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Symposium on Indonesia-Japan New Partnership

Date: March 10, 2015

Serveyed by Nikkan Kogyo Shimbun, Ltd.

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Contents

Outline of the symposium ……………………………………….………P2

Programme ……………………………………….………………………P3

［Programme 1］ Opening Remarks

1）Mr. Yusuke Shindo ( Minister / Embassy of Japan in Indonesia)…...P4

2）Mr. Tatang Akhmad Taufik (Deputy Chairman / BPPT)……………P5

［Programme 1］ Keynote Speech

3）Mr. Arif Wibowo (CEO / PT. Garuda Indonesia）…………………… P7

4）Mr. Yuji Hamada (Consulate-General of Japan at Medan)………… P9

5）Mr. Oloan P. Siahaan (Rector / Darma Persada University)…………P11

［Programme 2］

6) Economy Committee……………………………………………………P12

［Programme 2］

7) Government Committee……………………………………………….P28

［Reception］

8) Reception……………………………………………………………….P34

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Outline of the symposium

Title: Symposium on Indonesia ‐Japan New Partnership

Date : January 28, 2015 10:00～18:00 (Open 9:15)

Organizer: Ministry of Economy, Trade and Industry Japan

(METI , JAPAN)

Endorsed : Jetro Jakarta Office

THE JAKARTA JAPAN CLUB

Venue : Hotel Borobudur Jakarta

Registration: pre-registrant by internet/ free admission

Language: Indonesian / Japan(consecutive interpreting)

Number of Participants: 221 (including speaker)

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Programme: Symposium on Indonesia-Japan New Partnership

time

09:15 ［Open］

10:00～

10:30

［Programme 1］Opening Remarks

－Mr. Yusuke Shindo ( Minister / Embassy of Japan in Indonesia)

－Mr. Tatang Akhmad Taufik (Deputy Chairman / BPPT)

10:30～

12:30

［Programme 1］Keynote Speech

－Mr. Arif Wibowo (CEO / PT. Garuda Indonesia）Title: New Partnership

－Mr. Yuji Hamada (Consulate-General of Japan at Medan)

Title: ASEAN Economy Integration and Japan-Indonesia New Global

Cooperation~Importance of Local Development and Local Remarks~

－Mr. Oloan P. Siahaan (Rector / Darma Persada University) Title: Hart to Hart

12:30～13:30 Break (Lunch buffet)

13:30～

16:30

［Programme 2］Economy Committee

Theme: Issues and Initiatives for Indonesia and Japan to Grow Together

Panel moderator：

－Mr. Kazuhisa Matsui (Platform Coordinator/JETRO)

Panelist：

－Mr. Oloan P. Siahaan (Rector/ Darma Persada University)

－Mr. Seiichi Ota (President / PT. SHINTO LANCE INDONESIA）

－Mr. Tovi Singgih (GM/ PT. Mitsubishi Electric Automotive Indonesia)

－Ms. Norie Watanabe (Central Manager / Bridgestone Central Research Div.)

［Programme 2］Government Committee

Facilitator：Mr. Harunobu Nagai (Director /Asia and Pacific Div. METI Japan)

Number of participants: Japan/ 9 Persons , Indonesia/ 7 Persons

16:30～

18:00

［Reception］Greetings

－Mr. Iwao Ikeya (Counselor/ Embassy of Japan in Indonesia)

－Mr. Parlindungan Purba

(Head of 2nd Committee Regional Representative Council Indonesia)

－Mr. Kenichi Tomiyoshi

( President Director / Japan External Trade Organization, Jakarta Office)

－Mr. Yuji Hamada (Consulate-General of Japan at Medan)

Presentations

－Mr. Riki Kono Basmeleh（Entrepreneur） Title: What’s your story

－Mr. Dewanto Bachrie（Chairman/ Jakarta Osoji Club）Title: About Our Club

18:00 ［Closing］

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1)［Programme 1］ Opening Remarks

－Mr. Yusuke Shindo, Minister Embassy of Japan in Indonesia

To begin, I would like to congratulate you on your hosting of today's "Symposium on

Indonesia-Japan New Partnership." With a political system that is stable thanks to the

establishment of a democratic system, with the world's fourth-largest population, with a

"population bonus period" that is ongoing and expected to continue until about 2035,

and with a nearly 80% middle class that supports consumption, Indonesia is expected to

see dramatic economic development into the future.

Economically, Japan and Indonesia are partners to an Economic Partnership Agreement

(EPA), making each country one of the most important trade partners of the other.

According to the results of an investigation conducted by the Japan Bank for

International Cooperation (JBIC), Indonesia is ranked number 1 as a promising

destination for business development in the intermediate term. In 2013, direct

investment in Indonesia reached approximately 2.33 trillion yen. About 17% of that

total investment came from Japan, the most of any country.

In Jakarta, traffic congestion is rather serious and, as you are aware, most of the cars

being driven in Indonesia are Japanese products. Most of those cars are not imported

from Japan but rather are made by Indonesian workers at factories in Indonesia.

Although this is just one example, the fact that Japanese companies are contributing to

employment and economic development in Indonesia is something we are very happy

about. In ways such as this, Japan and Indonesia are in a very close relationship.

Although Japan has extremely good, close relations with many countries throughout the

world, I feel that the friendly relationship between Japan and Indonesia is special and

that we are bound by a strong friendship and ties that do not exist with other countries.

That is because the relationship between the countries of Japan and Indonesia exists not

only between governments but exists on the private level, and is based especially on

"strong relationships between individual people."

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In Indonesia, I am pleased to say, there is interest in Japanese culture, particularly

among young people. Japanese animation, or "anime," is very popular. Also, many

young people are studying the Japanese language. In fact, about 870,000 people are

studying Japanese, which is the second-highest number in the world. To have so many

Indonesians interested in Japan makes me very happy. Some of the greatest contributors

to the strengthening friendship between Japan and Indonesia are former students who

studied in Japan. Since returning to Indonesia from Japan, these former international

students have been active in various circles. They have lived in Japan, they understand

Japan as a country, they understand Japanese culture and Japanese society, and they

continue to be good, faithful friends to Japan and to us Japanese.

Here in Indonesia, former Japan international students established Darma Persada

University. I think Indonesia is the only country in the world where a university has

been established by former international students who studied in Japan.

I believe that the key to developing even closer ties between Japan and Indonesia will

be to continue to strengthen relationships with people of Indonesia who have a deep

understanding of Japan, including former international students and particularly those of

the younger generation.

Participants at today's symposium include young, junior Indonesian business people,

university-affiliated participants, Indonesian government officials who have studied in

Japan, people who are affiliated with Japanese companies, and others. I hope that each

of you will use this gathering as an opportunity to interact and to engage in meaningful

discussion, and that we can build a partnership for a new era and further deepen the

relationship between our two countries.

2)［Programme 1］ Opening Remarks

－Mr. Tatang Akhmad Taufik , Deputy Chairman of BPPT

Today, I will speak in place of my superior, who is the Chairman of the "Agency for the

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Assessment and Application of Technology," which, for brevity, is known as the BPPT.

He had to attend a meeting of the People's Consultative Assembly and was unable to

attend today's symposium. On his behalf, I wish to apologize for this unavoidable

circumstance. With the opening of today's symposium, I wish to offer my best wishes to

everyone involved and would like to read a message that I have received from the

Chairman.

For two consecutive terms, the Chairman of the BPPT has been a former international

student in Japan; thus, special feelings exist regarding the friendly relations between

Japan and Indonesia. Also, Indonesia has had a long collaborative relationship with

various agencies in Japan in the area of science and technology.

These friendly relations can be traced back to the era of President Suharto. Since that

time, BPPT employees, students, and others have been sent to Japan to study. At the

present time, probably half of our agency's employees have been international students

in Japan. Currently, among the priority programs of the Joko Widodo administration,

there are several programs that are planned for the years 2015 to 2019. First, in order to

strengthen and improve domestic productivity and competitiveness, there is a plan to

develop technoparks in several locations over the next five years. This development will

be supported by seven ministries and agencies, the Ministry of Research, Technology,

and Higher Education, the BPPT, the Ministry of Industry, and others. I hope that people

will utilize this program as an opportunity to strengthen future relationships and build

new partnerships.

Indonesia currently has 539 autonomous regions consisting of provinces, regencies, and

cities. It has become important for our country to achieve economic reform in local

government areas through the improvement and development of science and technology.

In addition, a cross-industrial technopolitan development plan has been created. It has

the potential to improve oil palm and other biomass added-value products. The local

government in Bantaeng Regency has developed plans as well, and the regent has

experience as an international student in Japan.

One more thing I would like to say at this symposium is that I believe innovation is the

key to economic stimulation. In Indonesia, the population of young people will continue

to grow in the future, which means the potential for economic development is extremely

high. We are currently studying how to maximize this "population bonus" through our

partnership with the people of Japan.

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One challenge that we must explore or put into practice in the future is a paradigm

called "Open Innovation." We believe that it is necessary to make use of resources that

exist outside the country and outside the individual company, and that relationships with

partners should be developed. We must create a relationship that utilizes such resources

while providing benefits to both Japan and Indonesia. We think there is a need to search

for and develop a new scheme. We must build a relationship that can provide benefits to

both countries while utilizing the resources and potential of Indonesia's young people.

It is my hope that through this symposium, we can help build a relationship that

provides benefits to both countries and that positive effects will be gained through

cooperation.

3)［Programme 1］Keynote Speech

－Mr. Arif Wibowo , CEO , PT. Garuda Indonesia

Title: New Partnership

This year marked the 66th anniversary of the founding of Garuda Indonesia as a

government enterprise. With a 5-Star Airline rating, it has been named one of the

world's seven best airlines. Also, as a member of the SkyTeam Global Airline Alliance,

it provides air service to 1,052 destinations in 177 countries. Garuda Indonesia owns

160 aircraft (including LCC sector), nearly all of which have been used for less than

five years. Garuda flies to 19 international destinations and 57 domestic destinations.

Service to Japan has been provided for over 50 years, connecting Osaka and Tokyo with

Indonesia. Daily flights to Denpasar and Jakarta depart from Tokyo's two major airports,

Haneda and Narita. Flights from Kansai International Airports(Osaka) depart each day

to Denpasar and four times a week to Jakarta. As economic relations between Japan and

Indonesia grow, air service to other cities in Japan is likely to increase in the future as

well.

The relationship between Japan and Indonesia as partners has extremely important

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significance, particularly from the standpoint of imports and exports. Japan is the No. 1

export destination for Indonesian products and is the No. 3 importer to Indonesia. The

number of visitors from Japan to Indonesia temporarily dropped during the 2008-2011

period, but the trend is upward now and quite good. Also, the number of visitors from

Indonesia to Japan is increasing. In fact, there was a 13% increase from 2013 to 2014,

with about 150,000 Indonesians visiting Japan in 2014. As a new visa relaxation policy

takes effect, the number of visitors from Indonesia will likely rise even more. Thus, for

our company, Japan is an extremely important destination.

Our company has contributed to society through the implementation of a variety of

programs. One of those programs is the "Go Green Program," which began in 2008.

Commemorating the 50th anniversary of the establishment of diplomatic relations

between Japan and Indonesia, this program donates one tree for each passenger, with the

trees to be planted in Indonesia. Related tree planting is being done in Yogyakarta and

other places.

Another program is the "Gambaro Nippon" Project, a humanitarian initiative that was

carried out from April to December, 2011, following the Great East Japan Earthquake,

which occurred that year. With the cooperation of the Ashinaga Foundation, Garuda

Indonesia donated 300 yen for each passenger, with the money to be used to support

children who were orphaned during that earthquake and tsunami. As part of the

"Gambaro Nippon" Project, "Enoshima Bali Sunset 2011" and other events were held.

Our company has also implemented cooperative programs with Japanese local

governments. One such program was implemented in 2013 with Yamanashi Prefecture,

and included cycling and tours around five Yamanashi lakes. In 2013 and 2014, a

Yamanashi Prefecture tourism promotion program called the "Mt. Fuji PR Campaign"

was conducted in Jakarta with the cooperation of Yamanashi Prefecture and Lawson.

There has been cooperation in the area of farm crops, too, with Yamanashi grape juice, a

specialty of that prefecture, being offered as part of our in-flight service. And a cycling

package tour was planned with Ehime Prefecture. We are currently considering using

Ehime specialties such as mandarin oranges and Imabari towels in-flight.

In the area of cultural exchange, too, Garuda Indonesia has collaborated in events such

as the JAVA JAZZ Festival and in the Metro TV program "Kokoro no Tomo."

We sponsored a soccer coaching clinic for Indonesian children by the Asian

Ambassador of the Japan Professional Football League (J-League). We provided

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sponsorship support for an exchange match featuring badminton gold medalist Mr.

Rudy Hartono. And as part of the events commemorating the 55th anniversary of the

establishment of diplomatic relations between Japan and Indonesia, Garuda provided

support for a sumo tournament in Jakarta.

Indonesia has a number of famous places and attractions. These include the orangutans

of Borneo, Mt. Bromo in East Java, Tri-Colored Lakes on Lombok Island, magical

temples of Central Java, and cool mountain retreats of West Java. I hope you will be

able to visit places such as these. We at Garuda Indonesia Airlines look forward to being

a top sponsor of the Japan-Indonesia partnership and to helping bilateral cooperation be

even better.

4)［Programme 1］Keynote Speech

－Mr. Yuji Hamada , Consulate-General of Japan at Medan

Title: ASEAN Economy Integration and Japan-Indonesia New Global

Cooperation~Importance of Local Development and Local Remarks~

During my roughly 40 years in the Ministry of Foreign Affairs, I spent 18 years in

Indonesia. My ultimate conclusion is that Indonesia has abundant natural resources, has

great manpower potential, and is the most prosperous country in the world. I can also

say that it is a country that will become increasingly important in the future.

I have summarized 11 key points that our two countries should emphasize as we work

together.

Point 1: For Indonesia to increasingly develop, two areas must be fully invested in:

technology and education. Japan and Indonesia can cooperate in these two areas.

Point 2: With regard to food and energy problems, Indonesia can save the world.

Point 3: "Rise of the people" as represented by the new Jokowi administration.

Point 4: The new globalization and Indonesia's road to becoming a major world power

through ASEAN economic integration (ASEAN integration will occur in 2015.)

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Point 5: The countries of the Asia-Pacific will become integrated in the future and

Indonesia will play a central role in the Asia-Pacific during the second wave of

globalization, as set forth in the "Asia-Pacific Concept" and "Asia-Pacific Community"

(prediction of Mr. Arifin Bey, one of the former Nanpo Ryugakusei [Special Overseas

Students from the Southern Regions]).

Point 6: Indonesia has infinite possibilities for agroforestry development and new

energy development, and Japan's technical cooperation can help drive that development

at a geometric rate.

Point 7: The promotion of proper investment, making use of urban space development

in Jakarta. The world's surplus money should not be used for speculative purposes but

for true investment and development. For example, Indonesia needs easing of traffic

congestion in Jakarta, expansion of urban space through the construction of high-rise

buildings, and improvement of subway and other components of its circulation

transportation network.

Point 8: Advocation of Indonesian studies ("Indonesianology")

Point 9: As Islamic terror, race relations, and other issues create barriers to Western-led

globalization, respect for diversity, as represented by the Pancasila (Five Principles of

Indonesia's Founding), has a universality that resonates throughout the world.

Point 10: Japan and Indonesia should explore the possibilities of agroindustry and

agribusiness development through "people to people" efforts.

Point 11: It can be said that as democratization and decentralization of power are

promoted in Indonesia, grassroots-level (private-level) international exchange is

necessary.

Lastly, if Japan and Indonesia will truly cooperate, Indonesia has its abundant resources,

while Japan has technology which is necessary for Indonesia. By investing Japan's

technology and effectively utilizing Indonesia's resources, the environment, and urban

space, Japan's economy will be revitalized and Indonesia's people will truly become

prosperous. If our governments and private companies will support "people to people"

cooperation together, the citizens of our two countries will surely have a bright future.

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5)［Programme 1］Keynote Speech

－Mr.Oloan P. Siahaan (Rector / Darma Persada University)

Title :Hart to Hart

Darma Persada University is, I think, the only university in the world to have been

founded by former international students who studied in Japan. I think that has played

an extremely important role in the Japan-Indonesia relationship.

World economic growth is shifting from the western side of the globe to East Asia,

including the ASEAN region. The economic strength of ASEAN and East Asia has been

supported by a flourishing international production network, resulting in the region

being called "the factory of the world." In the 1990s Indonesia developed economically

and industrially, and it has achieved economic growth of 5% to 6% over the past ten

years as well. The world has come to regard Indonesia as an extremely influential

emerging economic market and one of the largest middle-income nations. It has the

world's fourth-largest population, a working-age population equal to 45% of its total

population, and a middle class of 80 million people.

Domestically, on the other hand, Indonesia faces a variety of challenges. Specifically,

such challenges include economic competitiveness improvement, unemployment,

poverty elimination, income disparities, energy, and climate change. The nation must

select a development model that can resolve such issues, and must achieve economic

growth.

To avoid the pitfalls of a nation supported by the middle class, Indonesia should enter a

phase in which economic development is based on future innovation. Specifically,

innovative partnerships with strategic clusters are needed. Not only is it necessary to

develop a system of roads, ports, railways, and other hard infrastructure, but soft

infrastructure, such as human resources, must be developed.

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In order for Indonesia to increase its capabilities in the international production network,

it will be necessary to transition from the conventional exporting of natural resources

and industrial products, which are supported by low-wage workers, and shift to the

exporting of added-value industrial products, which are supported by innovation and

high productivity. Japan, too, is looking forward to trade and investment becoming

vigorous thanks to the Japan-Indonesia Economic Partnership Agreement (EPA) and the

Free Trade Agreements (FTAs) with ASEAN countries.

At the same time, we must remember that in order to expand our cooperation and

friendship during the next 50 years, we must nurture new leaders with a new mindset.

To help us carry out our roles from the personal level to the organization level,

cooperative networks such as Darma Persada University's Persada Alumni Association

and the Indonesia-Japan Friendship Association exist. I look forward to us growing

together both economically and in a variety of fields, and building a lasting, close

friendship. To do so, I hope we will cherish "heart to heart" connections and that

everyone will lend their support through this symposium.

6)［Programme 2］Economy Committee

Theme: Issues and Initiatives for Indonesia and Japan to Grow Together

Panel moderator：

－Mr. Kazuhisa Matsui (Platform Coordinator/ JETRO)

Panelist：

－Mr.Oloan P. Siahaan (Rector/ Darma Persada University)

－Mr. Seiichi Ota (President / PT. SHINTO LANCE INDONESIA）

－Mr.Tovi Singgih(General Manager/ PT. Mitsubishi Electric Automotive Indonesia)

－Ms.Norie Watanabe (Central Manager / Bridgestone Central Research Div.)

＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿

Mr. Matsui: My name is Matsui, and I am your chairperson for today. In the

Economic Session, rather than going into a detailed debate about economy, I want to

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discuss the ways in which Indonesia and Japan can work together through economic

issues. After our panelists have introduced themselves, we will hold a panel discussion

for 1 hour, followed by a 15-minute break, and then we will have a questions and

answers session with the panelists answering questions from the floor. Over to you, Mr.

Oloan.

Mr. Oloan: My name is Oloan P. Siahaan and I am Rector of Darma Persada

University.

The main point in today’s discussion concerns what sort of role manufacturing can play

in today’s development. Manufacturing can impart various impacts on other industrial

sectors. Major issues in Indonesia today concern infrastructure development, education

facilities, and how we should train human resources. In cooperative relations between

our two countries, I think we can do something in terms of training human resources.

When it comes to improving human resources in terms of quality or even in terms of

quantity and quality, Japan has excellent education systems in the fields of science and

technology. In Japan’s case, enterprises have in-company training and education

systems. Since these do not exist in Indonesia, I think cooperation can be provided here.

Japanese small and medium enterprises (SME) are making advances into Indonesia, and

I would like to talk about the benefits that both countries can obtain by allowing these

SMEs to conduct development as foreign capital.

Mr. Matsui: Next is Mr. Ohta.

Mr. Ohta: My name is Ohta. I am president of a surface processing company.

I have been president for 15 years, but before that I was an engineer. I came here in

1976, and until 2000 I worked in an electric furnace maker mainly melting iron and

manufacturing reinforcing steel bars, angles and so on. I was suddenly asked to become

president and have served in that position for the past 15 years.

I was born in 1947 and entered society just as Japan had embarked on an era of

high-level economic growth. Indonesia has also just entered a period of similar

high-level growth. I would like to talk about some of the experiences of Japan’s growth

that can be passed on to Indonesia.

First, in Japan, with the advance of industrialization and high-level growth, emphasis

came to be placed on efficiency and productivity, and performance came to be measured

in figures. The environment we had lived in until then underwent great change. As a

result, stress built up and people became mentally affected. Problems of “human

evaporation” occurred whereby working people suddenly disappeared and nobody knew

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what happened to them. How is Indonesia overcoming such problems today? In Japan,

in order to sustain motivation, 5S, TQC, and autonomous group activities have been

introduced and have played a part in resolving such issues to some extent, although not

totally. I and other people of my age hope that Indonesia can resolve its problems with

production management systems that are suited to Indonesian people.

Another problem has been the rapid advance of environmental problems. I hope that

Indonesia learns from Japan’s lessons in order to promote economic growth without

environmental pollution.

During the period of high-level growth, rural parts of Japan became extremely

impoverished. Many people left the countryside to live in the cities, leading to the

decline of agriculture and forestry. We entered an age where it became cheaper to buy

timber from abroad. I hope that Indonesia can advance urban development while at the

same time retaining the vitality of its rural areas.

Another important issue concerns the high added value of Indonesian manufacturing.

More than just having factories in Indonesia, it is important for Indonesian products to

acquire added value. I hope that systems can be built to encourage young entrepreneurs

and promote the establishment of new businesses by Indonesian and Japanese young

people. I would also like to consider this theme.

I want to ask Indonesian people what you can learn as you graduate university, enter

society and work in companies. In Indonesia, the only option is to learn while working

in a company. In Japan, on the other hand, there are specialist magazines, literature and

other resources that are all provided in Japanese. People are able to absorb new

knowledge, develop themselves and enhance their own skills. I hope that the same thing

can happen in Indonesia too.

We baby boomers have lived through Japan’s high-level growth period from beginning

to end. We have experienced the path that Indonesia is about to take. I hope that

Indonesian people will make use of our experience and know-how. I think that people

aged around 60 can offer valuable experience and assistance over the coming five or ten

years.

Mr. Matsui: Next is Mr. Tovi.

Mr. Tovi: My name is Tovi Shinggih. I work for PT. Mitsubishi Electric Automotive

Indonesia, a company that makes engine parts. We make parts not only for Mitsubishi

but also Toyota and other brands.

The auto industry produced 120,000 units in 2014, while production of motorbikes

numbered 22 million units. Generally speaking, auto production is around 10% the

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production of motorbikes. The eyes of the world are now watching Indonesia, however,

rather than resting on its laurels, Indonesia needs to advance improvements.

Production is one such area, however, another issue concerns the mitigation of traffic

congestion arising from the slow development of infrastructure and roads. In the area of

industry, localization is extremely important. The problem is that raw materials cannot

be procured in Indonesia but need to be imported. For example, aluminum materials are

produced in Indonesia but because intermediate processing is not performed here, it is

necessary to export such materials to Japan for processing and then import them again.

It is necessary for Indonesia to become capable of producing its own raw materials.

The automobile industry employs a lot of manpower and has an extremely large impact

on other industries.

Indonesia is making progress in terms of democratization, and I believe that orderly

democratization is important for economic development. Specifically speaking, this is

so regarding labor-management relations. Our company does not have a labor union,

however, relations are extremely good between employees and the management. Some

other companies have been forced to shut down as a result of labor-management issues.

Good labor-management relations are vital for industrial development.

Our two countries have some close similarities in spiritual terms too. For example,

Japan has the code of the samurai, whereas Indonesian people have fought for their

independence. The people of both countries have persistence and are willing to take on

new challenges. Having the same kind of spirit, I believe that our countries can achieve

great things by working together.

Mr. Matsui: Next is Ms. Watanabe.

Ms.Watanabe: My name is Norie Watanabe, and I work at the Central Research

Center of Bridgestone Corporation in Tokyo.

Bridgestone is mainly involved in the production and sale of tires. Bridgestone tires can

be found anywhere where cars run in the world. Indonesia is an important business hub

for us. We have tire factories in Bekasi and Karawang, and we have natural rubber

plantations that grow the raw materials used in tires in South Kalimantan and North

Sumatra. We work together with Indonesian people in all our business facilities.

Natural rubber is an important natural resource for Indonesia, and at the same time it is

an indispensable raw material for the tire industry. New mineral materials are being

developed in the advanced countries, but there is so far no high quality material that can

take the place of natural rubber. Among tires, the tires used in aircraft, large trucks and

buses especially are made 100% from natural rubber. Natural rubber will become even

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more important in the future.

As a producing nation, Indonesia occupies an extremely important position. In order to

boost productivity, we have advanced joint research together with BPPT. I have been

working on ways to improve productivity of natural rubber under a national NEDO

project since 2002. Indonesia has the world’s largest area of natural rubber cultivation;

however, it is unfortunately a little behind Thailand in terms of production volume. We

hope that it will become the best in the world and grow as an important supplier to

Japan.

I have been working on this natural rubber project for 10 years now, and everybody at

BPPT has been most cooperative. This project was started based on international

cooperation, and this has been the main reason for the success of the joint research.

First of all, I would like to stress the importance of face-to-face communications. The

success of cooperation and joint research is determined by the mutual sharing of

objectives and understanding of each other’s culture and environment. I wish to express

gratitude for the great help that has been given by the BPPT personnel who formerly

studied in Japan. We have also been greatly assisted by those officials who have helped

accelerate research and development in NEDO projects and so on based on public

funding. Since a single enterprise has very limited capability, I hope to see the

development of infrastructure and securing of funds for travel between both sides. There

are many people who are interested in the natural rubber research being conducted by

Japanese universities, and I believe it is important to effectively utilize this know-how

in order to support researchers.

Natural rubber is made by processing tree sap. Unlike rice or vegetables, it takes a very

long time for the trees to grow, and this means that research is also very time-consuming.

In the field of corporate research, usually results are demanded in a few years, however,

in the case of natural rubber, continuous research over 20 or 30 years is needed. The

main lesson we have obtained from research so far is that power is to be found in

continuity.

I would like to talk about issues for future attention. I have been involved in this

research for more than 10 years, and I realize the importance of promoting international

cooperation and training successors. I hope that young Indonesian and Japanese

researchers will exchange opinions about their own futures and development of the

natural rubber industry from now on.

If public funding continues to be made available, I think our researchers will be able to

continue working for a brighter future. By furthering human networks, I believe we can

strengthen our respective industrial bases and develop our countries.

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Mr. Matsui: Let us have another round of applause for our four panelists.

A number of points have already been raised. I would like to conduct a discussion on a

number of these. The first issue concerns raising the quality of human resources with a

view to increasing the competitiveness of Indonesian manufacturing. Concerning

technology and cooperation, Mr. Oloan mentioned the importance of cooperation on the

level of Japanese enterprises and education agencies.

The first point concerns translating human resources development into higher added

value in the manufacturing sector.

Secondly, as was also mentioned by Ms. Watanabe, it is important to build long-term

and solid training systems for developing time-consuming technologies and human

resources. There is a time aspect to this point.

The third point, which Mr. Tovi touched on, concerns the fact that even though there are

lots of mainly assembly plants in the manufacturing sector in Indonesia, the country is

still not capable of manufacturing its own raw materials. In order to reinforce

Indonesia’s manufacturing industry, rather than simply increasing assembly, it is

proposed that effort be made to boost production of raw materials without depending on

imports.

And finally the fourth point mentioned by Mr. Ohta is that Indonesia can make use of

Japan’s experience with high-level economic growth when it comes to developing the

manufacturing sector from now on. For example, this relates to the question of how to

have awareness of humanity, what to do about environmental measures, how to link

central government with provinces, and also the question of human resources

development, which is connected to the first issue.

To sum up, we basically will discuss three points. First is the issue of human resources

development – how to approach that with a view to boosting competitiveness in the

overall manufacturing industry. Second is the issue of how to create opportunities for

processing raw materials in Indonesia. And third is the issue of how to utilize Japan’s

experience. This also includes the issue of how we can make use of the outputs of

extremely time-consuming research such as that being conducted by Ms. Watanabe.

I would like to start from the issue of human resources development in the

manufacturing industry. Mr. Oloan talked about his hopes regarding the role that

Japanese enterprises can play in developing industrial human resources. Mr. Ohta, do

you have anything to say about this in reality?

Mr. Ohta: I think Mr. Oloan was talking about human resources development on the

technical level. Young people in Indonesia these days are technically almost at the same

level as their Japanese counterparts. Indeed, many Indonesians have attained a higher

level than Japanese people. Concerning why they are unable to exhibit this ability, for

18

example, they may want to make something but they don’t know where to purchase

materials and parts. They can perform machine processing, but are unable to perform

heat treatment. They can perform heat treatment, but cannot actually meet the

requirements that are set in Japan. For example, there is a process called magnetic

annealing that is used to impart hardness, however, in our experience we find that even

though they can perform magnetic annealing to impart magnetic characteristics,

sometimes they cannot obtain the required degree of hardness. However, Japanese

engineers can produce these products using the same materials.

This sort of situation arises not only because of problems with Japan and Indonesia, but

also due to problems between Japanese enterprises. The specifications that are written

on drawings cannot be achieved under the conditions that are indicated on the drawings.

The drawings are made like this on purpose. They are made in this way to prevent other

companies from believing they can copy the same specifications. This issue cannot be

overcome unless it is demonstrated to the customers. That is the degree of technical

capability that is required. We have experienced this two times. This barrier cannot be

overcome without technical prowess that is on a par with or better than that in Japan.

Mr. Matsui: Have you experienced cases in Indonesia where you tried to make things

according to the drawings but couldn’t do so?

Mr. Ohta: We could not have performed the work we are doing now even if we had

spent 10 years trying in Indonesia. Conducting the specified processing on the specified

types of materials does not produce the specified results. Japanese companies do not do

this to discriminate against Indonesia; they also do it in Japan.

Mr. Matsui: So, the same thing is happening inside Japan too?

Mr. Ohta: Yes. Japanese companies may think that things are done in a certain way,

but when they consign work in reality, this isn’t so. That is how the required products

get made.

Mr. Matsui: The Japanese side is really hoping that the consigned Indonesian

enterprises can exceed those expectations. They want the Indonesian enterprises not to

give up in the face of the requirements, but rather to rise to the challenge, don’t they?

Mr. Ohta: Yes, that’s right. Otherwise, Indonesia cannot grow.

19

Mr. Matsui: That kind of experience becomes technical prowess, doesn’t it?

Mr. Ohta: Yes.

Mr. Matsui: I would like to hear Mr. Oloan’s thoughts on this matter.

Mr. Oloan: Doing what Mr. Ohta just described incurs additional cost, although this

varies depending on the complexity of the products being made. In Japan’s case, there is

a system for consigning work to subcontractors, however, in Indonesia, when

purchasing a single part, a number of companies offer a tender and the successful

supplier is selected from these. In the subcontracting system of Japan, the parent

company has the responsibility of educating the subcontractor and raising its level, and I

think this is a point of difference with Indonesia.

Mr. Matsui: Once more, I would like to put a simple question to Mr. Oloan. If the

Japanese method of subcontracting were also implemented in Indonesia, would it be

possible for both countries to train corporate human resources in a joint effort?

Mr. Oloan: There was previously a system whereby large corporations in Indonesia

offered support for developing small and medium enterprises, however, it was not

successful. The subcontracting system of Japan is a unique approach that was

established over an extremely long period of time and history. For Indonesia, I think it

will be very difficult for corporations to take the time to nurture subcontractors like this

in the current era of intense competition.

Mr. Matsui: I would now like to ask Mr. Tovi. How does your company approach the

training of human resources with a view to enhancing technical capability?

Mr. Tovi: I think the conditions that Mr. Ohta just described are occurring in all

enterprises. I don’t think we can copy products simply by making them according to the

specifications given in drawings. In my company, we first take the actual product, draft

our own drawings based on that, and then perform manufacturing according to the

drawings we prepare. One of the problems we face is the need to change the sense and

thinking of Indonesian engineers. Many Indonesians tend to be satisfied if they can

copy products with 95% accuracy. Japanese, on the other hand, feel that they haven’t

achieved their objective unless it is 100% right. Since it may take 20 years even in

Japan to bridge that 5% gap, I think it is difficult for Indonesian enterprises to make

20

products with 100% quality. In reality, we seek solutions that are based on the actual

production line.

Turning to the question of subcontractors, it is necessary to change the attitude of

purchasing from the company that presents the cheapest prices. Corporations must

purchase at proper prices to ensure that subcontractors can also obtain proper profits. It

is generally fair to purchase at prices so that subcontractors can obtain a profit of

between 5% and 10%. Rather than simply choosing the cheapest option, it is necessary

to pay a fair and proper price and seek manufacturing with 100% adherence to

specifications.

Mr. Matsui: Mr. Tovi just mentioned that technical capability cannot be fostered

through simply placing priority on low costs. Certainly, compared to Japan’s era of

high-level economic growth, Indonesia does not have as much time on its side. Amidst

very intense international competition, Indonesian companies must also compete in

terms of price. In these circumstances, as Mr. Oloan mentioned earlier, Indonesian

companies tend to conduct tenders and strive to obtain products at the cheapest prices

possible. Having to conduct tenders in order to procure at low costs in the face of

international competition, it becomes extremely difficult for enterprises to nurture

human resources on a medium to long term basis. I would like to ask Mr. Ohta his views

on what Japanese-affiliated enterprises should give priority to in training manufacturing

human resources.

Mr. Ohta: This is also linked to the tendency to feel satisfied with 95%, but I think it

comes down to a lack of passion. During Japan’s period of high-level growth,

everybody worked as hard as they could. That kind of passion is lacking in Indonesia.

However, since Indonesia has always been blessed with abundant and various resources,

the remaining 5% can be covered by such resources even if the Indonesian people have

tended to slightly lack passion. Having said that, I don’t want to tell Indonesians to

simply work in the same way as Japanese.

Another point is the importance of accumulating small efforts. For example, in the case

of Japanese-affiliated enterprises, it is necessary for the Japanese to let Indonesians try

things and accumulate successful experience. When people can feel the joy and

satisfaction of successfully finishing a job, they will want to work without being forced

to. I have experienced this kind of thing.

Major enterprises have for a long time possessed systems for nurturing small enterprises.

These systems still exist today but they are no longer used so much. I know of one

example where such a system is actually used. It is a zaibatsu corporation. When the

21

owning family members ran the company, it had difficulty achieving its objectives,

however, it became successful when it starting selecting directors from among its

regular employees. Excellent human resources who had reached retirement age or had

contributed to the company were asked to run in-company workshops or take over

machine shops and electric repair shops based on an independent accounting system.

The parent company provided the initial funding. So, former employees conduct

management, and profits are apportioned. It became possible to perform work inside the

company and outside of the company. This company makes iron. There are other

reasons as well, but under the previous management, it produced around 20,000 tons per

month, but under the new management it now makes 40,000 tons. Whereas other

companies were experiencing a decline in competitiveness, this company became more

competitive and came to almost monopolize the market for MRT reinforcing bars and so

on. This company now boasts the highest quality products in Indonesia.

There are now autonomous developments taking place. For example, take the case of

somebody who works in a Japanese-affiliated motorcycle factory, has experienced

training in Japan, and has a responsible position in the company. If such a person were

to set up business independently, his former company would place orders with him.

Because he has experienced all that company’s operations from quality control to

delivery management, he is the most trustworthy person for the company. Such cases

can be seen here and there. In some cases the former employees autonomously establish

their own businesses; in other cases companies encourage personnel to do it. In that

sense, I think there is still hope for Indonesia.

Mr. Matsui: I would like to ask about the previous point discussing the relationship

between the pursuit of low cost and the attainment of high technical capability. Mr. Ohta,

do you believe that the desire to minimize costs is not necessarily an impediment to the

nurturing of technical human resources?

Mr. Ohta: It doesn’t affect technical capability or quality, but I strongly realize the

need to reduce costs. This leads to the production of cheap but good quality products.

Our company actually makes two types of products. First of all we make products that

can be made anywhere at a certain price. However, we also make products that only we

are capable of making, and we can sell these at prices that we decide. There would be

problems if no companies made the products that anybody can make, however, it is also

important for companies to have products that rivals cannot copy.

Mr. Matsui: So, it is desirable to have products that can be made anywhere, and also

22

products that can only be made by one’s own company.

Mr. Ohta: Ideally it is best to make products that no-one else can copy, however, it is

hard to achieve this ideal from the start. It is more realistic to start by making things that

can be made anywhere, and then to use the profits to make original products. After all,

the costs of development are fairly expensive.

Mr. Matsui: Would you like to comment, Mr. Tovi?

Mr. Tovi: I concur with what Mr. Ohta is saying. When making general products that

can be made anywhere, the quality level is standard and the production cost can be

easily calculated. When making standard products, since you can calculate the standard

production cost by yourself, you know that something is not quite right if another

supplier undercuts that cost.

I think it is important to make both original products that cannot be copied anywhere

else and products that can be made anywhere, although this may entail some difficulties

in terms of manufacturing.

Mr. Matsui: In order for Indonesia to nurture high quality industrial human resources

from now on, rather than being satisfied with making commonplace products at low

cost, I think it will be important to develop people who can strive for high quality in

making totally original products. Is that correct or not? If it is correct, how can such

motivation be provided? Would you care to comment, Mr. Tovi?

Mr. Tovi: Concerning the manufacture of auto parts, cost reduction of around 5% to

10% every year is demanded. In order to meet this demand, it is necessary to be

extremely innovative. Innovation is also required of designers and other engineers.

Anybody can expand sales if they can manufacture commonplace items at low costs.

For this purpose, it is necessary for people to change their mindset or thinking.

Mr. Matsui: I would like to ask Mr. Oloan whether universities and so forth are

taking steps to instill the motivation to take on new challenges.

Mr. Oloan: Our university introduces the concept of monozukuri manufacturing in its

courses. In Japan, monozukuri is founded on a deep love for making things and is a

reflection of the craftsman’s desire to make products with as much integrity and quality

as possible. It is also necessary to certainly prepare production process, but I believe

23

that this spirit is of prime importance. From the initial design through to the social

design, it is the desire to make the best items in that field. This still isn’t practiced in

Indonesia, but our university introduces such thinking in its coursework.

Mr. Ohta just talked about how former employees establish their own companies to

manufacture parts and sell them to their former companies. I also think it is important

for people involved in making and using products to collaborate in manufacturing

products. In Indonesia, this spirit of monodzukuri is still not established and we are in

the trial and error stage, however, I believe that a lot can be gained from trying new

things.

Mr. Matsui: I would now like to ask Ms. Watanabe about this. Mr. Oloan has said

that Japanese monodzukuri is supported by the fact that Japanese people like to make

things. Ms. Watanabe is currently involved in the long-term research of natural rubber

together with Indonesian researchers. I’m sure that such research could not be continued

without a fondness for natural rubber. In your experience of continuing research with

BPPT of Indonesia in the past 10 years, has this feeling always been there, or has it

emerged in the course of the work. Or is it necessary to share some kind of motivation

with the Indonesian people in order to like the work?

Ms. Watanabe: Since I have so far been engaged in international cooperation in the

research field, my response may diverge from the issues that exist on production lines,

however, I would like to give some thoughts.

In order to successfully conduct extremely time-consuming research, it is extremely

important for the people involved to display enthusiasm for and be interested in the

work. Management can play an extremely important role in this. As the saying “place

the right people in the right jobs” infers, the selection and nurturing of people who are

suited to the theme at hand has a huge impact. When it comes to placing the right people

in the right jobs or selecting people according to themes, it is important to ascertain the

right personnel upon having close communications with people. When working on

long-term jobs, it is important to celebrate successes together and to sustain motivation.

I think that this is a management issue common to research settings in both countries.

There are various themes in workplaces, and it is management’s job to ascertain what

people are interested in and where their passions lie, and to gauge personalities while

guiding the team towards good results and achievement of the long-term objectives.

This is what I am finding in my current research.

Mr. Matsui: I realize that placing the right people in the right jobs, nurturing people

24

to like their work, or assigning such people to the right jobs, are also necessary on

production lines in manufacturing plants. Would you like to comment on this, Mr.

Oloan?

Mr. Oloan: I think that research is a highly professional field, so various elements

such as having a liking for the work, issues of management, and environmental

problems are involved. I think that liking one’s work is a major factor in the middle or

lower level of production settings too.

I also think that the response of consumers is important. For example, in Germany, the

quality of products is said to be good, and there is a culture of properly evaluating

products as good or bad. In the case of Indonesia, consumers tend not to assess products

so much. Consumers tend not to assist the work of manufacturers or designers.

Mr. Matsui: I would like to sum up the discussion so far before we have a coffee

break.

We have largely debated the issue of human resources development in the

manufacturing sector, and a number of points have become clear. The environment we

have today is very different from the background to Japan’s high-level economic growth.

This is especially so regarding time. Time now is extremely limited. There is not much

time available to respond to demands. For example, compared to before, there is not

enough time now to patiently nurture human resources or develop the subcontracting

environment. Moreover, there is a pressing need to make products at low cost. Any

attempts to simply develop human resources or conduct subcontracting in such

circumstances are likely to be instant measures. There are two key points when it comes

to overcoming such issues. First, in order to firmly embed monodzukuri in Indonesia, in

addition to conducting long-term training, it is important to foster people who like to

make things on each production line. When people like products, and they pursue that

feeling, they probably aren‘t satisfied with 95%. They’re only satisfied with 100%. The

first point concerns the development of human resources who like the products they

make.

In the current environment that is not geared to subcontracting, the second point is to

respect the desire of people currently working in auto or motorcycle assembly plants

who want to go independent and establish their own separate businesses. The discussion

so far reveals that increasing the number of such people will contribute to strengthening

supporting industries, fostering human resources who are willing to boldly challenge

new technologies, and creating more places to train people. This will help meet the

needs of an age where speed is demanded.

25

I by no means offer this as a conclusion. I would simply like to give this summary as a

provisional summing-up of our panel discussion at this stage.

With that I would like to bring the panel discussion to a close and have a 15 minute

coffee break. Thank you for your attention. Can I have another round of applause for

our panelists?

We will begin the questions and answers session from 4:15.

(Interim break)

Mr. Matsui: Due to time constraints, I would like to invite questions from around

three people. I ask that you keep your questions short.

(Questions from 3 persons on the Indonesian side)

Mr. Matsui: Our first question asks for thoughts on why so little progress is being

made in monodzukuri, even though it has been a topic for discussion for some time

now.

Question number 2: Many Japanese SMEs have located to Indonesia in recent years, but

are they collaborating with Indonesian SMEs? There seems to be an imbalance at times.

And our third question asks why Indonesian enterprises cannot become subcontractors

for Japanese-affiliated enterprises. Is it because they cannot find opportunities because

of a bias towards affiliated suppliers? Secondly, concerning monodzukuri, Indonesia has

excellent arts and crafts, which indicate that Indonesian people do possess good

manufacturing ability. So why isn’t this ability utilized more effectively? Thirdly, cases

of employees in Japanese-affiliated enterprises setting up their own independent

businesses are extremely rare. Is this because there are lots of regulations? If

Japanese-affiliated enterprises have been operating in Indonesia for 20 years or longer,

shouldn’t they apportion shares to their Indonesian employees or give more preferential

treatment to the Indonesian side?

I will ask Mr. Oloan to answer the first question, while I would like to respond to the

second question. And finally, I would like Mr. Ohta and Mr. Tovi to respond to question

number 3.

Mr. Oloan: Responding to the first question, the definition of monodzukuri includes

various elements. It is a science, a philosophy, and also an art. Certainly, it takes a long

time in order to attain the spirit of monodzukuri. Not all professionals are endowed with

the ability to become managers. The Indonesian government has implemented measures

to improve the quality of human resources and develop entrepreneurs, but these efforts

26

have not always been successful.

Mr. Tovi: Responding to question number 3, monodzukuri is all about enjoying one’s

work from the bottom of one’s heart. Indonesia has the Pancasila (five founding

principles of the Indonesian state), which start by espousing that work is service to the

one and only God. Work is no good unless performed with the heartfelt commitment to

do it. If one performs work with the sincere desire to enjoy it, that work will remain

even after you have passed away. Such work truly benefits oneself, but this attitude is

not always thoroughly adhered to.

Concerning the question about subcontracting within business affiliations, to take the

example of Mitsubishi Electronic, since Japan is now experiencing a shortage of human

resources, I think it will be difficult for Japanese corporations to assign Japanese

personnel to management positions in all their affiliated companies. There will be ample

opportunities for Indonesian human resources to manage affiliates in Indonesia from

now on.

In the case of our company, already 50% of our suppliers are enterprises in Indonesia. If

firms cannot serve as official suppliers, this means that they are unable to perform

sufficiently competitive or satisfactory work that is worthy of merit.. If managers are

Indonesian, I hope that they will implement effective policies for Indonesia.

Mr. Matsui: Mr. Ohta, what are your thoughts on these questions? Also, I would like

to as Ms. Watanabe to comment on the overall proceedings today.

Mr. Ohta: Concerning the question of whether or not Indonesian people are suited to

monodzukuri, I think that they are. I don’t think that Indonesian enterprises are

excluded from the Japanese-affiliated market. In Japan, it is reported that entry of

Japanese enterprises does not necessarily guarantee work for conventional affiliates.

Affiliates are sometimes forced to retreat from the market when they find that, contrary

to expectations, they cannot obtain orders from their parent corporations.

Japanese enterprises are coming to Indonesia in search of parts they can use in Japan.

They are looking at small Indonesian enterprises. They are doing this because

purchasing from Japanese enterprises is too expensive and not price competitive. I am

talking about large Japanese enterprises. There are factories in Indonesia too. Rather

than expecting such plants to be ready and waiting, corporations need to directly look

for small local partners. For example, there is a place called Kampong Unkanen close to

Pulogadung. The operators here are more like small cottage industries. Even so, the big

corporations come looking for suppliers. The age of limiting work only to affiliated

27

enterprises is becoming a thing of the past.

The other point concerns the need to assume positions of responsibility in enterprises. I

know of a major corporation where Indonesian people are placed in charge of work. I

don’t think people can understand until this happens. When I was in Japan around 1965,

nobody imagined that we would become able to purchase cars. But once Toyota

launched the Corolla and Nissan launched the Sunny at relatively inexpensive prices,

suddenly ordinary working people became able to buy cars through installment plans.

Nobody expected this to happen.

One more point, concerning quality, Toyota cars used to have inferior coating to foreign

cars. They did not have shiny finishes. Nobody believed they could compete in the face

of such technical disparities, but today Toyota’s cars have excellent coating too. It’s hard

to appreciate unless that time actually arrives, however, I feel that it will not take long

for Indonesia to enter an age where there is satisfaction for all.

Mr. Matsui: Would you like to comment, Ms. Watanabe?

Ms. Watanabe: Today I mainly spoke from the viewpoint of research into natural

rubber. This research is solely intended to make tires, which are also car parts. All the

points discussed regarding monodzukuri apply in the same way. Understanding the

essence of materials in basic research contributes to better quality and more efficient

manufacturing, so I would like to discuss such matters with our research partners in

BPPT and Bridgestone Indonesia someday.

Mr. Matsui: Concerning the second question, of course definitions of small and

medium enterprises differ in Japan and Indonesia. SMEs that seek to locate business

outside of Japan in many cases are classed as major enterprises in Indonesia. However,

as Mr. Ohta mentioned earlier, we are entering an age where Japanese SMEs come here

in order to purchase parts from Indonesian SMEs. I believe that it will become possible

for the SMEs of both countries to build good relations of joint work and cooperation in

the future.

With that I would like to close this Economic Session. It may be difficult to digest all

points raised today, but if you could fill in your questionnaire sheets and hand them

back to the secretariat, I hope that the debate will continue.

28

7)［Programme 2］Government Committee

Theme: What Actions Will Be Necessary for Japan and Indonesia to Achieve

Mutual Growth?

Number of participants : Japan/ 9 Persons , Indonesia/ 7 Persons

Panelist：

[Japanese]

－Ms. Yoshiko Kijima（Minister Embassy of Japan in Indonesia)

－Mr. Kenichi Tomiyoshi

（President Director Japan External Trade Organization, Jakarta Office）

－Mr. Tadashi Ogawa（Regional Director for Southeast Asia Japan Foundation）

－Mr. Takuya Shimura（Chief Representative The Overseas Human Resources and

Industry Development Association (HIDA), Jakarta）

－Mr. Hiromichi Muraoka

（Senior Representative Japan International Cooperation Agency (JICA) ）

－Mr. Iwao Ikeya（Counselor Embassy of Japan in Indonesia)

－Mr. Kazuhiro Aizawa

（Vice President Director Japan External Trade Organization, Jakarta Office）

－Mr. Yuji Hamada（Consulate-General of Japan at Medan）

－Mr. Yu Oshida

（Assistant Director Asia and Pacific Division,Trade Policy Bureau, METI）

[Indonesian]

－Mr.Parlindungan Purba

（Head of 2nd Committee Regional Representative Council Indonesia）

－Mr. Ignatius Warsito（Director of Electronics and ICT Industry）

－Mr. Sofyari Rahman（Staff of Ministry of Industry Indonesia）

－Ms. Christina Natalia Pakpahan（Staff of Ministry of Finance Indonesia）

－Ms. Atang Sulaeman, M.Si

29

（Director of the Centre of Policy Improvement of Competitiveness）

－Mr. Derry Pantjadarma

（Director of Assessment Center for Improving Competitiveness Policy, BPPT）

－Mr. Anugerah Widiyanto

（Head of Technical Implementation Unit and Deputy Hall CCP, BPPT）

Panel moderator：

－Mr. Harunobu Nagai (Director, Asia and Pacific Division METI Japan)

________________________________________________________________________________

Proceedings summary:

Moderator: Mr. Harunobu Nagai, Director, Asia and Pacific Division, METI, Japan

The question for today's Government Session will be "What Actions Will Be Necessary

for Japan and Indonesia to Achieve Mutual Growth?" The new administration took

office last October. At the Indonesia-Japan summit in November, both countries agreed

to strengthen ties further. Also, during the meeting between Minister of Trade Gobel and

Minister of Economy, Trade and Industry Miyazawa in January of this year, there was

agreement on the importance of the two countries' bilateral relationship.

Today, I hope that everyone will think beyond their official job positions and freely

discuss conceivable steps that can be taken for the further development of our two

countries. Furthermore, I hope that this will provide hints as to how we should carry out

our respective tasks.

Mr. Ignatius Warsito, Ministry of Industry

It is my hope that while we renew the good relationship we have built with Japan up to

now, we will strengthen it, and that we will establish a type of collaboration that can be

carried on by the next generation. Specifically, Japan's "Cool Japan" concept is one way.

In Indonesia, the number of working-age people will continue to increase. For that

reason, I think it will be necessary to further develop creative industries. We would be

grateful if METI could think of ways to build bridges between traditional and creative

industries.

The new administration plans to develop five technoparks (at Bataan, Bandung,

Semarang, Denpasar, and Makassar) during the next five years. That effort will be

headed by the Ministry of Industry. When developing the technoparks, we would like to

use Yokohama and Nissan, Nagoya and Toyota, and similar examples for reference. We

hope to collaborate and make use of METI's experience.

The new administration has launched several programs, including Nawa Cita (Nine

Priorities Agenda). The Indonesian government hopes to advance its new programs,

while referring to and learning from Japan's efforts.

30

Mr. Sofyari Rahman, Ministry of Industry

As is also written in the National Medium Term Development Plan, one of the pillars of

the new administration is to put effort into the development of industrial parks. We

know that Japan's industrial parks have not been developed simply for large

corporations but rather have been integrations that have included small and

medium-sized enterprises, too.

In the future, through industrial park development, we hope to see several thousand

large corporations and several tens of thousands of small and medium-sized enterprises

created outside of Java. Target industries include raw materials, intermediate goods,

agriculture, and labor-intensive industries. We hope to boost exports, increase workers'

added value, improve productivity, and promote existing industries as well.

These items can create mutual benefits, and I hope we can achieve them through

cooperation between Japan and Indonesia. We can use our bilateral cooperative

relationship in areas such as new industrial field development, technical cooperation,

worker technical skills improvement, training, and education.

Mr. Kenichi Tomiyoshi, President Director, JETRO Jakarta Office

As a former METI employee, I have the opinion that manufacturing requires a

production network and is not something that can be taken on by single companies

alone. At the present time, however, production networks exist only on Java. And even

if an area has an industrial park, there must be electricity and other industry

infrastructure. This is based, of course, on the assumption that a production network

exists in the area.

I don't know if this would apply in Indonesia, but in Japan, regulations have been passed

preventing industries that were in metropolitan areas from expanding their production

facilities there. Then through incentives (subsidies) for production sites in

less-concentrated areas, factories have moved to more rural areas. As a result, factories

have relocated to the periphery of the metropolitan areas.

If this begins in Indonesia but companies limit their factory relocation to Central Java

for production network reasons, they will end up not leaving Java. It may take 10-20

years to relocate factories outside Java, but without inducement, this idea will not likely

succeed. Even in Japan, it has taken 20 years.

Mr. Parlindungan Purba, Regional Representative Council (DPD) Member

I belong the 2nd Committee of the Regional Representative Council (DPD) and am in

charge of natural resources, economics, infrastructure, and environmental fields. I also

31

serve as the chairman of the committee. Regional Representative Council (DPD)

members are chosen in a general election at the same time as the People's

Representative Council (DPR) members. The term of Regional Representative Council

members is five years. As with the People's Representative Council (DPR), the office is

located in Senayan. In contrast to the People's Representative Council (DPR)

membership, the number of Regional Representative Council (DPD) members does not

correspond to each region's population; instead, four representatives are elected from

each province. (There are 32 provinces.) We understand our region and have deep

relationships with the province governor, mayors, and local residents. One feature is that

we do not belong to any political party. North Sumatra, for example, has 30 People's

Representative Council (DPR) members and four Regional Representative Council

(DPD) members. I have three duties: I must formulate laws, I must state my opinion

regarding the formulation of the national budget, and I must oversee and monitor

government policies, particularly regional policies. President Jokowi's policies are

intended to actively develop not only Java but the provinces.

As a member of the Regional Representative Council (DPD), I fully support the flow of

the current administration's regional development.

Mr. Yuji Hamada, Consulate-General of Japan at Medan

(Supplementary explanation regarding Council Member Purba's relationship with

Japan) Council Member Purba manages a hospital in North Sumatra. He is also trying to

engage in medical care-related collaboration with Japan. He visited Japan in connection

with JICA's Regional Representative Council (DPD) training. At that time, he was

impressed by Japan's disaster prevention technology. After that, he launched a Disaster

Prevention Council to study ways to prevent floods, fires, and such, and organized a

civil defense team (fire brigade).

(Coffee break)

Mr. Derry Pantjadarma, BPPT

In the next five years, we plan to create technoparks in 100 locations. The BPPT has

engaged in cooperation with Japan for some time now, and has collaborated with several

universities in ocean and bio-related efforts. The BPPT will build eight technoparks and

a national technopark. This is a national project and will be headed by seven ministries

and agencies, including the Ministry of Industry, Ministry of Agriculture, Ministry of

Maritime Affairs and Fisheries, Ministry of Research, Technology, and Higher

Education, and the BPPT.

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The technoparks will accelerate regional development through innovation. The BPPT is

advancing the effort in cooperation with eight local governments. Specifically, the eight

technoparks will be located in Pelalawan Regency (Riau Province), Central Lampung

Regency (Lampung Province), Cimahi City (West Java Province), Grobogan Regency,

Pekalongan City (Central Java Province), Gunung Kidul Regency (Yogyakarta Special

Region), Bantaeng Regency (South Sulawesi Province), and Penajam Regency (East

Kalimantan Province), and the national technopark will be located in the Jakarta suburb

of Serpong.

The technoparks will have ample infrastructure and will be places of interaction

between business and education. Through innovation and new science and technology,

the technoparks will produce new industrialists and business people, and contribute to

regional development by making use of excellent local products and specialty products.

For example, Pekalongan has excellent fisheries-related products. In order to add value

to its seafood products, we look forward to BPPT research labs, educators, and others

joining together and working with local business people. Also, we are hoping to produce

20 new industrialists each year in each area from among the younger generation and

women's groups, for instance.

We hope to collaborate with Japan as follows:

Establish sister city relationships in eight areas and exchange knowledge.

Provide training in Japan for industrialists/business people born in the respective

areas. We hope then to interact with businesses, seek investment, and search for

business opportunities, making use of local products.

Also, in order to promote interaction between people, we would like to enlist

support from business people in both countries at the regional level with regard to

the investment environment, infrastructure, and permits and licenses.

Mr. Anugerah Widiyanto, in charge of Technical Implementation Unit and

Deputy Hall CCP, BPPT

The role of a technology incubator is to create or discover innovative businesses. On the

other hand, a technopark supports research and development, higher education, and

industrial park functions. For technopark development, Indonesia needs anchor

industries. Japan has a science park in Tsukuba, but what needs to be done in order to

build such a science park in Indonesia? We would like for you to share your experience.

We would also be grateful for cooperation in the field of university curriculum

development as well.

Ms. Atang Sulaeman, M.Si, Director of the Centre of Policy Improvement of

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Competitiveness, BPPT

I would like to hear opinions regarding these questions: In Indonesia today, what aspects

or factors are creating barriers to the achievement of good governance? Also, what

indicators are important with regard to achieving good governance? For Japan, what

barriers existed before good governance was achieved?

Mr. Iwao Ikeya, Counselor, Embassy of Japan in Indonesia

There are two keys to attracting various kinds of investment: "disclosure of

information" and "improvement of predictability."

Disclosure of information requires the appropriate disclosure not only of laws but of

presidential decrees and other detailed rules via the Internet, etc.

To achieve improvement of predictability, rules must be properly applied. I believe that

if these two conditions are met, a wide array of people will try to engage in business,

because they will have a sense of security.

Ms. Yoshiko Kijima, Minister, Embassy of Japan in Indonesia

(In response to BPPT's Ms. Atang Sulaeman regarding good governance) There are only

two things that the government can do: issue "regulations" and create "incentives."

As for regulations, the government can regulate by imposing penalties. However, the

penalties must be applied with transparency. Incentives, on the other hand, mean money.

The money possessed by the government is money from taxes. Tax exemptions can also

be given.

The government has the right to control these two items. We must support leaders who

are trusted by the people. That, I think, is what professional government officials do.

Let's work together!

Moderator: Mr. Harunobu Nagai, Director, Asia and Pacific Division, METI, Japan

To sum up today's discussion, I think the key phrase is "People to People." A number of

specific ideas were proposed by the BPPT, Ministry of Industry, and others during

today's discussions. What types of things are possible in the future? I hope we will

consider that question together.

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8) [Reception］

○Greetings

－Mr. Iwao Ikeya , Counselor Embassy of Japan in Indonesia

Hello. I'm Iwao Ikeya. I serve as Counselor at Japan's embassy in Indonesia. Since this

morning, we've had a full day packed with substantive discussion. Following this

morning's keynote speeches, the afternoon featured sessions on the economy and

government. The Economic Session was a fulfilling meeting that exceeded the planned

time, while the Government Session, which I attended, was also extremely enjoyable.

During the keynote speeches, the words "Heart to Heart" and "People to People" caught

my attention. I was reminded that the hearts and minds of each of us here today are,

after all, important components of our countries' relationship. I wish to close by saying

that I hope our bilateral relationship will further deepen as a result of this symposium.

－Mr. Parlindungan Purba,

Head of 2nd Committee Regional Representative Council Indonesia

The time spent together with METI, JETRO, JICA, the Japan Foundation, the Japanese

Embassy, and HIDA, during the Government Session was extremely meaningful. As a

Regional Representative Council Member from Medan in North Sumatra Province, I'm

engaged in promoting "exchange from person to person."

I plan to be a "bridge," particularly between Japan and Indonesia. When it comes to

investment, Indonesia is a country with promise. Also, I think this kind of interaction

and exchange must be promoted in all regions of the country and not just Java.

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－Mr. Kenichi Tomiyoshi ,

President Director Japan External Trade Organization, Jakarta Office

This symposium was held for the purpose of deepening the friendship between Japan

and Indonesia even further. In particular, the aim is to strengthen the ties of the younger

generation, or what is called the third generation. Even though our bilateral relationship

is very close, there has been a feeling that in recent years the relationship between our

nations' younger members has slightly weakened compared to the older generation. For

this reason, METI invited proactive people of both countries to be here today to help

build up the relationship between our two nations. Over 200 Indonesians and Japanese

participated in this symposium. I think this has been a wonderful opportunity.

JETRO Jakarta, to which I belong, is an organization that promotes trade and

investment from Japan to Indonesia, and vice versa. We think that it is very important

also to strengthen relationships among people of the younger generation through these

efforts. Therefore, I encourage you to use this social gathering as an opportunity to talk

together, do some networking, and build business relationships, particularly in the field

of economics.

○Presentation

The person on the left is Mr. Matsui,Platform

coordinator of JETRO, and the right is Mr. Riki Kono

Basmeleh, Entrepreneur, and the right is Mr. Dewanto

Bachrie, Chairman of Jakarta Osoji Club.

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○Presentation 1

－Mr. Riki Kono Basmeleh, Entrepreneur

Title; What’s your story

I was born from the union of an Arab-Indonesian father and a Japanese mother, and

have lived in Japan (city of Ueda in Nagano Prefecture), Indonesia, Singapore, and

Australia. Currently, I am part of a television program in Indonesia that introduces

viewers to Japanese culture. In this and other ways, I have been active as a bridge

between our two countries. It is from this background that I stand before you now.

What is your reason for being here today? I think there is a story behind everyone who

is gathered here. Also, I'm sure there is something that sparkles in each of your stories.

And even if each by itself may be small, when collected together they can generate

something that will have a new form. I would like to collect all of your stories and ideas

and blend them together.

The important thing is to share these and decide how to move forward. I look forward to

us creating a future together.

○Presentation 2

－Mr. Dewanto Bachrie, Chairman of Jakarta Osoji Club

Title: About Our Club

"Littering is embarrassing." That's our slogan. In places where many people gather, such

as the National Monument, Senayan Stadium area, and Blok M, you can find a large

amount of litter left by thoughtless people. For me, this is troubling. So three years ago,

I, along with a Japanese friend, started picking up trash. There are a lot of people in

Indonesia who seem to think that "it's OK to litter, because someone else will clean it

up." I don't agree with that culture (way of thinking). In front of large groups of people, I,

along with a Japanese friend who lives in Jakarta, called out to people, asking them if

they would help pick up litter. By taking this action, I felt like protesting to that

Indonesian culture, "Indonesian culture is a litter culture!"

Our litter pickup campaign began with Japanese volunteers and was regarded by

Indonesians as somewhat odd initially. Now, however, over a thousand Indonesians are

participating, and about 5,000 people attended a "Litter Pickup Rally" last year.

In closing, I would like to make a request. Please try to set a good example at your

school, home, or place of work. I believe that this type of activity should not only be the

mission of "Indonesia-loving Japanese" but the mission of "Japan-loving Indonesians"

as I hope we will emulate Japan's good points.

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○Closing Address

－Mr. Yuji Hamada, Consulate-General of Japan at Medan

Today is truly a day that should be commemorated. It was a day of heart-to-heart

bonding. Japan and Indonesia have deep ties in cultural exchange and history. If we will

combine our strength, we can generate tremendous power. By deepening our mutual

trust, as Mr. Purba mentioned, our two countries can achieve prosperity. In other words,

"heart to heart" and "people to people" interaction will lead to mutual trust. Interaction

between individuals will lead to interaction between countries. Thank you.