INDONESIA has attracted the attention of Scots since the very early 17th Century including James I of the UK whose naval officers annexed the tiny nutmeg spice island of Run in the remote Banda region of the Indonesian archipelago. Run therefore became one of the very first British overseas colonies.
After several years of siege by the Dutch East Indies Company, that 2.5 square kilometre island was traded with the Dutch for Manhattan in what must be the best property deal of all time. Ever since the days of the spice traders this vast and extraordinarily resource rich archipelago with its 17,000 islands spanning over 5000 km from east to west has attracted pioneering business people.
Indonesia has moved on since the European powers fought over its resources. Today it is the 16th largest economy of the world, consistently enjoying growth rates of five per cent that will propel it into the top 10 within the next decade.
With a population of over 260 million and a demographic dividend most countries could only dream of given at least 60 per cent of the population is under 30, it still enjoys the luxury of having over 50 per cent of its GDP driven by domestic consumption.
Urbanisation rates are rapid, so much so that the Jakarta conurbation with an estimated 30 million inhabitants ranks second only to Yokohama. And yes this young urban population is one of the most tech savvy anywhere.
While the opportunities are tremendous so are the challenges. I very much doubt that politicians back home could be even begin to grasp the complexities of managing such a diverse and distributed population let alone get their heads around both the hard and soft infrastructure demands.
Similarly, many businesses I have met have concluded that it is just too difficult to understand Indonesia and get a foothold in Indonesia. That would certainly be the case for those who expect to gain traction without putting in some hard yards.
If you need proof of what can be achieved, though, one of Indonesia’s largest business conglomerates Astra International has Scottish roots as part of the Jardine Matheson business empire.
To support Scottish businesses, I would encourage the Scottish Government to focus on a few key sectors that Indonesia desperately needs some assistance.
Renewables, water technology, aquaculture and of course oil and gas supply chain-related services spring to mind and certainly in the latter sector Scottish businesses have enjoyed considerable success over the years.
Some of the ground-breaking space services that analyse satellite driven data also offer immense opportunities for Indonesia’s vast agribusiness sector. Our spirits brands enjoy a high profile amongst the upper middle class and increasingly Scotland is now on the radar for the high-end tourism sector. In addition, as with China, Indonesian companies will over time look overseas to invest and make acquisitions. Scotland’s universities are now firmly on the radar for many Indonesian students and it has been encouraging to see both Glasgow and Stirling make inroads into Indonesia recently.
If only the students could stay on for a year after graduation and work in Scottish businesses – I firmly believe these students will in time become some of our best advocates. That restrictive policy should be reversed particularly for businesses with a genuine commitment to expand overseas.
As a trade envoy, I hope to be able to work with both the Indonesian and Scottish Governments to develop some stronger partnerships in key sectors. We should also be under no illusions that for the time being the UK Government needs to be part of that discussion and indeed in Indonesia the current UK ambassador has been extremely supportive.
For businesses that may fall outside the main focus sectors, I can still provide support by opening up doors and making appropriate introductions and indeed am doing so on a regular basis.
Indonesia is complicated and at times very frustrating but it is simply too large to ignore. I am very encouraged that the Scottish Government has seen fit to include Indonesia a one of the first three countries in the world for their new trade envoy initiative. Hopefully my ultimate successors and myself can do the role justice.
Source: The National