In thick or thin, Van Zorge is here for the long run

In thick or thin, Van Zorge is here for the long run

By Edith Hartanto and Budiman Moerdijat

JAKARTA (JP): For American James Van Zorge, home is where he
makes it. After 11 years' residence in Indonesia and marriage to
an Indonesian, it is now here.

An independent strategic consultant on economic and political
advisory services, the 40-year-old has witnessed the nation's ups
and downs in the past decade.

He worked with several of the country's most prominent
economists, including Radius Prawiro and J.B. Sumarlin, when he
arrived here in 1987 with the Harvard Institute for International
Development.

He has also been a consultant for the United States Agency for
International Development (USAID), and worked with the UN Food
and Agriculture Organization in setting up projects for forestry
companies.

His report, Indonesia into the 21st Century: Setting the Stage
for a Post Soeharto-Era, was published in book form in May last
year by the Economist Intelligence Unit of Hong Kong.

Van Zorge shared his knowledge of the country in a recent
interview.

Question: Has the crisis affected your life?

Answer: Certainly. Momentarily in a lot more demand for my services,
but I think that as the crisis deepens, I will be affected as
well.

No one can escape... a lot of expatriates have been affected,
a lot of companies are sending back home their expats. They are
converting dollar-denominated salaries into rupiah. Every
business' expectations have to be lowered.

Q: How do you view the crisis?

A: There are two ways to look at the crisis; the short term and
long-term outlooks.

In the short term, we are all pessimistic. Unlike the oil
crisis in the early 1980s, this will most likely be a much longer
and deeper crisis, looking at some very fundamental problems in
the economy.

The international investors are not just looking at the
excessive lending by the banks but also other issues, such as
corruption, transparency issues and the short-term debt problem.

But since I have been here for a long time, I tend to take a
longer perspective as well.

I am optimistic about the long run -- if you look at the
country's productive assets... the country can recover... you
just have to be patient... if you have the entrepreneurial type
of spirit, I think you will do very well.

Q: Are you paid in rupiah or dollars?

A: Various. Because I have different types of clients... some
pay in dollars. I don't have any objection to being paid in
rupiah because most of my expenses are in rupiah.

Some say the important issue for expatriates is that they have
overseas commitments in terms of money.

Well, my commitment is to my family here. But other
expatriates have their children going to school overseas. They
convert their income from dollars to rupiah, and back to dollars
again. Of course, some of them have encountered financial
problems due to the rupiah depreciation against the U.S. dollar.
It has become very expensive...

Q: Does the economic crisis affect your lifestyle, your family?

A: Yes, I'm a little bit more careful about spending money. (I'm)
saving for a rainy day... It hasn't affected my business yet,
but it could eventually...

Q: Some people here believe expatriates live in luxury, because
they are usually paid in dollars and this crisis has been a
windfall for them. Have any of your expat colleagues been
adversely affected?

A: Actually, I had a client who will leave in one week. Next
week, the internal office will be closed and all the expatriates
will be sent back home.

...A lot of foreign companies have reassessed their
possessions and seriously downsized their operations here. And
they have converted the salaries into rupiah.

If you're talking about expats' lifestyles, let's say that as
an expat you have a wife and two kids, and you have to send your
children to school. It's a very expensive proposition.

...At least you have to pay for a one-year (house) rent at
very high rates. Schools are very expensive, like the Jakarta
International School. So the companies are covering those costs
because they are unbearable to take as an individual.

I can understand why some people here think that expats live
in luxury. But ...the company is trying to provide for them by
giving some sort of protective web to make expats comfortable.

Usually, expats stay here temporarily. They won't speak the
language. After two or three years, they're gone.

You can't expect expatriates to live at the same standard as
the average Indonesian. They won't come to that point.

If they lived the average life, no expats would come here.

Q: You have lived here for 11 years. What made you stay? What
attracts you?

A: Well, I'm never bored here... things are always changing. Up
until recently, it was one of the fast-growing economies. It is a
diverse country with different kinds of ethnic groups. It is
fascinating.

Once I'm back in the States, I feel bored very quickly and I
just want to come back here because it feels more like home. I'm
used to this "temple". But I keep my American citizenship.

Because I have spent most of my life outside the States, like
many other expatriates, I have lost my sense of belonging.
Your home is where you make it.

Q: Let's talk about your report on Indonesia...

A: It's written specifically for foreign multinationals, overseas
markets, investment banks to give them a perspective on prospects
for political change in Indonesia.

I did it because I had spent 10 years in this country. ...

I interviewed about 50 Indonesians, like Amien Rais, Megawati
Soekarnoputri, some people inside the Armed Forces, government
officials, some political scientists.

I tried to find out what the thinking is on prospects for
political change. Is there any different succession scenario?
Will it affect the political change here, and also the economy?

So it is mostly the Indonesian perspective. But I found the
common thread of thought, that Indonesian political life comes
from a very far left and a very far right in politics. Starting
from people like Megawati, all the way to ABRI (Armed Forces)
generals.

I think most companies appreciate the perspective they were
offered because it was coming from a wide majority of
Indonesians.

I think that all the issues have been in the mind of the
international communities for a long time, and are even more
relevant today because of the current situation.

It is not meant to be a commercial book, it is not an expose,
it is not a political thriller.

It is a serious attempt to look at different scenarios for
political and economic change in Indonesia by talking to
Indonesian players, and I brought it to the foreigners'
perspective sitting outside of Indonesia...

Q: You have included the potential possibility of social unrest
in your report...

A: I've been asked so many times about social unrest. My comment
is that social unrest here has been a problem in Indonesia for
over a century.

It's not unusual to happen here. Especially the anti-Chinese
sentiment... Of course, with the hike in present food prices
and, closely down the road, the fuel prices, electricity prices.

People with limited income, especially lower-middle class and
lower-income class people, will certainly feel the pain.
Especially in rural areas, where they are in very close proximity
to ethnic Chinese shop owners who are running the small shops.

Who else is the target for the Indonesians? They will feel the
pinch more than the upper-income class.

Most of the money is being spent on food. And the prices of
food are going up and up ...at least 20 percent to 30 percent. In
some cases, a lot more.

If you're only, for instance, making Rp 300,000 income per
month which mostly has been spent on food, of course you will be
hurt.

So for people to vent their anger, as they have many times in
the past, they take it out first on the Chinese community.

But I think the important thing to realize is that this is not
some sort of organized, antigovernment protest. It's not going to
pose any serious threat to political superiority in Indonesia.

These are people venting their anger at the situation. There
are no visible enemies out there. It's not the government; people
are confused... They've lost their jobs, they're facing food
price hikes... This is just the kind of action for people to
let off the steam.

Yes, it's very unpleasant and I empathize with the people's
position. But ...to say that it is an anti-government movement
is a little bit exaggerated...

Q: Your personal opinion about the future of the country,
regarding the current pressure for economic and political reform?

A: It is a very serious crisis... and I think there is the best
man... (to help deal with the crisis), Widjojo Nitisastro, the
president's advisor. The IMF is also sending a team with the best
economists from the U.S.

And Soeharto has proven before that in a time of crisis he
turns to the "best" qualified people. I am sure that he will
listen to his advisers.

Right now (the important thing) is how to restore confidence
and ...if they can effectively address the short-term debt
problem, a lot of investors will start coming back in.

Q: Do you think Soeharto will get through the March's General
Assembly?

A: I think the military supports Soeharto. We have to consider
ABRI as probably the strongest organization in the country. They
believe that in times of crisis, they cannot afford to have
succession...

Yes, most definitely he will be successful in March -- then
the next question is "who will be the vice president?"

But whether the next VP will be the next president, no, I do
not think so... People are assuming so, but it is not really
the case.

I think what is more important than that is who is in the
cabinet. There should be a very strong cabinet. People should be
respected by the international community. There should be new
blood injection into the cabinet... Indonesia must convince
the IMF and international banks that Indonesia is serious with
the reforms, without any backtracking.

Q: Do you think President Soeharto has chosen the right team to
cope with the crisis?

A: Oh yes, of course. People like Widjojo Nitisastro have been
around for decades. He is one of the most respected figures in
the country and outside Indonesia. He solved crises in the early
1970s, early 1980s. He's an excellent economist.

Q: The IMF has been criticized for being overly optimistic about
Indonesia in the past...

A: I think no one could foresee exactly the cause of the crisis.
...everyone was optimistic back then... People should focus on how
to solve the crisis, rather than blaming the IMF or the
government...

Q: Do you think the city is secure enough for expatriates to
stay?

A: The military forces have doubled their troops in Jakarta, they
have put surveillance here. I think some of the best trained
troops in Indonesia are stationed here in Jakarta. Number one
troops, ya? And you have to be prudent of course. If you see
crowds staying together, just stay away.

Q: Will you leave this country if something bad happens?

A: No, I don't think so. The key is really just for the
government to stabilize the rupiah so the lower-income people
will be saved...

Q: What would you do in a riot?

A: The best thing to do for me and my family is to stay home.
It's the best defense. Running to some place else will only make
things worse.

Q: You have met most Indonesian figures here for your report.
What do you think of Indonesian political figures?

A: I think the so-called prodemocracy activists here, like
Megawati Soekarnoputri and Amien Rais, are very vocal.

But there are a couple of things like, one, we need a detailed
platform for reformation and change... They all talk about
corruption, cronyism, but I don't see any blueprint here. How
will they lead this country?

Number two is lack of leadership.

So I think we are not going to see people empowerment, as we
saw in the Philippines. The people power is good because it opens
up a dialog between the government and the people.

I believe since the July 27, 1996, riot, the government has
not allowed people like Amien Rais or Megawati to share some of
their pieces of mind... The important thing is to set... an
avenue to run people's aspirations...

But I don't believe there are political forces in this
country ...changes will come from within the government and
especially from within the Armed Forces.

...I don't think we will see any political reform yet because
we have to get the economy straight first.

But if you talk with people inside ABRI, the young generation
officials are very reformative-minded. They have to wait for the
economic crisis to be over and then make some blueprints for
changes.

The bottom line is dealing with the economic crisis
first... So clamoring for changes and asking Soeharto to step
down is very unrealistic at this moment. It will only make things
worse. He is the strongest leader we've got, who hopefully can
bring Indonesia out of this crisis.