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.