'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