Rational Optimist
Category: Issues & Ideas By : Justin Doebele Read : 694 Date : Thursday, October 13, 2016 - 11:31:21




Ahmad Zamroni / Forbes Indonesia

Thomas Trikasih Lembong became the chairman of the Indonesia Investment Coordinating Board (BKPM) in July, having previously been the minister for trade in the Joko “Jokowi” Widodo administration from August last year. The former head and co-founder of local private equity firm Quvat Management, Tom is a graduate of Harvard University, with a BA in architecture and urban design. In his first major public address in the BKPM post, Tom talked about his new role and outlook for the country in a luncheon presentation to the Jakarta Foreign Correspondents Club, held on August 10 at the Intercontinental hotel in Jakarta. The following are edited excerpts of his presentations and responses to questions.

On the Recent Reshuffle:

We have said it before, in the two years since President Jokowi took office, I can honestly say this is easily my point of highest optimism. Obviously, the reshuffle has a lot to do with that, I think it was resoundingly successful reshuffle, as evidenced by the reaction of markets. Much of the attention was focused on the astonishing return of our famous Sri Mulyani to the finance ministry post.

On Changing His Post:

The president actually communicated with me, the week prior to the reshuffle, and he conveyed some concern about how I would feel about it, which blew my mind. I said to him: “Pak, you’re the president, you can do whatever you want, you don’t have to worry about my feelings.” Then I told him that: “I’m fully at your disposal, I’m your man. You can use me wherever and whenever you want.” I agree with the president’s decision. I think these changes make sense. I’m 45, so I still have a long road ahead of me, and I don’t worry about up or down, this or that way.

On Growth:

Obviously, we’re very happy to see that in the second quarter, GDP went up. We had a nice surprise in the fourth quarter of last year, when growth was almost 5.11%. In the first quarter, it was down again to about 4.9%, and then in second quarter up again to 5.18%. I think this confirms what President Jokowi said earlier this year, that we have stabilized the economy, at 5% growth. Our task now is to gradually raise the growth rate to mid-5%, then high 5%, and on to 6%. The first goal was stabilization—then you can build from there.

On Smelters:

I think this strategy is finally working—with some wrinkles—and believe it or not, people are finally building smelters. However, we are not actually keen on smelters or oil refineries. The margins are paper-thin, returns are lousy, but they’re a necessary evil, an intermediate step towards further industry. You can’t get to the plastics and petrochemicals, unless you have the refining first. You can’t get to other industries unless you go through the smelter phase. Yes, it’s a painful way to progress the economy, and maybe not my preferred way, but we might as well muddle through.

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