Robby Djohan is a former career banker (Citibank, Bank Niaga and Bank Mandiri) and at one time managed the country’s flag carrier, Garuda Indonesia.
In the past few years he has released three books, namely Lead to Togetherness, The Art of Turnaround and Leading in Crisis, all of which have enjoyed moderate suceess.
Nowadays Robby divides his time between Jakarta and Bali (he is the co-owner of The Legian and the BIFA flight school in Buleleng). He also chairs the Board of Trustees of Jakarta-based Al Azhar University.
He also devotes much of his time speaking in seminars and in limited discussions on social capital, which he articulates at length inhis books.
The President Post recently caught up with him in Jakarta and discussed several pertinent issues.
Excerpts:
Can you articulate your notion of social capital?
I like to refer to my book “Lead To Togetherness, which basically explains the importance of social capital. Social Capital is basical ly people participation, the feel ing of togetherness and the feel ing of happiness. You will only obtain those feelings if you live in prosperity, improved knowl edge and live healthy, physically and mentally.
In the book you also dis cussed leadership.
Social Capital can only be built if initiated by leaders. We have in our nation’s history of leadership what is known as feudalism, hi erarchies and bureaucracy. We need leaders with integrity and capacity to reform Indonesia.
What do you think President Susilo Bambang Yudhoyono (SBY) should pay close atten tion to in the context of the global economy?
Global economy means that in terms of trade, relationships, there are no borders.
Now who will benefit from the absence of borders? The stronger economies, of course, and they will benefit at the expense of de veloping countries. In the case of the US, they will benefit from services, banking, investments in natural resources etc. In terms of productions and products, Chi na and India are in very good po sition to become leaders in those areas.
If that should be the case, how then can Indonesia benefit from the global economy? By mak ing priorities on how to bring in investments in areas where we can be competitive against oth er countries. For example infra structure projects, give them the means for them to invest in cost and easier operations.
What other aspects are worthy of the President’s attention?
Another aspect in global economy is how we can benefit from exports, as in some areas it is still profitable. We have to remember that the global economy will always benefit the more advanced nations and as such we have to be careful.
As such, I believe that it is more important that we build local economy, which is basically making sure that the economy is stable and that we maintain high discipline in managing monetary and fiscal policies. Stability is very important even for multinationals, joint ventures, big and small industries.
We have to have stable inflation, sound balance of payments and state budgets. Key is how to manage economic growth. Capitalize from investments that are already in place, but I believe that economic growth can also come from the development of social capital, prosperity, knowledge and health.
So why is social capital very important?
We very much rely on the productivity of the small and medium income group. We have many of them but not all can rely on labor. The bulk of the people that are down below are in the agriculture, fishery and SME sectors.
So what do you do to make them potential, to empower them so that they can also be part of the economy? By improving their potential to spend; if they have income and have the money to spend, then they are potential to build markets.
What are your other major interests in the context of so cial capital?
We have to develop free educa tion at least from primary school up to senior high school because the students are the future of our country.
We have to build a generation through education. Believe me, it is much easier to manage a soci ety that is well educated than that which is not because uneducated people always feel that they have their backs against the wall.
Educated people often have al ternative ways of thinking. It is very important that people find alternatives in life. A new genera tion is a generation that is educat ed and understands how to live in the right kind of democracy.
What is your general impression of President SBY?
He is man of vision and has integrity. It is important that he builds up capacity based on the integrity he believes in. Most books written about that capacity says that it can only be obtained if you work with the right kind of people.
What do you think should be President SBY’s priorities?
I believe SBY should focus on prosperity, education and health. It should become a reality. It is not merely the integrity of the vi sion but also the capacity to make this vision work.
How should he go about im plementing them?
He has to have the best people as ministers of trade, agriculture, fishery and labor. He also has to have an able person managing our tourism. All those depart ments have much to do with the development of social capital.
How do you think President SBY should build prosperity?
If the President wants to build prosperity he should spend a great part of the state budget in agriculture by increasing produc tivity, new areas in agriculture through water systems, technol ogy and others.
Currently, many farmers work from hand to mouth. This is not fair because they work very hard. It is the government’s role to help in the area of developing prosper ity.
In building the economy, the market can take care of that and we don’t have to be involved. But in building prosperity in agri culture, fishery, SMEs and oth ers, this is where the government should come in. The govern ment should get involved by pro viding sufficient capital through the state budget to help the peo ple and make sure that the funds from the state budget are well dis tributed.
Can you further elaborate on this?
When we talk about develop ing an economy, we talk about developing regions and crerat ing a good relationship between the central and regional govern ments.
So, we have to come up with very strong programs and that everybody should be committed to these programs. It is also im portant that the banking system, through the state budget, sup portts microbusinesses.
How do you see the role of banks?
The banking system is fully responsible for what they’re do ing, but the government should help. Officials shouldn’t just rely on banks and say they want them to spend 20-30% of their portfo lio to develop small-holders. The government should also help in funding. The government should channel funds through the bank ing system. It is more efficient and you have a grip on the banks. This has been my experience as a banker.
If people don’t spend, there is no market because a market is about buying and selling. Not only foreigners but also locals will invest if they know that whatever they invest they can sell. That is why social capital is very impor tant.
You are well-known as a professional who has turned around major companies such as Bank Mandiri and Garuda. How would you turn around the nation?
Turning around of the country can be done by taking advantage of the global economy and mak ing yourself competitive among nations. But you can also do it by developing its social economy, and this is where the government plays an important role.
Past presidents have focused on getting out of the crisis that was caused by the Old Order. What I expect SBY to do is to build a new generation with new para digms where people’s participation is very important. But if you want people to participate, they must have the capacity, which is basically education, health and prosperity.
It is important that SBY prioritizes on building prosperity and education so that the function of social capital works.
Indonesia is basically an agriculture-based country. How can we improve the lot of our farmers?
To improve farmers is very simple: through irrigation, fertil izers and pricing of products. You also have to increase yield, market that are useful to the farmers and the small holders .
Do you think Indonesia is still attractive to foreign investors?
People will always come to Indonesia to invest because we are a potential market. Investors will not come to Indonesia because of tax policy, infrastructure; they’ll come here because they know that whatever they produce here can be sold. So, we have two things: a developing market and a society that is prosperous.
We don’t have to worry, because a prosperous society has very strong social capital capabilities.
We were successful during Soeharto’s time, and we should improve this by being more independent, having less conflicts and focus more on social capital.
What would you do if you were the president of Indonesia?
I am too old to be president, but I believe that 50% of the state budget should be allocated to build the people’s economy, and that we must work with the best people committed to make Indonesia a country we can be proud of.