Indonesia Expat
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What You Hear May Not Be What They Say

investment in indonesia
What You Hear May Not Be What They Say

I can’t tell you Bill’s real name but can authenticate he was a high-level Australian executive sent to Indonesia to build contacts that might lead to business.

We shared a coffee. Then another. He continually checked his phone.

In 2021, Indonesia launched a sovereign wealth fund – the Indonesia Investment Authority. The pitch claimed foreigners could make money but the intent was to get funds into state-owned enterprises.

These include banks and fuel stations, power and water supplies, makers of guns and drugs and scores of other enterprises. Many are monopolies and do not always run efficiently.

Bill’s Board had been impressed by President Joko “Jokowi” Widodo telling the world his nation was hungry for investment and taking unpalatable bureaucratic condiments off the menu.

So Bill had sent all the right intro letters followed by e-mails and phone calls and was waiting in a Jakarta five-star hotel for the promised responses.

They never came and he quit the capital after exhausting his travel budget wondering what he’d done wrong.

The chances are that the service he was offering didn’t attract the people he’d contacted, particularly if middle management. If they hadn’t been told to respond, they’d feared getting involved in an unapproved venture.

Indonesian administration is top-down. Jump here for a guide to management styles.

Elsewhere, a polite rejection letter is common, but the Javanese think this is impolite so prefer to ignore it. Indonesians also use WhatsApp rather than e-mail or phone. Facebook is declining as a business tool.

Bill’s real fault was not understanding the Javanese subtleties; there’s no easy guidebook, but these comments might help.

Indonesia is the world’s third largest democracy, but it’s a mistake to believe it works like those in the Anglosphere. It’s a “flawed democracy” according to the Economist Intelligence Unit; nations in this grouping fail on measures of pluralism, civil liberties, press freedom and political culture.

Many Westerners assume that when the President makes a statement it carries the weight of one delivered by his equivalent in the US or UK.

If only. In 2021, Australia announced it was cooperating with those two nations to sail nuclear-powered submarines in waters around Indonesia in a strategy called AUKUS.

Jakarta officially stressed it was “deeply concerned over the continuing arms race and power projection in the region”. The Australian Broadcasting Corporation reported that Jokowi “repeatedly and forcefully” raised concerns with the then Prime Minister Scott Morrison.

Then in May this year, the New Straits Times ran an interview with Jokowi saying, “We should view … AUKUS as partners, and not competitors.”

Some media assumed Indonesia was shifting its position but Susannah Patton, from Australia’s Lowy Institute warned against reading too much into the President’s comments telling the Australian Financial Review: “Jokowi has form in saying very positive things that don’t necessarily reflect Indonesia’s official position.”

So before buying Bill’s business class ticket, his bosses should have thoroughly researched the President’s comments on overseas investment. 

Why were they made? Maybe to spur local corporates to open their wallets through the threat of foreign competition rather than open the doors to dollars and yuan.  

Indonesians are nationalistic and many resent outside influence (“soft power”) they think comes with investment. Jakarta might tick a proposal but the overseas company finds its plan frustrated by regional administrations.

Some Chinese companies have brought in their own workers causing resentment among locals expecting jobs. A good discussion on how Beijing does business abroad is here.

Indonesian leaders must use Indonesian when making official statements so it’s best to read the original and get a reliable translation rather than use the words published in the Western media.

Indonesian is not Jokowi’s first language – that’s Javanese, a complex hierarchical tongue adroitly employed by the president.

It’s rarely used outside the island which dominates the archipelago politically and economically, so misinterpretations are commonplace. For those serious about Indonesia, one of the best guides to improve understanding is here. 

 Many readers would know the old cliche that an Indonesian’s “yes” means “no”, and a “no” means maybe. When Australian journalists once asked Jokowi if  their nation might join the ten-member Association of Southeast Asian Nations, he apparently responded:  “I think it’s a good idea.”

This led to reports that an expansion of the ten-member group was possible, but those knowledgeable of the nuances laughed. Wrote one academic: “Australia has not been invited to join ASEAN, and will not be invited to join ASEAN in our lifetimes. Jokowi was offering a ‘Javanese response’, trying to be polite.”

Bill’s company might have done better in hiring an agent to advise on who to see and what to say. Most embassies in Jakarta have business units able to recommend reliable resources, though it’s wise to double-check officers’ skills and experience. 

Are they academic theorists who’ve never been outside the public service, or do they have dirt under their fingernails?

In brief: Examine every angle, talk to all sides and take your time. Indonesians don’t like to be hustled.  Who does?

When you eventually find the right folks, work hard to maintain contacts. Remember birthdays and national events.

Do your homework. Too much information is never enough.

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