Indonesia’s Co-Co Spirit The new globalism

By Shoeb K Zainuddin on 03:58 pm Feb 01, 2012
Category Archive

On New Year’s Day, while the rest of the country was recuperating from the festivities of the night before, Tourism Minister Mari Pangestu was out cleaning the beach in North Jakarta. The initiative made headlines in the local media but more importantly it sent a strong message to the public that maintaining a clean environment is everyone’s responsibility.

That sense of collaboration between all stakeholders is one of the driving forces behind Mari’s initiatives to build tourism and creative industries.

She is now taking the initiative nationwide and will clean beaches in Bali and Manado in the coming weeks. “This is an awareness program and I will fine tune it as we go along. We want to show that we can do things in a sustainable way in this country,” she says.

That message will be heard loud and clear at the World Economic Forum in Davos this year.  The theme of this year’s gathering of world leaders is “The Great Transformation – Shaping New Model,” with an emphasis on collaborative power.

Professor Klaus Schwab writes in his executive summary that a new economic model is needed to account for the fundamental power shifts that have already occurred and those that are continuing to take place. These shifts are not only West to East and North to South but also the emergence of new non-state actors who want to have their say and have the capability to do so.

“We need new models where governance processes on all levels integrate these newcomers in what I call collaborative power – the capability to exercise collaborative power will determine the future on the business, national, regional and global levels,” he states.

Collaboration and cooperation have been the hallmarks of Indonesia’s remarkable rise over the past seven years. With an economy chugging along at more than 6% per annum; a young and productive workforce, growing per capita income, low inflation and strong fiscal health, Indonesia is one of a handful of economies around the world that seems to have not just the ingredients but also the right policy mix for long-term sustainable growth.

Strong economic growth has also created confidence and national pride among Indonesians. “I do sense a new sense of nationhood and increased confidence in the country,” says Mari. “This is partly due to the youth being driven by greater confidence in the future.”

She notes that Klaus Schwab is trying to analyze the new model driving this transformation on a global scale. In Indonesia, the government understood the underpinnings of this trend much earlier.

“It’s really one of collaboration and last year Indonesia’s theme at Davos was collaboration and cooperation which is gotong royong in the modern sense,” she notes.

“It is collaboration in the wider sense. The transformation since 2010 has been towards the emerging countries, the shift of power from West to East. This is not just about North-South, East-West or a greater role for emerging countries which was the focus for the last two years. It touched on how do you accommodate the greater power of China and the role of emerging countries in the governance of global institutions and the balance of power.

“Now it’s beyond that and it’s about collaboration at the inter-generation level between the young and the old. It’s about collaboration amongst all stakeholders and this is exactly what we have been doing for the last 10 years.”

Indonesia has transformed itself from an authoritarian state to decentralized democracy, where policies cannot be implemented without collaboration and coordination between central government and local government because implementation is done at the local government level.

“You really have to have buy-in from all stakeholders as well as collaboration. This is what we have been trying to develop in the last seven years in this government,” says Mari, adding that there is a subtle difference between collaboration and cooperation.

“Cooperation is just trying to work together while collaboration is where you cooperate but also do things together because you know you are both going to benefit. There is a greater good at stake.”

The other transformation underway is the explosion of social media and the digital revolution. The cyberworld cannot be ignored and the government and the state must collaborate with the young generation if it wants to get their buy-in. With the third largest number of Facebook members in the world, Indonesia has dealt with this aspect very well too.

“Having said that, we have our challenges,” Mari admits. “We cannot say all is fine and well. These challenges include improving the physical challenges as well as political maturity. If you want collaboration to work, you need the underpinning, you need to have the institutions and frameworks to work. It can’t be just a loose organic sense of working together.”

Mari adds that in the past there has been too much developed-nation lecturing about what is right in the North-South context. But with the developed countries and the traditional big players going through a humbling experience, these big players do not have the upper hand anymore. They are no longer triple-A.

“Nobody has the moral authority to say this is the right way to run economic policy today,” notes Mari. “The Europeans certainly and maybe the Americans are doing a bit better but they are a more humble now.”

Stung into action

The new transformation and collaboration taking place now also includes making sure that natural resources, whether food or energy, are not wasted. This is crucial for Indonesia given its vast natural heritage and as a home to some of the world’s oldest rain-forests.

In terms of developing sustainable and efficient use of its natural resources, Indonesia is not quite there yet but it has had some successes.

The country’s palm oil industry is a case in point. One of Mari’s successes as Trade Minister was converting some of the large palm oil players into a more environmentally conscious direction and towards sustainable production.

“You can’t have sustainability at the cost of development and you can’t have development at the cost of sustainability,” says Mari.  We want to have both so the challenge was to find a third way where both sides could work together.”

This third way was achieved between the Sinar Mas Group, one of the largest palm oil producing companies in the world, and conservation groups. Following criticism of its operations and environmental record Sinar Mas executives, conservation groups and the government sat down to work out a plan.

They agreed on an independent study and the result of the study became a basis for a work plan that Sinar Mas agreed to undertake. “They (Sinar Mas) were found at fault but not totally at fault. So they agreed to undertake a series of steps which are monitored by some of their buyers such as Nestlé,” says Mari.

It’s a great collaboration story and illustrates how Indonesia approaches the challenge of balancing economic growth and protecting its natural heritage. “We want a sustainable trade policy not just in palm oil but our other natural resource exports. It’s a good win-win all round and its good for country branding.”

A new model for sustainable tourism

Mari is now transplanting the ideas and concepts she developed as Trade Minister to her new tourism portfolio. “What we are trying to do is create the standards for sustainable tourism and than giving either incentives and rewards or sanctions for compliance,” she says.

Eco-tourism, for example is much in vogue these day. But what is the definition of sustainable tourism? Eco-tourism and sustainable tourism are quite different, she notes, with eco-tourism more focused on protecting the natural environment, representing a big undertaking.

“To me sustainable tourism is tourism that is going to be sustainable, meaning that there is continuation, development and growth. For that to happen, there has to be environmental, social and economic sustainability,” she says.

Environmental sustainability means creating standards for hotels, restaurants and other production units of the industry in terms of energy efficiency, waste management and cleanliness.

“This is what we are trying to develop both at the ASEAN level as well as domestically. What is interesting is that you can get carbon credits for such accomplishments if you meet the Gold Standards that were created in London,” she notes.

The ministry wants to incentivize the industry to adhere to these standards. “It’s not enough to give awards. You need to get people in the industry to understand that meeting these standards has long-term benefits and it is good business,” she says. “Tourism and cleanliness are synonymous and we are very concerned about protecting our biodiversity, whether it’s the sea, our forests or beaches.”

When it comes to social and economic sustainability, the key is ensuring that local communities are included in the growth of the tourist destination and the development of the area.

“They will be the ones who will take ownership by protecting the environment and keeping it clean. If they benefit economically from the existence of the destination, they are more likely to keep it sustainable,” says Mari.

“Bali, for its plus and minuses, has benefited from tourism so they work very hard to ensure security and cleanliness. Learning from Bali, we need to get it right from the beginning,” she adds.

GlobeAsia February 2012