If we spend energy on the past, we won't move forward

Indonesian industrialist Sukanto Tanoto is the chairman of the Singapore-based RGM International group, a leading industrial group, which currently runs the world's largest pulp producer, mainly in Riau and North Sumatra. In a talk with The Jakarta Post's Kornelius Purba on the sidelines of a seminar organized by INSEAD Business School in Singapore over the weekend, the businessman shared his views and feelings about Indonesia. The following are excerpts from the interview.

Question: As a regional economic player, what is your view about the Indonesian economy, and the fact that it has not fully recovered from the 1997 economic crisis or that the capital that flowed out then has yet to return?

Answer : I think there are a lot of discussions about inviting back ex-Indonesian economic players overseas and so on. All businesspeople, when they invest, are looking for business opportunities. Businesspeople, like ants, are attracted to sugar. Or they may be compared to water -- water never falls never flows from below to above, but always from above to below. That means that businesspeople always look for opportunities in places where they are safe. This is the basic element.

Before the crisis (1997), we are among the biggest investors in the country. We sold our assets. But in 2000, we brought back almost US$1 billion to finish all our projects in Indonesia. So there was crisis, there were big capital outflows. But we did not announce it. In 1999, people were even talking about why we sold our assets.

Question: Why did you come back?

Answer : We came back not because of the issue of nationality only but because business itself requires investment, and if you do not finish it, everything is wasted and you lay off workers. So you must finish it. Then our business will have a better cash flow and opportunities. That is why we invest, it is not purely a matter of patriotism.

Many people have been working for us for many years, so we also feel some responsibilities. Then there is the environment. We learned the hard way how to handle this problem.

How will we improve the economy?

What is most important here is that everybody has to do their part. Everybody ought to do what they ought to do. For 53 years since 1945, Indonesia had only two presidents. Imagine, in the last 7 years alone we have had four presidents: Pak Habibie, Pak Abdurrahman Wahid, Ibu Megawati and Pak Susilo.

It is a very dynamic, changeable external environment in which we are operating. So now, with a new government, I think the government should do what it needs to do to improve the situation, security, and also improve the investment climate.

How?

You need people to feel comfortable and feel secure. In what sense? What is important here is how we move forward. Since 1998, we have had four presidents, and all of them have had different styles. If you look at history, what is right and what is wrong can be different. During Soeharto's time, it was right, then under Pak Wahid it was wrong. And under Pak Susilo, perhaps it is not wrong anymore.

If you continue going along with this trend, you will spend a lot of time and energy on the past. Now we must move forward. Indonesia does not stand alone. We are part of the 10-member ASEAN. We are also facing head-to-head competition with China and India. We need to move forward.

So, if we spend a lot of energy on the past, we won't be able to move forward as people will keep on fighting each other. It is OK to have different opinions, but this is a process. For example, the media is now open, but they need to use their freedom in responsible ways. The government needs to move forward to create a good investment climate where people feel secure.

All businesses are now in a difficult situation -- oil prices are going up, and this has affected costs, and we will have to deal with these. We must try to improve things, try to work well, and we must try to move forward. But if people continue fighting each other and try to find scapegoats and then raise issues, either positive or negative, but out of proportion, then businesspeople will start to think that because of the high oil prices we can't work and so on, ask for more protection, and then there it is. I call this a downward spiral.

Look our situation now. There is conflict over textiles between China, and the EU. And U.S., European and American customers also want to diversify their supply away from China. And Indonesia can use this opportunity. Look at the Blue Ocean Strategy. China needs a lot of palm oil, energy, coal, all mining products. We are producers.

Question: How about macroeconomic problems?

If you go to China, to India, Singapore or, even, Malaysia, they still give tax holidays. Look at what China is doing, they are pro-business. They provide a lot of incentives and encourage more people to come. If you go to invest in China, they treat you like VVIP. You get police escort.

Question: How about Indonesia?

You and me both know about that, I don't want to talk much about that. In China, you get a license very quickly. Not only in China but in all the other neighboring countries. I have no investments in Vietnam, but I've heard it is better than Indonesia. It is unbelievable. I feel bad for my country. But we still have a chance. We must work together, the government, business, the media, on how we can grow our economy.

Deng Xiao Ping said, "I don't care whether it is a white cat or black cat. As long as it can catch a mouse it is a good cat."

How about law enforcement? Do you think you are treated like scapegoats?

I think it is not only law enforcement. It is also the public's general perception, through the media, in looking at conglomerates. There are good and bad conglomerates. You are branded sometimes without clear evidence.

Question: How will you handle the highly controversial Indorayon pulp and paper plant?

We have a new mind-set. We understand now that it is better to have communications with communities and so on. In the past, you got the license, you worked based on the government permit, then you didn't care about the others because you were legal.

But what we have now learned is the need for communication. Overtime, we will be able to improve our skills in this regard. Now we are very aware of it.