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VP Jusuf Kalla, the business diplomat
The Jakarta Post , Jakarta | Sat, 10/07/2006 10:01 AM
Vice President Jusuf Kalla recently went on an official visit to the United States and Spain, on a mission to attract foreign investment to Indonesia. He met with leaders of major businesses in the U.S. as well with top U.S. and Spanish officials. The Jakarta Post's Avian E. Tumengkol was part of the vice presidential press corps. The following is his report on the visit.
Even after eight years of reform, investors in the United States are still reluctant to make significant investments in Indonesia, home to world's largest Muslim population. Thanks to a recent visit by Vice President Jusuf Kalla, some Americans have perhaps become convinced that now is the right time to invest in Indonesia.
For example, U.S. oil and gas giant Chevron Texaco told Kalla's entourage it was ready to invest a massive US$6 billion in oil and gas fields in East Kalimantan. It will also develop the Duri Riau oil field.
Kalla visited the U.S. from Sept. 23-28 at the invitation of his U.S. counterpart, Richard Cheney. He engaged in hardcore economic diplomacy to win over businesspeople and officials.
He boasted of Indonesia's economic potential, insisted its investment climate was safe, and challenged potential U.S. investors to seize the opportunity.
Foreign investors have been reluctant to come to Indonesia because of rampant red tape and corruption, as well as a lack of legal certainty.
At the top of Kalla's agenda was energy giant ExxonMobil and its plans for the huge Natuna natural gas field in the East Natuna Sea. Kalla urged ExxonMobil's top executives to review the existing contract and ensure mutual profit and a fair production split. The existing deal, last revised in 1995, heavily favors ExxonMobil.
""The contract must be reviewed and benefit both parties; only then will we do business,"" the Vice President told The Jakarta Post, adding that Indonesia can survive without Natuna.
Kalla also wants ExxonMobil to begin production at its Cepu oil project by 2008.
Talks with the Newmont Mining Corp. resulted in the further expansion of the Elang Dodo mineral exploration site in Sumbawa. Other high-level discussions resulted in World Bank funding for cocoa research and development projects.
While addressing the U.S.-ASEAN Business Council, Kalla described the challenges Indonesia has faced in trying to restore the 7-8 percent economic growth it enjoyed prior to the 1997 financial crisis.
Kalla emphasized that Indonesia understands the importance of domestic stability to business, and said the country's house was ""in order"".
He added that the Yudhoyono administration is concentrating on domestic reforms, including aggressively fighting corruption and establishing good governance.
""Don't look at the Indonesia of the past. Look at the present Indonesia, we are now much better and it is safe,"" he insisted.
Kalla stuck to a hard line, telling one would-be investor, ""What I need is not your commitment. I need the implementation of your commitment.""
The Vice President also addressed broader trade issues in a meeting with United States Trade Representative (USTR) Susan Schwab and Indonesian Trade Minister Mari Elka Pangestu. Schwab and Mari then signed an agreement to cooperate against illegal transshipment of textiles and apparel.
That agreement is the latest achievement in the U.S.-Indonesia Trade and Investment Framework, a pact governing some US$16 billion in bilateral trade per year.
Before leaving the United States, Kalla sent an official letter to Cheney, strongly urging Washington to lift the U.S. government's travel warning on Indonesia. The U.S. mission in Jakarta issued the advisory in November 2005 and has yet to retract it, despite the absence of incidents since then.
In between meetings with business leaders, Kalla found time to meet Secretary of State Condoleezza Rice and National Security Adviser Stephen Hadley to explore ways to fight regional security and global terrorism and promote democracy. He also raised the issue of Hambali, an Indonesian with alleged links with al-Qaeda. Indonesia has repeatedly asked to interview Hambali, but the U.S. has refused to grant access to the suspect.
Kalla also visited Spain to attend the International Symposium of Government Peace Negotiators in Madrid. There he was praised as a key player in ending the 29-year conflict in Aceh.
In Madrid, Kalla met with Spain's Minister of Foreign Affairs, Miguel Moratinos.
On his way home he performed a minor haj pilgrimage in Mecca.
The Vice President traveled on commercial flights, except in the U.S. where he chartered a small plane.
Kalla now brings home a handful of investment pledges from American business leaders. He said a special team of trade and economy experts and lobbyists will be established to follow up on the trip. It will be their job to move those pledges from ""commitment"" to the stage Kalla repeatedly pushed for: ""implementation"".
