EPISODE 22
TRANSCRIPT

Episode Twenty Two

The Big Picture:

Gita Wirjawan of Ancora Group

3 November 2020

(past transcripts)

 

ALAN  0:09  
Welcome everyone to the 22nd instalment of Indo Tekno. My name is Alan Hellawell. I am Founder of Gizmo Advisors, and also Venture Partner at Alpha JWC Ventures. Now while we enjoy diving deep into various aspects of the Indonesian tech ecosystem week-to-week, we at the Indo Tekno podcast think it is useful on occasion to view the broader forest from the trees; to pan out in order to discuss the bigger picture that is Indonesia. There are a few people as capable of going from at one moment profiling Indonesia from 50,000 feet; to the next moment being able to share his impressive familiarity with the multifaceted aspects of the Indonesian tech ecosystem, as today's guest Pak Gita Wirjawan. Many know Gita as Indonesia's 27th Minister of Trade, an office he held from 2011 to 2014. Others may have been lucky enough to have cultivated their careers in finance or tech under his mentorship. Gita's incredibly wide range of talents and experience frankly made it difficult for me to choose a point of entry into this podcast. Gita, an absolute pleasure to have you join us today. 

GITA WIRJAWAN  1:17  
Likewise, Alan. I'm happy to be here. 

ALAN  1:20  
Now, given the sheer expanses that you have covered throughout your life, I thought it might be fun to kick off this webcast by simply sharing with you just two coordinates from your past. In each case, A) a place on the map and B) an activity. We'll have you explain to our audience the context around each of these "x and y" coordinates. So, let's start with the first two coordinates: A) Bangladesh, and B) Golf. 

GITA WIRJAWAN  1:47  
Bangladesh was a real learning ground for me because that was when I was only 13 years old. And I first learned how to speak English and speak foreign languages or other foreign languages, before which I was only born and bred, and grew up in Jakarta until I was almost 13. And it taught me a lot, the two years of living in Dhaka, Bangladesh. It taught me a lot about how to appreciate my home country, Indonesia, and it taught me a lot about how to basically intertwine myself with the international community. Golf has always been a passion since I was nine years old. I was thrust into the game by my parents. My parents were avid golfers at that time. I was beginning to enjoy the game ever since I was maybe 10 or 11 years old. And Bangladesh was the place where I actually got to sharpen my golfing skills in a really big way, given the fact that the international community and Bangladesh at that time was very, very passionate about golfing as frequently as possible at the only golf course in town. I was lucky enough to be given the privilege and opportunity to practice as much as I could. 

ALAN  3:00  
Now I gather that you've had the opportunity to golf in the presence of quite a few luminaries. Is that correct? 

GITA WIRJAWAN  3:07  
Yeah, because I became a low handicapper pretty quickly and at a pretty young age. So I managed to catch the attention of some of the "heavy hitters" in the political scene and also in the diplomatic scene in Bangladesh. So I got to win some local tournaments and some of the bigger tournaments in Bangladesh. 

ALAN  3:28  
Our next set of coordinates: A) Delhi and B) Swimming. 

GITA WIRJAWAN  3:32  
Delhi was the next stage of my growing up, where I got to know a bigger community in the academic journey that I went through. I went to Delhi because my parents thought that the high school in Bangladesh was probably not as good as what the high schools offered by the Indian academic system at that time. So I went with their intuition. And I transferred to New Delhi, where I spent three years to complete my high school. And swimming was also a passion of mine. I actually started swimming long before I started golfing. I started swimming when I was maybe four or five years old. I took lessons and I swam competitively. But upon landing in New Delhi, I gravitated more towards my other passion, which was music; and other sports, including soccer, basketball, and all the rest. 

ALAN  4:24  
And that brings us to my last pair of coordinates: A) Texas and B) piano.

GITA WIRJAWAN  4:29  
Texas was a real eye-opener. I went to the US, first to a small college up in Wisconsin in a little town called Beloit, where I got a music scholarship. The rest I had to basically work my way through. After two years, it was a combination of two things. Number one, it was just getting too cold for me in Wisconsin, and number two, my parents thought it was a good idea for me to reconnect with my older brother, who was doing his Master's a PhD at Austin. So I transferred down to Austin and had a ball because the climate was a bit more similar to that of Indonesia. And I was able to spend time together with my older brother, during which I really delved deeply into my musical passion. And I was really enjoying my time there "gigging" on a regular basis while I was doing all kinds of odd jobs. But of course, at almost the end of my undergraduate years, again, I came to an intersection where I had to decide whether or not I should stay in music. And thanks to my parents advice, they basically advocated that I do something a bit more pragmatic than music. I chose accounting at the beginning of my fourth year of my undergraduate studies. 

ALAN  5:40  
Now, Gita, given the expansive list of interests and accolades that you have built from a very young age, I have to ask: if we were to look closely, would we see the paw prints of a "tiger mom" running through your youth?

GITA WIRJAWAN  5:53  
I would argue yes. I think my mom was just like every other mom in town: very demanding with all of her kids in terms of the disciplines we had to go through. Yeah, I would attribute a good chunk of what I've gone through and what I've become to what Mom had told me. Of course, Dad was a real good balancing factor. He was the chill kind of guy who really didn't put a lot of pressure on you. But he was getting all the updates from my mom in terms of where I was traversing through.

ALAN  6:20  
So we know who ran the household then. Well, before we tighten our focus to our favorite topic here at Indo Tekno, which is Indo's tech ecosystem, it would be great to discuss Indonesia from the macro perspective. I assume you've maintained more than just a passing interest in the big picture since your days serving as Minister of Trade. How do you view Indonesia's growth prospects going forward, Gita? 

GITA WIRJAWAN  6:45  
Long term, I'm still very optimistic about Indonesia's trajectory. We've gone through this unprecedented episodic stress of COVID-19. It has derailed I think, the trajectory of most countries around the world, but I don't see any reason why we're not going to be able to recover out of this. I think the only difference between my thinking and some other people's thinking is basically the duration within which we could bounce back. I do foresee the near future as being somewhat episodically stressed by way of the sheer limits of the vaccination capabilities and the extent to which we can actually vaccinate successfully. I think it's pretty safe for me to assume that it's going to take at least two to three years before we can see really sound, if not pronounced, recovery economically speaking. But the long game, my God, we're talking about the next 20 to 30 years, given the demographics and given the ability of more and more people to basically be able to reach out for their own financial inclusiveness; I think that's pretty staggering in terms of the future that lies ahead for Indonesia and Indonesians. Look, it's a $1.1 trillion economy. And as much as we've heard the cheerleading by so many people with respect to how we're going to turn out to be the fourth largest economy in the world and the third largest democracy, as we are right now, I would not be content with just those two attributes. I would be more content, I think, if Indonesians would then be known as technologically, environmentally sound people who can actually resonate with everybody around the world in the context of not only technological innovations, but all the soft power that we could project upon the rest of the world. I think the easiest way to illustrate this is what the Indians and the Koreans are doing in terms of their ability to create such an impact on people in terms of how they're being perceived as actually genuinely intelligent people, but also being able to influence the pop culture, and the culture of the world. And I do believe that that future is one for Indonesia too. 

ALAN  8:55  
Absolutely fascinating analogy. It makes eminent sense. Now, Gita, I know that education is near and dear to your heart. You, for instance, established the Ancora Foundation with the mission of helping both early stage education and graduate studies for talented Indonesians. Where on the spectrum, do you maintain your greatest optimism? And what, meanwhile, do you view as Indonesia's greatest challenges across that educational spectrum? 

GITA WIRJAWAN  9:19  
Let me speak of the challenges first. I think one of the most systemic challenges for Indonesia and of course, the Indonesian educational system is the lack of open mindedness. And this is reflected in the way we've been framing regulatory stuff over the years. I'm not suggesting that we're not open minded at all. But I'm only suggesting that we could still be more open minded. And I do foresee a future where we could actually be a lot more open minded in terms of getting the Indonesian people to be much more educated. There is no reason for a Nobel Prize winner from some other country not to be teaching at a a local school here. There is no reason for the coolest researcher from anywhere around the world not to be able to actually add value to any proposition; intellectually, academically, even professionally, in Indonesia. And I think we're lacking that compared to what Singapore might be at, or even where Malaysia is at. And I think to the extent that we can show more open mindedness, I think it's going to be awesome. And I say that on the back of the fact that if we take a 20 to 30 year view of how much money the Indonesian government is going to be allocating for educational purposes, it's staggering. The rate that we legislated ourselves to be spending 20% of the government budget for educational purposes, the future value of that 20% per year in the next 25 years could easily turn out to be about $5 trillion. And with that kind of money, there's no reason for us not to be able to educate ourselves in a much more open minded manner. And there's no reason for us not to be able to populate all the best campuses around the world, assuming that we get the necessary scholastic aptitude so that our students can actually enter some of these great schools around the world. In terms of where I want to be on the spectrum, I do believe that we could see some more game changing in terms of artificial intelligence applications, and to some extent, our know how in synthetic biology. And these two areas are what arguably could be value additive to Indonesia's moving up the value chain. Also Indonesia's getting more intertwined with the rest of the world before conversations that matter in the next 20 to 30 years. 

ALAN  11:39  
Fascinating insights. Now Gita, a follow on question around education: how can we improve its contribution more specifically, as one of the most important inputs to the successful growth of the tech ecosystem? 

GITA WIRJAWAN  11:52  
It's factual that not enough Indonesians are studying empirical science. I think more are actually embracing social science. That I think is something that could be fixed. I'm not suggesting that we should eliminate or discount the importance of Social Sciences. But I do believe that with proper guidance in increasing the focus on empirical science, that's definitely going to be very, very supportive of the technological narrative going forward. The second: money matters. And I do believe that there is a disproportionate increase in scale in terms of the number of Indonesians who can actually converse with capital holders around the world for purposes of advancing their technological narratives, unlike what we probably saw 5 or 10 years ago. So that actually gives me optimism. But it also presents the stuff that we could actually be working harder, if not smarter on, going forward. 

ALAN  12:50  
Makes eminent sense. Now Gita, if we think about Indonesia's tech ecosystem in anatomical terms, and what parts of the "body" do we need to develop further to create our own version of Silicon Valley? 

GITA WIRJAWAN  13:03  
Well, that's going to take a long time to emulate what's happening in Silicon Valley. Today, even China is scratching their heads every day to try to figure out how to emulate it. What part of the body? I think every part of the body needs to be worked on for us to try to emulate the DNA of Silicon Valley. But I'm less worried today than I would have been 5 or 10 years ago, given what I've seen in terms of some of the young "technopreneurs" in Indonesia, being able to actually sound relevant. And this is largely, I think, attributable to what they've experienced educationally or academically, but also conversationally with their peers, be it in Southeast Asia, or beyond. 

ALAN  13:44  
Encouraging to hear. You mentioned China. I'm wondering Gita, what systems need to be in place to replicate China's success, both broadly speaking, and as they relate to technology entrepreneurship. 

GITA WIRJAWAN  13:55  
Look, China have the benefit of one political party system. And I don't say this only in a political sense, but it's within logic that if you have a one party system, you can, on the assumption of great visionary leadership, you can afford to think long term. You're not shackled by the cycles of five years of political processes. Whereas Indonesia, unfortunately, or fortunately, being a multi-party system; with the kind of political fragmentation that we're seeing, it's inevitable to be more focused on short-term stuff, given that were shackled by the five year political cycles. So that, I think, is a structural benefit that China has. Number two, China, once they have basically crafted the long game, be it in the context of technology or in the context of non technological matters. Once they've crafted the technological narrative. then the rest is, I think, pretty academic. they've figured out a way to basically finance the technological innovations. We can talk about how China is actually outspending the United States with respect to some of the artificial intelligence-related matters. Kai-Fu Lee, I think, had aptly pointed out some of the staggering undertakings that China has been embarking upon recently, and about to embark upon going forward. So that I think will speak of the kind of robust nature of technological innovations in China. And third, not only is the funding or the financing offered by the Chinese private enterprises, and also the Chinese public enterprises as to support technological innovations, but the Chinese themselves, the people, they're very entrepreneurial in nature. And that entrepreneurial spirit, I think, is gonna only help augment whatever other attributes that have been very conducive to this technological innovation narrative. Now, does that mean that Indonesians or Indonesia are not going to be able to do that? No, I don't mean that at all. I do believe that once we can start pulling ourself together as to think more long-term than how we've been thinking over the last few years, I think we've got a real chance because I do believe that private enterprise has been very robust, despite the fact that the public enterprise has not been very robust, as we might have seen in China. But the proactivity of private enterprise in Indonesia, I think, is going to change the conversation involving the public enterprise. And that I think, will be net-positive for the technological innovation narrative in Indonesia going forward. 

ALAN  16:32  
Let's continue that dialogue around the interaction between public and private. What is your broad assessment of Indonesia's Omnibus Law? And what specific implications might it have for the technology scene? 

GITA WIRJAWAN  16:45  
The fundamental objective of the Omnibus Law (putting aside the debates on how it was socialized with the stakeholders) was for the purpose of showing to the world that we would become more open-minded, number one. And number two, we would welcome business into Indonesia. And to me that I think is net-positive. We look at the FDI that's been flowing to some Southeast Asian countries. Take a look at Singapore, Singapore is pretty much LeBron James in terms of getting FDI. They're getting FDI of around $19,000 per capita, whereas Malaysia has been getting FDI per capita of about $270. Countries like the Philippines, Indonesia, and Thailand have only been getting about $91 worth of FDI per capita. So to me, that's an understatement. That's an understatement that needs to be reworked and rejigged. And we need capital, but usually with financial capital comes technological capital. And I do believe that Indonesia does not deserve to be getting FDI per capita only $91. It needs to aspire for the kind of numbers that perhaps Malaysia is already getting, or hopefully, eventually what Singapore is already getting at $19,000 per capita. So I do believe the Omnibus framework is designed for that number of $91 per capita worth of FDI to change for the better. And to the extent that it does, that I think we could rework the narrative so that we can be a lot more relevant with respect to the world, be it from a technological standpoint, from an economic standpoint, or even from a geo-strategic standpoint. 

ALAN  18:33  
Some fascinating insights. Now, can you talk about your own role as an investor? What categories have you invested in historically? And where are you investing now? 

GITA WIRJAWAN  18:42  
I started out in 2008, when I quit as a banker, and I ventured into mainly natural resources and real estate. I got lucky. But then after about a year, and three months, I was asked to serve in the government for almost five years. So then I restarted again, about five and a half years ago. Ancora is a six and a half year start up. I have basically repurposed my thesis. I'm getting heavier on technology and reading as much as I could on genome sequencing and synthetic biology. I'm mainly on a mission of trying to get higher productivity or marginal productivity and higher marginal efficiency for Indonesia going forward. Secondarily, real estate has been a passion for me. So that's the second area that I'm spending quite a meaningful part of my time on. And the third is what is basically legacy of my old natural resource thesis. But, even within that space, we've basically try to streamline the thesis so that we're a lot more focused on just one or two parts of the natural resources, as opposed to the few things that we would have been focused on about 10 years ago. 

ALAN  19:50  
Gita, in what ways do you work with, and support, Indonesia's tech entrepreneurs? 

GITA WIRJAWAN  19:55  
I try to spend every day having a conversation with somebody who is in the tech space. And that conversation could be in the context of figuring out a better way, a more environmentally friendly way, a more financially inclusive way, to make money on a pre-existing investment thesis. Second, it would be just giving informal advice to somebody who's in the tech space. And number three, it could just be with somebody wants to strike a conversation on his or her new ideas. And that has been pretty rewarding as of late. And I basically limit the conversations to anything that's technological that's going to help attain higher marginal productivity for Indonesia. 

ALAN  20:40  
Now Gita, are there any other passion projects that you are pursuing right now that we haven't covered? 

GITA WIRJAWAN  20:46  
Education is an area where I could be spending more and more time out of sheer interest to see a much more broadly and deeply educated Indonesia so that we could all become more relevant to the rest of the world. 

ALAN  21:00  
By the way Gita, I'm a great fan of your "Endgame" webcast series. Can you give us a sense as to how you came to create the series and what your intentions are for Endgame? 

GITA WIRJAWAN  21:09  
It was actually a random conversation with some friends of mine. We invested in a movie production company, and we founded a school of public policy. And out of the conversation with these two entities came the idea of doing a podcast. And I thought, I want to do it differently. I want to do it in a way that would basically showcase smart Indonesians or "Indonesianists." They don't necessarily have to be Indonesians. They could be non-Indonesians who care about Indonesia going forward. And I want to be able to basically project that to as many people as possible within and beyond Indonesia. And it's really on an educational mission. We're not out there to seek controversy or conspiracy. We're out there to basically just share knowledge and seek more knowledge. Why it's entitled Endgame? Basically, the question that I always ask every interviewee of mine, whether they're applying for a job, or whether they're asking for advice, I always ask them, "what's your endgame?" And that really became the central piece of our conversation. 

ALAN  22:10  
And how do our listeners most easily access the series? 

GITA WIRJAWAN  22:14  
You can go to Spotify or YouTube or Anchor or Apple. Just type "Endgame." 

ALAN  22:20  
Fantastic. Now, Gita, I need to get one more personal question in edgewise. You used to be the Chairman of the Indonesian Badminton Association. I note that we have two Men's Singles players in the Top 10 worldwide right now, while the top two doubles teams are both from Indonesia - this is globally. What can we expect from Team Indonesia badminton in 2021? 

GITA WIRJAWAN  22:41  
I think we have a good chance of winning the Olympics. Unfortunately, it's been deferred until otherwise noted. I think we've got a good chance at winning at least the Men's Doubles. and hopefully the Singles. And I say this on the basis of what we did within the Association and what we did with the players. I thought we laid the ground really well in terms of picking the talents. We tested their IQ. We tested their VO2 max. We tested their physical abilities and everything. It's a long term investment. And I can tell you, they could beat some of the brightest players on court today. And I do foresee a future where this sort of discipline is going to continue and hopefully will bring back more victories down the road. 

ALAN  23:26  
"Ayo Indonesia!" It's been deeply enlightening to have you on today, Pak Gita Thank you so much for joining. 

GITA WIRJAWAN  23:32  
Thank you Alan. 

ALAN  23:33  
Today's podcast was translated from English to Bahasa Indonesia by Alpha JWC Ventures. Terima kasih telah mendengarkan. Sampai jumpa lagi!

Transcribed by https://otter.ai
 

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