(Tempo September 27 – October 03 2005)
“After Jawaharlal Nehru’s visionary programs of agricultural, industrial and scientific self-sufficiency in the 50s and early 60s India slumped for the next two and a half decades into an insular slumber with anemic GDP growth rates that were far behind the Asian tigers, including Indonesia, and well below what was required to tackle poverty and a failure to effectively control population. Business and enterprise was bound by the shackles of the dreaded ‘license raj’ administered by a bureaucratic system that was out of touch with reality. The legacy of this can still be seen in the chaotic state of the country’s infrastructure with dogged resistance to privatization and market forces by vested interests.
However, vast swathes of the Indian economy have been progressively liberalized starting from the path-breaking reforms ushered by Dr Manmohan Singh, current Prime Minister, in his earlier role as the Finance Minister of a cash-strapped government in 1991. These reforms have incentivized entrepreneurship, unleashed intense competition in most sectors, provided consumers with a wide range of products and services and driven companies to absorb the famed “value for money” mantra of the Indian customer”.
“Indonesia also needs to urgently emulate from India steps on how to integrate itself into and benefit from the new economy. This is an economy transformed under forces of globalization, connectivity and research & development in challenging new areas. For example, the spread of outsourcing, growth of biotechnology, diversification of manufacturing bases, collaborative production, public sector-private sector partnerships and the like.
Partly as a result of the severe economic crisis of 1997/98 and partly due to the absence of forward planning, Indonesia has largely missed out on the boom in outsourcing. Investors point to the weakness of the education system, lack of sufficient training in English, high telephone costs and the absence of any government initiative to attract outsourcing opportunities. None of these is insurmountable and future generations of wired Indonesians will surely question the absence of a policy to at least partly tap this economic phenomenon of the 21st century.
Biotechnology is an even more inexplicable absence. The rich tropical climate of the country, prevalence of disease, access to some of the world’s most lush and rare rain forests and the traditional heritage of jamu should provide enough attraction for research and development in this exciting new frontier. Yet its development and government focus remains minimal”.
“As it [Indonesia] searches for guidance in this current period of uncertainty it can find a friendly neighbor, that having wrestled with similar challenges, is confidently forging ahead. India’s policy lessons of enlightened self-interest, focus sectors and alignment with the new economy are worth emulating and perhaps the best tribute by the current government to the Bandung spirit of 1955 kindled by Nehru and Sukarno when such sharing of best practices was first envisioned”.
