Bakrie & Brothers CEO Anindya Bakrie on Indonesia's Growth

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00:00So, I want to just talk to you a little bit about Indonesia.

00:02We spoke about it on the panel a bit, but growing at about 5%,

00:06despite some of the headwinds that we've been speaking about all day.

00:09Do you think that is adequate for an economy of Indonesia's size,

00:14especially regionally, such a powerhouse?

00:17What would you say the outlook is for growth?

00:18First of all, our president has this target of 8%,

00:22because Indonesia has been growing for almost three decades,

00:26about 5%, on the back of the domestic consumption, also government spending.

00:31Now, as we are taking in a lot of FDI and also getting a lot of surpluses in trades,

00:38we believe the 8% target gradually to 2030 can be achieved.

00:43And that is important for Indonesia and I think also for the world,

00:46because we have 285 million people.

00:49Right now, we have about $5,000 per capita, making us $1.3 trillion economy.

00:55But we need growth, as we need a lot of jobs.

00:58We need a lot of people to make sure they go up in the value chain in terms of their welfare as well.

01:04So, yes, we do need additionally 3% on top of the 5%.

01:08Do you think the policy decisions of the new finance minister who has come in

01:12is adequately getting the country on track to achieving those goals right now?

01:18I think so, because his policy is to bring liquidity to the private sector.

01:23And as you know, Indonesia, about 70% of the economy is actually coming from the private sector,

01:29including the state-owned enterprises.

01:32As right now, Indonesia is running quite strong with the sovereign wealth fund called Danantara,

01:37which has almost $1 trillion AUM.

01:40That liquidity is very much needed for both private sector as well as state-owned enterprises within Danantara.

01:46And this will induce a lot of growth in the country.

01:50Having said that, a lot of the social initiatives being done by the government,

01:54such as the free nutritious meal to 8 million kids and lactating mothers,

02:003 million low-income housings per year,

02:03as well as free health check-up every year for the 285 million people,

02:07I think that's a good thing.

02:08That will also increase a lot of the social security and comfort for the people.

02:13What about deregulation, though,

02:15and potentially that helping to increase some of the FDI that we're seeing in the country?

02:22Do we need to see a bit more deregulation?

02:23No, we always need more because I think…

02:26Deregulation.

02:27Because at the end of the day, I think the country,

02:30and also it is a competitive arena in the world.

02:34In order to be competitive, we have to continue to deregulate

02:37to make sure that companies, investors become much more efficient, much more productive.

02:42We did a big omnibus law about five years ago during President Jokowi's era.

02:48I believe one is coming also during President Pablo's era,

02:51and the numbers have shown.

02:53We have hit a record of FDI year after year.

02:56I think this year we will probably cost $100 billion of FDI,

03:00which is quite a lot of money.

03:02And the trade surplus per month is about $2 billion,

03:05which is very good, especially knowing the geopolitics tension

03:09and the refiguring out the supply chain as well.

03:13So what sort of deregulation, then, do you think should be maybe first on the docket?

03:18I would say first and foremost is how to help small-medium enterprises in Indonesia.

03:23So, Jennifer, in Indonesia, while it is a big country,

03:2760 million business organizations actually are small-medium enterprises

03:32as well as cooperatives.

03:34So we need to make sure that the access of fund is easier for them,

03:38access to market is easier for them, and also access of technology.

03:42I think if we empower a lot of the small-medium enterprises,

03:46naturally the big companies, whether Indonesian private colomerates

03:51or the sector enterprises, will also have a captive market

03:55because they can buy their products.

03:57What does that mean for Bakrian Brothers?

03:59Are you thinking about new investment outside of Indonesia,

04:02new sectors, potentially coal, expanding some of the investment on the continent?

04:07Are there potential deals that you're looking at?

04:09So 90% of our focus, Jennifer, is still in Indonesia

04:12because we see a lot of growth.

04:14We are in three different sectors.

04:15Number one, energy, coal, oil, and gas,

04:18and we also come into critical minerals such as gold, copper, zinc, bauxite.

04:24So that's number one.

04:25Number two, we focus on industrialization of steel,

04:28including getting into infrastructure businesses such as Tower Road.

04:32Number three is the digitalization such as media, technology,

04:36and also intelligence infrastructure such as Data Center.

04:39Now, in Africa, we have two countries that we have started to be involved in.

04:44Number one is Mozambique with the gas field as well as cooking coal,

04:50and also Guinea as we focus also on possible plantations and also bauxite.

04:57So we see a lot of opportunities to work together

04:59because the south-to-south collaboration between Indonesia and Africa

05:02I think is still very low and a lot of room for growth,

05:07and we are a believer in that.

05:08Are you encouraged, though, by the steel demand right now?

05:12Don't you think it should pick up a bit more

05:13to justify increased investment into the backbone of steel?

05:17No.

05:18By the way, one of the biggest exports from South Africa to Indonesia is steel,

05:24coming from ore and so forth.

05:28So the steel demand will continue to be there

05:30as the growth in the country is continuing and growing.

05:35But I think the possible investment for our group

05:39can also be about building the new supply chain

05:42that will also bring value additions to Indonesia or Southeast Asia as a region

05:47as well as South Africa or Africa as a region.

05:51And we want to keep the value additions also in our parts of the world.

05:54Yes, we should work with all sides of the aisle or the east or the west,

05:58but I think our countries have fair ambitions to hold a lot of the value additions in the country.

06:05Including the U.S. still.

06:06Yes, that's right.

06:07A partner still for Indonesia.

06:09Yeah, I think U.S. has always been a good partner.

06:13As we talked a little bit before,

06:15we want to diversify our trading and investment partners.

06:19That's why in the last three months,

06:20we signed a deal at SIPA,

06:22Comprehensive Economic Partnership in Humanity,

06:24with Canada, EU and Peru,

06:26all in three months, right?

06:28And we are also joining BRICS

06:31and continuing the process of accession in OECD.

06:35So we're trying to do many things

06:36and also try to balance our involvement internationally.

06:42Thank you so much, Anandia.

06:43It's great to speak with you again.

06:44Thank you very much.

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