Indonesians mark the 15th anniversary of the fall of Suharto

Editorial: Indonesia Must Rise to Future Challenges

By Jakarta Globe on 1:00 am May 16, 2013.
As Indonesians mark the 15th anniversary of the fall of Suharto, they have every right to be proud of how far their nation has come. On May 21, 1998, Indonesia was a nation in crisis and on the verge of being balkanized. The government was in disarray and the economy was in free fall.

Riots, looting and mass demonstrations had erupted in major cities across the country. Money was fleeing the country and businessmen ran for the exit. The future looked bleak and chaos was the order of the day.

Fifteen years on, Indonesia is a nation transformed. It is the darling of foreign investors and a member of the G-20 group of largest economies in the world. It is a thriving democracy and a respected voice in regional and global affairs. Businesses are booming and a young middle class is rising.

Those chaotic days seem a distant memory now as a free press and an engaged civil society have led to political stability. The country has had two rounds of free and direct presidential and parliamentary elections without violence.Indonesians have every reason to be proud of their nation and what it has achieved over the past 15 years. It took courage and strong leadership with a dose of luck to turn the country around and to move from a near basket case to a fast-growing economy.

But even as we bask in our achievements, we must look to the future and what the next 15 years will bring for the nation. It will face new challenges that will need fresh thinking and innovative policies. The country must reform its education system so that we can ensure that our people have the capability of rising to the challenge.

Most importantly, we will need extraordinary leaders to take the country further forward and to establish it in the ranks of the top-10 economies in the world. We have come far but much hard work still lies ahead.


Fifteen Years On, Indonesia Making Headway

By Dominic G. Diongson & Francezka Nangoy on 9:06 am May 16, 2013.
In the days leading up to Suharto’s stepping down from power on May 21, 1998, Indonesia was a nation in crisis.

Demonstrations against the authoritarian regime erupted in major cities across the country. Ethnic Chinese businessmen, fearful of attacks on their shops, hastily packed up their families and belongings, leaving their cars literally at the departure curbs of airports for flights out of the country.

About a year earlier Indonesia had allowed the rupiah to trade freely against the dollar, and the nation’s economy went into a downward spiral.

With the currency’s sudden depreciation, the costs to repay dollar-denominated loans soon more than doubled, and prices of overseas goods soared — sending the inflation rate skyrocketing.

Soon thereafter, the social fabric of Indonesia unraveled, as hundreds of thousands of people became jobless from the bankruptcies of many small and large businesses. Discontent toward the government started to spill over into the streets.

When Michel Camdessus, the managing director of the International Monetary Fund at the time, presided with his arms crossed and looming over a seated Suharto, who was signing conditions of a bailout, the public became livid at the perceived Western subjugation of Indonesia.

Now, peace dominates the landscape among the nation’s 33 provinces and more than 17,000 islands. President Susilo Bambang Yudhoyono became the first leader to be elected for a second term since Suharto’s fall from 32 years in power. Indonesia’s economy remains among the fastest-growing across the Asia-Pacific region, as many of its more than 240 million people are being lifted out of poverty and moving into the middle class.

Indonesia, like many of its neighbors in Southeast Asia, has recovered from the 1997-98 financial crisis, and there are signs of further progress. The nation has paid its $23 billion debt to the IMF in full, and the government’s finances, for the most part, are in order.

In a report last year, the IMF said that “Indonesia’s economic performance has been impressive in recent years.”

While the wheels of fortune have turned for the better for Southeast Asia, Western nations are mired in debt. Indonesia’s public debt-to-gross domestic product ratio has fallen to 23 percent from 76 percent in 2001 due to its policy of maintaining fiscal discipline.

At the same time, European nations such as Greece, Portugal and Ireland turn to the IMF, the European Commission and the European Central Bank with their debts exceeding GDP. The United States itself faces chronically high unemployment rate at almost 8 percent.

Indonesia has also focused on domestic spending to help boost economic growth. The nation’s unemployment rate has fallen to a record low of 5.9 percent, about half of what it was just eight years ago. Minimum wages have also been increasing in major cities across the nation.

“Democratization is maturing, and there are a lot of young entrepreneurs in the business world now,” said Sandiaga Uno, an Indonesian businessman who operates a private-equity firm.

“Economic policies are becoming more transparent, and economic growth is becoming more sustainable and more evenly distributed,” he said.

As part of the nation’s initiative known as Reformasi in 1999 to transform Indonesia’s political, social and economic systems, regional governments have been given more power, allowing their provinces to thrive and develop.

There is greater transparency as well, with people more freely able to discuss subjects such as criticism of the president and institutions, once off-limits. Political parties are now free to form, and the media plays an important role in both informing the public and acting as a watchdog.

The National Social Security System (SJSN) Law, approved in 2004, has paved the way for the establishment of five social security programs: health insurance, employment injury, pension, old-age savings and death benefits.

There is also greater transparency in how the government performs its duties and conducts its business.

The formation of the Corruption Eradication Commission (KPK) has helped to root out rampant graft, a trait that was endemic during Suharto’s reign.

At the same time, though, Islamic radicalism — suppressed during the Suharto era — is gaining ground.

While the rule of law is yet to take hold firmly, the country is also moving in the right direction on this front.



About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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