Focusing on Asian business

Focusing on Asian business

By Mohammad Sadli

MELBOURNE (JP): Attending a big conference in Melbourne
focusing on the prospects of doing business in Asia, one enters a
different atmosphere. The conference was dominated by Australians
first of all, then Europeans and Americans, while from Japan
there was a strong delegation of Keizai Doyukai. Participants
from the ASEAN countries, India and South Korea were a minority,
but there was a sizable delegation from (mainland) China,
reflecting the opening up of the country and the newly affluent
businessmen venturing into the world.

The focus was on doing business and competing in Asia. At one
time the conference broke up into three country focus groups; on
Indonesia, China and India. For one reason or another Japan,
Korea, Thailand, Malaysia and Singapore did not get a special
focus group.

The Indonesia focus group drew the biggest crowd and was
attended by some 150 people. The China focus group attracted
somewhat less than 100 participants, while for the India focus
group a small conference room was reserved occupied by less than
50 attendants.

Many Australian businessmen are attracted to prospects in
Indonesia. From them one does not hear major complaints any more.
Somewhat euphemistically, corruption in China and Indonesia was
contrasted as being at one end of a scale, with New Zealand and
Australia at the other end. The advise of businessmen experienced
in doing business in Asia is that one has to be very patient,
have consideration for the local culture and be very careful and
cautious in choosing local partners. On the other hand, it is
observed that Asian businessmen stay with their foreign partners
for a long time. Perhaps the truth is that after foreign
technology is effectively absorbed, the local partner will create
a new venture in the same business but will not abandon the
original affiliation.

The opening up of the Indian economy is attracting much
attention. The Japanese are especially eager to be updated in
their information and insight. But there is concern that the
political process in India could set back economic
liberalization. In the meantime, economic growth is inching
upward, crossing the five percent line. Exports and imports are
really picking up.

The world's extreme interest in East Asia is due to the
splendid performance of the developing part of the continent.
Growth rates are predicted to stay in the seven to eight percent
bracket per annum, several times the rate of the western world
and Japan. That means that in one or two decades Asia will become
the economic center of gravity of the world. Conferences such as
the one in Melbourne are basking in Asian optimism as if nothing
can stop East Asia in its path of progress. Actually, this would
be unwise because political stability and regional security, the
underpinnings of such process, are not automatically guaranteed
in the long run.

But otherwise, Western business should be inside this area,
sooner rather than later, to get in on the ground floor. The
infrastructure requirements alone will be a mindboggling figure
of a trillion dollars or more in the ten years to come, and China
and ASEAN will attract the lion's share. Such money cannot come
from the World Bank or other concessional sources and hence the
whole system of construction and operation of public
infrastructure should be geared towards private sector
involvement. The legal and management systems should be reformed
from one that was originally anchored in the public sector.

Privately financed and operated public infrastructure
facilities need not become more expensive because of expected
greater efficiency in operation and cost savings in construction.
Even if the user has to pay more as is the case with toll roads,
that has to be contrasted with deficit financing in the old days
when all people had to pay through the process of inflation,
regardless of the fact that people living in Aceh were not using
the (better) roads in Java.

The sponsor of the Melbourne conference is the Committee for
Economic Development of Australia, a non-profit organization of
business and no extension of the government. There is an
international network of such organizations, like the Committee
for Economic Development in the U.S. and Keizai Doyukai in Japan,
and several others in Europe. This network holds annual meetings
like this year in Melbourne and next year in Madrid.

The Australian Committee for Economic Development of Australia
has also embarked on an Asian network called Asian Region
International Association of Cooperating Organizations which is
still in its infancy. The cooperating organization in Indonesia
is Indonesia Forum with Prof. Sadli in the chair. The first day
was devoted to the first meeting of the Asian Region
International Association of Cooperating Organizations but the
Asian delegations were small and could not field important
businessmen. Probably because such businessmen are too busy to
spend a couple of days in an overseas conference where the
emphasis is not on business deals. Japan with Keizai Doyukai is
not yet a member of Asian Region International Association of
Cooperating Organizations.

But Indonesian businessmen should spend some time in meetings
where their horizons can be broadened and contacts enlarged.
Indonesia should no longer be obsessed with investment into, and
business promotion for, their country only. The Indonesian public
should also be taught that Indonesian investments overseas do not
constitute capital flight, even if a Chinese conglomerate invests
in China. In Australia there is already visible Indonesian
investments in real estate and property, but probably more from
the other ASEAN countries.

Many of the Indonesian businessmen who were top executives in
the 1960s and 1970s have now become board members or chairmen and
are not burdened any more with day to day responsibilities. Such
senior and wise men could play a part in international business
communication and diplomacy, and meet their counterparts in
conferences like Asian Region International Association of
Cooperating Organizations, World Economic Forum, APEC Business
Forum and others.