'Now is the time for local firms to expand'

'Now is the time for local firms to expand'

Warren J. Keegan, an international expert in marketing and
global business strategies, predicts that international companies
will shun Indonesia for some time as a consequence of the Sept.
11 terrorists attack on New York and the Pentagon. However, this
low interest from multinational corporations may provide better
opportunities for local companies to expand and tap the domestic
market. Keegen, founder of Warren Keegan Associates, Inc. and
principal partner of MarkPlus&Co in New York, shared his views on
global marketing after the Sept. 11 attack with The Jakarta Post
and Republika over the weekend. The following is an excerpt from
the interview.

Question: As a marketing guru, what do you see as the impact
of the Sept. 11 terrorist attacks on global marketing?

Answer: The short term impact is tremendously negative;
travel, tourism, immediately dropped.

This short term impact is still felt, especially in travel and
tourism.

But this impact is already being replaced by longer-term
impacts. Travel is resuming. There has been some recovery in
travel and tourism.

As far as the global market is concerned, growth will resume,
as fundamental drivers of globalization are still in place.

The major drivers of globalization are technology, economic
integration and political integration such as the European Union
and North American Free Trade Agreement, ASEAN; global strategy
envisioned in enterprises. These all are still there. Nothing has
changed. After Sept. 11, everything is still there.

The impact of Sept. 11 is, I think, simply going to underline
the importance of doing a better job of global marketing.

There is really tremendous needs and opportunities for global
marketers to continue to address human needs, and to do this in a
way that brings value and benefits to customers and companies.

You said the driving forces of globalization remain intact.
What about the restraining factors of globalization?

The major restraining force for globalization is war. Trade is
peaceful, globalization is peaceful, and war puts an end to that.

But this world is too small for war. India and Pakistan talk
about war. Russia and the U.S. talk about war. Fortunately, that
war never happens between Russia and the U.S. Fortunately, war
between India and Pakistan never happens. We don't need that
today.

The emerging superpower now is China. Are the U.S. and China
going to be in conflict with each other? Very, very unlikely.
Both countries, I think, recognize the value of cooperation and
peace.

What about war on terrorism. Will war on terrorism affect
globalization and global growth?

I don't believe so, The war on terrorism is a metaphor.
Basically, the war on terrorism is not about a military
operation. War on terrorism, the important part of it, is going
to be addressing the underlying problems, the conflicts and also
addressing the issues of poverty and participation.

Let's now focus on Indonesia. How seriously will all these
things affect Indonesia?

In the short term, i think, the impact is negative. It has
reduced income in the U.S. And I think economic growth this year
in the U.S. will be flat. Therefore, there will be reduced
demand, and generally, it's going to have negative impacts on
world growth, and that includes Indonesia.

Indonesia is somewhat protected from this, however, because of
the huge domestic market, and the opportunity is here.

I think in the longer term, Indonesia will succeed.

Indonesia was not an attractive destination for foreign direct
investment. And the Sept. 11 attack only worsened Indonesia's
investment climate, simply because Indonesia has the largest
Muslim population in the world. Do you really think that there
are business opportunities in Indonesia?

International companies probably have not made any money in
Indonesia for a long time. People that invested before the crisis
had not made a cent. They are all under water.

This has not been a good place to invest, although companies
which have been here for a long time, have done extremely well,
especially companies producing consumer goods and export-oriented
products.

Global companies, for the most part, are not focusing on
Indonesia. I think this will create opportunities for local
companies. It means there is less competition for this huge
market.

Indonesia is the fourth largest country in the world, and it
insulates you somewhat from the downturn in the global economy.
Every company here can concentrate on opportunities to grow in
the domestic market.

This is a good opportunity for Indonesian companies to take
advantage of as there is not much competition from multinational
companies.

The strategy for globalization for any company is first
establish yourself successfully in your country. And the second
stage is going out to the world.

This gives Indonesia a good opportunity.

What about the prospects of foreign investment in the country,
considering the U.S. zealous war on terrorism which may target
suspected terrorists in countries like Indonesia?

I personally think two countries in the world of Islam, Turkey
and Indonesia as the best examples of two emerging democracies
and economic growth.

They both are developing and I believe are committed to
democracy, they are aligned to an elected government, as opposed
to various forms of autocracy. And these two countries are
examples of complete compatibility of Islam with growth,
development and globalization.

I see both countries as providing opportunities for people in
their countries to satisfy their aspirations in life. Both
countries are big emerging markets. Those countries are on my
list of the top ten emerging markets in the world. And that means
they would grow faster than the rest of the world.

I see the two countries as examples of positive growth and
democracy. I don't think Saudi Arabia is a good example for
everybody.

What do you think the government and private institutions
should do to address the current problems of negative perception
on the country?

I think this country will benefit from a more confident, more
unified government. And that is something that can only emerge
from within.

As far as foreign investors are concerned, the best thing is
the perception that there is a government, and that it is in
charge, that it is capable of addressing the challenges in this
country, and that would have a positive impact within the
country and certainly attract investors.

As for corporations, what an individual company could do is
focus on opportunities, be they domestic and international, and
compete in domestic and global market.

There will be continued globalization, continued opportunities
for companies everywhere in the world, including Indonesia, to
address human needs, to make sure that world development
continues -- world development that supports human values, and
supports peace and cooperation. -- Riyadi Suparno