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hardtalk with zeinab badawi. welcome to hardtalk, with me zeinab badawi in new york. my guest in this rare interview is the foreign ministerfor iran, president we dodoo of indonesia was re ce ntly president we dodoo of indonesia was recently elected to a second term in office. he said he had big ideas to raise the standards of living for his people. indonesia has the biggest economy in southeast asia, but it faces a series of challenges, from infrastructure to corruption and extreme income inequality. my guest is indonesia's minister for national development planning, who is here trying to attract investors. but is the government doing enough to tackle its problems? minister
bambang brodjonegoro, welcome to hardtalk. here you are in london trying to attract investors to your country. what message are you giving them? i think the first one must either size of our economy and the population as well. 216 million population, with gdp more than1 trillion currently. but in 2045 it will be 120 million, with gdp of about 7 trillion. so, a big opportunity so looking to the future. so, come to us because we are big, but you also have a lot of problems. last year, the us department of commerce had a report advising american business people, and it said look, indonesia in a
world bank report last year ranked 72 out of 190 countries under ease of doing business. it said us firms and counter complex regulatory requirements that make it time—consuming to enter the market, laws are often opaque or conflicting, that doesn't sound very good. we admit that our investment growth is lower than expectation. i think most problems balance on that issue. but in the next term of president we —— widodo, the next step will be cutting bureaucracy. but also, the report cited remains a concern for many businesses looking to operate in indonesia. there are many examples i could give, but a more recent one is many examples i could give, but a more recent one is that jakarta's
anticorruption more recent one is that jakarta's anticorru ption court sentenced more recent one is that jakarta's anticorruption court sentenced a former cabinet minister to three yea rs former cabinet minister to three years in prison over a case involving a state—owned power plant. this sort of thing doesn't look good. we understand that corruption is still not gone from indonesia, but we always promote anticorruption, we but we always promote anticorru ption, we always but we always promote anticorruption, we always support anticorruption, we always support anticorruption action. in fact, the recent prosecution under the president saw comments from the president saw comments from the president himself, saying everyone is subject to the jurisdiction. what are you doing, though? it is all pervasive. the transparency international report says a large number of the population have pay bribes for services. political corruption is pervasive, and parliament is widely considered the most corrupt institution. you have a
lot of cleaning up to do. yeah, sure. it has to start with reducing the cost involved in politics. i think the root of the problem is high cost to be involved in politics. being a legislative member as well as being a governor or mayor. that is the root of the problem, and then we let the national anti—corruption commission to work, so they can do whatever they want as long as it can reduce corruption. so we are concerned not only with the action but with the prevention of corruption itself. so when you attend events around the world, you say we are doing everything we can to root out corruption in politics and economics, everywhere in indonesia? yeah, ithink
economics, everywhere in indonesia? yeah, i think the main message whenever i go to an investment forum will be to make sure all the process will be to make sure all the process will not go through a long and bureaucratic procedure. instead, we set upa bureaucratic procedure. instead, we set up a special institution dealing only with investment, so any investor doesn't have to worry about being involved in political corruption or any red tape bureaucracy. so we know that indonesia is southeast asia's biggest economy, and you have to grow by about 6% in order to meet the needs of your people, it is just over 5% at the moment. the world bank has applauded your efforts in indonesia, trying to reduce income inequality. but the fact of the matter is, as we know from the 0xfam report, that indonesia is the world's six the most unequal country. you have the largest income inequality. that is a terrible indictment on all the government's effo rts indictment on all the government's efforts in your country. yeah, that's why our priority on reducing
income inequality has to start with reducing poverty. president widodo is the first president who has been able to bring our poverty rate below 10%. there are still close to 10% of poor people, meaning almost 26 million, so that is the reason why inequality is very high... is a 26 million, but a world bank report from 2015 says growth over the past decade has primarily benefited the richest 10% and left behind the remaining 80% of the population. that is about 200 million people. that is about 200 million people. that was the first year of president widodo, so we inherited what happened in the past. after that, president widodo gave the emphasis that we need to reduce poverty. that is why — it is the first time indonesia has a poverty rate below 10%. and that is the formulation to reduce inequality. in 2015, when we
just started the first term, the inequality is more than 0.4, which is kind of intolerable. so he is tackling it? it is a big priority? now the generational inequality is 0.34. so now the generational inequality is 0.34. 50 it now the generational inequality is 0.34. so it is going down? one challenge for you is that there are many people in indonesia who have low wages, and i am thinking particularly of the manufacturing industry, which accounts for about a fifth of the gdp. there was an investigation by the guardian newspaper in 2017, and it said the reality of working in one particular factory making clothes for an american fashion label has been laid bare, with employees speaking of being paid so little they cannot live with their children, there is the existence of antiunion intimidation, high production targets and sporadically compensated overtime. i think the root of the problem relative to the quality of human resources themselves, if you
look at our labour force, more than 50% are only graduates from secondary school, elementary or secondary school, elementary or secondary school, elementary or secondary school, meaning that in terms of productivity they are fairly low. 0nce terms of productivity they are fairly low. once you have low productivity you cannot get the high rates. it is not high wages, it is unfair wages. this report says that they are not being compensated for overtime. i am talking about the... the fair wage. 0ne overtime. i am talking about the... the fair wage. one thing we have done is to have a formula to adjust the minimum wage, which is very important. and the minimum wage should reflect the basic needs of daily life, especially... but secondly it is improving the quality of the labour itself. notjust education but also skill. if you can improve skills you can get higher productivity, and then it will be
easier to get fair wages, or even higher wages. so, you easier to get fair wages, or even higherwages. so, you have easier to get fair wages, or even higher wages. so, you have things to com plete higher wages. so, you have things to complete in the first five years, and the second five years, improving the labour force will be the top priority. can you say there are no sweatshops in indonesia at the moment? yeah. you can't say that, can you? i think foreign manufacturing, for labour intensity, we still have the problem about labour getting the fair wages. but if you talk about manufacturing type, they don't have any problem with the wages because usually they only hire productive workers. but thatis only hire productive workers. but that is an extremely tragic situation, isn't it? especially for the people who work in these sweatshops and a large number of them are women. well, i think now them are women. well, i think now the protection of labour is much better than before. we have the pension fund scheme, we have health
insurance that is also therefore the workers, aside the poor people. what about protection for the approximately 4.5 million migrant workers who are from indonesia, working in countries like malaysia, singapore, hong kong, saudi arabia, the vast majority of whom are women, mostly working in the domestic sector. we hear periodically cases of abuse, a recent one about a young indonesian woman, i made, who was allegedly starved, tortured and left to die outside the home of her employer in malaysia. what are you doing to protect these woman workers? we understand the issue about abuse. that is the reason i think a couple of years ago during this government, we did a moratorium on sending woman migrants to the middle east. so, that is the first
step, because we know in the middle east there are a lot of cases involving our migrant workers. east there are a lot of cases involving our migrant workersm east there are a lot of cases involving our migrant workers. it is not just the involving our migrant workers. it is notjust the middle east though, this was in malaysia. yes, but the ego group is middle east. we are trying to solve it with the government in malaysia, to make sure that our representative consulates and embassies can do better protection, and we also have a special institution in indonesia to deal with migrant worker safety. for other parts of the world, we have heard that the conditions are much better. so we focus now on middle east and malaysia. migrant workers could be a really big problem for you that you have to grapple with. you already have an unemployment rate of just over 5% you already have an unemployment rate ofjust over 5% in your country. the risks of automation in indonesia, as well as many other manufacturing nations in the region, isa manufacturing nations in the region, is a very real one, and it is going
to put a lot of people out of work. so many studies say this, as many as 64% of workers in the textile clothing manufacturing sector. so what are you going to do? whatjobs will you be able to provide? there are two types ofjobs that could substitute. the possibility of losing jobs itself. number one, the digital economy or industry 4.0 will make industry more efficient, so with higher growth you can create a newjob opportunities. with higher growth you can create a new job opportunities. he with higher growth you can create a newjob opportunities. he doesn't have to be in the same sector as you mention, but also in other sectors, and could provide morejobs. secondly, there are types ofjobs that if you have more skills then you can survive automation. we identify the types ofjobs that you can survive automation. we identify the types of jobs that will survive because of automation, but in order to cope without you have to
have higher skill, and that is why in the next five years we are going to focus on vocational training, the missing link of our quality of labour force. looking at the labour force, obviously construction is another big sector in indonesia, and you have this 400 alien dollar infrastructure plan for your country, but i am thinking in particular of the fact that there are many chinese workers working on chinese funded indonesia, and this was something that was raised in april when president widodo was re—elected, and his rival, prabowo subianto, accused him of being too soft on china. the first one has been identified as a hoax. there we re
been identified as a hoax. there were no chinese workers in indonesia? not every single one, but there are not as many as people on social media are trying to say. they talk about millions and millions, no... not millions, maybe thousands. evenif no... not millions, maybe thousands. even if there are thousands of chinese workers, what i understand because i follow infrastructure projects in detail, they only come for a certain period. so for example you build a power plant, and there isa you build a power plant, and there is a critical period on the second 01’ is a critical period on the second or third year is a critical period on the second orthird year in is a critical period on the second or third year in which you need to have more skilled workers in order to accelerate the completion. in that period, then they bring more skilled workers. unfortunately sometimes we don't have enough skilled workers to cope with the acceleration, so they, only for the period, after that they go home. you can see that during the operation it is already covered by the indonesians.
what can you do with your relationship with china. i said that was a factor in the presidential election and you are relying on lows from china. that i have to do correct you. china is not on the radar in the top countries giving loa ns to radar in the top countries giving loans to indonesia. they are not evenin loans to indonesia. they are not even in the top five city gave them below countries like germany and france. but it is moving up. isn't it? if i see the total amount, france. but it is moving up. isn't it? ifi see the total amount, it is quite small, actually, because we are trying to encourage china to participate through investment, not refinancing. it is more through equity than debt financing. the head of the indonesian invest co—ordinating board said the traditional source of investment has been japan and korea. traditional source of investment has beenjapan and korea. i do have to note, he says, overthe beenjapan and korea. i do have to note, he says, over the last five yea rs note, he says, over the last five years china has gone from number 13... years china has gone from number 13. .. but years china has gone from number 13... but it is investment. it is not a loan. that is investment. have
you not just obtained not a loan. that is investment. have you notjust obtained a big loan of about five and a half billion dollars from the china development bank, a state owned policyholder? so you have that... again. we have to do detail about the source of loan andi do detail about the source of loan and i have to ensure you again that the top five is the world bank, adb, japan, france and germany. china is still not on the radar although they increase. 0ur still not on the radar although they increase. our strategy is to limit the debt financing from china and instead we force them to do more equity financing. investment. there is the high—speed railway between ja ka rta is the high—speed railway between jakarta and badung. why are you trying to limit chinese activity, though? what is the reason? we do not limit. we just though? what is the reason? we do not limit. wejust do not though? what is the reason? we do not limit. we just do not want to be trapped in a debt problem. and you
think china might lead you into that? anybody. so we limit the debt financing from japan, we limit it from multilateral development banks like the world bank. china is special, isn't it? china is a big presence in your part of the world and you have the problems in the south china sea where countries like the philippines are very nervous about chinese activity there and all the claims about, you know, the various territories and so wanted it so various territories and so wanted it so what is indonesia's china policy? how do you balance your need for some chinese investment but also try to say, well, we understand the concerns of our neighbours. we welcome very much their investment, 0k? equity financing not debt financing. second one, because it is pa rt financing. second one, because it is part of macroeconomic policy. secondly, in regards to the south china sea, fortunately indonesia is
not a party having a conflict with china and, numbertwo, not a party having a conflict with china and, number two, we try to maintain our sovereignty so we a lwa ys maintain our sovereignty so we always have problem with illegal fishing, including from china, not only from china but from other neighbours. we always try to be strict. illegal fishing neighbours. we always try to be strict. illegalfishing is a big no so we strict. illegalfishing is a big no so we have to deal with this illegal fishing and we do it bilaterally with china. but looking at the region as a whole, i put to you that the former foreign minister urged indonesia to step up its leadership in asean and in navigating this difficult course. with china. is indonesia doing enough? in its role asa indonesia doing enough? in its role as a leader in as seattle? we are doing enough, trying to maintain the peace and stability in the south china sea by trying to build or trying to facilitate more constructive discussion between our collea g u es constructive discussion between our colleagues in essien and china. for
example, although you mentioned that the philippines may have had some tension, but i noticed lately that there are now more and more chinese investment in the philippines. economically they are doing 0k, even now with vietnam in the trade war, china is also working with vietnam. so using the economic approach will neutralise the possibility of conflict in the south china sea. so here you are in europe trying to woo investors in london but you have a problem with the european union at the moment, the fact is that indonesia is the world ‘s largest palm oil producer and the eu is seeking to ban its sale with you because it is concerned about the way you produce palm oil and it says that ra i nforest way you produce palm oil and it says that rainforest are cleared to produce palm oilfor use in biofuel. this will be a big problem for you.
we have done our homework. first, a moratorium of expansion of plantations in indonesia has been in effect for a couple of years. secondly, we understand that this is not about an environmental issue. this is like any traditional trade war. you have, in europe, some commodities that may be less competitive to palm oil and you are trying to protect your commodities. so you say it is a you protectionism. but greenpeace says on deforestation, indonesia has already lost 72% of its intact forest. this threatens people like the sumatran tiger and orangutans and how many people who depend on the forests for food and shelter. firstly, we are now trying to protect our forest. we are now doing reforestation and stopping deforestation. 0f reforestation and stopping deforestation. of course it could be considered to labour better late
than never. we have done something. we did a moratorium for palm oil and we are trying to do ourjob. so you can grow your economy and continue reducing palm oil without damaging the environment. and we understand that again, this is about a trade war. you take retaliatory measures against the eu? i don't think we have to do. should be able take a constructive approach to resolve the issue. i think everybody should get a win—win situation rather than a win lose. post brexit will you lobby the uk for palm oil concessions? we have not talked about that to the uk specifically. we are more on the... what is it customer timber products in which we have successfully achieved agreement with the uk for exporting timber products from indonesia. talking of sustainability you decided in your government that ja ka rta you decided in your government that jakarta is no longer sustainable as the capital of indonesia. far too
much traffic and the environmental problems, it is polluted and sinking. you are wanting to move it to the island of borneo, but java, where jakarta is, is the largest archipelago, it generates about 50% of gdp and you will put your capital somewhere isolated? of gdp and you will put your capital somewhere isolated ? not of gdp and you will put your capital somewhere isolated? not at the centre of the country? the movement will just be centre of the country? the movement willjust be for government administration. so jakarta, in willjust be for government administration. sojakarta, in the future will still be our capital of business finance and trade in services. so most economic activities will be from jakarta. if you mention java activities will be from jakarta. if you mentionjava is the biggest, yes, 58% of gdp and 57% of our population. but unfortunately the environment ofjava is no longer capable to support that kind of economic activity. and on the other side, outsidejava economic activity. and on the other side, outside java is economic activity. and on the other side, outsidejava is left behind compared to java. so we need to
create one of the economic sources of growth. 0ther islands and kalimantan happens to be... that is borneo. so that is borneo. i must ask you about terror because, of course, we saw injakarta in 2017 a couple of terror attacks and more recently in saw a buyer. and everybody remembers the bombings in bali. that can put off investors and tourists and you rely a lot on tourism revenue, especially from bali. what can you reassure people out there and say, look, indonesia is on top of this terror problem. firstly, our police force and military have already worked cooperatively and in the full capacity to deal with potential
threats at an early stage. so despite all these challenges, you say to investors that indonesia is open for business? indonesia is very much open for any investment, for infrastructure and for manufacturing and services especially on tourism. minister bambang brodjonegoro, thank you very much for coming on. i don't think we will see temperatures as high as 27 degrees, not for a little while because things have been changing from the west.
this type of cloud brought out breaks of rain eastwards during wednesday. behind me here, a lump of cloud bringing rain on friday. in between, a clear zone of weather so through the day ahead we will see sunshine and showers as well. and it will be quite breezy. there's still some rain to clear away from the south—east corner through the first part of the morning. that rain is mostly light and patchy and behind that we see some spells of sunshine but also some showers. it's most plentiful across the northern half of the uk. could be a couple of showers across parts of suffolk and essex down into kent as we go through the afternoon but for the majority of england and wales it is dry with spells of sunshine. cooler than it has been an breezy as well. perhaps a couple of showers clipping into north—west england and north wales but for northern ireland and scotland we will see a scattering of showers, some of them some thundery, blowing through quickly on that brisk west, south—westerly breeze. that could make for a somewhat tricky opening day at the open. some showers moving through, some of which could be heavy and possibly thundery and it could be quite breezy.
as we go through thursday night into the early hours of friday, the showers continue for a time in the north. further south with clear skies it will be a call and fresher night than we have been used to across parts of eastern england and behind me across the south—west of the uk, cloud gathering by the first part of friday morning with some outbreak of rain ahead of our next weather maker. this frontal system developing and pushing in from the south—west. it has been very dry lately across the far south of the uk but even here we will get a dollop of rain during friday. this wet weather pushing north—eastwa rd and heading into southern and central portions of scotland. northern scotland perhaps staying driest and brightest of all. with this wet weather ther could be the odd flash of lightning and rumble of thunder but also be quite breezy. and temperatures at between 18 and 21 degrees. rain on friday clears away as we enter saturday and then we are back to a day of sunshine and showers a hefty downpour at times with an odd flash of lightning and rumble of thunder. signs of things turning a little
i'm rico hizon in singapore, the headlines. an ebola outbreak in the democratic republic of congo — the world health organization declares an internationl emergency. boeing offers $50 million to the families of those killed in two 737 max crashes, but relatives say the company is yet to apologise. if boeing's wrongful conduct continues, another plane will dive to the ground, killing me, you, or your children. i'm samantha simmonds in london. also on the programme: myanmar‘s military accused