 On behalf of CSIS, I'm delighted to welcome you here to this talk by Dr. Srimalyani Indra Wadi. My name is Marie Hebert. I am the Senior Fellow and Deputy Director of the Southeast Asia Program here at CSIS. We're delighted that Ibu Srimalyani has joined us here today, recognizing that she's been through a pretty busy patch with the World Bank IMF meetings that just basically ended last weekend, but she says that people have been continuing here through much of this week. Ibu Srimalyani has been the Managing Director at the World Bank since 2010, and her portfolio basically covers the world. For those of us in this room, it's clearly one of the priorities is East Asia and the Pacific, but she also is in charge of South Asia, Africa, Europe, Central Asia, Middle East and North Africa, and I just forgot the Caribbean, so I'm not sure what's left out. Srimalyani was the Finance Minister of Indonesia before she came here. In that capacity, she was very key in guiding Indonesia's economic finance policy in Southeast Asia's largest economy in the years prior to coming here, and also was managing the finances during the financial crisis during 2008 and 2009 when Indonesia ended up doing quite a bit better than a lot of its neighbors. Ibu Srimalyani holds a Ph.D. from the University of Illinois, so there's no novice, no newcomer to the United States, and we're welcome you to CSIS today, and what she'll do is she'll give a short talk, and then we'll follow up with questions. Well, you can choose, but it might be a little better for the talk. Thank you, Mariah. Very good morning to all of you, and thank you for inviting me here. I heard that there are quite a lot of other prominent guests speaking in this forum, and certainly I was asked to talk about the topic which is very close to my own profession, but also close to my heart. Indonesia, Southeast Asia, economic performance, but also related to governance. I think when we talk about Southeast Asia, this is a region, 10 countries, with the GDP total is 1.9 trillion US dollars, it's bigger than India, and the population is 600 million Swiss of the United States, in Kampar Kapita close to $4,000 per capita, which is close to China, so it's really a region with huge potential, and also provided a very good performance in terms of the economic, as well as in this case, sometimes you see it on the social progress. The growth in the decades on average 5%, if we treat Southeast Asia as one economy, one country, it is in the position of the 9 largest economic in the world. So that is the situation, and the ASEAN, which they established the Southeast Asia country, established the association since 45 years ago, they also established what they call it the economic union or economic community, accelerated into 2015. When I was finance minister, we heard that the leaders met, and then they said, why don't we move forward the target to establish economy community into 2015. Of course, that was done when the situation in Europe is still not giving them the alarming signal about being the community means a lot of things in this case. But this is the region, which is also very reliance on trade and really driving their growth. So if you talk about three decades or four decades of performance in the Southeast Asia, and if you look at current statistic in which that trade to GDP ratio is 150%, then you then definitely see that this is the region which is going to be really affected by the global environment. And of course the discussion on IMF World Bank annual meeting last week was mainly also dominated by the concern, worry of many ministers of finance or even prime minister, president who visited us, they share their concern about what is going to happen with the European crisis, the US outlook as well as how this it will affect in term of their economic performance. Many of those countries has done a good job in 2008 by doing a more responsive and timely counter-cyclical measure. Many of them still have a room for the fiscal. Others is already exhausted in term of their fiscal space. So they are now really facing and maybe in some sense not really ready to face with the second cycle of crisis that will affect both from their external demand as well as the domestic demand. That is the theme which is shared by many developing countries whether this is low-income country, middle-income country and especially for the state. But also it's become the issue in term of how we can design the global growth return to the what you call it sustainable and inclusive and stable growth pattern. Now I was asked by the CSIS to speak about more on governance and how this governance can contribute and play a role in economic performance. By definition I think many people have their own perception about governance. They say well governance can be reflected into a many different perception idea. But I will define governance as the fairness, equity and impartiality. I think that is the three most important element of when we talk about fairness, governance, good governance, that is fairness, equity and impartiality. And within that definition is definitely touched very close to many of the institutional problem. That is if the institution whether this is public or especially public but also private can treat people with impartiality and fairness. And that will definitely not just the result or the end result of governance but that will require what you call it a necessary condition that will make this institution behave like that. That is the setting of the institution which adopting rule of law, effective law enforcement, you have rule of law but you don't have an effective law enforcement and judicial system. It's become the necessary condition for any system that want to adopt a good governance. And certainly within that element of fairness, equity and impartiality can only be enforced and perceived as a fair by the public if there is a transparency and also accountability. And this is exactly the challenge for any institution when they claim that governance have strong correlation with the economic performance. Historically empirically we can see it. Any country who has much better governance they are going to be able to deliver more sustained growth at the micro level, at the micro level even if you can see it that they usually deliver better in term of the health indicator whether this is on mortality of the infant mortality or in term of the health services and road quality and education. So there is a strong at least empirical evidence showing that there is a strong relationship with good governance and good development result. The problem is of course when we talk about governance and growth and especially when you are putting within the context of today. Because many of us are saying that governance that will provide with certainty is definitely lowering the transaction cost. And transaction cost which is low meaning that you can achieve a much better efficiency or in this case in this case it can also provide more certainty. Lower transaction cost, efficiency, certainty they are all good for business and that's why you have a good growth or better growth. That is the logical correlation between governance and growth. But if you put it within the Southeast Asia and you are going to have a quite interesting observation. Because if you look at even in Indonesian case, Indonesia during presidential hard talk for 32 years if you talk about whether we adopted good governance everybody will say well we have a lot of corruption especially at the elite top elite. But the performance is not really that bad. The economic performance for 32 years is the average is good if you can consider it that 7% is good of course and the poverty reduction is there. So there is also mixed feelings about with corruption which is linked closely with the concept of governance with the effectiveness of any regime and system to actually deliver what you call it a good economic performance that is the development whether you measure it in a growth or in this is poverty reduction. But why then Indonesia in 1997, 1998 after shocking by the financial crisis that suddenly people feel that they want to have it is maybe not sudden because in the past it was repressed closer it is not coming up in a headline or in the news. But it's become sudden because then suddenly we become open and transparent. So it is not about the temporary good performance of economy because you can also see it now in the Middle East situation quite a lot of authoritarian regime with the corruption at the top elite they can still deliver a good growth sometimes a little bit poverty reduction. But definitely they are not profiting with what they call it dignity freedom and equality. So it is about the problem of sustainability rather just the temporary performance and when I call it temporary it can be long. 30 years is not temporary in this case it's long enough to actually achieve something good. And that's why I think it is more about the sustainability and there are other thing that for many of the new democratic system there is also a sense of new element of frustration by this system because check and balance is and participatory decision making process is definitely invite so many party in your decision making process and especially if it is related to the public policy of course and that mean in a country which have still unevenness whether this is on education level opportunity in the past legacy then you are going to have this participation is more creating complication and not even giving what they call it the value edit of contesting idea so you have the best option of policy because the idea of inviting everybody to participate of course you can contest the idea you can contest even in term of prescription policy option and everybody become part of it and own that decision and that will create more sustainability the feeling of treating them in a dignity and the fairness and equity in term of the participation and that with that we will expect that the decision is going to be long lasting and it's going to be sustainable but what is maybe become the many of country expressing and this is going to be a very good observation because many of the democratic system government which is elected they are asked by their folder to deliver fast enough on the development result they sometimes argue that it is it cannot be done fast enough because we have to go through this democratic process well especially during this time when you are seeing how the democracy provide us with a good example of united state decision making process on the debt and budget everybody said that this is more serving a process rather than result and many developing countries really asking and aiming for result because they need to catch up they are still in lower level this is something that need to be put within the perspective because it can create a more mixed observation but also it could also come to the wrong conclusion some country can be then make the conclusion that well okay maybe what we need is not a democracy but authoritarian as long as it is efficient effective in delivering that is going to be fine but it will betray historically in term of what you call it participation and sustainability and especially when you talk about the dignity and freedom why it is important because within the development concept and this is also quite true in many of the southeast asia country i'm talking about indonesia i suspect that in this case when the development even if it is delivered it was delivered by the authoritarian government you create a middle class which is thick enough and this middle class is asking for more than just growth and they are asking participation and so on and that cannot be satisfied within the system which is not democratic transparent and establishing more impartiality and fairness and equity so this is the natural demand which is going to threatening the development achievement itself now unfortunately of course when we are talking about good governance and especially within the public sector my own experience what is going to be the element of building good governance i will say four element which is very important first it relate you cannot state and do the rhetoric of good governance if you don't have the public institution especially who has the capacity who has to who adopt transparency and accountability my own experience as a finance ministers we can talk about i'm now opening up my minister of finance we want to adopt good governance but you can sometimes frequently embarrass when your own staff have no competency and capacity and that's against the objective of building trust of the public because when you say that we are now adopting good governance we are opening up our institution we become transparent we want to become accountable and please correct us please criticize us and they can find a lot of things to criticize because of the capacity concept this is a very difficult choice especially at the initial stage when you really have to build the institution toward good governance because you still have a lot of legacy issue legacy problem structurally the institution cannot change overnight while at the same time you've already told public that you are adopting it and there is no backtracking and if you backtracking you can easily then criticize that you are no longer so capacity is definitely very important and unfortunately when you talk about capacity competency of the institution it takes longer time the question is always the very difficult trade-off in a short time when the minister is there in which they have to deliver something while at the same time they have to deal with the institution which is not up to the level so many developing country and Southeast Asia in this case is actually one of the example that you really actually want to deliver something but the institution is not up to the level that you can rely on that institution to really deliver according to what you want so the development challenge is always you have to develop while you also have to build your institution it's a different from the more advanced country in which you can really discussing about policy with assumption that the institution is there for you to do their function the second one on a building good governance is participation and oversight by civil society and by public in general this is a very important element and I can share you again my own experience the budget has become open the budget has become open in which in this case you upload it to the website you even in this case publish it to the media surprisingly when everybody in the past everybody asking for transparency you become transparent but you see that the quality of check and critic and analysis is not immediately good so in this case you become frustrated who's going to be my partner when I'm debating about this policy because when you talk about the budget with the whole option this is the revenue side this is going to be how I'm going to generate revenue I'm going to collect tax and the tax is going to be in this sector especially because it is under tax or so many things and then this is the revenue side and the revenue is going to be channeled we have a lot of subsidy we also built for the road infrastructure and you want to have a debate with its really looking at the budget and no one there to criticize to even understand the budget to read the budget so in this case we have to really have a lot of creativity for example in the minister of finance of Indonesia we do the contest of high school student how to read budget well we have a very good participation and amazingly I must say sometimes the result is much better than even the bachelor degree thesis which is I think is good I mean you will not you will be surprised when you are opening up and give this access that you are going to have so many good things coming from unusual places or from a different group of people but then I also actually quite discussing a lot with many of the media editor and so on because I said if you don't invest your reporter to understand about the real issue of the budget as much as you are having an openness the openness is not educating people it's not really providing with the value added so there is really a lot of effort and investment need to be done in order to really build good governance not only in a public institution but those part which really playing what we call it in economics of demand side of governance who demand good governance people civil society media but in order for them to be a good effective demand they really have to know what they are really asking and that is exactly what you call it the quality of the participation and oversight the third element is creating competitive private environment so I think this is also related to the corruption actually good governance should have the correlation that the corruption cases or prevalence is going to be less and that's not always easy in an institution in which you have quite a lot of what I call it legacy issue in my own experience the first thing is always that in the past when I first enter the minister of finance they always said well Ibu of course they become corrupt because their salary is not even enough to pay their need monthly okay how long it takes well it's only three weeks two weeks and that's why they need to find other income so they said they justify the corruption because even at the minimum level that they said that they cannot perform their function okay that means this has become a vicious circles as a minister of finance you have to cut that circle first okay I will eliminate the justification of corruption by correcting to what you call it it's just the normal it is not become highly paid because I always say that at the time in Indonesia if you want to be rich you are not working at the minister of finance you have to work outside but the country the government owe you a decent life as part of the civil society that you have to exist in your society as a decent group of people who's doing your public function and that's why you deserve a decent level of salary it's not becoming rich if you want to be rich and you think that you are so skillful and so smart you can go outside the government and that is something which is I think justify in many government in the world which is good they actually have a very good revolving door between the public private rule which is I think should be there so that is one thing at least what you call it you eliminate the first reason for them to justify that I become corrupt because it is necessary but then even when you deliver that you are going to immediately going to face because the media the parliamentary member party CSO NGO is going to be well you've already increased the salary why you still have a corruption or why you're not delivered the services they always think that immediately when you increase the salary immediately tomorrow my staff is going to be become the angel of the of the of the Indonesian government civil servant it's not so you really have to do a lot of battle inside in order for you to make sure that they are going to be impartial but at the same time they are still competent and reliable in delivering public services and that is the the challenge of building good governance the fourth is the political accountability of course at the end you cannot say the building governance and so on if you are not accountable politically and with that is certainly you have to communicate what is the result goals that you want to achieve or even in this case if you part of the public service delivery you have to be able to say that this is going what it takes in order to deliver a certain services and then people public is going to ask the accountability in term of the result whether you achieve the growth rate whether you achieve the education level whether you achieve the deficit financing whether you achieve the revenue target whether you achieve the spending target or in this case whether you achieve the service delivery level and that's the area which I think is going to take a lot of also action from the demand side many innovation can actually accelerate this political accountability because it is not just you finish your term and that's it but they demand to have what you've already achieved every term that you already deserve for the country and in this case is going to have connection with with the people so that is the the challenge of building a good governance for many ASEAN countries Southeast Asian country it's actually not internal governance which is important why because the global world has changed you see that a lot of rhetoric in the past three years especially since 2008 when there is a Lehman brother problem us problem and then now followed by the european in the past three years the economic discussion is always say that the emerging country developing country now become the model of the global economy they in term of growth they are always higher but also in term of the crisis the reason in 2008 they can still perform well they can manage their economic performance better although they are facing with the global shock now with that environment and even if you look at the statistic that developing country now contribute more or even 50 percent of the global growth if you look at the china even with the projection that we are now having a partnership with the chinese government and doing the chinese 2030 scenario if the current performance is going to be maintained by 2030 china is going to be the largest country in the world they are now become the largest exporter they are the second number two importer in the world they become always in a top one or two in the world but china is only one country reflecting many developing country emerging country who is now moving up to the ladder of the global scene so for them it is not only internal governance that they are asking or were asked to build many of this emerging country now has been asked to play a role on the global governance i think bob zulik is give many speeches which is saying that it's time for many developing country to play a role not only just in the past donor recipient lender borrower but you become the shareholder and stakeholder of the global economy and that's why being a shareholder you have to shape the policy you have to actively talk not only saying that you are there and we are here yours and ours but become you and us in this case but we talking about our global system and when talking about the global system this is something that need to have a very good opportunity for many emerging country i was the finance minister indonesia i actually sometimes feel that that expectation is just too much for us because as a finance minister of indonesia every day you have to deal with the parliament you have to manage the economy you have to improve the institution you have to reform so there are so many domestic tasks but every time i travel to attend the asian finance minister meeting asian plus three a pack meeting i am f word bank adb meeting they are expect us to say something and to play role and we said oh my god who's going to support me who do we do i have still spare thinking brain or even attention to this global while at every day you are going to be pressured by all the domestic but this is going to be the demand of the global global system economy so many emerging country now in this position and that's why we are now in the word bank is also try to create what we call it the middle income country club because many of them when they are facing my own example when i have and i very courageously at that time said okay i'm going to initiate the meeting of finance minister as a sideline of the un fccc that is the climate cup 13 in Bali the first time climate change meeting there is an initiative of finance minister to also discuss about climate change actually usually in the past the climate change or that's environmental or minister of environmental or at least those which is related to environment at at most in many advanced country is foreign affair but never actually minister of finance talking about climate change so we have to educate ourselves but actually that put it there so i have this initiative i was asked what how about you hosting that oh okay i think it's out of my own passion and which is logically we have we want to live in a good environment we know that the sustainability of environment is in danger by growth so by instinct i said i think environment is very important i have passion and i want to host it and then suddenly i asked my stuff and they have no idea they have no experience what is climate change who's the party who should be invited what is the issue and so on so you really when you are courageous enough to become host you really have to deal with a lot of capacity building again and sometimes you need international community to help you okay give me what is the agenda who should be who should be invited how we are going to organize it something which is for you like csis in here in washington every corner you have the experience to deal with this kind of thing but here in washington of course everywhere no the center of power of the world of course but in developing country hosting international event is something which is very seriously not yet to become the industry or so that kind of thing when you are asking many of developing country playing their role in shaping the global governance whether you are talking wto when you are talking about the reform in yam evan word bank or in our global financial institute system they are actually struggling about how and the most with their domestic as well as their international role the most they certainly can do which is closest actually use their own experience as a developing country in order to voicing what is actually need to be seen or need to be considered when you are shaping a policy at the global level and that is now if you see many of the developing country starting to also asian asian plus three is definitely there and they becoming more organized even in this case if you look at the agenda that they are discussing it's actually quite ambitious and they can actually create also a good discipline among themselves because if they leave it alone to become just individual country playing their individual role globally they don't have this pressure which is a positive constructive pressure for them i give you one example that is the single window of the asian i mean this is a very practical the asian has already lowering their tariff they want to become one trade zone it's supposed to be the flow of goods should be free across the asian but beside lowering tariff they say that each custom have custom institution of each of this country have their own way of doing business so it's create a lot of frustration in them of the what kind of form that need to be filled and even this case it can create a lot of unnecessary tension for example asking how exactly how much exactly that we export to singapore and how much exactly singapore is exporting to us there is a lot of dispute and that's become more suspicion and the trust is not there and that's why creating a one single window in which all good will be connected and the system is going to be more uniform and then the system and the process is going to be more or less standardized is very good it's good for business it's good for the economy it's good also for the governance but you have to be very sure for indonesia because the indonesia is the biggest country in asian when we are quite courageous saying that okay we signed the single window so when i was finance minister my staff informed me ibu we have already agreed a single window what single window there is one single window that is we are going to connect it with singapore malaysia but which window that we are going to use because in indonesia we have tanjung priok in jakarta window we have medan another window we have surabaya another window and that's all big and not to mention sulawesi in which we have ujung panda so for us as a big country the task is much even bigger and that's why i said okay could we at least show that the good will we will try to improve and standardize the window in tanjung priok because this 60 percent of our trade is coming in and out from jakarta after that we will then we'll build the other but certainly in this case it's it was perceived and appreciated by many of business community we move very far very ambitiously in order to create a good governance and and that's actually perceived very well and that's also showed to many much smaller country like laos kambuja i i didn't actually embarrass by telling them well you know my problem and your problem is not that difference you talk about capacity i also have the capacity problem you have a corruption i also have a corruption problem you have this complexity i have also the complexity but if i can do it then you can do it also and that's can create a very good discipline in managing so that is going to be many of what you call it the global governance challenge i think many emerging country is going to play more forceful role but of course they are going to use more their own domestic experience and lesson in order for them to say something and of course credibility of many emerging country can only be supported when they they call it put your house in order exactly they are now putting their house in order macroeconomic policy relatively now sound governance and institutional building is in the process to be improved and then they play a role at the regional as well as the global so i think i will stop up to here in short i think the conclusion while the south east asia is it is a very dynamic region it is a you can you call it tiger economy we have another economy which we call it lion economy that is africa now so you are going to have tiger you have lion you are going to have dragon so we have a lot of animal and i think they are building the right policy or the right institution they adopting a sound policy certainly in this case is governance is part of the very important element of the success of sustaining the growth i'm not telling only just a temporary performance of the group but sustaining in the medium and long term thank you very much thank you ibu simuliani that was a very thought provoking overview of the the issues that affect countries as they try to to struggle with providing better governance in their own economies and so we really appreciate your your very thoughtful insights on that we're going to open it up now for for discussion maybe if i could ask the first question you've given a good overview of what the components of governance are some of the challenges in achieving governance but if i don't know if this is too difficult in your current hat who you're wearing your current hat but if you had to grade asian and term asian country especially the major economies and how they're doing and establishing good governance what grade would you give them if you were their professor this is like print charts you change from a bcd to zero to one hundred either way the curriculum but the asian i mean the governance in term of the scale for asian or you can pick individual countries too whichever one you feel that's going to be very tricky well yeah in a way we have the cpi a what is the cpi stand for that is the indicator that measure the governance effectiveness it is not going to be like a indicator that just showing one element because the cpi is telling about how long it takes for you to pay tax how long it i mean there are so many the composite indicator that is then come up with one skill so in that i'm not going to have to give a skill which is different from cpi i'm i i don't remember which country in what position but i'm sure singapore has been perceived as a high uh indonesia still struggle a little bit low but there is a progress um militia i think is also close to a higher position so that is more or less the composition i think vietnam in this case i've been dealing with indonesia and looking at vietnam they are all having a similar problem like indonesia in 1890 in which the role of state is there the uh competition is there they are struggling in them of how to adopt or maintain good macroeconomic policy when there is a structural problem in their institutional especially related to state-owned enterprises so i think many of this country have a different position on their governance indicator cambodia is definitely another laos and then Myanmar so i guess i'm i'm just telling maybe indonesia we made some progress there is a little bit now perception about worry whether there is this progress is going to be continued but definitely the composition of what you call it reform in order to simplify the cost of doing business the process of doing something to get the permit is is is is actually there well um open up the floor if you have a question raise your hand uh there's some microphones uh they'll come to you and and uh for here please um uh identify yourself and um and then give us your question hi my name is george gourman i'm an ma candidate for international affairs at american university and i had a question about uh what institutional reforms can be implemented to strengthen federal local government communication and ensuring federal policies and goals are goals are implemented on the local level um thinking specifically about places like Cali monton where local governments can um can sometimes operate almost independently and uh implement negative aspects of of deforestation and exploiting resources uh how can this be rectified well there is a reform which is already adopted since 97 98 which is related to the local government that is first they become decentralized and have the autonomy the idea is actually very good and for indonesia is is is very logical because it's a big country that is to closer the government accountability to its own people and that's why you delegated the power to local government in the past during presidential time when you are even asking for any business license and so on you really have to go to jacarta and that's become the very centralized authority but then it's become a corruption also and not to mention uh the process it takes to to have that kind of permission or uh uh agreement by the government now it it's become decentralized and uh have enjoying the local autonomy that's the first reform you're asking what is going to be the next reform there is an implication of any step on the first reform first they are closer to the people but the capacity is not there so institutional capacity is there because the idea of closer to the people is become direct accountability whether this is related to the service delivery on education health basic services clean water and so on many local government is actually don't have this capacity and also for indonesia the political decentralization is not actually follow very closely with the fiscal decentralization revenue side is still government central government some of the revenue component for example like revenue on oil and gas has a very explicit explicit formula how you divide it between national and local government even in this case on the natural resource related to forestry now even at my time they even asking about the cigarette because the revenue from the the cigarette is actually very high and they are asking for the revenue sharing which is actually theoretically isn't is is not there but political pressure is there so the revenue decentralizing the revenue side is only partial there is a law which is now giving more room for the local government to generate their own revenue so local tax is going to be or is already adopted i think two two years ago they have the new law on the local tax so there is a potential revenue side on the spending side is really their own so the fiscal decentralization is more on the expenditure side and that's exactly what you mentioned that is they can spend their money according to their own local political choices and there is of course direct election there is a local parliament and so on but the design is good the result is uneven some some local government is really good progressive even at the municipality other is actually like behind either because of leadership problem whether this is also a capacity problem or even in this case because they are still in a very early nascent democracy at the local level local civil society is not there they don't know how to ask for accountability they cannot exercise what i call it earlier good governance what they really ask the local government to deliver so this is going to be the the theme for Indonesian reform what you call it second and third generation of reform is actually the reform at the institutional capacity and the effectiveness of this democratic openness system to really deliver what the people want there is some progress that there are still a lot of homework need to be done john sure john phipps with visa um actually my question leads more from your comments um you talked about uh a greater share of responsibility for developing emerging countries for global governance and what we're seeing is sort of a push by some prominent emerging countries to change the way in which um how would you say some of the rules are set and i would say this applies to the imf and world bank um what we're seeing or we think we're seeing is uh you know areas where there was sort of an adopted adopted standard okay what is good governance you know there's an agree upon standard that we try to measure on a global level and yet what we're seeing perhaps is it some pushback saying hey that standard may not be the best standard or may not be the best standard for us and so you know in terms of like uh in trade relationships instead of what we thought of as open and transparent markets now it's there's pushback well let's let's you know move beyond or let's let's erect barriers that aren't necessarily um fall within the rules of tariffs and non-tariff barriers so it's a long question but how much pushback do you see on that level is the is the institution itself coming under a lot of pressure to in a sense be more lax in governments governance structures uh in what what rules it applies in its lending policies so for instance you know instead of you know the model being hey you must be transparent now it's well it's going to take longer maybe we need to change the rules a bit but we still need the money now um i think it's good to put it within the context of you revering whether this is affecting the way the IMF or in this case bang in engaging with this country given that they sometimes have a different view or still pushing back there is really a constant uh discussion as well as interaction with them many of developing country when they first respond and making a speech in the public in international fora they're always positioning themselves as a victim of course of whatever the legacy historical setting in the past but now with their size is getting bigger their rule has become bigger the claim of become a victim is no longer credible okay and that's why for them to say that i am now become part of the shareholder this is an evolutionary rule change that still in the process of shaping if i can call it that way the the interaction the kind of interaction which is showing that there is a different or there is an interest saying that give us a breathing space give us a learning lesson so that we can catch up so then if we have the capacity and the real readiness we will go to we will comply and adopt the international standard there is an element of truth in that because i myself in Indonesia when i was this is really a debate within the cabinet at that time when we said that we've already signed for the free trade agreement and then i said when it was signed by the leaders before we just actually following by 2012 this is going to be lower into five percent or even zero so there is no really tariff barrier and many ministers actually have a genuine anxiety not in terms of that there will be many of the domestic player is not going out of the business but sometimes is a very genuine concern regarding how i should protect the people and what is actually telling is that many of developing countries despite their commitment to agree on a liberalization and so on they sometimes forget to prepare their own domestic institution so that when you are opening up to your country your country actually then you will be at that time relying how to protect for example the most vulnerable the poor people through a good social safety net if you are going to deal with consumer which is going to be facing with a very competitive company offering you so many things there should be a consumer protection if there is unfair business practices there must be something there and it is not there many of developing country has not yet actually building that institution so that when you are opening up you get the benefit of competition and open but then you also protecting especially the people which really deserve to be protected but they are vulnerable to the power of industry the power of sometimes company which is not really comply to good governance in a way so in a way i think there is a genuine but also it can be also used by the free rider to actually saving the narrow interest group so in a way i think many developing country now is going to be in the position if they are in a position to only just hey you you have to adopt this principle i think that is not going to be a good communication mechanism to get what you call it the real ownership the essence and the most important part here is actually developing country to become part of the owner of global governance global policy and so on and that's why the debate can be open it can be perceived that it is a pushing back but i think i can testify in the bank i don't i don't see that we are relaxing it actually we are still struggling with so many safe guard which is still there when we are lending the money that you have to make sure that the indigenous people will be treated well we have to make sure that the environmental is going to be taking care of we have to make sure that they are adopting a governance that make sure that the resource resource is not going to be corrupted so i don't see that even there is on any relaxing even in the ifc side we also asking the ifc when they are investing in the in the developing and in any country they also bring this value because at the end many developing country is not only just need the capital they actually importing a set of value when the capital coming to this country that is about not only technology not only the money but also the way you work the way you organize the set the way you engage with the local community the way you interact with the government if this infrastructure coming with the behavior which is not giving them that value edit is actually ruining also or destroying the value because if the infrastructure coming with the bad behavior or polluting of destroying the indigenous people or even in this case bribing the government official they are just acting just like other economic animal so in the way actually this has become a more consistent interactive and continuous interaction what i can actually maybe have a more positive and optimistic perspective with the openness now with the technology information in which you have a facebook or twitter and so on you will not underestimate that the inconsistent behavior can sustain when you do the rhetoric or you play a very good rhetoric publicly or in this case for a company you make a very good advertisement painting yourself your that your company is taking care of people taking care of environment comply on good government paying good tax but you are behaving differently people will easily knows that you are not consistent so in this case i think it applies to public institution politician but also apply to many corporations i'm not sure in this case that many emerging country is really want to have a different standard or value what they really want is the fairness and equity and when they become large actually it serves their own interests to adopt the same good principle on the governance because it will not serve them domestically it will be very very difficult for them to explain their own domestic constituency they say hey you know what i'm in an international forum i've been very courageous to refuse that any investor should protect our people it won't ring any good sound for for many of the people in their own or even is yes i will allow any investor coming to our country as long as they bring money i don't care whether they are going to just dump a lot of pollution and of course it's not going to be it is not i mean when they adopt that kind of principle it's not serving the interests of the west or the international standard it's serving your own people so they know that it is going to be that okay thank you thank you marie and thank you the ibu srimulyani uh my name is andy by union with the east west center and i'm also a journalist with the gikato post you mentioned about the lack of a credible counterpart when you open up the budget for public uh debate and you mentioned the media was also one of the partners that you expected and in my defense i guess uh many of my uh journalists we train to how to read the budget they will poach so and then and then when to work for financial companies but that's that's uh i mean that's that's a story it's no i'm not defending myself but i can understand the lack of a you know credible debate in Indonesia on issues very important like the budget i have two questions one is uh you know when you talk about the four elements for good governance uh you know first one was the capacity of the public institutions and number two was uh oversight by civil civil society kind of number three but number four you mentioned about political accountability now when it comes to southeast asia uh you know when we rank uh i'm looking at their ranking by freedom freedom house of countries that are regards democracy or you know free or not free uh you know countries like that are successful economically like singapore malaysia they don't rank as democratic right indonesia ranks higher but your your ranking of the good governance uh you know you put singapore and malaysia quite high so i'm just asking about you know the the uh the benchmarks that you use when you measure about the political accountability being the number four element in that good governance the second question is about this the heavy reliance of southeast asia on export markets there have been talks since the global economic crisis about asia not just southeast asia but east asia as a whole trying to decouple you know from from the west from united states uh i i would like to hear your take about the feasibility of east asia decoupling from united states uh or even the desirability for for them in doing that and what what how is the world bank see this this issue whether is this something that the world bank would encourage each asian countries to actually go that way or you want to continue to promote more integration between the economies in the world thank you i think on the first point um maybe the word is not credibility but comp capability of the civil society including media because i'm not questioning the credibility of media it's you to judge whether they are credible or not but capacity and the ability to become the reliable partner is certainly there and you see that it's very difficult when you train you have a good reporter they are going to be then hijacked by the other company because they become very good in especially jakarta pose i'm sure they are going to be high um i think your question is about political accountability it it is not saying that the political accountability should be democratic in this way people can be accountable in a monarch system they can be accountable politically the accountability is saying that you have this power whether this is power coming from god whether it's coming from your family or coming from people who elect you when you hold this power it is not just to serving that power the power will serve whoever is going to in this case people in a democratic system you say this is people so you're asking about three actually democratic system political accountability and good governance in a way you can be non-democratic but adopt good governance when you say that any king i think if you read a lot of story about 1001 days of arabic there is a good king who can every night you go and sneak out to see how the people suffer and then the king will give something the political accountability has been set through their own system of accountability in a democratic system there is an election based on the promise that you are going to deliver you are elected and then you have to deliver if you are good you will be re-elected if it is not then you are going to be toppled or changed and then there will be a new regime and there is a check and balances so in a way this is not going to be one easy instant correlation because as i said the quality of democracy to deliver political accountability is not instant and immediate or automatic you can be a very good you can have a democratic system but a very messy political accountability or even in this case you can have a very democratic system but it's a very bad governance because it's not automatically there and that is exactly so for so many countries which is adopting democracy you are going to still have a lot of homework to build that democracy to function according to what is the goals because the democracy itself is not the goal this is the system that will facilitate a country to achieve their goal through a contract with your folder which in which you believe that this is going to be a good mechanism so in this case the check and balances need to be there you need an impartial justice system which is not co-optated by the politician political party you try you have to try to avoid the captive or captured situation in which certain interest group can really hijack the interest of the big the people through their policy influence that kind of thing is another thing which is i think in democratic system they can still survive bad governance what you got an interest group they will use the democratic system in order for them to pursue their objective and that's why it is really a continuous process and that's why i said democracy is not a panacea it's not going to be automatically tomorrow with democracy you are going to have this is exactly also when i share and meet in montreal i was invited by cificus this is the NGO organization internationally and then i met with some NGO from the middle east they start sharing their frustration that oh i thought that after hosni mubarak is not there president ali is not there we are going to have an easy easy system is much better system now they are getting frustrated with the the economic situation and so on well the freedom is just the beginning you need a lot of continuous work this is like a project in which you just opening up and then you have to start building it sometimes you think that after opening up the the door and immediately you are going to have a new palace is going to be provided by you it's not so that is going to be something which then i share the the indonesian experience in which takes 10 years if you see indonesia now it seems that indonesia is fine it's not if you take a look like 99 moray was there and he knows very well what is the struggle of indonesia at that time you just open all the media and the news at that time so that is maybe the position on a democratic political accountability and good governance and andy and you know that there are country which is provided you with a very good example in which they are not really democratic but they adopt good governance and they have a good political accountability i don't have to name name but there is a country like that so i think this is something intellectually we are going to be actually forced to all this thing but for our own experience in indonesia we are not regretting and definitely we believe that democracy is good for indonesia but we know that in order this democratic system to deliver a good thing need there are so many things need to be built rule of law justice system the quality of the debate that is in term of the civil society the middle class role is actually very important the second question is about decoupling well when i said that the south east asia and east asia in general is actually the region which is getting but the benefit of global economy trade to gdb ratio is more than 100 so their prosperity has been built based on their connection or ability to sell their goods to outside the region now the issue of decoupling is becoming a little bit actually betraying their historical path what we are saying that many will actually quite hopeful that when the global economic weekend they can still maintain a positive economic growth so there is now maybe an observation or a hope or expectation that this is going to be decoupling what is actually happening is that this region is big enough so they have a strong domestic demand has been built for southeast asia we have 600 million income per capita 4 000 of course for singapore is much higher close to 40 000 china you have 1.3 billion people with income per capita close to 4000 india in this case so all this asian country they've already now because of capitalizing their economic performance based on their linkage to the global economy by exporting they have built a strong domestic basis so when the global economic weakening they still can sustain their economic performance by relying on their domestic demand it doesn't mean that they are going to be continuously because definitely domestic demand is going to be more balanced in providing and contributing to the growth and that's why you can say that the reliance to the global economy but i i am not in the position that they are going to be totally decoupled with uh western europe or united state they contribute they have enjoying the benefit of being globalized and linked to that they are now actually also trying to globalize other part of the world outside the united state and that's why china is now have a very strong relationship with the latin america many of the latin america also have a growing interest to china middle east is doing the same thing south asia with the east south east asia so you have quite of eastern europe now try to defeat or try to diversify their export so i think the globalization or linkage is still going to be there because deep knows and they see it from historical and uh empirical evidence it can really in improve your economic performance but certainly they now have to play a role in which they're balancing their growth model both for their own domestic sustainability but also in them of creating balance growth globally so imbalances globally as well as imbalances domestically need to be corrected and that correction will not lead to decoupling they are going to be still coupled but they are going to be more balanced unfortunately uh we're our time is up i know there's many hands up there that people still have questions uh sorry about that but uh uh ibu simuliani has a busy schedule and we're gonna have to respect that we've already run over time ibu simuliani thank you very much i think you've challenged all of us and expanded our thinking on the role of governance in not only in in in asia but globally but uh for those of us interested in southeast asia was particularly challenging so thank you very much thank you