Shinta Kamdani: Opportunity and empowering women

 

 

 

 

 

BusinessThink: How open is Indonesia to entrepreneurs?

Shinta Kamdani: It is very open to entrepreneurs. I think the government at the moment is trying to make the environment conducive so there is a much better investment climate for both foreign as well as domestic investors.

BT: How about overseas investors who want to invest in Indonesia? The Indonesian government has been courting foreign capital – is that going to continue?

Kamdani: Yes, definitely. The government has a very big target in trying to achieve foreign direct investment (FDI) to Indonesia. I think what they are trying to do is improve the climate – first, on the regulatory aspect. We have many overlapping regulations from the central government and the regional governments so they are trying to deregulate some of this policy.

The second aspect in attracting foreign investment is the simplification of licensing because in Indonesia that is one of the big issues – the bureaucracy. In order to get a licence to do business in Indonesia, it takes quite some time. So now it is being coordinated under a one-door policy – a one-stop service we call it – so a foreign investor can just come and pick up all the licences, from all of the technical ministries as well. It is supposed to be faster and more efficient. 

The third aspect is the government is giving a lot of incentives, whether it is tax allowances [or] tax holiday. This is also to attract more investors coming in.

BT: And how about the Trans-Pacific Partnership (TPP)? It has been much discussed and is quite controversial in some parts of Asia. What is Indonesia's role, and will it be a success?

Kamdani: Indonesia is still considering whether it should join the TPP. I think right now we are still at the analysis [stage], and we are trying to evaluate what [would be] the impact of the TPP if Indonesia joins. [And] what [would be] the impact if Indonesia does not join? So the government is doing this work together with the private sector to do an evaluation of the TPP. I think the point of the TPP is that we understand how important it is in terms of Indonesia joining because we want to be competitive.

At the moment some of the countries joining, [such as] Vietnam or Malaysia, are well ahead of us. So I think there are many considerations, but the domestic players are very much a concern also – you know, by opening up to the TPP – so this is something that is under discussion.

BT: You briefly mentioned Vietnam and Malaysia. They have recently put a lot of money into infrastructure. That has traditionally been the problem with Indonesia – there hasn't been the infrastructure. How important is it that the country invests in new roads and railways to get goods to market?

Kamdani: I think it is very important. Government is putting a big priority on infrastructure development. And we are really lacking fiscal infrastructure as well as the soft infrastructure – which is the human capital.

On the fiscal infrastructure, you can see that this is really going to [have an] impact [on] the high cost in terms of the logistics and the supply chain. So it is very key. For example, the government has put a target on power plants. It wants to build around 35,000 megawatt of extra electricity [capacity] for Indonesia.

But there is a disparity because in execution there are a lot of problems. While they are trying to accelerate the building of a lot of infrastructure, not just in Java but also on the eastern part of Indonesia as well, I think on the execution they have been having challenges in actually doing this.

BT: How can they overcome the challenges? I know in the case of the high-speed rail link in Java, a lot of the capital has come from China. Is this cross-country partnership a way that Indonesia could build its infrastructure?

Kamdani: Definitely. Indonesia needs a lot of support from many countries, not just China. China has a lot of interest in wanting to invest in infrastructure in Indonesia. They provide a lot of self-financing. So do the Japanese. But there are many other countries that want to come in also.

There needs to be a seriousness and commitment from the government to do this openly. You know, we'd have an open tender, we'd do it in a transparent way. I think this is [an] important signal for foreign investors who want to invest in infrastructure.

Many of the challenges we face in infrastructure investment are in coordination. So the government is putting [together] a special task force for acceleration of infrastructure development in Indonesia and hopefully this will help many of the critical points that are happening on the side with the land acquisition and the licensing and so on.

BT: And can I ask you about doing business in Indonesia where there are many more women in the workforce. Indonesia seems very successful in getting women integrated into the workforce. But does that work up to the top levels of the company?

Kamdani: That's where the challenge is, Julian. I think in terms of entering the workforce now we have equal opportunity. Of course in terms of pay many say the female is lower [paid] and so forth, but in general I think that is not an issue.

The issue is women who want to pick up the career ladder, to go up to a leadership position. This is really the key. How can we break the ceiling so that more women are ready and want to accept leadership positions, including in business?

BT: So how can we get more women in leadership positions?

Kamdani: I think, first, [by] creating a supporting network. A lot of women share the same problems and the same issues, so we are creating a network so [that] women can support each other. I think this is important – that we give support among the women.

Second, [we need] to provide an environment for women in the workplace that is conducive – whether that is with day-care or by providing special facilities – that will help women that have this multiple role where [they] are trying to be a housewife as well as a working woman. So many of these conditions we are trying to improve.

BT: And how about female entrepreneurs? What can be done to encourage them to develop their ideas, and then for investors to come forth with the investment that Indonesia really needs?​

Kamdani: On my trips around Indonesia I find very exciting women start-ups – women who want to start their own business. And women SMEs. They are a really big driver and a lot of them play a big role in their family, and are really supporting the family. So I think in many [instances] they have a lot of initiative, a lot of potential. But the "how to" is the problem.

One is access to the market. The second is access to finance, and the third is capacity building – on the training and the skills of these women. So with this we need to try to support, by providing sufficient mentorship, outside of financial institutions, to support their businesses.

BT: You make it sound as if mentorship is really key when it comes to developing entrepreneurship and female leaders?

Kamdani: I think it is very key. Mentorship is even more important than the financial aspect, because with mentorship you open up their mindset and really give them guidance on how to establish a business and how to develop the business to be successful. And having a mentor is really a great help. So we [should] provide training. We [should] work together with many universities, and also incubate them because if they are in a start-up environment, it really helps them to work with many similar start-ups and SMEs.