Depressing news. Inspiring news.
Pasensiya na po.
Whenever I come across anything inspiring, I make it a point to share it with as many Pinoys as I can.
My reasoning: maybe – just maybe – this might egg us to unleash our passion… to lift our sagging spirits… to push us to go the extra mile in whatever endeavor we’re involved with.
Of course, the downside is… a lot get amazingly depressed.
There’s so much talent in our blessed land but we can’t seem to harness it to go full throttle.
But I shall persist. Until I run out of inspiring stories to share.
So, ready or not… here’s another one. This time from Bloomberg.
In May 1998, Indonesia was in turmoil. During the previous 10 months, the currency had plunged 80 percent in value and food prices had soared 200 percent. Rioters were marauding through Jakarta, torching businesses owned by wealthier ethnic Chinese, who were fleeing for their lives.
Safely ensconced in Hong Kong, where he was on vacation, an Indonesian-Chinese retailer named Djoko Susanto could have sat tight. Instead, he flew home to defend his four supermarkets from the mob. As he transited Singapore, where planes were arriving from Indonesia full and returning empty, the airline’s crew stared at him in disbelief.
“There were five people on my flight,” Susanto recalls. “And I was the only Chinese.” While he couldn’t save his stores – all four were looted to the last light bulb — Susanto was on hand to seize an opportunity that would make him a billionaire, Bloomberg Markets reports in its June issue.
More than 1,100 people died in the 1998 riots, and the economy contracted 13 percent that year. Doomsayers predicted that the world’s fourth-most-populous nation, a former Dutch colony spanning 17,500 disparate islands, would fragment.
Susanto — who as a child had slept under a mosquito net on the dirt floor beside his impoverished parents’ market stall — bet that Indonesia would survive and that its vast mineral and agricultural resources would enrich many of its 238 million citizens, creating a dynamic consumption-driven economy.
When that happened, Susanto reasoned, many Indonesians would prefer to shop locally in air-conditioned minimarts rather than at traditional roadside shacks, or warungs.
In October 1999, barely a year after the riots, Susanto opened the first of what’s now a chain of 6,000 stores called Alfamarts.
The investment proved prescient.
From 1999 through the end of 2011, Indonesia’s annual growth surged from zero to 6.5 percent, swelling the number of middle-class consumers by 50 million to more than 130 million, according to the World Bank.
During the same period, the average wealth per adult jumped fivefold to more than $12,000, Credit Suisse Group AG reported in October.
While some other fast-developing countries such as China struggle to switch from an export-led to a consumption-based growth model, Indonesia is ahead of the game: Consumer spending accounted for 55 percent of gross domestic product in 2011; the comparable figure for China in 2010 was 35 percent.
“Indonesia is being driven by this huge consumption engine,” said Pong Ho Yin, a Hong Kong-based fund manager at Allianz Global Investors, which oversees 279 billion euros ($370 billion) worldwide. “The opportunity that is coming from this phenomenon is going to be enormous.”
Pong, who runs Munich-based Allianz’s Indonesia fund, said he believes the country with the world’s biggest Muslim population could soon be ranked alongside the emerging BRIC giants: Brazil, Russia, India and China.
In the last quarter of 2011, Indonesia’s GDP growth, while lagging China’s 8.9 percent, exceeded India’s 6.1 percent, Russia’s 4.8 percent and Brazil’s 1.4 percent, according to data compiled by Bloomberg.
In the future, Indonesia, with a median population age of 27, may reach a growth rate of 8 percent, Pong said. China’s one-child policy has left behind an aging workforce.
“I can’t imagine Indonesia won’t catch up,” he said.
In this economic environment, Susanto has thrived. In 2009, he sold 10 percent of the shares in his company, Sumber Alfaria Trijaya, on the Indonesia Stock Exchange (IDX), raising Rp 135 billion ($15 million).
As of May 1, the stock had climbed more than 13-fold compared with a threefold increase in the Jakarta Composite Index (JCI). On May 1, Susanto’s 56 percent stake was worth about Rp 11.4 trillion.
Not bad for an entrepreneur who left school at 16 because his parents couldn’t afford the fee demanded by the government to change his Chinese name, Kwok Kwie Fo, to an Indonesian one, as required by law.
Susanto said his bet on Indonesia stemmed from his experiences in the 1998 riots as well as his conviction in the potential economic power of the Indonesian consumer.
Though a victim of anti-Chinese policies under then-dictator Suharto, who had closed Chinese schools and banned the language, Susanto discovered that not all Indonesians were antagonistic to the Chinese minority.
Some of his customers actually tried to protect his stores and were grateful when he reopened for business after just two weeks to provide them with essential supplies, according to his daughter Feny Djoko Susanto, 35, who’s chief executive officer of Sumber Alfaria.
Other companies have cashed in on Indonesian consumerism almost as spectacularly as Susanto’s.
From the beginning of 2009 to May 1, the JCI was the world’s fifth-best-performing benchmark index out of 96 tracked by Bloomberg, returning 232 percent compared with a 70 percent rise in the MSCI BRIC Index. Topping the list, with a 675 percent increase, is the Venezuela Stock Market Index, which lists only 14 companies and is illiquid.
The rocketing numbers make Indonesian stocks look expensive in the eyes of some investors, such as London-based Robert Davy, who helps manage $20.3 billion of emerging-markets equities, including Indonesian shares, at Schroder Investment Management.
Largest Gold Mine
On May 1, the JCI was trading at 14.3 times estimated earnings compared with an emerging-markets average of 10.6.
“In the longer term, Indonesia is clearly highly favorable,” Davy said. “But from the shorter-term perspective, it is one of the more expensive emerging markets.”
Indonesia is the world’s No. 1 exporter of power-station coal, tin and the palm oil that greases one-third of the world’s frying pans and woks. It’s also home to the largest gold mine and the single biggest recoverable copper reserve and is the world’s second-biggest exporter of liquefied natural gas.
Foreign direct investment — the biggest source being neighboring Singapore — jumped 20 percent last year to a record $19.3 billion.
In the space of five weeks in December and January, both Fitch Ratings and Moody’s Investors Service raised Indonesia’s debt to investment grade.
By contrast, Standard & Poor’s in January downgraded nine European nations, five months after stripping the United States of its AAA status.
“In the midst of downgrades, we have been upgrading,” said Indonesian Vice President Boediono, who has a PhD in economics from the University of Pennsylvania’s Wharton School.
The ratings firms’ confidence reflects Indonesia’s ascent from bankrupt dictatorship to fiscally stable democracy. After declaring independence from the Dutch in 1945, the country had just two leaders during the next 53 years.
The second of them, Suharto, was president from 1967 until he was forced to step down during the 1998 turmoil sparked by an Asia-wide financial crisis that Indonesia survived only by accepting a $43 billion bailout from the International Monetary Fund.
Under Suharto, businesses in favor with the government exploited an economy reliant on crude oil exports. IMF crisis-management measures began to change that, forcing the breakup of some monopolies.
From 1998 to 2004, three more presidents came and went before the election of Susilo Bambang Yudhoyono, who was returned for a second, and final, five-year term in 2009.
When Yudhoyono, 62, a retired general who underwent some military training in the United States, came to power, he sprinkled his administration with Western-educated technocrats such as Boediono, who ran the central bank before becoming vice president.
Yudhoyono pledged to attract more investment by cutting interest rates, fighting endemic corruption, raising living standards and fixing crumbling roads and power stations.
While much of that manifesto remains a work in progress, especially on the corruption front, he’s delivered political stability and a fourfold increase in foreign direct investment.
Yudhoyono also declared war on Islamic militants; his forces arrested or killed scores of suspected terrorists, including the masterminds of the 2002 bombings on the resort island of Bali in which 202 people died.
The government’s stated priority now is tackling some of the world’s most dysfunctional infrastructure.
Yudhoyono campaigned for office on a promise to unclog roads, ports, railways and air terminals and to build badly needed power stations.
In December, the parliament passed legislation making it easier for the government to acquire land for infrastructure construction, and Yudhoyono’s government says it wants to spend $18 billion this year on such projects.
Jakarta has a population of 10 million and no subway. Traffic is frequently gridlocked despite a pooling program that requires cars to carry a driver and at least two passengers at peak hours.
Just as pedestrians hire cabs in other cities, Jakarta drivers hire passengers to cheat the system, providing much-needed employment to thousands of so-called car jockeys — men, women, children, often entire families — who line up curbside and wave to signal their availability.
Promise With ‘Legs’
Caterpillar, the world’s largest construction- and mining-equipment maker, is betting that Yudhoyono will succeed. It announced in November that it will triple excavator production in Indonesia and spend $150 million to build its second manufacturing base in the country.
“Infrastructure has been promised in the past and not delivered,” said Kevin Thieneman, the Peoria, Ill.-based company’s country manager for China, India and Southeast Asia. “But this time, we believe it has legs.”
Indonesia’s transportation problems — and its ambition to overcome them — are starkly apparent on the western tip of the island of Java, near where the volcano Krakatoa smolders.
There, the 24-kilometer-wide (15-mile-wide) Sunda Strait divides Indonesia’s two most populous islands: Java, with 137 million people, and Sumatra, with 51 million.
At ramshackle ports on either side of the strait, snaking queues of trucks wait for up to three days to get berths on rusting ferries to cross the narrow seaway. Despite the unstable geology — 170,000 died or went missing after an earthquake and tsunami off Sumatra in 2004, and an 8.6 magnitude temblor panicked Indonesians as recently as April — Yudhoyono’s government says it wants to spend $10 billion on the world’s longest suspension bridge, to be built across the strait.
For Johan Sinaga, a 35-year-old truck driver, the bridge can’t come soon enough. Dragging on a clove cigarette in the shimmering heat at the Java port of Merak, Sinaga says he regularly slips port officials 50,000 to 100,000 rupiah in tembak — literally, shoot — to jump the queue.
Whether or not Indonesia can fix its infrastructure, Djoko Susanto’s company stands to benefit. If the roads and power stations are improved, Sumber Alfaria will be able to make speedier deliveries and its minimarts will have stable electricity supplies. If nothing changes, the company also profits.
Ever the Entrepreneur
So says Susanto’s son and company board member, Budiyanto Djoko Susanto, 30, reasoning that as the traffic jams worsen, Indonesians will find it more convenient to shop at a corner Alfamart than to battle through traffic to the nearest supermarket.
Ever the entrepreneur, the elder Susanto has turned congestion on the streets into an advertising opportunity. He has plastered his delivery vans with slogans urging gridlocked motorists to save time and hassle — by driving to the nearest Alfamart to shop.