Indonesia: Prabowo on Western "Double Standards", Jakarta City Master Plan & Microsoft $1.7B Investment with Gita Sjahrir - E422

Gita Sjahrir, Head of Investment at BNI Ventures, and Jeremy Au, talked about three main themes:

1. Jakarta City Master Plan: Gita highlighted Jakarta's urgent urban planning needs to address rising sea levels, land subsidence, air pollution, traffic congestion, sanitation upgrades and education requirements. Miscommunications, fragmented stakeholders and the recurring blame game in political discourse have contributed to this impasse. They discussed the new Jakarta Agglomeration Area Council, led by Indonesia’s incoming Vice President Gibran Rakabuming Raka (Joko Widodo's son), which aims to coordinate two governors, four mayors and four regents to create a new master plan for 6,700-square-kilometers.

2. Prabowo on Western "Double Standards": Jeremy and Gita discussed Prabowo's strongly-worded The Economist op-ed which said that the West had "double standards" on Gaza and Eastern Europe and that valuing the lives of civilians in Palestine less than in Ukraine is morally indefensible. Prabowo has long advocated for cease-fires in both countries, signaling a more public foreign policy than the outgoing President Joko Widodo - while maintaining continuity on domestic and economic policy. Gita noted that Indonesia's population size and economic growth strengthen its voice in international affairs, vs. other ASEAN neighbors that have voted similarly for peace deals in both conflicts.

3. Microsoft $1.7B Investment: Jeremy and Gita discussed Microsoft's $1.7 billion investment to enhance Indonesia's digital infrastructure and workforce capabilities. This investment highlights Indonesia's potential to become a key player in the global tech market. They also addressed the challenges of brain drain and debated on dual citizenship as a solution to retain talent by allowing Indonesians to work abroad while maintaining ties to their home country, in contrast to Singapore's immigration policy. They emphasized the importance of upskilling and continuous education to keep the talent pool relevant and competitive,

Jeremy and Gita also talked about the similarities in urban planning in Jakarta vs. San Francisco, the debate on national security concerns related to dual citizenship, and the impact of political stabilization and economic continuity post-election.

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(01:33) Jeremy audio:

Hey, Gita. Good to have you again.

(01:34) Gita Sjahrir:

Hi, how are you?

(01:35) Jeremy audio:

Awesome. It's been a lot of travel. So I was in Thailand watching the Huawei conference. I was in Riyadh for an entrepreneurship conference, but I learned a lot actually about both Huawei and the Chinese mobile phone and IT hardware built out the system, plus also, Saudi Arabia, it's my first time. So this is very interesting to see the economics and the policies as well. How about you?

(01:54) Gita Sjahrir:

That's amazing. I'm so glad. I've been good. Definitely, I've been traveling a lot too. Just went to Bangkok for Uniscap's Feminist Finance Forum. And then also now traveling a little bit more before going to finish up my conference in San Francisco.

(02:06) Jeremy Au:

Busy, busy, busy. And what we wanted to do was talk a little bit about what's happened in Indonesia over the past month.

(02:12) Gita Sjahrir:

Yay!

(02:12) Jeremy Au:

Yay. I mean, a lot has happened. First of all, a lot of people like our electric vehicle discussion. So we kind of called it because a lot of articles since then have come out about the EV ecosystem, but I guess the benefit of doing a podcast is we can just ramble about whatever we're seeing, and we don't have to do these and sources and write a long report about it.

(02:30) Gita Sjahrir:

I mean, these are just things that we see on the ground, right? So as venture capitalists, we see hundreds of decks on certain things all the time. So that's why we have more of real-world and real-time assessment of what's been going on out there. For example, the EV we've seen is going on two years now or something. And so let's see what's going to happen next in terms of the next big thing that people talk about.

(02:52) Jeremy Au:

Yeah. And I just want to say I am a big supporter still of EVs. I do believe that every car in the future will be a hundred percent EVs. I think EVs are going to help save the planet. We'll just say that the production of it may end up being in, a lot in China or Chinese-affiliated firms or local companies, partnering with the Chinese ecosystem, rather than being domestically manufactured.

(03:11) Gita Sjahrir:

And there's nothing wrong with that either.

(03:12) Jeremy Au:

Yeah. What happened to “everybody wins”. We help each other.

(03:16) Gita Sjahrir:

When, did this become so binary that it always has to be one destroyed over another? It's bizarre.

(03:22) Jeremy Au:

Yeah. It's the reality of where we are. Hopefully one day, our kids, our grandkids will look at this time as a blip, hopefully.

(03:28) Gita Sjahrir:

Or they become more transcendental and they understand that the world has more nuance. I don't know.

(03:34) Jeremy Au:

They ascended using AI therapy.

(03:36) Gita Sjahrir:

Oh my gosh, okay, mental health and AI. Let's go there one day.

(03:39) Jeremy Au:

Yeah, let's go there. Oh, we should do that one day. It'll be a fun one.

(03:42) Jeremy Au:

But yeah, talking about the things that happened to the ground, obviously a lot of things have happened since the Indonesia election. It feels like the political situation has stabilized a lot, but could you share a little bit more from your perspective?

(03:51) Gita Sjahrir:

Sure, things have stabilized. People are waiting for the transition to happen in October. So in the meantime, there have been other issues that are coming up into the frame, but those are issues that also have been around for quite a long time. And we're talking about this even before, right? So there are issues regarding what to do with, well, not the capital city anymore, but one of our large cities, Jakarta, and how to work with the infrastructure there. And also there are related issues with it.

(04:18) Jeremy Au:

Yeah. And this basically starting to leak or push through the signals about what the policy differences are. So obviously, from electoral campaigning, you said it's really about a message of continuity, but of course, there are similarities and there are differences. One of them that you mentioned was that the Jakarta Agglomeration Area Council has a master plan for Indonesia's, Jakarta traffic, and urban dynamics. And so what is said is that Gibran is going to be the new lead so the incoming vice president and the son of the outgoing Jokowi Widodo son.

(04:51) Gita Sjahrir:

Well, Jakarta is also a behemoth of a city, which means it has a behemoth of problems, and I live here, so I can tell you how it even feels like, not only are we talking clean air problems, but also traffic, which we've become legendary over the years, also questions of, Yeah, it's true. Also, questions of environmental concerns, all of that are going on right now because the problem with Jakarta is it was also never really built to become this dense and this big.

At the time, it really was a colonial seat for the VOC from the Netherlands. So it wasn't really built in order to become the big city that it really is now. That's why I think people are seeing that Indonesia when you look at Jakarta, developed in pockets,. So even if you look at Jakarta, it's not structured in a way that's very strict. It is created in a way where people go, "Oh, there's a community building here and it's pretty grassroots," and then, "Let's start building infrastructure," is more like it. So some type of formalized structures are needed to bring the city together but that means this is a very long, very expensive, and going to be a very holistic process that might be a bigger homework than people think.

(06:06) Jeremy Au:

Yeah. So there are two parts to it. One part is the challenges of the city, and the second one is the political organization process to try to fix it. So basically from the problem side, as you said, just a recap is you have air pollution, you have traffic problems. We have 30 plus, 35 million people in Jakarta, and more and more in greater Jakarta. And then obviously there's the rising sea levels. There's a sinking subsidence of the place as a result is also flooding as well. And obviously, there's the other stuff, which is sanitation, education, infrastructure, all that stuff. So it's a big Rubik's cube. I don't even, I think Rubik's cubes make it sound simpler.

So it's like speed Rubik's cubes. A lot of problems, but let's talk a little bit about the process. So what does the council, what does that do from your perspective?

(06:50) Gita Sjahrir:

Oh boy, I don't know also if the council has set up the right timeline and plan to do this because I'm not really sure in what stage they are in. There's just a lot of gossiping, lots of talking right now, but Jakarta has always been a behemoth of a problem that, as you rightfully said, becomes very political very quickly. So for example, the clean air situation that we have has been akin to the Beijing air pollution problem except the difference is in Beijing, there was a strong political will to fix it, whereas in our realm, what ended up happening was it was politicized because people don't want to take the blame. And so because people don't want to take the blame, what ended up happening was one area will say, "Oh it is because of foreigners," and you're like, "What foreigners have to do with it," because yes, "foreigners want to make us believe that we're doing a bad job so they're actually skewing the data," and there are all these conspiracy theories that happen, and before we start getting judgy on Jakarta, I just want to say that cough, cough, remember COVID in 2020, and the number of conspiracy theories and assumptions that just happen because of one thing.

So that's just air pollution, by the way. I can't even talk to you about traffic, because then, here we go, then you'll go, "Oh, it's because all these car makers are competing with each other." "That's why they're trying to sell Indonesians more cars and paying off blah blah blah," and things just become very political very quickly. And I think that's very common for new electoral democratic systems where the keys of power are still just not really established in certain areas. If you're a democratic party in the US, there's a really good chance you've been around for a long time. If you're a party in Indonesia, there's a really good chance you've been around since like 2004. Or 2006? Or even later than that.

(08:41) Jeremy Au:

Yeah. I mean, air quality obviously is a big problem all across Southeast Asia. Also a big problem in Vietnam. Obviously, part of the economic growth. Some statistics that I have here on hand here. It says here that the residents of Jakarta are exposed to six times the recommended level by the World Health Organization for PM particle concentration levels. And so if the quality level improved to just the basic guidelines, then Jakarta folks will live 5.5 years longer, which is a lot. That's sad, but it's a tricky problem because air pollution is similar to traffic. It's always someone else's problem. If you burn something here, it's someone else's problem in the air. If you're public planning, it's someone else's problem at some level as well. So I'm just kind of curious how you think about that because the new body is going to cover, they said greater Jakarta which is about 10 times the size of Jakarta itself. About 6,700 square meters, 6, 700 square kilometers. So it's like Jakarta, four satellite cities, four regencies. So that's a lot of people, it's a lot of stakeholders. What would you foresee that? Because it's two governors, four mayors, four regents, Jakarta. How would we go about having those conversations from your perspective?

(09:46) Gita Sjahrir:

I swear, so many problems in Indonesia. I really think can be solved if there's just political will, basically, people coming together and going, "Hey, we should fix this, but I keep laughing about how we shoot ourselves in the foot because we would do some good things and then we would do some things to hurt ourselves, which also lots of countries do, but I'm more critical because it's my own country. And what tends to happen is there's a lot of blaming that shifts around. And there's also a lot of victim play. I only did that because you did this and therefore that, and so much of the issue lies in communication. We are not necessarily also Asian culture as a whole, not necessarily known as to be the most optimized when it comes to communicating efficiently and effectively. Effective is the keyword here, which is how do you create political will together? And that's been a really big problem here for a long time, a very very long time because of just how short a time frame people think. And when I say short time frame, as in people think in terms of, "Oh what's going to happen in two years or three years?"

And that's also super common with other countries and people always think it's just a democratic situation because people have to be elected, but actually, it also is common with emerging markets, just like new economies, new types of worlds, like new types of communities. That's very common because no one has a stronghold yet in a very solid and real way. They can foresee their third, fourth, and fifth generations ahead, still being in that same realm.

(11:18) Gita Sjahrir:

So this is really the crux of the problem, like communication and having a political will that's going to be huge for Indonesia, and one more: talent. So when I say talent, it's not because Indonesia doesn't have talent. Indonesia has tons of talent, but how do you maintain that the talent is constantly reskilled, upskilled and staying relevant to the needs at hand? Because as we heard, there's, a lot of positive news about Satya Nadella wanting to invest more than a billion into Indonesia. And then there are all these other tech companies coming in saying, "Oh, why don't we invest in Indonesia?" But then again, the question will always be, sure, but how do we ensure that our talent? Can stay relevant in a changing world because then the question isn't about, "Oh, they need to learn STEM." " They need to learn computers," sure, but we also don't know, as humans, we also don't know, 50 years from now, what does that even look like? None of us know. Why? Because of the way things grow.

Things grow exponentially more complex as time goes on. We can barely predict what's going to happen in 25, let alone 50. So then, it becomes about how you maintain a relevant human resource and talent pool.

(12:26) Jeremy Au:

Yeah. A lot of these challenges do feel familiar, especially with the San Francisco Bay area urban planning, which I always find quite amusing because you talk about emerging economies, but I'll say the US is definitely developed, and San Francisco obviously has the best technology and one of the highest concentrations of wealth. But they have a similar problem where San Francisco City, unfortunately, like Oakland, Cupertino, Berkeley, they all have suburbs and they all have very strong local communities, mayor's equivalent or their planning councils, and then they don't have a unified urban planning dynamic where it makes it difficult to even get to an agreement on public transportation, which should be more of a no brainer. Whereas New York on the other side, is much more cohesive. It's always just two things. It's always a New Jersey governor versus New York City.

They are really competing but, it feels a little bit more straightforward, and they're also more aligned than, they're not aligned, actually, interestingly. So it's an interesting dynamic there.

(13:19) Gita Sjahrir:

Yeah. So for Jakarta, for the council, I wish them the best and hope they find the right talent that will fit.

(13:25) Jeremy Au:

Yeah. But you know, it's a new problem for Indonesia, so I feel like the San Francisco Bay area has not solved it for the past 20 years. So you still have another 20 years. You shouldn't feel bad. You shouldn't feel like it's an emerging market problem.

(13:36) Gita Sjahrir:

It's, a yeah, it's, It's, USA problem.

(13:38) Jeremy Au:

It's a problem.

(13:40) Gita Sjahrir:

It's just because we live in this world.

(13:42) Jeremy Au:

Yeah. And speaking about, like you said, there's obviously been some investments, right? So Microsoft, a lot of the tech leaders have been traveling Southeast Asia and everybody's been making stops in Indonesia to make those commitments. So education obviously is a big one.

(13:53) Jeremy Au:

How are you thinking about that?

(13:54) Gita Sjahrir:

Oh, for education, I mean I'm not an expert at all. I do know that education is one of the largest allocation for the national budget and I think that was what made a lot of people feel very strongly against or for Minister of Education appointments. So I'll be interested to know who's the next minister of education and related to investment, upscaling education reform or maintenance, whatever it will be.

There's also been a lot of talks about what do we do with brain drain and the growing Indonesian diaspora. There's a lot of talks about Indonesians getting, it's called LPPP, but it's basically a scholarship from the government. And with that scholarship from the government, a lot of people end up literally leaving Indonesia forever, so they would go to school there and say, “Oh, we're just going to stay here,” and do you? But that actually takes into question. Hey, how are we going to view citizenship? So recently there was that coverage on Bloomberg about dual citizenship potentially being one of the solutions for Indonesia.

(14:57) Jeremy Au:

It makes sense because, instead of Indonesia is giving up a passport to get a passport overseas, then, dual citizenship makes sense. Also, this is 300 million folks, right? So it's a good net, interestingly, in contrast, Singapore doesn't have that, I mean, Singapore is quite clear that there's only one citizenship they can have.

(15:13) Gita Sjahrir:

Okay, yeah, to be fair, Singapore's passport is either the first or the second most powerful in the world. It's 192 visa-free countries or something. It's more of a question for Singaporeans, what other passports can you give, you even more access than what you already have, which is very different than an Indonesian passport? And when people look at passports, it's not just about access to countries. So in the past, the history was there was questions about national security. For Indonesians, if an Indonesian is a dual citizen, how do we know where their nationalism lies? And what we realize these days is with a changing world and changing trends and technology, threats are not necessarily coming out of just that one individual or group. In fact, it could really also just be cyber attacks, so cybersecurity and all those questions. And so I think with the changing world situation, a lot of countries must look inward and just question are the policies that served me or I thought served me decades ago. Will it continue serving me decades later? And I think for Indonesia, when you think about the brain drain problem and when you think about the need for talent today in our very rapidly growing economy then that becomes a question worth pondering.

(16:27) Jeremy Au:

Yeah. The national security side does jog my memory a little bit. One of the big reasons as well is that Singapore does require a two-year military service commitment for citizens and permanent residents, right? Males. So one of the concerns with dual citizenship is that a lot of folks will have it as kids and then they will just, at the age of 18, say, hey, I'd rather not serve the country of Singapore. I'll just go to the UK.

(16:49) Jeremy Au:

So that's also a big difference, but now that I thought about it, you know, speaking about national security and all that stuff, it was interesting because I was reading The Economist and I'm flipping through the paper magazine like an old person, and then, I read across Prabowo's letter where he said that, the title was like Prabowo accuses the West of double standards on Gaza and Ukraine.

(17:07) Gita Sjahrir:

Yeah yeah. He's been fairly open about that, though, like he is, and in general, the Indonesian people are fairly open about that. And how a lot of it has to do with our history. Palestine, I think, being one of the first countries, if not the first country to recognize us as a nation eons ago, decades ago. So there's a lot of solidarity there. But to be fair, when we're looking at the world today, there are questions about double standards when it comes to the moral high ground. What is considered to not be fair by a lot of the world, if the West says that is the way it goes, that's fair, then it becomes a standard, almost. And that is where a lot of Southeast Asian countries, that's why we're just really in our own world, in a way, is because we also don't want to be taken and dictated by a lot of other influences and powers. So for example, in Indonesia, there's just so much and so many questions and pressure from the West about, " Hey, what's your relationship with China?" and we're in the same continent, and if the Chinese are willing to work together with us and collaborate and skill transfer and do things that are just productive together. Also, what's wrong with that? And that is really where things are. Just because someone has an enemy, we're almost always trying to get dragged.

And that's a lot of the sentiment where honestly, probably a lot of the emerging markets. Why are we being held to someone's opinion? Why are we being held to someone's goals? And why are we being held to someone else's double standards?

(18:37) Jeremy Au:

I know, it's super fair. It's if X is the enemy, then the enemy of my enemy is my friend, but the friend of my enemy is my enemy. And therefore the neutral person who doesn't want to get involved in this off. of the enemy is a future enemy or friend.

(18:52) Gita Sjahrir:

Yeah, but it's true though. The president-elect has been fairly vocal about it. By the way, our current president is also fairly vocal about it, and so are other presidents before, which is why they're always questioning how come when it comes to global wars, only certain wars get the recognition. Only certain crimes get the designation of war crimes. How come other ones don't count? And I think that's just a frustration that's probably held by a lot of people in emerging markets.

(19:21) Jeremy Au:

Yeah, but it's interesting because, I remember, it was like almost a year ago when I remember Prabowo, kind of, I went out and basically say, call for a ceasefire between Russia and Ukraine. It's interesting that policy is consistent because he's not calling for a ceasefire in the Middle East as well. So I think the policy position is actually quite common in the global governments. I mean, if you look at Singapore, it's also kind of calling for the same dynamic. If you look at most countries in Southeast Asia, actually, the same thing, which is they have called for a ceasefire in Ukraine, and they also called for a ceasefire in the Middle East, so policy-wise, it's actually,

(19:52) Gita Sjahrir:

Fairly consistent.

(19:53) Jeremy Au:

Not very different from most countries. I mean, you know. Very consistent, right? I mean, we saw that in most of Africa, a good chunk of, almost all of Europe almost all of Asia. Policy-wise, not dramatically

(20:05) Gita Sjahrir:

No, and I think something that probably a lot of Western powers can learn from Southeast Asia is how we've also coexisted together. I think it was, I forgot which politician it is now, but actually, many politicians have talked about this, how Southeast Asia, with our diversity and our differences in religion, ethnicities, histories revolutions all of these things we're coexisting for the most part. We're coexisting. We're really learning to just rely on a lot of geopolitics and also rely on a lot of cohesive policies in order to maintain peace, because all of us, unfortunately, have had pretty rough and bloody histories. And Ithat is why our foreign policy, and if we look at Prabowo's stance, has been pretty consistent almost everywhere because we know what it's like to have a very rough, very bloody past, and to just not continue that. And so that's why I wouldn't say that Prabowo's stance is necessarily controversial. It's controversial if you look at the other people involved, other powers involved, but it's pretty consistent in terms of what is it that he's looking for when it comes to the world's geopolitics.

(21:14) Jeremy Au:

The part that's interesting is less about the policy stance because that's consistent across most of these Asian governments. I think it's twofold. One is, first of all, that he is describing it as double standards. And I'll probably quote the paragraph because it's quite strongly worded. So it's how it's framed. And then the second part, of course, is that the weight the press is giving him is more than what they would give other countries in Southeast Asia. So those are the two things that's come up. But let me go and quickly do a quote here. What he's basically saying is, "How is killing Palestinian civilians less worthy of denunciation than the killing of Ukrainian civilians? More and more people in Indonesia and all over the world, the global South, and in the West feel that the failure of Western governments to put pressure on Israel to end the war indicates a serious moral crisis. How else can such double standards be explained when we are asked to have one set of principles for Ukraine and another for the Palestinians? Almost a year ago, I called for a ceasefire between Russia and Ukraine. I called for a ceasefire for the same reasons I'm calling for one in the war Israel is waging against Gaza."

(22:15) Gita Sjahrir:

Yep.

(22:15) Jeremy Au:

That's a quote and I thought it was well written. It was very clear and very strong, in tone. So maybe one part of it is just, that most of the language from Southeast Asian governments on both issues has been much more diplomatic.

(22:27) Gita Sjahrir:

Yeah. Yeah, definitely. I think also, it depends on the position of the country and how big we are and where we are headed. For example, I can understand why smaller countries will want to be more diplomatic. Of course, Indonesia has almost the same size as the US, so maybe in that way, it gives Indonesians more of a strength in order to speak more strongly. There's just more of us, literally just more of us also as a country, it's growing very fast. So that kind of gives this feel that there's more economic stability, more economic strength to back up whatever it is that we are saying, but in general, with all of that in mind, I can also understand why Indonesia is taking a stronger stance.

I can see why Prabowo is saying that too. A lot of people don't know this, but Prabowo actually grew up in several different places. He's traveled a lot. And so he's also quite quite aware of tensions abroad. He's quite aware of different cultures, different histories, and that's causing him to speak out more these days. Also, I mean, he's a president-elect. There's also that, right? Okay, I think the criticism that lots of people have lobbed on Indonesia, and I'm not saying that it's not valid or real. It's that, of course, Indonesia's not fully innocent either. As a nation, we've totally done and probably still doing, and still doing a lot of things wrong and, committing a lot of mistakes, but in the end, you can say that about every country. You can also say that about almost every politician. So it's more about the country reckoning with its status as a very large nation that can potentially become more powerful in the future and just claim its place in the table.

(24:10) Jeremy Au:

And that is interesting because, Prabowo has, and is the current defense minister. And obviously, he's a veteran as well. So it's interesting to see that where, as you said, Indonesia gets the ability to say more because of his size and of his relevance and he's also choosing to speak more because there are also other large rich countries around the world that are much more, I would say, diplomatic in how they are phrasing their current policy positions, even though they're more similar. And this circles back to the kind of like question that we had, which is, as we see the political stabilization post-election, it feels to me, as an outsider, it feels it's still mostly continuity in terms of the economic side, in terms of trying to make sure the capital city, the new one continues to go well, fix Jakarta problems. So it feels like the domestic side feels more, but maybe, I don't know, I get a sense, and I'm not sure if it's true or not, but to me, it gets a sense that maybe the foreign policy might be more prominent

(25:06) Gita Sjahrir:

Probably, in general, is just more aware and just more conscious of foreign policy and how it can affect Indonesia. I do know that probably most Indonesians are exhausted and tired of having to deal with foreign policy. Multiple visa headaches and always not being trusted in any country, always considered lower-class citizens. For the most part, most Indonesians, and there are so many of us, are just really, really tired of that. And that will affect lots of things. Foreign policy affects, not just the economy, but almost everything. It'll affect how people perceive you and the trustworthiness of the country. It'll affect foreign direct investment. It'll affect policies to do with almost anything and everything. So it's fair that Prabowo now that he's seeing Indonesia is becoming stronger economically and also politically for the most part stable and growth-wise is also quite stable.

What can we do with this current trajectory in time? And it'll be interesting to see how our foreign policy shapes up and how it affects the lives of people. Just normal Indonesians trying to make their lives better.

(26:12) Jeremy Au:

On that note, that's a strong message of hope for the future. so let's how it shakes out.

(26:16) Gita Sjahrir:

I hope so.

(26:18) Jeremy Au:

Well, I'm optimistic, but I hope so. You never know. Southeast Asia is like that, we're optimistic, but we all hope so. We all have the cross our fingers and I think we all have to do our part to keep things nice. On that note, see you next time.

(26:30) Gita Sjahrir:

Take care. Bye!