Remarks of President of the Republic of Indonesia During Kompas 100 CEO Forum, in Nusantara Capital, North Penajam Paser Regency, East Kalimantan Province, November 2, 2023

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 2 November 2023
Category: Remarks @en
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Assalamu’alaikum warahmatullahi wabarakatuh.
Good afternoon,
May prosperity be upon us all,
Om swastiastu,
Namo Buddhaya,
Greetings of Virtue.

Distinguished Ministers, President Director of PLN, CEO of Kompas Mr. Lilik Oetama, Head of the Nusantara Capital (IKN) Authority, Governor of East Kalimantan province, Regent of PPU, Ladies and Gentlemen, CEOs who are present here.

When we come to Kalimantan, usually before remarks, there is a pantun (a repetitive poetry). I’ve been coming here many times and have always been given pantun but I’ve never read ones. Therefore, on this good opportunity, I want to read a pantun.

Ikan Lou han, Ikan Gabus
Direndam dulu baru direbus
Supaya pembangunan maju terus
Pinjam dulu seratus

What I meant in the pantun is about the 100 CEOs of Kompas who are present here. Not about the money. However, everything needs money especially to build this country.

Ladies and Gentlemen,

I have said it many times. I have often said that Indonesia is a big country. We often forget that this country is a very big country. Many people don’t know. I often talk to Heads of States, Heads of Governments that we have 17,000 islands. They don’t know that our population is almost 280 million. Many people don’t know this. This is what I often repeat in meetings so that everyone knows that Indonesia has 17,000 islands and has the 4th largest population in the world.

Maybe you have never tried it, but since you have a lot of facilities such as private jet, try flying from Banda Aceh directly to Jayapura or to Wamena, then you will know how big this country is. I tried it once, it took 9 hours 15 minutes. Try flying from Banda Aceh to Jayapura then you will know how huge this country is. This is similar to the duration of flying from London to, let’s say Istanbul, passing through six or seven countries. Yes, it is our country.

We also have enormous potential. I’ve also said this many times. Abundant mineral potential, abundant fisheries potential, abundant agricultural product potential, abundant green energy potential. We have 4,400 rivers, of which 128 are large rivers, and the largest is Mamberamo River which has a potential of 23,000 megawatts of green energy. Second, Kayan River in Kalimantan, 11,000 megawatts, that’s hydropower, not geothermal. Our geothermal has a potential of 29,000 megawatts and only around 2,000 megawatts have been used. The potential is still huge. This is will be the attraction of our country because in the future the green economy, green energy will become a strength.

But the most difficult thing is how to integrate this potential so that it becomes a great strength for our nation, the dependence of other countries on our nation. I really want our products to be able to enter the global supply chain. This is what we are currently in the process of designing, namely the EV battery ecosystem and the EV ecosystem. But integrating this is also not an easy thing. How to integrate nickel which is abundant in Sulawesi with bauxite which is abundant in the west, in Bintan, in West Kalimantan, then integrate it again with copper in Papua and West Nusa Tenggara. Where is the most efficient location if we want to build a factory. Back to when Freeport considered whether to build a smelter in Gresik or Papua, I asked for it to be in Papua at that time. But after we calculating it, finally it was decided in Gresik. This is because to integrate one another in a big country like this is a difficult thing.

But again, to build it, the Government cannot do it alone. It needs the role of all of us. It needs the contribution of all of us, including entrepreneurs, investors, CEOs, and all of you here. I imagine that if we can integrate this, we can move forward from a developing country to a developed country.

I have also explained many times, that opportunity is in the next three national leaderships. And that is also what was often conveyed by the World Bank, by the IMF, by the OECD, by McKinsey. I asked the National Development Planning Agency (Bappenas) to count again. The opportunity is there, but the challenges are not easy, it needs consistency and continuity. Because from what I have learned, our leadership always reaches middle school, then when we change leaders, we go back to kindergarten, go back to elementary school, so it always starts from zero. Do we want to continue like that? Cannot. If you are in middle school, you should be able to go to high school, you should continue to bachelor’s degree, master’s degree, doctoral degree. It should be like that. Consistency is needed.

I learned from Latin American countries, in the 50s, 60s, 70s they were already developing countries, but until now most of them are still developing countries, some have even fallen into poor countries. But there is one example of a country that in my opinion, because of its management, because of its good governance, it achieves a very fantastic economic growth, namely Guyana. Guyana used to be one of the poorest countries in South America. Then oil potential was discovered, exploited by the private sector, not by the SOEs. It was carried out by the private sector, not by SOEs, but facilitated and regulated by the Government. That’s correct. We should follow it. Sometimes the private sector wants to regulate. The right thing is that the private sector can manage it privately, but the Government facilitates and regulates it. And, now Guyana is the country with the fastest economic growth. In 2022, their economic growth reached 62 percent because the private sector and the Government work together. We also want to be like that.

Back to Freeport. There are private companies, there are state-owned companies, as well as the Government. The Government obtains Corporate Income Tax, Employee Income Tax, export duties, royalties, non-tax state revenues, and because we are share owners, we get dividends which are not small from Freeport now. I am often asked by the public, “Sir, nickel exports have been stopped, the private sector will continue to do the work so the profit will be enjoyed by them. What will the people get?” I answered, this country cannot work like the private sector. The state does not get profits from there. The state gets revenue from Corporate Income Tax, Employee Income Tax, from royalties, from non-tax state revenue, from dividends, we get a lot. From there, what can the state budget be used for? For village funds, for social assistance to build infrastructures. It must be explained like that so everything is clear. We think we won’t get anything but actually we can. So once again, cooperation and collaboration, are now the key.

I will give a second example, the development of IKN. This also cannot be done by the Government alone. We need US$33 billion, it is impossible. Therefore, yesterday we designed 20 percent is from the state budget, the 80 percent is from the private sector. I am happy that since the Government started this project two years ago, in the middle of this year the private sector has started to enter, laid the first stone and carried out groundbreaking. Currently we are slowing down because we prioritize domestic investors first. Foreign investors have shown their interest, for example from Singapore 130 investors came to see the new capital and showed their interest. We have received 320 letters of interest so far. That’s a lot, but we will give it first to domestic investors.

Why so serious. I just want to show everyone our new capital. I want to hear some comments.

Representative of CEOs
After visiting IKN, this is our goal to reach Golden Indonesia 2045. From our point of view as field practitioners, apart from infrastructure, what you have showed us is really important. Because to reach Golden Indonesia, I feel that apart from natural resources, we also need infrastructure, we need human resources, golden human resources.

So, Sir, please give some directives regarding human resources, as well as law enforcement, legal certainty, legal reforms. Because everything that we build here needs legal certainty. Do not let investors who have invested here find troubles in the future, in the next cabinet. Thank you.

President of Republic of Indonesia (Joko Widodo)
This comment is not about IKN. Only complaint.

Representative of CEOs
It is not a complaint. I talked about certainty.

President of Republic of Indonesia (Joko Widodo)
I need comment on IKN.

Representative of CEOs
If there is legal certainty and legal reforms, we are ready to support IKN together with you. Because that’s what we need from the private sector. We need certainty.

President of Republic of Indonesia (Joko Widodo)
What kind of certainty?

Representative of CEOs
We do not want to find troubles in the future.

President of Republic of Indonesia (Joko Widodo)
Why? What could be wrong in supporting IKN?

Representative of CEOs
That’s what we want to say. This IKN is built for our future generations. In 2024 you want to carry out the independence day ceremony here. We are ready but we also need certainty, especially in legal aspect, we must be careful.

President of Republic of Indonesia (Joko Widodo)
Many people assume that next year the IKN will be completed. Who said that? Next year we want to carry out the independence day ceremony here, meaning that the field will be ready. Not the whole city. To build the whole city may need fifteen years, or faster if the private sectors build it quickly.

Therefore, I invite everyone here to buy the land here since the price is still cheap. In SCBD area in Jakarta, the price of land per meter is probably Rp200 million, in Menteng area maybe Rp150 million per meter, in Balikpapan it is already Rp10-15 million per meter, while here it is still under Rp1 million per meter. But, maybe next week the price will rise. If there are a lot of people interested, the price will rise.

So again, IKN is an investment for our future, an investment for Indonesia’s sustainability. So, if you still have any worries, why worry? The law already exists, the law is supported by 93 percent of the party factions in the House of Representatives (DPR). What are you afraid of? Afraid of the election? We had elections for several times already, in 2009, 2014, 2019. It is normal if the tension is a bit rising ahead of the elections.

I see that we are becoming more and more mature in our democracy. Differences are normal. Different choices are normal. It’s the people who choose. Sovereignty is in the hands of the people. No matter how handsome you are, if the people are not happy, what will you do? This is the people’s choice. It is normal during competition. You are used to do business, you are used to deal with the economy, so no need to learn to be a politician. The most important thing, we hope that after the elections we will be united again for our beloved country and nation.

Back to downstreaming. We shouldn’t just focus on one. I usually like to focus on one thing, but if I can do two, it’s better. Don’t just deal with minerals, because we still have lots of others. We can work with agricultural products or marine products. Now perhaps the most popular thing in the future is seaweed, because not only for pharmaceutical purposes and beauty, seaweed can be used to make bioethanol. Indonesia is the second largest producer of seaweed in the world and it is very possible to become the first largest in the world. Now, we can only produce 10.2 million tons and are still exporting raw materials to be made into gelatin powder. Why don’t we switch to bioethanol? If we can promote seaweed, people from the upstream to downstream will get the profit. It’s very interesting for me to see and we want to make one example, then copy it to other locations.

We hope that when we focused on downstreaming in minerals, agriculture, plantations, and marine fisheries, our estimation is our income per capita in the next 10 years will have reached almost US$10,000, around US$9,600 or less. In the next 15 years, maybe we will reach approximately US$14,000, around US$13,600 to 14,000. Twenty years from now, it could be US$21,000 and above.

But once again, the challenge is not an easy challenge with the current global situation which increasingly unclear and uncertain. Climate change reduces production, then the increase in interest rates in America that causes capital outflows, the Ukrainian war, plus the war of Hamas and Israel. I think many of these challenges are indeed external challenges that are difficult for us to predict and to calculate.

That’s what I want to convey on this good opportunity. I see that the future green economy in our country will be a very big opportunity. The opportunity is very visible. It’s just a matter of whether we want to start immediately or not, and that depends on all of you. The state just, again, organizes and facilitates everything.

I conclude my remarks.
Thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.


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