 Well, I know we're still expecting a few other more people, but I think we should start. I know our guest has a busy schedule here in Washington. My name is Murray Hebert. I'm a senior fellow and deputy director of the Southeast Asia program here at CSIS. It's a pleasure to welcome all of you to CSIS today for another in a series of banyan tree leadership forums, particularly to invite, to welcome Chairman Gita Wirwan, who has as many of you know from, obviously from reading his bio is the Indonesia's investment coordinating board chairman. Indonesia is Southeast Asia's largest economy, is the third largest democracy on the planet. Indonesia has done phenomenally well in economic growth figures in recent years, a particular time when many other countries were in recession or suffering from rather anemic growth. Indonesia has attracted a little less than you would expect levels of investment, doesn't really compete with many of its dynamic neighbors. And so one of the jobs of Chairman Wirwan when he was brought in by President SBY was to figure out ways to step up the investment levels, foreign investment levels, and reverse some of the trends that had existed. So we're very privileged that Chairman Wirwan has agreed to join us here today to talk about some of his efforts to attract more investment, talk generally about Indonesia and about its economy and the government's priorities more broadly. Prior to joining, to taking up his current post, Mr. Wirwan was the co-founder and co-chairman of Ankora Capital Management, a private equity fund. Earlier he served as chairman and president director of JP Morgan in Indonesia. Mr. Wirwan has a master's degree in public administration from Harvard's Kennedy School and what we'll do today is the chairman will give brief introductory comments giving an overview of some of his thoughts on the economy and foreign investment and then we'll open the floor to discussion. Chairman Gita, it's a pleasure to welcome you back to CSIS. Thank you. Thanks, Murray. Very good afternoon to all of us today. I want to also wish our good friend Ernie speedy recovery after what he went through a few days ago. And I also want to thank our ambassador for being here today. I want to make some housekeeping announcement before I go through the observations in the next 15, 20 minutes. We are going to do a major cultural event this weekend on Saturday and this will be at the mall, which will feature performances from Indonesia, particularly the Angklung or the bamboo instrument, which will be played by everyone of Dino's family and also 5,000 others. And I want to encourage all of you to come out on Saturday timing and other details to be shared by the embassy later. But that's one of the main reasons why I'm out here today along other purposes of basically visiting and meeting up with opinion makers and think tank organizations in New York and Washington, which we have somewhat regularly done in the past 18, 19 months since I first joined the government. I think Indonesia today is a little bit different. And I want to talk to you about the Indonesia today and where it could potentially go to in our lifetime, at least in my lifetime. And I want to just basically share with you some of the perspectives, the issues, and the opportunities that people have known Indonesia for. The topic of Indonesia certainly has to involve a conversation about Asia. And I know many of you are quite intrigued by the new Asia today. We go back to the first two millennia, I think the first 1,800 years, Asia basically made up around, if not more, than 50% of the global GDP. It wasn't until 200 years ago that Asia's portion of the global GDP started declining until recently when it appears to be on the rise again. And some even have theorized that the current share of Asia's portion of the GDP at 35% or so is potentially going to go up to 50 to 55% taking the 30 to 40-year view. And much of that is going to be underpinned by what happens in China and India. But I'd like to think as an Indonesian that I think some of that should be attributable to what's going to happen to Indonesia in the next 10, 20, 30, if not 40 years time. Take a 40-year view. I think the global GDP is poised to grow from the current $70 trillion to perhaps slightly over $400 trillion US. And that will basically bode well for the world and hopefully also for Asia, which will make up more than 50% of that. Now, I think people are also beginning to understand the increasing dichotomy between, on one hand, basically the rise of Asia, which will imply the erosion of the dominance of the US. But also, on the other hand, Asia's having to basically go into this untested future without an America. And I think this dichotomy is what many Asians are pondering today as to where Asia is going to come about going forward in the next few, if not many years. From an economic standpoint, I want to share with you a story involving a guy by the name of Jim O'Neill. This is an economist from Goldman Sachs who basically coined the acronym BRIC. He basically did not include Indonesia, and I believe it's for reasons that he hasn't been to Indonesia in the last 15 years. And I have, I think, managed to convince him that Indonesia is a completely different story from what Indonesia has been known for many years ago. And one of the conversations I had that would go back to about November last year, he had a page on his presentation that would basically depict the economic delta of Indonesia amounting to a mere 500 billion US for the next 10 years. And that, to me, is something that would not make too much sense by virtue of the following. Last year's Indonesia's GDP was at 720 billion US, and you were to extrapolate that at 6.5 to 7% real growth. In the next 10 years, it should grow to about 2 trillion US, giving us a delta of about 1.3 trillion US, which is well above the 500 billion US that he had basically noted on one of the pages. After a number of discussions and meetings, I think he is somewhat convinced now that Indonesia deserves to grow by a lot more than 500 billion US in the next 10 years. Now this is, I think, a revelation which I know exists by virtue of the fact that not many people don't know Indonesia. And I always kid that a lot of people in Oklahoma don't know where Indonesia is, much less Florida. But I'm not here to kid about geography, but I'm here to basically make the note that Indonesia is a changed story, and it's also a changing story. Now, Indonesia, today with 240 million people, very young demographics, just so you know 60% of the population are younger than 39 years old, 50% of the population are younger than 29 years old. And it just so happens that we are reproductive, that we will be able to maintain that demographic profile in the next 10 to 15 years, that if you take a pulse check, any time between today and 15 years from today, there is a good chance Indonesia will have the same demographic profile that we do today. And this is great capital for anybody that wants to invest in Indonesia, knowing that youth is there, knowing that youth translates to productivity, and of course, economic sizing. There are other recognitions that are being given to Indonesia, whether it is civet, N11, eagle, 3G, emerging markets, growth stories, growth markets, and all these acronyms and terminologies and phrases that have been assigned to Indonesia by many famed economists from the region and also the world over. It is an increasing recognition that some of us in Indonesia think and seem as being overdue. And if you ask me whether Indonesia deserves to be an investment-grade country, I think we should have gotten the investment-grade status a year or two ago. If you take a look at the last sovereign bond issuance of the Republic of Indonesia, which was done about a couple of months ago, it was priced better than Citigroup. It was priced at pricing that I think is reflective of an investment-grade country. And this is only going to happen if we keep telling the world the new Indonesia and if we keep showing the world that Indonesia can actually deliver on some of its promises. Warren Buffett once said that you can't make a baby in one month by impregnating nine women. You just got to wait nine months. And I do believe that we have to wait. We have to earn it and we've got to do it the way we have to do it. And we can't be bypassing anything that would shortcut anything for Indonesia's sake. But the good thing is that there's a lot of young Indonesians in waiting in Indonesia, including our ambassador in the U.S. Other recognitions take the form of BBC's naming Indonesia as the number one place to go for entrepreneurs. The World Competitiveness Index at number 44 for Indonesia. Indonesia is having climbed from number 54 in a mere year or 18 months from 54 to 44. And hopefully we'll be able to achieve the same kind of feat in the context of doing business by way of what the World Bank and IFC say about Indonesia. The most important thing is that we're young, we can wait, and there is an increasing number of Indonesians who get it, who get the 21st century paradigm. And I do believe that we will be able to make things happen in the short-term, mid-term, and long-term. Now, if we were to peel the onion a little bit more, GDP of 720 billion U.S. last year, take a three to four-year view in 2014, our GDP is poised to grow to about a trillion point one U.S. dollars. Take a 10-year view, it will grow to about two trillion U.S. dollars. Take a 15-year view, it will grow to about four to four-and-a-half trillion U.S. dollars. Take a 20-year view, it will grow to about six to seven trillion U.S. dollars. So I know my kids, my youngest daughter is eight years old. I know when she is 28 years old, Indonesia's GDP per capita will be about 22,000 U.S. dollars. Compare it and contrast it with the current $3,000 GDP per capita. That gives me tremendous satisfaction and, of course, incentive to do whatever it takes to make sure that Indonesia grows to where it's supposed to be. Now, as you know, we are already the 17th largest economy in the world. We have become a member of the G20. And if we take a look at how we have behaved from a fiscal standpoint, I think we have done pretty enormously well. At a debt-to-GDP ratio of 26%, on a continuing declination to about 21 to 22% in three years' time, we can somewhat gloat to our American friends, our Japanese friends, even our European friends. But that's no incentive for us to fall into the kind of hubris that some of our friends have gone into. And we cannot afford to be any complacent just by way of how we have done ourselves from a fiscal standpoint. Monetarily, I think we can also be proud of some of our achievements. Our inflation rate last year was at 5.96%. And we've only had to raise our policy rate just once in the last 19 months. As compared to China, India, Thailand, Vietnam, Malaysia, and Singapore, which have had to raise their policy rates by quite a number of times in the same period. I want to just raise one point, the issue with inflation in Indonesia relates to the basic of things. And that's chili. Indonesia eat a lot of chili. And the contribution of chili to our inflation of 5.96% last year was 0.86%. And also rice. Indonesians are the largest consumer of rice on a per capita per year basis. We consume about 139 kilograms of rice as compared to our friends, brothers, and sisters in Thailand, Malaysia, and Vietnam at a mere 60 to 70 kilograms per capita per year. So I think we can do two things. On the supply side, we need to ramp up marginal productivity of rice. And on the demand side, we can do something in terms of getting Indonesians to substitute over to other substitutes. Or perhaps put up an ad that tells people that eating rice is cancerous. But that's not the way to go forward. I love rice, so does my family. Demographics is another selling point from Indonesia. And I said, this is what's going to carry Indonesia forward. Ten years from today, there's going to be more than 600 million Chinese who are going to be older than 60 years old. At the same time, there's going to be more than 500 million Indians who are going to be younger than 29 years old. At the same time, there's going to be more than 130 million Indonesians who are going to be age 29 years old or younger. So it all depends on what we do with these young people. But the problem is we're not as educated as the Indians and the Chinese are. We have only produced about 14,000 PhDs. And we're producing 7 to 800 PhDs per year. Take a 20-year view of Indonesia, we'll only be able to add the number of PhDs by a mere 16,000 compared to what China already has. Supposedly, they already have 500,000 PhDs today and India similarly at 500,000 PhDs. We're not going to be able to compete with the Indians and the Chinese of the world until and unless we do some game changing on education. Whether it is at the uppermost tier of the tertiary or even at the lowest tier of the tertiary. Surely below that, we've got to take care of the polytechnics and the ITEs to make sure that we have the plumbers. We have the non-plumbers, the hairstylists, the computer programmers and the guys who basically do all levels of the value chain for purposes of Indonesia getting on to the industrialization bandwagon. Now, what a difference have 13 years of pain and lessons done to Indonesia? If you asked me 13 years ago as to whether or not Indonesia was going to Balkanize, I probably would have agreed. Indonesia politically and economically was moribund. But guess what? I think we've learned to swim sideways. And sometimes you learn the best ideas by swimming sideways. We're not going to continue swimming sideways, but I think Indonesia has gotten its act together. And I basically sympathize and empathize with some of our friends in Europe who have to get on these austerity measures that will be very painful and difficult. The kind of stuff that we have to or we had to do 12, 13 years ago. Now, the challenges for Indonesia are varied and numerous. The first one is corruption. People always ask me as to whether or not Indonesia has corruption. And my answer is yes. But the question is for anybody that wants to build factories, anybody that wants to take a 5, 10 or 15 year view of the country, they have got to size up as to whether or not Indonesia is going to be more or less corrupt 5 years from today or 10 years from today. And I do believe that it is not the case that Indonesia will be more corrupt. It took Hong Kong 30 to 40 years to fix corruption. And I certainly want a better future, not only for myself, but also for my kids and grandkids. And there is a more increasing number of young Indonesians who are taking ownership of what's important for the future of Indonesia to make sure that our lives in the future are much more meaningful. Second is the natural disasters. This is something that we've had to deal with. We've learned how to deal with them. But I think this is something that's going to be inevitable going forward. We are talking with a number of people from around the world in terms of coming up and undertaking early warning signals, defense mechanisms so that we can limit and mitigate the risks of those natural disasters causing difficulties on our economic lives. Third is infrastructure. I remember in the early 90s, the Chinese came to Indonesia to learn how to build highways. Ever since then, they've built only more than 70,000 kilometers of highways. Ever since then, we've only built 500 kilometers of highways. Today, China has, I think, more than 4.5 million kilometers of highways. India, similarly, at 4.5 million kilometers of highways, Indonesia, a mere 340,000 kilometers of highways. We're not producing infrastructure at the pace that India and China are, particularly China. Our spend rate on infrastructure was only a mere 3% of our GDP, vis-à-vis 5% to 9% of India and China, respectively. Our consumption of steel is also on the low end of the game. We only consume about 30 kilograms of steel per capita per year. South Korea consumes about 1,200 kilograms of steel per capita per year. What does it take for a nation to become a modern nation? It needs to be consuming about 500 kilograms of steel. What does it take for us to go up from 30 kilograms per capita per year to 500 kilograms per capita per year? We need to be basically producing an additional 120 million tons of capacity. And that will take about 120 to $150 billion worth of capital, which is not an easy feat. And this is something that we've got to work on so that we can get on this necessary industrialization bandwagon. I've talked about education. Healthcare is another issue within the infrastructure space that we need to address. I think there is a lot of homework that Indonesia and Indonesians need to work on in the next 5, 10, 15, to 20 years. I've talked about natural disasters. I've talked about corruption. I've talked about the lack of infrastructure and the loss being basically institutional reforms. We can tabulate all the 200 to 300 institutional reforms that Indonesia must address. But to do that, we must be able to get Iraq together on just one or two. And if we were to pick the one or two that we need to basically reform, it would be the land acquisition law. The land acquisition law is something that's been pending for about 25 years. This is something that will basically give certainty and clarity with respect to timing and pricing for any investors who want to build infrastructure. Any time an investor or a businessman can be given that kind of clarity, I think he is good to do business. And so far, we're not able to do that. And I'm hopeful with everything that we're doing that we will be able to get this law out before the end of the year. The second institutional reform, I think, would involve the government's ability to take on fiscal views. Some of you may be aware of the fact that since 25 to 30 years ago, we've been precluded and prohibited from taking on fiscal views, on certain investment pieces by way of giving tax holidays or tax allowances. We've had a breakthrough, we've been able to convince the government. And we got the government regulation out last December, signed by the president. And we should be able to come out with the necessary technical ministerial decree in a month or two to basically lay out the details in terms of which investors would be entitled to what sort of tax holidays and tax allowances for any particular sector. This is unprecedented, but it means a lot for Indonesia because we've not been able to do it only for the last 25 years. The third is basically being able to flex the tender procedures or regulations were basically in the process of revising presidential decree 13, which basically has required minimum three bits or three bitters for any particular infrastructure development. I've been advocating for a greater degree of flexibility for this so that if we get a bit from a GE or an Astra International, and if I know that this guy is putting in a bit for something that I think it's worth, so be it, as long as I know that this will mean the acceleration of infrastructure development. Such flexibility and open-mindedness has not been present in the way we've been thinking about doing infrastructure development. And I'm hopeful that by the time we get this revision out, I think we'll be able to send a completely different signal in terms of how we do the infrastructure development. Case in point, public-private partnerships. The government has been talking a lot and a long time about public-private partnerships. Some of you are nodding, meaning acknowledging the fact that we haven't been able to get anything done the last 12 to 13 years. But guess what? We basically took that over from the Ministry of Planning and the Ministry of Finance nine months ago and we delivered the first ever PPP project. This was the central Java power generation capability amounting to about three billion US dollars for a two times one thousand megawatt power generation capability. We got 11 bits, we lowered it down to four, and we got the Japanese consortium to win. And this is something that I think we can check off the box in terms of creating the necessary international reputation in terms of the way we undertake the process. And we're in the midst of trying to get another PPP project, which is a water treatment project in East Java, which has been pending only since 1968. And I am optimistic that we will be able to get this thing done before the year end. This is the water treatment project in Pasurwan and Sidoarjo in the eastern Java province. And with everything that we're doing, I think we're likely to be able to deliver one or two this year. And I certainly believe that one or two is certainly a lot better than zero in the past 12 or 13 years. This is the kind of stuff that will entail credibility for Indonesia. And I do believe that we can do one or two. We should be able to do five to 10 in the years to come on a yearly basis. Now, what does all this mean in terms of the future for Indonesia? I think it means a lot. This last year amounted to about $23.5 billion U.S., outside oil and gas upstream and banking. It went up by close to 60% compared to the year before. And what was good about it was also that the portion of domestic capital formation went up. In 2009, domestic capital formation was 28% of the total capital formation. In 2010, it went up to 29% of the total capital formation, which went up by a big percentage from 2009 to 2010. The other good thing is that deployment of capital to outside Java took place in a big way. In 2009, only 18% of total capital formation took place outside Java. In 2010, 33% of total capital formation took place outside Java. Meaning people outside Java who deserve better and more welfare are getting the money. And we are doing whatever we can to make sure that there is more and more deployment of capital to outside Java. Now, surely, is this enough for us? No. I think we have to do whatever it takes to make sure that that number of 33% goes to 50% at least for total capital mobilization outside Java. Is it enough for us to stop at $23.5 billion for the total capital formation? No. Because we were to take a 20-year view starting with the base of $720 billion of GDP in 2010 and ending with about $7 trillion of GDP in 2030, the accumulation of those GDPs would be about $52 trillion US dollars. Taking the approach of 20% of that for capital formation or fixed capital formation, we were to I think we would be responsible for having to attract about $11 trillion US dollars of capital formation in the next 20 years. 20% of that would have to be in the context of infrastructure. Bottom line, that's a lot of zeros. That's a lot of money. Great requirement in the next 20 years, amounting to about 10 to 11 trillion US dollars, of which for infrastructure, we're going to need about $2 trillion US dollars in the next 20 years. Now are we going to be able to do that? I am optimistic with everything that we're doing, but if we can just achieve the one or two game changers that would be needed, I think we should be able to have good probability of achieving those. The challenge is for the United States, I think, to understand that Asia is on the rise, particularly Indonesia. Asia is not just about India and China. There is that little country called Indonesia, which is quite meaningful. There is that little region by the name of ASEAN, which has a population of 600 million people and a collective GDP of $1.9 trillion US dollars, of which Indonesia makes up between 45 to 50% on a year-on-year basis. It needs to be recognized. The other challenge is for Asia not to fall into the kind of hubris that people have been talking about. I think there is no reason for any of us in Asia to think that the world is going to be decoupled. At the rate that the intra-Asian trade and investment has gone up, we have to realize that much of that is intermediate in nature, with the view that the final destination is the US. At the rate that China has to deal with its issue of moving the pendulum from an investment-centric economy to a consumption-centric, and it could take years, I think we have to learn to coexist in a more cohesive way going forward. And I think within all that, Indonesia shall and will be a pretty attractive investment thesis. Thank you very much. Thanks, Chairman. We're one. That was a great, excellent overview of Indonesia's economy and some of the challenges that you're facing and how you're trying to address these going forward. I'm sure you've given all of us a lot of food for thought and probably knowing a regular Washington audience, you're going to face a lot of interesting questions. So with that, I'd like to open the floor. If you have a question, please identify yourself and let's ask questions, not give speeches, please. Thank you. Please. First of all, thanks for your comments. There was a lot to digest there, and we all went to school on them, I'm sure. But I want to take you back for a moment, you're a world-class investment banker by training. As you look at Indonesia right now, what properties do you see? What sectors in particular do you look at in wearing your old hat for a moment that are undervalued, where the valuations are attractive, where in that predatory environment that you used to come out of is a buy opportunity? What, we want investment tips. This is the new Washington, we're a post-crisis now, we want to hear what we should be buying with all the money that we don't have. I would hold on to cash, I'm just kidding. No, I think the obvious choice would be infrastructure, because this is something that Indonesia lacks, big time. I'm not worried about whether or not money is there for infrastructure financing. I think it's a question of whether or not we can get the framework right. And it doesn't require the tweaking of a couple of hundred things, just one or two things. That would be the obvious, but in terms of fulfilling your IRR requirement, a typical infra development or project would be, I would guess, between the 10 to 15 percent range IRR, whether that's good enough, but for private equity guys, certainly that may be on a low end of the range, because they're looking at well above those kinds of numbers. But outside the infrastructure space, if you're looking for portfolio opportunities, the stock market trades at about 13 and a half to 14 times PE today, and that's already at par with the multiples in Shanghai and Mumbai, while Mumbai has had some corrections in the last couple of months. But is that fairly valued? I don't think so. I think there's still room for growth in Indonesia by virtue of the infrastructure development, because that's going to underpin valuation increments in everything else, which would be in the composite of the stock market. So somebody asked me this the other day, the stock market in Indonesia has already gone up by 190 percent in the last, what, four, five years, is it going to stop right there? I don't think so. I think it's still slightly undervalued at the rate that we haven't gotten our act together on the infrastructure. And just imagine this, despite or not getting our act together on infrastructure, we have still been able to be on the ball, if not ahead of the ball on managing inflation, unlike other countries in Asia, which are, I think, somewhat struggling in managing inflation. So I think the opportunity is about beyond infrastructure. Banking, I think it's pretty much gone through the necessary restructuring and consolidation. There's likely to be more consolidation, but beyond that, in terms of the insurance and the natural resource and some of the other spaces, I think it's still a very, very attractive place to invest. Other questions? Jim Bodner with the Cohen Group. Can you talk for a minute about the regional champion provinces and the incentive structures that are being set up for those? We came up with the regional championship notion last year, early last year, mainly for purposes of boiling up one against the other. I mean, we figured that by telling the West Sumatra governor that South Sumatra is doing well, it's going to provoke him to do more and better. And it has. And this is one thing that we did that basically allowed us to get much bigger numbers outside Java. Surely this was done with only seven provinces as regional champions, but that would have been at the expense of the other 26 provinces who have been voicing their concerns and madness at me for not being included as a regional champion. So we're going to do not around a regional champions this year, involving the next seven. And hopefully that will catalyze people to do more and better in these new set of provinces. In terms of incentives, we did not apply any particular incentives with any of these. We're sticking to the script that any fiscal and non-fiscal incentives ought to be done from the center, from Jakarta. And that has worked out okay so far. So yeah, I think we'll continue doing it with more and more provinces. I'm Kristi Bush from Soja's Corporation. I've heard that your president made a comment recently about renegotiating the natural resources contracts. Could you expand on that a little bit? Look, I think we were having lunch with some of the U.S. corporates today, including one large company in a natural resource space. There's some disillusionment amongst public officials within the government with respect to how we have given out concessions dating back to 30 to 40 years ago to large multinational companies who have not explored and exploited to the extent that the concessions were for. Not nearly as much. And this surely would have been at the expense of some of the local entrepreneurs not getting the fair share of the contracts or whatever. And this has been registered in a big way by quite a number of the local entrepreneurs. Number one, number two, the disillusionment also relates to the fact that some local mining companies, Indonesian mining companies, are actually paying larger royalty percentages than multinationals. This is not an anti-local or anti-foreign. I think this is a way to basically try to seek the truth in terms of finding the right balance for the local and the non-local. Now, I think the bigger question is whether or not we're going to be close-minded with respect to foreign investments. Certainly not. And I want to just give you a perspective, as I've shared earlier today over lunch. The target for fixed capital formation for a five-year period for Indonesia is a trillion US dollars. The national banking asset is a mere 300 billion US. And it grows at a rate of 20% per year. So anybody in Indonesia could only borrow about 60 billion US per year from any bank in town. You multiply that by five, you get to about 300 billion US. On a typical debt to equity of 70 and 30, the equity coming from any Indonesian entrepreneur would be about 100 billion US. On top of the 300, anybody can invest from Indonesia up to only 400 billion US, but we have a target of a trillion US dollars. So we've got a whole of 600 billion US to fill. So, you know, we have one of two alternatives. We reduce the target, you know, if we don't like foreign investors. Or we find ways to draw the balance, right? We're certainly not reducing the target of foreign investments because if we reduce the target of foreign investments, that would mean Indonesia's having to grow or ability to grow at a mere 4% as opposed to 7% or 8% that we want. And that would be problematic. I think more and more people are understanding this. I spent quite a bit of time talking to parliamentarians, you know, at hearings and stuff. But also at the same time, I spent time talking to, you know, at universities to tell people the reality of what sort of investments and what portions or proportions of investments ought to come from both domestic and non-domestic sources. Thank you. Nadine Farouk with the State Department. I was hoping you could elaborate a little bit on how you see corruption improving, particularly for investors who are going in and they see these new laws and they're wondering if their contracts are going to be enforced and if they're going to get the full protection of the law. I mean, as I've said earlier, are we going to have a perfect scenario by tomorrow where we have dispute resolution mechanisms, perfect scenarios of sanctities of contracts and all that? The answer is probably not. But you know, there are some who are sitting in this room, I'm not going to mention names, who went through this sort of issue and we actually sat down and helped mediate with the relevant, you know, people that they had difficulties with. And it turned out okay, we were able to mediate between the two sides with a win-win solution for both sides. But it all boils down to whether or not Indonesia is going to be better off or worse off in the years to come. And I'd like to think that Indonesia today is a lot better than what Indonesia was one, two, three, four, five years ago. And I'm not the one saying it, international communities are saying it, international institutions are rewarding us, with the kind of recognition that we never got for many years. Now, take that forward, is it going to continue? I think so. And I think it's only going to accelerate if we were to invest in educating Indonesians as much as, you know, we could or possible. I don't know if that answers, but that's, you know. Hi, my name's Jim Waller from Nathan Associates. I've very much enjoyed your remarks, particularly at the end when you talked about ASEAN as a region. And here, I was talking with a lawyer this morning in Vietnam who is trying to advise his clients, and they have offices not only in Vietnam, but also throughout the Southeast Asian region to position themselves to take advantage of ASEAN as an investment location. However, one fly in the ointment is that the new ASEAN Comprehensive Investment Agreement has not been ratified by all 10 member countries. It hasn't taken effect. One of the countries that hasn't ratified it is Indonesia. I noted that the leaders, when they met in May, said that it would be ratified by the end of the year. So I'd be interested in your perspectives of whether or not you can see that one through in a short period of time to make ASEAN a very interesting place for an attract investment. Thanks. It was actually two countries, Indonesia and Thailand, that didn't ratify. And Thailand is slightly behind Indonesia in terms of ratifying the negative or the reservation list, which we have ratified, by the way. And this was a point that was raised from mid-year last year, and we took care of that late part of last year. So I think we're all waiting for, you know, Thailand and the whole group to basically acknowledge this on a collective basis. You know, I was kid with my friends that, you know, one of the few mistakes Indonesia made was that it didn't go to war with the U.S. That people just get to know about Vietnam more and better than they do about Indonesia. But, you know, we're only 240 million people, slightly larger than Vietnam's 90 million people, and we're at 720 billion, slightly larger than the 86 to 90 billion U.S. economy of Vietnam. But I agree with you that ASEAN ought to serve as a collective destination of investments. But if the question is with respect to whether or not we're going to function and serve like the euro zone, I don't think so. I think the different pieces of the puzzle function in different ways. But culturally we're so glued together and we didn't go to war with each other as much as the Europeans did, you know, hundreds of years ago. But I think it is a fantastic proposition for ASEAN to serve as an investment destination by sheer size of it, you know, 1.9 trillion U.S. dollars ever growing at 6% annually and 600 million people. But I think there's a few things that need to be addressed before we can get that. From a trade standpoint, I think we've already done that, you know, in terms of the free trade arrangements that we've signed with quite a number of countries. But in terms of investments, some, but I think more could be done. Yeah, I agree. You are crystal ball said in 10 years, 2 trillion dollars, 20 years, 6 to 7 trillion dollars GDP. In that context, how the rest of the world would be in the, of course, China, India, and in conjunction with that, how that 7 trillion dollars consists of, you know, trade, consumption, and so forth. Thank you, sir. At the moment, our economy hinges on consumption for close to 70%, which is a good thing. It's sort of like India and the U.S. We've got to move that to the other side so that we have a higher percentage of fixed investment. You know, as a component of the GDP, China has to move the other way. Now, whether the equilibrium is at 50 or 60 in terms of consumption as a ratio to the GDP, we don't know. But at least that is what has sustained our economy. And we didn't have to do it with quantitative easing, right? And we didn't have to create liquidity artificially so that people would consume more KitKats and instant noodles and whatever. It's already a moving and existing part of the equation. I think the challenge is to ramp up the fixed capital investment ratio. China is nearing 50% in terms of its fixed investment, you know, ratio vis-a-vis the GDP. That may sound a little too much because it will be difficult to justify an attractive return on investment if you're spending or reinvesting that much of the GDP into the economy. But we certainly have the opposite problem. So I think on the assumption of demographics and assumption as a major underpinner of the economy, I think we are in good shape in terms of supporting that trajectory at 6.5% to 7% real growth in the next 20 years. That will take us mathematically to the 6 to 7 trillion figure, barring any catastrophic scenarios. But we have gone through a near catastrophic scenario in 2008, and we were able to enjoy an economic growth rate of 4.5%. And that's largely because of our consumption as a main driver of the economy. So I think if we can ramp up the fixed investment ratio to the GDP and continue educating people, I think we've got a fairly good chance. If I could ask you a question about the trade and investment situation in Southeast Asia. As you know, the business community, the foreign policy community are pretty excited that the U.S. has joined the Trans-Pacific Partnership. It's a way to get the U.S. engaged at a more formal level to try to make sure the engagement is long-term. Four ASEANs are already in the Trans-Pacific Partnership. Philippines, to some extent Thailand before the elections, was talking to the U.S. Japan, obviously, outside of ASEAN. And then two weeks ago, Senator Luger made a suggestion that the U.S. ought to look long-term at the possibility of a free trade agreement with ASEAN. How does Indonesia view what's going on in the TPP and the talk about ASEAN-US FTA, and does it see a possible role for itself in this? Look, I think we're quite a long way from there. I think we've got to make sure that we successfully implement some of the other inter-country arrangements. You mentioned the free trade agreement. We've signed free trade agreements with quite a number of countries already. And we're yet to see the mutual benefits of some of these. These are work in progress. I'm not making a statement of facts that are catastrophic to us, but I'm just making a statement of facts that I think each country needs to work on. Now, I think before we get to the TPP stage, we need to be able to basically prove that some of the other agreements that we've signed are working in a fair manner for the relevant country's concern. But if the question is, you know, with regards to whether or not the spirit is there to achieve something in the nearest possible future, yes, but I'm not expert enough to define a timeframe as to when we're going to be able to achieve that sort of an understanding between the U.S. and ASEAN or the U.S. and Indonesia. My name is Sos Kim. I'm a retired journalist. I think I'm going to break the train of your thought a little bit. You see any political instability in the future? And the question is why? I think that's more for the ambassador than for me. But look, I mean, common sense tells me that, you know, the president is limited to two terms. This is the second term. There's clearly no motivation. I mean, from a constitutional standpoint, there is no motivation for him to try to stay on beyond 2014. But I think the going is pretty good today in Indonesia. You know, it's like, you know, we took a time freeze from 1997 until today. For those of you who haven't been to Indonesia in the last 13 years, congratulations because we had it really tough. And I think, you know, the young Indonesians are really proud of the fact that things are actually moving in the right direction. The disillusionment is not with respect to the possibility of nonperformance, but the possibility of underperformance. You know, many of us are of the mindset that we ought to be doing 8% at least and we believe we can get there. And this, I think, will have implications on how people see the political development in the country. I think there is a high degree of the society who wants to see sustenance, you know, from what we're experiencing today. Thank you. Dewi from Voice of America. I'm quite intrigued by your statement that Indonesia won't be more corrupt. Why you or we can't be more optimistic than that? I mean, like saying less corrupt? Instead of saying less corrupt? I mean, can you elaborate? Is it not corrupt at all? Yes. And the other topic is about using Indonesia is heading toward overheating conditions and whether overheating. Because in Bali, I remember one economist from Harvard they said that Indonesia is one of countries that... I remember who that is. That was Jeff Frankel, a former professor of mine. Is the government worried about capital inflow? And are you worried that if Indonesia achieves investment rate, capital inflows will accelerate? Thank you. Look, I think Jeff's comment was a general comment and that I think the frequency of crises will heighten. And this will certainly involve flight of capital from one place to another in a more abrupt manner. Whether or not he was contextualizing that in Indonesia, I wasn't sure because at the same time within that same event he was basically making very favorable comments about Indonesia's economy. And I'll tell you this. In 1998, our foreign exchange reserve was a mere 17 to 18 billion US. Today, our foreign exchange reserve is slightly over 120 billion US. And at that time, our market cap was about 30 to 40 billion US. Today, our market cap is around 400 billion US, of which the domestic liquidity and domestic ownership of the capitalized stock is much higher than what it was, certainly on relative and also absolute basis. So that I think insulates Indonesia's vulnerability from attacks of capital. Does that guarantee the elimination of such possibility? No, it doesn't. But all I can say is that empirically from a foreign exchange reserve standpoint from a greater degree of liquidity standpoint for domestic ownership and domestic capital providers, I think we stand a much better chance than what we did 12 to 13 years ago. Now, on your comment with respect to Indonesia's dealing with corruption, I think we're on the right track. The only way to accelerate that or do more of that is to make sure that more and more people get educated. David, who is sitting next to you, is on a mission of increasing the number of Indonesians studying in the US. In my time, we had 14 to 15,000 Indonesians studying. Today, there is 100,000 Indians and 100,000 Chinese studying in the US as compared to a mere 7,000 Indonesians. So I think the game changer ought to be Indonesians studying in the US in a number of 20,000, at least in the next few years. And that will certainly correlate with our ability to eradicate corruption faster and better. Chairman, thank you very much. I think all of us can say we've enjoyed an hour of enlightened, educating kind of conversation about Indonesia's economy. We've all learned a lot and, as always, you've been very engaging. So thank you again and all the best. Thank you.