Newsmaker Interview: Sandiaga Salahuddin Uno
At the time, he was Executive Vice President at a firm in Canada, but the crisis saw the company go into bankruptcy and he lost his job. So, the Wichita State University and George Washington University graduate decided to return to his homeland and set up on his own.
In 1997, the 43-year-old co-founded PT Recapital Advisors, and in 1998 he co-founded Saratoga Capital, which today is one of Indonesia's largest investment firms. This success has made him a prominent success story, and in 2011, Forbes Magazine listed him as one of the country's richest men, with a net worth of almost $800 million. AmCham Indonesia sat down with the accessible tycoon recently to discuss the current economy and prospects for the country.
AmCham: What do you think about the issue of protectionism here? As an Indonesian businessman, do you receive any special privileges?
Sandiaga: We have to understand that multilateral trade is good because it can open up more jobs and drive economic growth. The issue is, every country still has a tendency toward trade protection. I think this has to be stopped while keeping a fair trade system. In my opinion, Indonesia is one of the countries most open for investment, despite the wishes of the government and local businesses to secure a larger domestic stake. But the new mining law, for example, is very progressive and attractive to foreign investment. Indonesia is keen to attract more investment because investment and domestic consumption are the main drivers of our economic growth; it is hard to count on exports.
Because domestic consumption is strong, Indonesia relies on consumer goods and services investment to come to Indonesia. I realize that investors may hear different things political sound bites about us moving toward protectionism - but I think investors must be very smart in recognizing what the real policy is and what is just a sound bite playing to the political gallery. Indonesia is a newly- democratized country, and now we have deal with parliament and some factions of society who are always sentimental about protecting Indonesian interests and assets. If you can find good local partners in Indonesia, you will see that the government works very hard to help the investment climate. Protection that comes from government officers is just political sound bites. Even in the US, some politicians talk about Buy America, or closing borders for imports from China. I think that's the reality of today.
We have to understand that when government officers make a statement, they occasionally have to serve their political affiliations. For example, what is happening now, the imported meat quota scandal. The public knows that there is a political agenda behind it, but if we take a look at the master policy, it's very open, although implementation varies from time to time.
As a local businessman, I don't feel like I receive any special treatment.
Longer term, who will be the winners and losers doing business in Indonesia?
There is no guarantee that Indonesian business will win in the future. I think it depends on how far companies can adapt to local change, to the dynamics of the Indonesian market. If companies that now have a large chunk of the market fail to adapt, they may lose out, whether they are foreign or local investors. At the end of the day, the government will see which investments can really spur economic growth.
Is Indonesia on track to be ranked seventh in the world in terms of GDP in 2030, as predicted by research firm McKinsey?
On a macroeconomic level, it is. We have recorded impressive macroeconomic indicators, even better than India. But I will give a yellow alert to infrastructure development and a red light alert to bureaucracy reform. These are factors that will influence whether we will achieve this. We need good quality development. Without improvement in these two sectors, we will see overheating, economic growth will be inefficient and Indonesia will be caught in a middle-income trap.
How do you keep your business growing when political interests sometimes take precedence over business interests?
Saratoga's core interests are natural resources, energy, infrastructure and consumer goods. We have been in the business for 15 years and have seen growing investor trust and we are looking at the possibility of an IPO this year. I have found it difficult to ignore all the political noise because it is everywhere, but then again, as I said, I can differentiate what is noise and what is real policy. Saratoga has a long-term business commitment, not an every-five- years commitment.
I don't get involved in politics. It is important for me to minimize the effect of democratization as we experience it now in Indonesia. I do not worry about political noise. You will find it everywhere, not only in Indonesia. But it is very important for Indonesia to keep the noise at a level that doesn't disturb business activity.
http://www.amcham.or.id/interviews/3861-newsmaker-interview-sandiaga-salahudin-uno
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