion, energy, ideas, and an unquenchable thirst for life inspire me the most. I’m fueled by their energy, fascinated by their ideas, and inspired by the way they live life to its fullest.

While working with Starbucks, I had the lifelong pleasure of meeting a man with more energy and verve for life than an army of optimists. Richard Tait is filled with passion to constantly push boundaries, explore new frontiers, and voraciously bring new ideas to life. Richard Tait, creator/founder of Cranium, and more recently the sports hydration drink Golazo, is an amazing example of an entrepreneur at heart. I recently spent time kicking a ball around in Seattle with Richard where he shared his entrepreneurial story of chasing the American dream and pursuing what makes him tick.

Start Young and Dream Big.

Richard has been a self-described entrepreneur since he was 4, selling fish door-to-door in his native Scotland. Richard’s humor and industrious attitude gave him the perfect entrepreneurial foundation. After coming to the U.S. and studying Business at Dartmouth University, the lights on his American dream began to look a bit dim. He had dreamt of working with Apple, but after being denied several positions on multiple occasions, he settled for working for Microsoft as a Project Manager–this was in 1988, long before the PC or takeover of the Internet. Being at Microsoft for the next 10 years led Tait on an amazing adventure one could never have anticipated. And after an astounding 10-year journey, Tait knew he was ready for his next big thing, he just wasn’t sure what that was.

Rainy Days and Passionate Serendipity Lead to Big Ideas.

It was a rainy Seattle day, the perfect reason for a few buddies to challenge their board game skills. After being thrashed in a game of Scrabble, followed by a glorious comeback in Pictionary, Tait sat back and contemplated the whole experience. He was amazed that both games were overwhelmingly dictated by the players whose skills aligned with the game. After realizing that very few board games offered a challenge for a variety of skill sets, he saw an opportunity. He knew that there must be adults and children alike wanting to partake in friendly competition with a variety of skills, where everyone has a chance to shine. From that simple insight, Richard began to sketch out the blueprint for the revolutionary board game Cranium.

At that time the game market was full of negativity, and Tait wanted to create something radically different, an entertainment company full of pizzazz and positivity. He and his partner began building prototypes at night at their local Kinko’s, conducting focus groups in peoples’ living rooms, and in short order, Cranium was created.

After manufacturing 2,700 games and creating an out-of-the-box distribution relationship, the board games were sold in unusual places such as Amazon, Barnes & Noble and Starbucks, and it worked. If you ask Tait how he got there, he’ll tell you it was by constant ducking, diving, determination, and the power of word-of-mouth. The key to his success is that he never forgot his customers were his sales force, and he approached every aspect of his business with them in mind.

Boredom Can Be a Great Motivator.

Entrepreneurs often find themselves unsatisfied, bored, or wanting more. Fast-forward to 2008 after Cranium’s monumental success and sale, Tait found himself asking what next. As he sat in his office watching Mexico and China battling around the soccer ball at Quest Field, his next big aha moment struck. Inspired by the 60,000 people and the roar of the crowd and drums, he decided to create a passion brand for soccer. Tait started to think about a brand that was all about engaging with the people who embraced soccer the most.

By talking with soccer players and coaches and watching them during and after games, Tait found that players want a product that energizes them while offering hydration benefits. He also found that they don’t like putting unnatural products in their bodies. After watching players at a soccer game mix Red Bull and Gatorade to get their hydration and energy fix, he saw an opportunity–and that’s the genesis for Golazo, an all-natural sports energy drink. Golazo, which means “big goal” in Spanish, contains 10 natural ingredients and gives athletes the hydration they need while offering an extra boost of energy they often crave. Tait has big aspirations for Golazo and is on a mission to win the hearts and minds of soccer players everywhere.

Passion and Risk are a Powerful Combination for Success.

Tait has a profound passion to share his entrepreneurial spirit, hoping others will adopt the courage and determination needed that pushes them to take risks others aren’t willing to. Tait encourages anyone with the unique opportunity to intersect their personal passion with a professional pursuit, to go for it. Not surprisingly, Tait derives a great deal of inspiration from Steve Jobs. “Why would you be in the Navy when you can be a pirate?” is a philosophy Tait adopted from Jobs and lives throughout every bone in his body. He has been a pirate his whole life; he would rather rebel, pioneer, and try something new. He lives in a community of breaking rules, rather than conforming to them as most entrepreneurs do.

It is with this spirit, a healthy impatience, and a dogged determination that pushes Tait, and other entrepreneurs alike, to take risks that others cannot fathom. Like Tait, we encourage you to take a risk, push boundaries, and make your dreams come true. Pursue your passion with your professional path, and if you get knocked down, get right back up. Be a pirate, not a sailor.

 

 

http://www.fastcompany.com/1803092/five-lessons-to-do-what-you-loveand-succeed

 

 

Good article, enjoy!

 

 

Cheers!

A Year That Three Companies Won’t Forget Too Easily

For many companies, the past 12 months were a period they would perhaps rather stop thinking about, given the euro zone crisis and other economic woes.

But for three companies operating in Indonesia, 2011 was a year they won’t easily forget for entirely different reasons.

Cineplex 21, Research in Motion and Citibank made dozens of headlines here this year, but few of them in the business pages.

Cineplex 21: Bans and a boycott 

In the third week of February, film journalists attending a seemingly run-of-the-mill movie preview were shocked to hear an announcement that would become one of the biggest stories of the year.

Frank Rittman, the Motion Picture Association’s vice president for the Asia Pacific, told journalists who attended the preview screening of “Black Swan” that American film producers were planning to boycott Indonesia because of a proposed new system of determining royalties on imported films.

As the MPA later explained, industry practice worldwide was to calculate import duties based on a per-meter of film print rate. But Indonesia had “clarified” that “import duties and related taxes are to instead be based against the royalties payable to the overseas distributors,” which has “a significant detrimental impact on the cost of bringing a film into Indonesia and has introduced substantial market uncertainties.”

The story that followed would rival the best Hollywood blockbusters in twists and turns. For starters, “Black Swan” never got shown on the big screen, and neither did several other Hollywood hits over the next five and a half months. Cinemas took a huge hit, with revenues reportedly down 60 percent, as people either stayed away from the B-level offerings or flew off to Singapore in desperation.

Sitting quietly in the vortex of the whirlpool of controversy was Indonesian film industry giant Cineplex 21.

The day after MPA’s announcement, Cineplex 21 spokesperson Noorca Massardi told the Jakarta Globe of the dire prospect if the government refused to budge on the new royalty system.

“If no solution is found, Indonesian cinemas will close down one by one,” he said.

A week later, a little more light was shed on the backdrop to the controversy.

Apparently, President Susilo Bambang Yudhoyono had called in December 2010 for a balanced treatment of foreign and domestic films in cinemas.

The Finance Ministry responded by auditing film import tax reports for the past two years and found out that some film importers had not included royalties in their payments.

As a result, three film importers were suspended for owing Rp 30 billion ($3.3 million) of import tax on film royalties. It emerged many months later that all three importers were affiliated with Cineplex 21.

“Legally, the owners of Cineplex 21 and the importers have no relation, but we have always acknowledged that we are close to them and we admitted that to the KPPU in 2002,” said Anitio, a director at Cineplex 21, referring to the Business Competition Supervisory Commission.

Like many good movies, the story ended with another twist.

By July, the government and the film industry managed to settle their differences over the royalty computation. Two of the three importers, however, were still banned from operating as they refused to pay the supposed back taxes — and they were the ones responsible for bringing in the blockbusters.

A solution presented itself: the government granted a license to a new film importer, Omega Film. But in doing so it raised a number of eyebrows since Omega was established by Ajay Fulwani, a nephew of Harris Lesmana, one of the primary owners of Cineplex 21.

Monopoly allegations have long dogged the cinema giant, and the events of the past year brought back those issues onto center stage.

But since the companies technically are not related, the monopoly allegations have never been proven legally.

Tadjudin Noer Said, a commissioner at the KPPU, acknowledged that the cinema industry was dominated by one player, but he explained that as long as it did not control prices, it was not considered a monopoly.

Just before the year ended, however, hints of a third act arose. The Investment Coordinating Board (BKPM) said in early December that the film industry could be removed from its “negative investment list,” opening it to foreign direct investment.

“Any changes should become clear next year,” said Ananto Haryono, director of investment planning at the BKPM.

RIM: Can’t catch a break 

Few people likely will dispute that Apple iOS and Android devices dominated the smartphone and tablet world in the past year, leaving Canada-based Research in Motion struggling to stay afloat.

But with Blackberry still being the smartphone of choice for many Indonesians, one would think this Southeast Asian country would be the one market they had fewer troubles to deal with. That’s not quite the case.

RIM’s troubles here started last year but only seem to have worsened during the past 12 months. They mostly revolved around the central theme of access: the government wanted access to the highly encrypted messages sent through the BlackBerry servers, and for RIM to block access to pornography on the ubiquitous devices.

Communication and Information Technology Minister Tifatul Sembiring said in August 2010 that “there is no plan for a ban” and that the government was merely demanding that RIM provide a data center in Jakarta that would allow for “lawful interception” by authorities of messages in compliance with the 2008 Information and Electronic Transaction Law.

Also, RIM also had to block access to pornographic Web sites on the smartphone.

When 2011 began, however, the government adopted a stronger tone. On Jan. 8, Tifatul gave RIM a two-week deadline to restrict access to porn sites or risk being shut down. The company eventually complied, installing the filters a day before the deadline, but not until after a tense two weeks that saw the negotiations take an ugly turn.

The controversial minister from the Prosperous Justice Party (PKS) launched a Twitter tirade against RIM, accusing the foreign company of ignoring the country’s laws and benefiting only from the large market without paying any taxes.

“Do we always have to bow to foreign [entities]? Is it arrogant to remind foreigners to respect our laws and regulations?” read one of the many tweets that earned him the ire of several Indonesian BlackBerry users, who even tried to get his account blocked on Twitter.

That chapter eventually closed and RIM spent most of the year fulfilling the rest of the government’s demands: that RIM set up at least 40 authorized customer care centers in the country, facilitate lawful interception of its encrypted BlackBerry Messenger services by law enforcers and set up a Regional Network Aggregator, all by the end of 2011. By August, RIM said it was on track to meet all requirements.

But the year wasn’t going to close so quietly for the company. On Nov. 25, a promotion to launch the new BlackBerry Bold 9790 at the Pacific Place mall by selling it at a steep discount to the first 1,000 customers went awry. Confusing instructions from the organizers combined with impatience and frustration among the crowd, many of whom had been waiting since the wee hours of the morning, led to pandemonium that left three injured and at least 90 unconscious.

The ensuing investigation named RIM Indonesia’s outgoing president director, Andrew Cobham, a suspect along with three others.

A week later, on Dec. 9, the Communications Ministry struck again, saying again it would shut down BlackBerry’s Internet service because RIM set up its regional server in Singapore, instead of in Indonesia as had been “demanded.”

Tifatul said his ministry would issue “early next year” a regulation requiring all telecommunications companies operating in Indonesia to build data centers here. That would then give the government legal grounds to terminate BlackBerry services in the country should RIM refuse to comply.

Citibank: Dogged by scandals 

If there was one week in the whole year that Citibank Indonesia executives hope never had happened, it would be the last week of March.

On the 25th of that month, police announced that Malinda Dee, a Citibank relationship manager, had been arrested for embezzling at least Rp 17 billion (she was later indicted for Rp 40 billion) from clients. It did not help that the details that later emerged about Malinda were worthy tabloid fodder — a younger common-law husband who was a struggling actor and model, cosmetic enhancements and ownership of luxury apartments, two Ferraris, a Mercedes Benz and a Hummer.

Then, as Citibank spent the next few days working to assure its customers that their money was safe, a 50-year-old politician, Irzen Octa, died in mysterious circumstances on the 29th after meeting with debt collectors hired by the bank, in a private room at Citibank’s Menara Jamsostek office on Jalan Gatot Subroto. He was supposedly there to discuss how his credit card debt ballooned to Rp 100 million.

It was a week that created a public relations disaster worthy of the best PR crisis managers the world has to offer, tied up Citibank in court cases for at least the next year and altered the course of its operations during the next two years.

In May came the sanctions: no new credit card customers for two years, no priority banking clients for one year and no opening new branches for one year.

Although the government initially banned Citibank from hiring third-party debt collections — which contributed to a 27 percent drop in profit from January to September as its operating costs increased, partly as a result of having to hire around 1,400 debt collectors — it rescinded it in December.

Seven Citibank executives were also ordered to take fit-and-proper tests in early May in response to the twin banking scandals. Bank Indonesia said it found that most of the directors taking the test had neglected Citibank’s internal procedures.

Shariq Muchtar, the Citibank country manager at the time the scandals erupted, was later moved to the Singapore office and replaced with Tigor M. Siahaan, the first Indonesian to lead Citibank Indonesia.

Aside from Malinda, six other suspects have been charged for their different roles in the embezzlement case. Three, Malinda’s common-law husband, her sister and her brother-in-law, are currently facing trial at the South Jakarta District Court. Last week, prosecutors demanded four- to-six-year jail sentences and Rp 200 million to Rp 350 million fines for each of them.

In the case of Irzen’s death, five collectors — none of them actually employed by Citibank — are standing trial for violence resulting in death, unpleasant conduct and deprivation of liberty.

During the hearing, which also took place at the South Jakarta District Court, two witnesses — both bank tellers — retracted their previous testimonies to the police.

Irzen’s family asked for an independent autopsy by renowned forensic doctor Mun’im Idris in May, and the result differed from the one from the police

The latter found that the death was caused by a ruptured blood vessel in the lower brain stem, which may indicate a stroke. It also found a scratch on his nose, the result of a strike with a blunt object, but that did not cause the death.

However, Munim’s autopsy revealed bruising and bleeding in the brain stem and bruising on other parts of the body. The cause of death was a strike with a blunt object, he reported.

Citibank’s legal team is pressing charges against Munim for making false claims. South Jakarta Police are currently investigating that charge.

A separate civil suit filed by Irzen’s family for compensation, demanding Rp 3 trillion in damage based on future living costs of his two daughters, is still being heard at the Central Jakarta District Court.

Let’s see what 2012 will bring.

 

 

http://www.thejakartaglobe.com/news/a-year-that-three-companies-wont-forget-too-easily/487188

 

 

A long read, but interesting facts that happened in Indonesia in 2011 (not as if 2011 has ended yet, but lets hope for no trouble for the rest of the days in 2011). Good stuff for you to read, what’s most remarkable thing that happened in your country in 2011? Share it with us!

 

 

Cheers!

Rising Demand Set to Boost Property Market in Indonesia

Indonesia’s property market is expected to continue growing next year on the back of an investment rating upgrade and land law ratification that will encourage more development, analysts say.

“With a higher rating and the land law, there is a kind of assurance that developers’ investment will be secured, especially in terms of project risks such as land price and project scheduling,” said Anton Sitorus, head analyst at property consultancy firm Jones Lang LaSalle-Procon in Jakarta.

Indonesia had its sovereign debt raised to investment grade by Fitch Ratings on Dec. 15, and a day later legislators passed the land clearance bill for infrastructure development into law.

Anton said real-estate developers would be encouraged to acquire more land as road construction created access to potential locations.

Office space, retail properties and industrial estates are expected to lead demand for growth, experts say.

“When Indonesia obtains investment grade, offices and retail space will go up even more because these properties are what foreign investors are looking at when they enter a market,” David Cheadle, managing director at property services firm Cushman & Wakefield Indonesia said recently in Jakarta.

Cushman & Wakefield’s research showed that office space had increased significantly in 2011 in the capital.

Demand keeps increasing as companies that currently do business in Indonesia expand and foreign companies seek to set up operations in a market where new office space is limited.

In Jakarta’s central business district, total net take-up for office space occupancy — which measures the change in occupied space — was 332,600 square meters this year, up 63 percent from 2010. That was the highest annual take-up since 1997, the last peak in the office market cycle, the Cushman & Wakefield report said.

The office space occupancy rate in the business district rose 5.5 percentage points to 90.7 percent this year from 2010, according to Cushman & Wakefield.

“This indicates strong corporate recovery since the global financial crisis in 2009,” Cheadle said. High demand pushed average gross rental price up 8.1 percent in dollar terms and 8.6 percent in rupiah terms.

The report said that occupancy rate would ease slightly at the beginning of the 2012 as several office buildings were scheduled to enter the market.

It is expected to rebound quickly to more than 90 percent “as occupiers, buyers and tenants take up physical occupancy, given the high pre-commitment levels within most of these buildings completing their construction early in the new year,” Cushman & Wakefield said.

Anton said growth would continue to be positive as he expected the supply of new office space to be limited.

Jones Lang LaSalle expects continuous business expansion in Indonesia to maintain support for demand next year. The country’s government has forecast the economy to grow 6.7 percent in 2012 from an estimated 6.5 percent expansion this year.

“Considering the global macro condition, there should be some slowing down, but I don’t see signs of it so far. Both local and foreign companies still want to expand in Indonesia,” Anton said.

Numerous foreign companies, mostly from Asia, had contacted Jones Lang LaSalle to gauge the property market in Indonesia, and he said he expected demand for office space to continue outpacing supply through 2014.

In the retail property market, shopping malls are still crowded and Anton expects that to continue next year, driving demand for retail space.

Foreign supermarket and department store operators are likely to be the main drivers for retail demand, he said.

“In the retail sector, Indonesia has a strong long-term appeal, just like China. Indonesia has excellent population structure,” Anton said.

Household spending accounts for more than 60 percent of Indonesia’s economic activity, and the nation’s middle class is growing. With a population of almost 240 million people, average per capita income last year was around $3,000, and that is expected to rise this year.

In the condominium market, Cushman & Wakefield said the new supply in 2012 was projected to reach 18,140 units, or more than double from 8,088 units in 2011. Net take-up is expected to reach 18,163 units, or up from 12,304 units in 2011.

Low interest rates might at least encourage banks to use money that is available to them to dispense as consumer loans for homes, Anton said, rather than having banks use the money to invest in the central bank’s debt papers and government bonds.

Demand for industrial estates remains high and prices have been rising above average this year and in 2010 as manufacturers from automotive companies, consumer goods producers and pharmaceutical factories expanded their production.

So far, the favorite locations for industrial estates are Cikarang and Karawang because of their easy access to the Tanjung Prior port, Anton said.

The two areas are industrial parks in West Java that are home to companies such as carmaker Daihatsu, toymaker Mattel and foodmaker Kraft.

 

 

http://www.thejakartaglobe.com/business/rising-demand-set-to-boost-property-market-in-indonesia/487158

 

 

What would you say to this? Will you invest in properties in Indonesia? As a foreigner, what kind of property investment do are you interested at in Indonesia? Share your thoughts with us!

 

 

Cheers!

Indonesia Plans Export Tax On Coal, Base Metals in 2012

Indonesia, a major global producer of raw materials, will look to introduce export taxes for coal and base metals next year, as it tries to encourage more investment in its mining sector, a government minister said on Friday.

Last week, Indonesia, which is the world’s top exporter of thermal coal, the globe’s second-largest nickel producer and home to the world’s second-largest copper mine, said new financial policies for commodities were in the pipeline but gave few details.

“We are preparing the concept of an export tax on mineral products as a supporting policy for encouraging base metal and coal downstream industry development,” Industry Minister Mohamad Hidayat said on Friday.

He added that the idea would soon be discussed at the Finance Ministry’s fiscal policy agency led by Aryanto Sagala, head of the industrial policy, climate and quality assessment agency at the Industry Ministry .

“Hopefully we can impose the export tax in 2012,” Sagala said. “This is crucial as a milestone for a total export ban in 2014. If we wait until the total ban is imposed in 2014 then it will be late for the government in preparing the local downstream industry.”

He added that the government would provide incentives for industry investment, such as tax allowances and tax holidays.

The Energy and Mineral Resources Ministry is already drafting a rule that would by 2014 require miners to carry out minimum processing on minerals before export.

Any regulation would be part of a mining and coal law introduced in 2009 that requires miners to process coal and minerals into higher-value products before exporting them, as Indonesia seeks to boost revenue from the mining sector.

The archipelago, the world’s fifth-largest copper producer last year, has only one copper smelter and this shortage of smelter capacity is mirrored in other metals.

Industry players argue that not all miners wish to extend their businesses into smelting and other value-added procedures, and that the 2014 law would make them uncompetitive compared to miners in other producing countries.

“At the moment, the resource sector is a cash cow for governments all over the world, whether emerging economies or first- world economies,” said Gavin Wendt, a Sydney-based analyst at MineLife.

“Governments want to maximize the amount of income they can generate.

“One of the things about Indonesia is that it is a relatively low-cost producer … if all of a sudden you increase the costs of production, then a lot of mines are probably going to become uneconomic.”

The country, which was returned to investment-grade status by Fitch Ratings this month, already has export taxes in place for cocoa and palm oil, with the aim of ensuring domestic supplies and boosting downstream industries.

Indonesia has been considering an export tax on power plant fuel coal for many months, but implementation is likely to face fierce opposition from the industry.

The country produces mainly low-grade coal, used predominantly in India and China.

Indonesian miners that could be hit by a new export tax include International Nickel Indonesia, Adaro Energy, Aneka Tambang, Freeport McMoRan Copper & Gold and Bumi Resources.

“When governments start talking about this sort of thing, it does create a lot of uncertainty and investors hate uncertainty,” Wendt said.

Reuters

 

 

http://www.thejakartaglobe.com/home/indonesia-plans-export-tax-on-coal-base-metals-in-2012/486731

 

 

 

Do you think the strategy to ensure domestic supplies and boost downstream industries by imposing the export tax will work? or it will backfire to the economy? Share your views with us!

 

oh and one more thing, Merry Christmas and Happy holiday everybody!!!

 

 

Cheers!

Facebook Agrees to Changes to Improve Transparency

Berlin. Facebook Inc. has agreed to make several changes to its services to improve transparency and better protect the personal data of its millions of users outside of the U.S., following an in-depth audit of its international headquarters that was released Wednesday.

The social media company, based in Palo Alto, California, agreed to changes including asking European users if they wanted to partake in its Facial Recognition, reworking its policies of retaining and deleting private data, and reducing the amount of information collected about people who are not logged into Facebook, the company said in response to the report of the Irish Data Protection Commissioner.

Facebook’s international headquarters are based in Dublin, Ireland, a member of the European Union. This means the company is required to comply with European data privacy laws, which are more stringent than those that apply in the United States, particularly regarding how long data can be retained.

“Facebook has committed to either implement, or to consider, other ‘best practice’ improvements recommended by the data protection commissioner,” the company said following the announcement of the report. “Meeting these commitments will require intense work over the next six months.”

The company has agreed to present its results in a follow-up to the report in July.

Facebook has been scrutinized for its privacy practices in the U.S., too. In November, the company agreed to submit to government audits of its privacy practices every other year for the next two decades as part of a settlement with the Federal Trade Commission. The FTC’s complaint had alleged that the company exposed details about users’ lives without getting their consent, as legally required.

It is standard for Ireland’s data protection commissioner to audit any high-tech companies in the country to ensure that their practices are in keeping with the European law, and make recommendations to help them to meet those standards, should they fall short.

“It is not the object of the audit, to decide whether there is a breach of law,” Billy Hawkes, the data protection commissioner, told reporters. “It is to help an organization achieve full compliance with law, put their compliance into best practice.

Facebook has repeatedly come under fire in Europe for a raft of complaints ranging from accusations that it sells personal data to advertisers — a charge that the Irish authority said its findings did not uphold — its Friend Finder application and “archiving” of data that users have deleted.

This is especially the case in German-speaking nations, where laws protecting individual privacy and the use of personal information are even more far-reaching than those covering the European Union, where Facebook has run up against several complaints from local data protection authorities.

A group of Austrian students calling themselves Europe vs. Facebook also took up the crusade, filing a series of 22 complaints directly with the Irish authorities in what they said was an attempt to force Facebook to follow the rule of the law.

“We are thrilled,” said Max Schrems, 24, who speaks for the group. “It is far more than what has previously been achieved in Europe. There are a lot of things that they have to change, far more than what they have had to change before.”

http://www.thejakartaglobe.com/tech/facebook-agrees-to-changes-to-improve-transparency/486317

Has anyone tried the Timeline view yet? I have, my suggestions, keep it away from your current girlfriend.

Cheers!