Turning perceptions into concrete reality

Turning perceptions into concrete reality

James Kallman, PT Grant Thornton Indonesia, Jakarta

In today's world, economics and finance are increasingly
dependent on political, geo-political and socio-economic
impressions. The use of the word "impressions" is deliberate. For
if impressions are managed correctly then they will turn into the
reality. In other words, reality is what you make of it.

Corruption, collusion and nepotism, a past authoritarian
government, dysfunctional banking sector plagued by non-
performing loans, changing role of the military, transition from
a fixed or managed exchange rate, capital flight, as well as
independence movements and sectarian violence, all sound very
much like Indonesia's multi-dimensional crisis. Yet exactly the
same problems exist today, and on a larger scale, in China.

Yet this is not the vision as perceived by the world at large,
for China skillfully manages the impressions, which in turn
become the reality. Among positive impressions that China
portrays are of being a stable and secure nation and a steadfast
partner in combating terrorism, as well as a country where strict
enforcement of due process of law prevails.

By playing on its vast population, China offers the promise of
being a huge market of the future, as well as having the
potential for unlimited GDP growth.

Having cleverly managed the dissemination of its propaganda,
China has been rewarded by becoming the largest recipient of
foreign direct investment among emerging markets; this despite
the fact that the realities on the ground do not paint such a
rosy picture. Again, the impressions have become the reality and
a force for positive momentum.

In the modern world, there are no such things as secrets where
the state of nations is concerned, although it is true to say
that bad news travels faster than good. It is also a trait of
human nature that bad news attracts bigger headlines, but this
does not mean that Indonesia must just sit back and accept that
the only exposure we ever seem to get in the international media
is generally negative. Instead of waiting for the news to be
reported, it is up to Indonesia to shape the news.

However, this is something at which Indonesia is poor, often
failing to present things with a positive enough slant or with
any sense of coordination. Perhaps this has cultural roots, but
while modesty might be an admirable social trait, self-promotion
is a survival tool in the modern world.

Dissemination of information is a vital task for any
enterprise, be it governmental or commercial and this information
must be up-to-date, factual and displayed in its best light.

Yet it is not solely the responsibility of the central
government to disseminate information, though as in other fields
its leadership is essential. Much more can be done at lower
levels of government to make potential foreign investors aware of
the opportunities that each individual province/district offers.
Solo could do more to promote itself as a batik center, Bandung
for textiles and Yogyakarta for fine silverware for example.

In other words, accentuate the positive and provide the image
of a country of diverse skills and opportunities.

What Indonesia needs is comprehensive image management on all
fronts, domestic and international, economic, political, geo-
political, multilateral and bilateral. Rather than treat each
piece of positive news as an isolated incident, they must be
coordinated into a positive stream of image enhancing good news.
And there has been a series of very positive items of late, in a
number of different areas.

On the legal front for example, the trials of Tommy Soeharto
and Akbar Tandjung signal that the administration is paying more
than lip service to its pledges to restore Indonesia to a nation
based on the foundations of law and order. While on the political
front, President Megawati Soekarnoputri has indicated that she
will attend the inauguration of President Xanana Gusmao in the
former Indonesian province of East Timor, ignoring calls that she
boycotts the occasion. Such signs of a growing maturity within
the nation do much to restore the confidence of Indonesia
watchers.

Confidence building is a matter of numerous small steps, and
the most important step to make in any journey is the first. Thus
the sale of the government stake in BCA was very positive in that
at last a major IBRA holding was divested in an open, transparent
manner, giving promise of more to come. The renegotiation of US$
5.4 billion in government debt at the Paris Club meeting was also
a positive follow-up, for it signaled that the creditor nations
have faith in the current government direction.

As Indonesia's finance minister, Boediono recently pointed out
though there has been a turnaround in psychology, perceptions and
climate over the past few months. That is a positive sign in
itself, but is just another step along the path. It is now a
matter of building on this and managing the positive perceptions
so that they turn into reality. Then, and only then can Indonesia
say that it is really on the road to recovery and a prosperous
future.