'Forbes' magazine takes a closer look at Indonesia
By Endy Bayuni
JAKARTA (JP): When the top executives of Forbes come to Indonesia, they don't only update their list of local tycoons for inclusion in the American business magazine's annual list of billionaires all over the world.
There's some of that, certainly, but Chairman Caspar Weinberger, accompanied by Vice Chairman Christopher Forbes, was in town for three days this week mainly to meet business and government figures to collect material for his regular column in Forbes, widely read by American business leaders.
Forbes is the latest American publication to take a closer look at Indonesia, a country which many American officials say has great potential, but is widely underreported by the media.
"There is immense potential here, natural resources, trade and labor force, and a government that's hospitable to business," Weinberger, who served as defense secretary under President Reagan, said.
"Basically I think American companies, companies all over the world, are looking for new markets, they are all becoming global, as they should. I think they've been looking around here for a long time, and I think they're more and more interested now."
"This is a very powerful economy, a very strong economy, and it's obviously a big market," he said.
Weinberger admits that American corporations have been slow to tap the potential of Indonesia.
"A lot of American companies still don't understand that they really have to be global, that they have to have the markets if they want to succeed, and that if they want to develop and want to expand their trade, they have to go all over the world. And this is a very obvious place."
Just how immense this potential is can be seen by the inclusion of Indonesians in Forbes' latest list of the wealthiest families and corporations in the world.
In this year's list, published in the July edition, at least three Indonesian names appeared: the Wonowidjojo family (net worth $6.7 billion) which owns PT Gudang Garam, Eka Tjipta Widjaja and family ($5.1 billion) and Liem Sioe Liong and family ($4.5 billion).
Christopher Forbes, the younger brother of Malcolm Steve Forbes who unsuccessfully bid for the Republican presidential nomination this year, says a few more Indonesian billionaires will probably make it into the list next year.
He recalls that Forbes only discovered the first Indonesian billionaires two years ago. "As we get better at this list, we will find more and more."
Forbes, which in its Internet website describes itself as "the capitalist tool", was founded 75 years ago by Christopher's grandfather.
Weinberger, at 79, remains as sharp as ever in his analysis of global affairs as well as American politics. This is apparent not only in his commentary columns in Forbes, but also during the brief interview in his suite at the Grand Hyatt.
His background explains the extensive knowledge that San Francisco-born Weinberger has of business, politics, and government affairs, as well as the Pacific region.
In government, his portfolios included defense secretary between 1980 and 1987 under President Reagan, and director of the Office of the Management and Budget and Secretary of Health, Education and Welfare, both under President Nixon. In business, he was director of PepsiCo Inc., New York, Quaker Oats Co., Chicago, and the Becthel Group, San Francisco.
His first encounter with the Pacific was during World War II, when he served in the Pacific Theater of Operations, first with the 41st Infantry Division and later as a member of Gen. Douglas MacArthur's intelligence staff. He was released from active duty with the rank of captain.
The graduate of the Harvard Law School joined Forbes in 1989, first as publisher, and since 1993 as chairman.
His long stint in government may explain his caution when asked how he sees Indonesia's political future in the event of a change in national leadership.
"We wouldn't comment on the succession because that's very much an internal matter," he said. "And besides, there doesn't seem to be any need for a succession at the moment. But it's always wise to plan for it, of course."
"Basically we're looking at the reasons why so many of these Asian economies are very strong, and I think it's very clear - they have been following free market principles and encourage competition and encourage capital to come in, and privatization.
"All of these are reasons why they're prospering and are the things that make entry into these markets very attractive for American companies who are used to free market principles.
"Of course we look at the stability of the government, and it's obviously very strong, and look at its policies."
Asked to compare Indonesia with China in attracting American investment, Weinberger said Indonesia is "far in the lead".
Beijing has been moving more slowly and uncertainly towards free market policies, and American investment has been limited to provinces where there is greater autonomy, such as Shanghai and the coastal areas near Hong Kong, he said.
There is also the problem of the absence of rule of law in China, he said, while in Indonesia he finds it "relatively stable."
Weinberger says human rights issues will remain part of the equation of Indonesian-U.S. relations, although a Republican administration would approach the issue differently from President Clinton's administration.
He argued that Washington should go ahead with the planned sales of the F-16s to Indonesia, if it is in the interest of Indonesia's security and defense.
"Basically, the U.S. needs allies, needs friends. And one of the ways of maintaining those friendships and alliances is to work together in military matters."
Winston Lord, the Assistant to the U.S. Secretary of State on Asia-Pacific Affairs, during a congressional hearing last month made a forceful argument about the strategic importance of Indonesia to the United States, both in politics and economics.
Lord also asserted that relations cannot reach their full potential as long as Indonesia continues to have human rights problems.
Washington has delayed the sales of nine F-16 fighters to Indonesia until next year because of concerns expressed by some members of Congress about what they see as Jakarta's crackdown on political dissent.
"I believe we have a good human rights basic policy, and we would like to have other countries see the benefit of that too. But it's a delicate business telling a country what kind of policies it should have," Weinberger said.
He added that not only the administration, but American investors also take the human rights situation into consideration in deciding where they want to invest.
"Human rights is always a basic part of the equation - as to whether the place is a good place for investment, if there are continued disturbances, then obviously it is not a very good place for doing business."
Weinberger encouraged Indonesia to explain its policies in the United States.
"Not enough people in the United States know, or have the opportunity to know about Indonesia as they should.
"Indonesia is a very important country and a very important relationship. There is a large amount of ignorance in the U.S. about Indonesia and I think that's very unfortunate.
"This is a very important part of the world and Indonesia clearly plays an important role in this part," he said.
Weinberger believes in the need for the United States to maintain its military presence in the region, describing the Philippines's decision not to extend the lease of two American military bases on its soil as a "terrible mistake."
"I would hope to maintain our presence, provided that we're wanted there," he said, referring to the presence of American troops stationed in South Korea and Japan. "We never stayed in places where we're not wanted," he said.
When asked, he refused to single out China as the biggest potential threat to peace and instability in Asia, as suggested by some analysts.
"There are several different potential threats. The more we are armed, the more we stay together, the more we are intent on deterring any kind of war and intent on keeping conditions for peace and prosperity, the less the chances are for either war or any successful attack against us.
"But we have to stay together, we have to stay united, and stay armed," he said.
Weinberger finds it a paradox that "most democracies don't like to spend the money that is necessary to keep themselves safe and democratic."
Looking ahead on the U.S. presidential election, he said Republican candidate Senator Bob Dole would have a far better approach to Asia-Pacific affairs if elected than Clinton.
"I think Mr. Clinton doesn't have any real foreign policy.
"His foreign policy is to get re-elected. He changes from week to week, and I don't think he has any commitment or basic understanding of the problems of the Pacific.
"Senator Dole, with his years in the Senate, worked with a number of different foreign countries, and understands these matters much better. And I think the relationship that the United States has with the Pacific will be in much stronger hands if Senator Dole were elected."