'Forbes' magazine takes a closer look at Indonesia

'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."