Gadbaw ready to tell RI tale to Americans

By Yenni Djahidin

WASHINGTON D.C. (JP): Indonesia is drawing greater attention among the American public these days. Most news that appear in the American media however cast Indonesia in a bad light. Human rights and labor rights problems, East Timor and the campaign contribution scandal involving the Lippo business group have all overshadowed most other news about Indonesia, and certainly the overall relationship between the two countries.

Congress members have picked up some of these issues and pressed the administration to lean hard against Indonesia.

With the Indonesian constituency in the United States virtually negligible to influence American attitude and policy, it is left up to Indonesian "friends" in the United States to rectify some of the American misperceptions of Indonesia.

One of them is R. Michael Gadbaw, vice president of General Electric International and chairman of the U.S.-Indonesia Business Committee of the U.S.-ASEAN Business Council.

Gadbaw joined in a subcommittee hearing to review U.S. policy toward Indonesia at the House's Committee on International Relations this month. He testified along with Aurelia Brazeal of the State Department, former U.S. ambassador to Indonesia Paul Wolfowitz and Sidney Jones of Human Rights Watch.

"I felt the need in testifying, to get up and to tell the story based on my own personal experience and observations in Indonesia," Gadbaw said in an interview.

The following are excerpts of the interview at his office.

Q: How do you assess the criticism over Indonesia in the U.S.?

A: It's an irony. Indonesia would have fewer political problems in the U.S. if it hadn't been as economically successful. Indonesians love Indonesia. I don't expect them to leave Indonesia, but that's why it's important for people like me to get up and tell the Indonesian story because there are not that many Indonesians here in the U.S. that are in a position to tell the story.

If you look at other countries, there is a large (percentage) of people of Indian heritage here. They make sure their congressmen and senators know the real story on India. People of that heritage make sure that Americans understand their country and what is happening there. The fact is Indonesia has really had such a positive economic experience that it has not seen that kind of massive migration.

So, it's up to people like us to help make sure that the Indonesian story is told because we testified that here is the fourth largest country in the world, and it's one of the least well understood countries in the States. It is a shame because Americans are forming misimpressions of Indonesia. They don't understand all the positive things that Indonesia has done.

Q: What do you suggest that Indonesians do?

A: We have to get more and more people that have been to Indonesia to speak about Indonesia. We have to develop ways to communicate, to tell the Indonesian story.

Q: Who is 'we' exactly?

A: There is the business people such as the 100 that came with us to Indonesia (in March). There is the participants of the various students exchange programs between Indonesia and the U.S.

The Indonesia Society that (former U.S. ambassador to Indonesia) Ed Masters is the head of is doing a very good job. I give out (to people) his book about Indonesia. Books like this we have to give them around, so people can read them.

There is the testimony, congressmen and senators speaking about Indonesia. We have to look for any opportunity we can.

Q: Would you describe the business community and former American ambassadors as President Soeharto's lobbyists?

A: People like Paul Wolfowitz and Ed Masters and Bob Barry are not lobbyist for any government. They are not lobbyist, but they are for the Indonesian people and for getting Americans to understand what in Indonesia is all about as a country, and what the Indonesian people are all about. That's really the role that they are playing. I think it's unfair to characterize them as though they are a lobbyist for anybody.

Q: What is this U.S.-Indonesian Committee which you chair?

A: It's a group of companies, a group of people representing companies that have interest in Indonesia: trade and investment. And this group of people come together regularly to work on specific projects that would help promote more trade and investment with Indonesia.

Q: Are American investors confident about Indonesia in view of the political situation there and the speculation of a possible presidential succession in the near future?

A: American investors are confident in Indonesia because there appears to be a very strong consensus among the people about the direction that Indonesia should go in terms of its economic policies. Whoever succeeds President Soeharto will continue in the same direction with the economic policies. Americans are confident that this is an important political process that will take place, but that won't fundamentally change the Indonesian orientation with respect to those policy areas that create the condition for doing businesses in Indonesia.

Indonesia will continue to be an open economy, it will continue to drive deregulation and reforms. And it will continue to promote policies that will encourage economic growth and constantly rising standard of living for Indonesians.

Q: What should Indonesia do to attract more American investment?

A: The areas that we are working on include further improvement in its customs system, to eliminate delays and difficulties in clearing things through customs. We would like to see them continue on the path toward trade liberalization. So that they continue to reduce their terrace, and allow for companies to be based in Indonesia and export to other parts of Asia and the world, and to be able to bring in componentry that would not face a very high level of terrace and other type of restrictions. We'd like to see it continue in the path toward deregulation that will allow companies to be able to distribute their products in Indonesia. We'd like to see them continue in the path of deregulation in the energy sector, so that they can utilize international capital to build their power generation infrastructure.

Q: Do you think American investment should be linked to the human rights situation in Indonesia?

A: One has to look at business in the context of economic and social development. And what impact does business have on economic and social development. When American companies come into a country, they look for countries that are receptive that want to work with American businessmen, that means that they're willing to accept the way Americans do business. What that means is that we pay employees well, we train them, we treat them with respect, we want to see the country develop economically and socially, and those values are part of our corporate culture. When we come to a place we treat people as equal, we treat them with respect, and that has a positive effect as people work with us and realize that we share the same sort of values that they have.

Q: What about the criticisms alleging poor treatment of workers by companies in Indonesia producing Nike shoes?

A: I know that Nike, as a company, has spent a lot of time focusing on this issue and putting into place controls to make sure that people that manufacture shoes for Nike maintain the standards that Nike requires in terms of wages and working conditions. I am told, and I have no reason to think this is not true, that they have people on Nike's payroll in those factories whose job it is to make sure that they live up to those standards. I think there is a certain amount of misinformation that gets circulated about Nike, but these recent developments have to be looked at in that context, because, I think, Nike is very sensitive to the publicity and the impact that this publicity can have on Americans' willingness to buy their shoes. And there is plenty of competition. You don't have to buy from Nike, you can buy it from lots of other people. So, it's in their interest to make sure that their shoes are made up to and in accordance with the standards that are expected in Indonesia. In fact, I think, it's typically the case with respect to many American companies, that the standards that they apply are better than the minimum standards. I would be surprised and disappointed if it turned out that they were paying below the minimum wage because that would be a violation of Indonesian law. And no American company wants to be violating Indonesian law. In fact, American companies generally want to provide, meet a standard that is higher than that is required by the basic law.

Q: How do you respond to accusations that American companies use cheap labor in developing countries?

A: The question is, what's the alternative? Would you rather have these people not being employed? The fact is, Indonesia has people that as they attract manufacturing to Indonesia it will employ that labor force, and as that labor force is employed, the price workers can command will constantly go up.

They (the Indonesian government) has just raised the minimum wage. And the minimum wage now is higher than it was ten years ago. But the way for countries like Indonesia to develop is the same way like Taiwan, Korea, Hong Kong have developed, which is to attract businesses, create conditions in which people are willing to invest, invest in training, invest in building plants, in putting up houses for people to live, in creating transportation networks so people can get to and from work.

Q: What difficulties do American companies find in doing businesses in Indonesia?

A: We tend to look at difficulties as opportunities. Yes, we have difficulties. We have to learn how to operate in Indonesia. We have to learn how to adapt to Indonesian society and culture. We have to develop products that are appealing to Indonesians. We have to solve logistical difficulties, transportation problems. We have to solve training problems, figure out how to teach people, how to manage the businesses that we operate there. We have communication difficulties...

Q: With?

A: Maybe basically making sure that people have the information that they need in order to operate. For example we have a lot of expertise here, but Indonesia is in another time zone. I am sure you have communication difficulties with Indonesia because either you're getting up very early in the morning or you're up very late at night. There's only a few hours at either end of the day when everybody here and everybody there are awake at a same time. So, you have to overcome those through technology, and e-mail and various technique.

I think the legal system is not as developed as we would like it to be. The commercial law, the framework for doing commercial law is, again, not as developed. Those are the sorts of problems that, the sorts of opportunities, if you will, for development that we see.