 My name is Marie Hebert from the Symmetro Chair for Southeast Asian Studies here at CSIS. It's a delight to see all of you. We're obviously very delighted to have a senior official coming from the new President Jokowi's administration in Indonesia. I'd like to just notice, I guess we don't have it on the board, but if people want to follow this event on Twitter, you can go at Southeast Asia, DC, or at CSIS, or hashtag CSISLive. I think at least some of our staff here are going to be tweeting during the Pakulahut's speech. I'd also like to just announce that this banyan tree leadership form is sponsored under a new renewed program that we've just re-established, and that is that we will renew our Derwin Pereira Indonesia Initiative. This is a speaker series that we have on Indonesia here at CSIS. It's a platform for discussing politics, economics, private sector engagement, environmental issues, education, et cetera. So we thank Derwin Pereira very much for his support. Our speaker today, as you've seen from our invitation, is a senior advisor to President Jokowi. His name is Pakulahut Panjaitan, who is, as I said, a senior advisor who's named in October. Previously, he's had a host of very prominent positions in Indonesia. He was most recently ambassador to Singapore. He previously served as minister of industry and trade. He is the founder of an energy and mining company called Tobah Jahitra Group. And in his earlier career, he was also an officer in the Indonesian Army from 1970 to 2000, and he reached the rank of general. He has some roots in Washington. He graduated with a master's in public administration from George Washington University. General Lahut, it's a great pleasure to have you here. Do you want to stand here? I'd like to also just apologize for the awkward formation of this room. There's so much that goes on at CSIS, and sometimes we have to squeeze into spaces we hadn't planned to squeeze into, so that's why we have this formation today. Sorry about that, but I think we'll make up for it with the content of the discussion. Thank you, General, please. Good afternoon, ladies and gentlemen. Distinguished guests. It's a great honor for me to be here this afternoon. It's such a very prestigious institution, and I was introduced by Murray about myself, yes, but I spent quite some time also in U.S. Army Special Forces Training. I was in Fort Bragg two times, back to 1978 when I was captain, and I enjoy very much for Bragg. And also I went to several training with U.S. Army Special Forces, and also we established kind of a joint exercise with U.S. Army Special Forces in Indonesia some years ago when I was major in colonel. But then started 2001, no more joint exercise with U.S. Army Special Forces until maybe sometimes ago. I hope that this joint exercise can be pursued in the years to come because I think the role of Indonesian Special Forces in Indonesia is very important and also facing especially the ISIS threat right now. I think the common threat for Indonesia and U.S. Ladies and gentlemen, let me begin with the title of this presentation, the Key Challenge for Djokovic Administration 2014 and 2019. Now, there are three immediate problems facing by President Djokovic is today's number one, political configuration in the parliament. Number two, we are talking about the national security and foreign policy issue. And number three is domestic economic issues. And let me begin with the political configuration in the parliament. Before the presidential inauguration, if you look at now the Great Indonesian Coalition supporting President Djokovic is 37%, consists of four political parties, and while the opposition consists of five political parties, while the Democratic Party led by former President Djokovic as a, you know, balanced political party. Now, after, consider as a opposition, the red and white coalition. And then after the inauguration, you see the configuration like this next slide, see the Great Indonesian Coalition become 44%, and then the opposition political party 45%. A lot of foreigners, you know, watching Indonesia very carefully, because they understand the problem in the parliament is gonna be very difficult for President Djokovic. Like in the US, also in the Congress, now controlled by the Republican, of course, you know, give also hard time for President Obama for the next two years' time. But Indonesia, I think, but Djokovic quite successful, I should say quote unquote, to manage this issue. If you look at now today, this is the configuration, but if you look at per today, for yesterday, Monday and Tuesday, yesterday, Monday and Tuesday today, another different, another changing happening, and that P3, the Islamic political party, already shift to the Great Indonesian Coalition, while the Golkar is the largest political party within the Red and White Coalition, split with two leadership right now. One lead by Mr. Abu Zira Bakri, and the one by Mr. Agung Laksono. So quite easy, if I may say so, for President Djokovic now to manage, because yeah, no more solid coalition within the Red and White Coalition. But not only that, I think, because Pak Djokovic give a very good example and his background is very clean, considers very clean, at least until today, hopefully on the world also still like this, but some of the leader within the Red and White Coalition, they have quite a lot of problem behind, which is I think also this is the weakness point of them. If you look at today, Attorney General arrested like 87 of people in Indonesia, linked to the corruption, some of them member of this political party. So give a strong signal to the people of Indonesia that President Djokovic is serious to tackle corruption issue within the country. Not only the anti-corruption agency now working on this particular area, also the Attorney General used to be, Attorney General is a very weak position, but today he going to prove, he prove it that, okay, I can use also the hand of Attorney General to minimize corruption within the country. By doing so, this is also the strong signal to the political leader. Okay, you better be careful. If you criticize the government very hard, then you are also facing to the other problem because the government very transparent to lead this country. Next slide. Now, let me remind you also the presidential system in Indonesia, I think it's similar to in US, a check and balance system, I think it's very important for Indonesia because we learn also from US and to secure also the administration program, government needs to cooperate with the parliament. But yeah, parliament also role is very important for Indonesia, but in the same time, also the government also, you know, especially for the budget issue that also can use the previous year budget for the next, for this year budget if the government, if the parliament, you know, disapprove the budget proposed by the government. Yeah, next. Now, if you look at now the last, I just give you one example, the mood of the Indonesian people. Look at the survey result by Bill Lindel, that 54% of the people of Indonesia like to see the honesty, like to see the leader with honor, with honors that he can, you know, tell the truth because they'll maybe get tired with some talking about good thing while in reality they play behind. So there's a thing that the strong point of Pajokowi, he's very sincere, very humble, very honest and he proved it, he showed it to the people of Indonesia today, look at, for instance, it's very funny sometimes if we look at now he, you know, still using an economic class flying, you know, within the country. It's sometimes very hard for us to understand, you know, sometimes make like chaotic or in the airplane, you know, every body wants selfie with the president, you know, and you cannot see it in the U.S. So so many secret selfies around you. This is one of the problem, but he proved it that he can manage. Also the delegation of Pajokowi right now, number of delegation is very, he reduced significantly, used to be maybe 100 people, now only 17, like in the Beijing Conference for the IPEC meeting, his delegation only 31 people. But this is also we have to be careful, you know, look at because he's number of secret service only nine people, which is I think very hard for them to protect the president for the nine days trip, you know. So kind of adjustment needed in the next time. Yeah, next slide. Now, also if you look at now the Jokowi leadership, as I mentioned earlier about example as a role model, look at the expenditure of the, you know, the government. They like to squeeze, especially to the unnecessary expenses, traveling expenses, yeah, for the, you know, government official, he make it more and more efficient. I think the expenses for, you know, unnecessary things also like meeting outside of the office while they can do it in the office, but they do it in the hotel, now no more. Move it to the office of the government. If you look at now, I'll give you example, the budget for the only meeting and meeting in Indonesia like 41 trillion rupiah. Yeah, now they cut it maybe like to 24 trillion rupiah. So nearly half, 41 trillion rupiahs are like nearly four billion dollars. Now less than that, only maybe less than two billion dollars. So give significant number that people enjoyed very much. Wow, the president give the example. The minister give a good example. His government official give a good example. But in the same time also create some problem, you know, because the salary system in Indonesia is, you know, still very low, you know, we have to restructuring like a president salary for instance 3,000 US dollars while the CEO of Pertamina, the national oil company maybe 21 or 22,000 US dollars, unfair and also the OJICA and also the central bank, the president of central bank is like 40,000 US dollars. So we have to restructuring this, have to see the structure of the salary fixed in the years to come. Especially for the bureaucrat in the, like in the embassy, our embassy, I mean the member of our embassy salary maybe, we have to improve also. We have to see for them to, you know, to survive to enough money for them to serve their life in foreign countries. Yeah, next. Now national security issue, the number two, let me start with this. If you see that there are three issues. Number one, radicalism becomes a serious issue and to poverty and low level of education. The radicalism I think is a one issue like ISIS, like ISIS and Al-Qaeda to some extent. This is one issue that we have to address very well and poverty, that's why the program of Pajokowi, we are not only talking about the economic growth, but we are also talking at the same time about equality. Equality is very important. Number three, also talking about the low level of education. Education is very important because you understand that demographic bonus of Indonesia is very good. It's like for the next 15 years, it's very beautiful. But at the same time, we are facing the problem about the quality of education especially on technology. On technology side, I think outside of Java, very little university focus on technology. So we have to improve this. President Jokowi understand very much. If we are not successful to tackle this demographic bonus, then become a threat in the future. So then we have to improve the quality of education. We have to have the good university around Indonesia. That's why like president of Freeport for instance, we discussed it last time, you have to build a good university in your area to support that area, to give them incentive, to improve. It's like a Freeport, it's very easy for them to invest for education in that particular area. Not only to give money to the local leader of tribes, but also to provide kind of education over there to be involved in this education area because this is very important for the people of Indonesia. Now, talking about the illegal economy in Indonesia, if you look at now this slide for instance, that our marine sector for instance, that we have to handle this work very much. Like I give you one example of illegal fishing. Illegal fishing, the slide show you the numbers. We can save like 23 billion dollars per annum if you're successful to tackle the illegal fishing. That's why the government policy today is very hard, very tough. We are not allowed anymore the illegal fishing operate within the Indonesian territory. We're going to take the very hard action of this because so far we give talking, keep talking, talking, arrest them and promise to bring to the court and nothing happened. Play again something over there. Now the president say no, execute. Once you take it out, execute in place. So make it very quick. Now you see that the fish price outside of Indonesia become higher while Indonesian fish price in within the country lower. So to give a good example, so this kind of policy basically give kind of proof to the people of Indonesia that President Joki is serious to handle this kind of problem. Now let me move to the defense budget. I discussed, I mentioned early that we have to manage to control our sea territory. Indonesia consider as one of the largest archipelago country. Now if you look at the budget of our armed forces like 0.8% of our GDP, our GDP right now is 1 trillion US dollar. So consider it's like 7.2 billion US dollar but if you compare it to Singapore and Malaysia we are much lower. So what's the government policy? We're going to increase this defense budget up to 1.5% for the next five years but we link to the economic growth. Our economic growth above 7% I think we can even go higher. So maybe by 2019 the national budget, sorry, defense budget maybe can go to around 20 billion US dollar per annum. By doing so then we can enhance or strengthen the performance of our armed forces and so we can manage or protect our own sovereignty and we can handle illegal fishing like I mentioned earlier that we can save like 20 billion or maybe 23 billion US dollar per annum. So this is I think very important not only talking because we like to see our armed forces very strong but we also to manage or to protect our own economic interest. This is also important to build up our cooperation, especially facing the ISIS threat. I think this is common threat. This is one issue that discussed by President Alec Jokowi at the time with Senator John McCain and I think we Indonesia commit to deal with this ISIS and we are very confident that we can tackle this one. Although we understand around 300 Indonesian fighters somewhere now with ISIS but we have already some policy on this and we are very comfortable that we can do it together, that we can manage this one. But the very important real established special forces cooperation, US Army special forces cooperation, Indonesian special forces I think is very important why simple. Like in the US system I think your CIA using your own delta or your SEAL team to deal with this kind of problem on behalf of I mean the supply by the CIA intelligence. Same thing Indonesia, I think our intelligence agency using our special forces to deal with this. So now if you don't have a good relation between the US Army special forces and the Indonesian Army special forces then maybe to handle this kind of threat is not going to be very effective. Now, strong armed forces and foreign policy. I think very important also the role of our armed forces over there could balance the situation in this region. If you look at now the China armed forces are much stronger. If you look at now India and look at Indonesia. So Indonesia can play a role to balance the balance of power in this region. If you look at now the South China Sea, one of the issues that are very important for US and Indonesia as well. And Pajokowi policy is very clear. Like to see a dialogue to promote dialogue to solve this problem. And at the same time we have to secure also a CPAT in that particular area so then economic and not disturbed by this dispute. And in recent leadership within the ASEAN I think is very important being the largest ASEAN countries. As you are aware I think the population of ASEAN is around 600 while Indonesian population 250. So nearly half of the ASEAN population in Indonesia. While our economy right now quite good, 6% something good. And I believe after one and a half years then we can go above 6%. I strongly believe in that because after the high field price then our current account deficit also become much better. And again nearly no resistance at all from the domestic people. So yeah this is very good signal for Indonesia that policy taken by the president Jokowi is accepted by the people of Indonesia. Yeah, next. Now if you look at now the Indonesian Maritime Act this is I think very important issue that also one of the President Jokowi program. Maritime issue is very important because the location strategic location of Indonesia in that look at the slide is very important. So we like to play a role more effective in this area. So then Indonesia could improve some of our facilities in order also to reduce the cost of our transportation within the country. So this is I think very important in this region. Now let me move to the domestic economic issue. There are two issues that I'm going to present in this one. The reallocation of energy subsidies and number two, improve infrastructure quality. This I think those two issues is very important for Indonesia in the next five years. Now if you look at now reallocation of energy subsidy, subsidy I think around $31 billion per annum which is I think huge. We have to tackle this one, reduce this one and then we'll bring this area look at the subsidy to the infrastructure health and education. Look at on the right slide on the box you see the subsidy for the fuel and for the gasoline is around $120 trillion but in the same time the red block you see the reduced price of crude oil but today I believe around $65 which is I think good for Indonesia because the cost of transportation, the cost of so many things in Indonesia can be reduced today. So by hike the fuel price last month then we can save like $11 billion next year so then we can allocate this budget for infrastructures. So then the year after maybe we can go up to $15 or $20 billion. So by doing so then our national budget today is $200 billion. I believe for the next three, four years maybe we can go up double maybe nearly $400 billion per year. Now if you look at now how much money do we need? Budget do we need for the next five years for infrastructure? If you look at the slide I think we need $545 billion and there are so many things that we can do together over there. Like also the President of the US in Indonesia and I understand right now the American economy much better than three years ago when we were here two years ago in US economies like this but today if you look at much better than before much better than Europe. You look at Europe now I went to, I was in Paris two weeks ago. I think unemployment rate over there unbelievable 9.5 percent. Look at now in the US I think below 6 percent. So compared to when like two years ago like eight something percent. So you see the difference. So now the Europe economy also not so good. Japan also nearly recession and Russia right now nearly recession as well because the economy, the crude oil reduced significantly so revenue there also less and the same time also Brazilian already recession and US moving up like this. In Asia you look at now China I think also their economy still around 7.5 percent and India still very good above 6 percent. Indonesia 5.3 percent. So those three countries I think in this area play a very big a very significant role. Now so the President of the US in Indonesia I think is very very for Indonesia a very important for Indonesia especially for the next five years. Now ladies and gentlemen because I come to my conclusion the other issue that addressed by President Jokowi is transportation cost. Transportation cost in Indonesia is very high the previous slide if you look at now it is 14.1 percent compared to Japan only 4.9 percent. What we're going to do we like to reduce this cost to 7.5 percent for the next five years. By doing so then I think Indonesia more competitive for years to come. So we are working very hard to do this. This is why a very important the tall she tall program of Jokowi to reduce transportation cost within the country. If we look at today for instance the cost to transport goods from Java to Papua much more expensive compared from Java to Hokkaido, Japan. So we have to reduce this one. So to make Indonesia more attractive for the investor. So many islands of Indonesia like in Sumatra, like in Kalimantan and Sulawesi. So there are so many things that can be done in Indonesia. So I like to see also more investor from US to come to Indonesia. Ladies and gentlemen let's come to my conclusion of this presentation. I think the beauty of Jokowi strong leadership he gave a good example to the people of Indonesia which is I think very important like I mentioned earlier in region is a partnership system. I think the people follow the leader when the leader give a good example they will follow. And number two I think to maintain the teamwork is very important and Pak Jokowi's give target to any minister to achieve and which is I think he challenge also the minister if you cannot achieve this target by this time then I'm going to replace you simple as that. And that's why if you look at now the minister within the country working very hard. Yeah some of them performs so but the economic team so far I think performs quite well. And strong law enforcement I think that's one of the complaint from the foreign investor. I can I promise you that the government of specific Jokowi being a businessman in background he really wants to fix this issue. And for the next two three years time maybe two years time then I think our economy is still a little bit flat not growing like very much. But after two years time I believe our economy can move very quick I can go. I'm strong believe that we can go to 7% even maybe 7 above 7% by the year 2018. Ladies and gentlemen I thank you for this presentation. I'm ready to answer any question raised by all of you. Thank you very much. Yes sir. So we'll open up the floor. If you have a question Lin please identify yourself. Thank you very much. My name is Lin Kwok and I'm from Brookings institution. I had a question on the South China Sea. There is talk about deferring approaches within Indonesia about how deferring approaches within Indonesia about how to approach China's encroachments into the waters of the Natuna Islands. On the one hand you have the Foreign Ministry approach which is to downplay these developments and to seek to play the role of an honest broker between ASEAN and China. On the other hand there's also talk of the military wanting to take a stronger approach against China. Could you speak a little bit about these two supposed conflicting approaches within Indonesia especially in light of talk that President Jokowi is actually more focused on economic performance within the country so that foreign policy will very much be left to his advisers? Well let me put like this. Sorry my ear not so good because of Bob Gilbert Ambassador you know. I was trained in military so many sometimes I have problem with my ear. Sorry forgive me about this. I think the discussion between President Jokowi and Senator John McCain at the time is very clear. We're not going to use any military force in this area. What we're going to promote is a dialogue. Any dispute issue we're going to promote dialogue solution and we believe that's I think the best solution. So in the dispute we're called the South China Sea there's a thing we can do with the dialogue. Indonesia can be also bridging this dispute between China and Philippine and China with Vietnam. So that's I think the best solution for this kind of issue. Regarding of the Natuna, Natuna also I we understand very much this is the territory of Indonesia and I don't think that any problem so far and we're going to do our exploration for the gas, Natuna gas and I think with the Chevron join operation with the Pertamina. So again, we don't have any plan to use our armed forces to solve the dispute issue in this region. Yeah. Any questions, comments? Please. Over a bit. Excuse me, we're short of microphones at this end of the table. I'm Rana Freiberg with LSI Associates, consulting firm here in Washington. Thank you so much for your remarks. I'd like to refer to the point you made about education in Indonesia and it's linked to not only to economic development but to national security is the president and I know the president has many, many priorities to deal with right now but you seem to suggest that education is something that he's personally interested in and if I'm not mistaken Indonesia is operating has been operating under a 20 year plan for education that was developed in 2005. Do you know whether the instruction to the ministry of education is to revise education policy? What are the targets that are being established? Yes, thank you very much, ma'am. See, look at now the posture, the structure of our at the cabinet of Chokowi. He transfer director general of higher education to the minister of research. The reason to do so again, to tackle about the quality of education especially on the technology and the outside of Java. He dreams that we like to see the research university outside of Java, none today per today. So only in Java Island. So in order to do so I think the minister of research have to focus higher education and research in one ministry. So now you're going to link education, higher education, research and industry in order to improve our industry. So if you look at now the downstream industry, for instance, it is very, very important. A lot of downstream industry outside of Java while the quality of education over there very low. Now if you have to export from Jakarta, from Java to outside of Java, this could also trigger some kind of unhappiness within the island, you know. Because say why should come from Java? Why don't you use our people? But when we're going to use them, the quality of the people over there especially on technology is very low. So now in order to avoid this kind of problem, we have to improve the quality of education and special technology over there. So I think that the policy not gonna change much but the way they do it, I think, that's I think the different. So President Jokowi very concerned on this and everybody understand this is one of the issue that we have to address. And I believe President Jokowi can tackle this issue. And within five years we can see a lot of changing Indonesia. And he give also quite a lot of fun, budget to minister of education, minister of research for instance. We don't want to be only market of high technology. We like to see Indonesia also to export high technology. Look at the population of Indonesia, 250 million. Assume only 0.5 very smart. This is 12.5 million people, largest in Singapore. If you educate them very well, then a lot of smart people from Indonesia. Now during the next visit of the president to Washington next July, here already planned. They're going to give a speech to maybe, I don't know, maybe Harvard, maybe MIT, whatever. What's the target? You're going to request, you give a slot to the smart people of Indonesia to do further study here, maybe for PhD, maybe postdoc. What the purpose of that? They're going back to Indonesia. They have to help the education, to help the industry, so many things. Because there are a lot of opportunity in Indonesia right now available. Thank you, ma'am. Was there another hand, please? Brian? Thank you. Brian Harding from the Center for American Progress. I was wondering if you could offer your perspectives on among President Jokowi's priorities. Which might he be able to accomplish through executive action, executive authority within the presidency? And which do you think he needs to work with the parliament on? And related to that, if the president is able to form a majority coalition sometime next year, are there any new areas of reform that you think the president might take on? Or reform? Well, first of all, I think cooperation and relation with the parliament are going to be much better next year. And I believe so. I don't see much threat anymore. That's my personal view anymore from the parliament toward the president. Because they know the president very firm. Before, maybe they thought because he's very humble, then I can play with this man. Because he's from a solo. I'm from Jakarta. I'm a rich man and so and so. But this one, this guy from middle of nowhere I can play with. Today, no. Never happened in the history of Indonesia. 87 people arrested in one time. This one, even one major general, was arrested yesterday. And he doesn't care, the president. So he proved it. So again, your concern about the issue with the dynamic of the parliament, I don't think it's gonna be a big issue anymore. Yeah, maybe I'm too optimistic on this, but no, being my assessment so far, I'm quite correct on that. So I'm very confident that I don't see that much problem on that. Well, you said the parliament, as I said, no more problem with the parliament. Yeah, there are so many things can be done with the parliament because the spirit of this to bring economic growth and to bring equality for the people of Indonesia. So what's the parliament against with this? If you against Jokowi for this program, you against the people of Indonesia, as simple as that. So to be honest to you, I didn't see much problem. Of course, he's facing internally, because he make now very efficient, which is some of the people used to enjoy with this lucrative, sorry, corruption. Now, less and less. There's a problem maybe facing by Jokowi. Look at now also the corruption cases tackled by Jokowi. Maybe some of these people trying to play a game, but again, I believe with the style of what Jokowi, he can manage this one very well, yeah. Thank you, Pak. Well, could I just follow up on that question? You mentioned before we started this meeting that President Jokowi thought he had to get going really fast with his program because he would, particularly if he wanted to be reelected in 2019. And what do you see as the political challenges that he might face going forward beyond the possible tensions with parliament? Who could be breathing down his neck ahead of 2019? Yeah, I think his promise, he has to deliver his promise like 70, 80 percent. If not, the people say, hey, you are not, you are not really talking, you know. Indonesia is very smart people now. Who is challenging him? I think so far till today, nobody. I can tell you nobody can challenge him today, but today, because he still delivered what he promised. So again, depending on how much he delivered what he promised during his campaign. But if you look at now, I'm not saying statistically, but what he delivered so far, I think he's quite okay. Yeah, some issue not yet addressed very well. Takes some time, only 40 days so far. So it's too early to judge. Let's see after three months or one quarter, maybe then we can see, you know, the progress, yeah. Back there, please. Thank you. My name's Michael and I work with the Global Poverty Project. I'm just wondering that you mentioned a lot of the poverty issues which the president wanted to address. How much of an issue is lack of access to sanitation? And is it something that's high on the president's agenda? I know Prime Minister Modi of India also elected this year. That was a big thing he made. He promised to provide sanitation for all toilets and households by 2019, I think. And I'm just wondering in Indonesia if that's an issue and if there's anything being addressed there. Well, sorry to say, we are not so primitive. I think our sanitation is not a big issue in Indonesia anymore. We are know how to handle this one. So the issue right now is poverty, yes, in general, yeah. We are deal with this issue and we're going to handle this very well. That's why I said, not only talking about growing our economy, but also we are talking about equality. Equality also, the people should enjoy also the fruit of this economic growth. So yeah, the President Jokowi very concerned on the poor people. So and he give his example by his own experience because when during his childhood he came from very poor family. So he said to me sometimes, Paluhut, I know how the feeling of the poor people, because my family removed by the government four times in the Kali solo, in the Bengawan solo river. They moved from one place to another place to another four times and he said, I don't want to do this. So I can understand fully the feeling of the people. So then why they're not using the terminology of move the people, but he used the terminology of relocation, by providing them housing and something like that. So if you look at Jakarta, his experience in Jakarta, the Jakarta budget when he entered the office, it was 41 trillion rupiah equivalent to $4 billion, but when he left his office as a governor, it's like $7 billion. So within one and a half years time, he nearly doubled the budget of Jakarta and by next year, the budget of Jakarta is going to be $10 billion. So I can understand why. And he said, simple, Paluhut, make it a government. So then all link with the IT, then you can manage, you can monitor everything. Tax payer in Jakarta also increasing significantly and I believe also within the country in Indonesia, you can see the difference within two years time, three years time, let's say three years time. So then I think Indonesia will be, see the changing quite a lot. So then I think give also some confidence to the people of Indonesia that Indonesia could enter the new era of Indonesia. Thank you very much, Paluhut. I'm Vikram Nehru from the Carnegie Endowment for International Peace. Thank you very much for your remarks. I have a two part question. The first is I think everybody was very impressed by the increase in the oil price, the fuel price which President Jacobi introduced pretty quickly into his term. And it came at a point when world prices were very low, so it was a very opportune moment to do so. But I think I was a bit puzzled as to why the President didn't use the opportunity to link the domestic price to the world price so that he could fix the subsidy and not the price. And this was a very good time to have done so. And I was wondering why you decided against that, but I know it was being discussed, but why did you decide against it? The second question is to do with infrastructure, savings for infrastructure. And apart from the increase in the oil price, I wanted to ask you, what is this administration going to do differently from the past administration to accelerate infrastructure development? It's not as if previous administrations hadn't tried to increase infrastructure investment. So what are you going to do that's different? Thank you. Yeah, number one. Okay, this one by law we are not allowed to do so. The Constitutional Court decided 2001, 2004, we are not allowed to do so. So what we're going to do, we're going to take average price one month. So then we're going to link to this one. So they're going to do that, but the way they do it is a different. We cannot just link it to the market price, but we make it average price per month. Then we link to that one. Basically it's the same. So then I think we can keep the subsidy around four billion US dollar for next as to the poor, two ordinary people. Said number one. Number two, you're talking about, what's the difference for the infrastructure? I think it's simple. He checked, he controlled to the ground. Before, none. This one, he checked it to the ground. He understand fully what's really going on on the ground. I give you example, like electricity, the simple one. He said, well, it takes like nearly three years, two years time to get the purchase price agreement, to get the license for the electricity investment in Indonesia. Now he said, wait, you can do it within six months. Within six months, you get the purchase price agreement. Number two, for instance, he said, okay, how long does he take the payback of the investment? Okay, eight, nine years time. So we have to ensure that this can be payback within eight to nine years time. And then how much a project IRR? He said 14, 15%. So something like this, you come up with how many cents per kilowatt hour. So then secure to the foreign direct investment within eight, two years time, you get back your investment in Indonesia. Another issue like geothermal. Geothermal, we are the largest geothermal potential in the world. I think like 90,000 megawatt including the hot water. The pure geothermal is around 29,000 megawatt. Only 10% so far, you know, using in Indonesia. Why? Because the price. So we discuss it with the price. And he said, why don't we just give it 15, 16% but levelize. When they pay back done, you go to the normal price because no more energy cost on that because this is the steam. So they agree. So right now we'll see the geothermal. The very attractive to invest in Indonesia because you know, secure the investment gonna be payback within eight or nine years time. Before they just set up, how many cents? Six cents per kilowatt hour. We don't know how long does it take to get the payback. How? I think the IRR, project IRR maybe only 11%, which is very low. So this kind of project is make a different with some other as compared to the, if I may say previous government, yeah. Thank you. Thank you. General, I'm Bill Wise, Johns Hopkins University School of Advanced International Studies. You mentioned the importance of strong armed forces, but you spoke specifically only about special forces. If you look at Indonesia's defense problem objectively, let us say solely on military grounds and without political consideration, it looks like the force mix, the current force mix, heavy on land forces and light on air and naval forces doesn't fit an archipelagic nation like yours. One would think you would be want to invest more in airlift and sea lift in ISR and coastal defense to 200 nautical miles, things like that, stronger naval and air forces. Some might call that an Indonesia's case military reform. I wonder what, if anything, do you and your colleagues plan in the area of military reform? Question one and the second question with regard to reform, what message did the president intend to send by his appointment of his defense minister? The last question first. No message, but he's a military, pure military, he's a good guy. He was working under me before, I don't see any problem and he proved that he can work in line with the policy of the president. He's very clear on that. So president said to me, sometimes ago, he has to follow my policy. Regarding of the special forces, I was brainwashed by the American special forces, so I talk a lot about special forces. Now I'm joking. No, I just give example. Basically the government of Jokowi like to give more budget for the Navy because we like to see more, what do you call it, sea patrol in order to control our territory, our border, like in Arafura in the northern part of Indonesia, very little, our vessel present over there. We like to see also maybe in like in Manado area, in what area, what North Sulawesi, and we like to see maybe our fleet gonna be much bigger over there to control our border over there. So, yeah, Air Force I think very important also for Indonesia. We like to see also more C-130 present over there, right now only three squadron. I believe we are going to have at least five squadron in order to manage our territory. I think you are all aware that distance from Eastern that were so wrong to Jakarta is like four hours flying time by jet, by C-130 maybe nearly five to six hours flying time. So, we consider that. So, in the same time now we order, I think, up from U.S. and also we are talking also about the drones. Drones very important program of the Jokowi to manage our territory border, our sovereignty. So, basically we are dealing with this problem. We are not talking only specifically the special forces but I'm talking about special forces because focus on the ISIS. ISIS issue I think the role of special forces very important, the Army special forces, the Navy special forces gonna be work together with our intelligent agencies to tackle this issue. Well, first of all, my name is Andre Sauvageau and I'm the director for Vietnam and Southeast Asia for the interstate travel company in Detroit, Michigan we have designed a high speed magnetic levitation rail which would be great for Indonesia by the way. Anyway, the moving rapidly along. My question, sir, is a follow on to I think the first question that was asked about the South China Sea. And I agree with you that Indonesia has a central position in ASEAN as a great dialogue partner. You've showed that after that conference in ASEAN meeting in Cambodia where they, you know, the Whom Sen wouldn't sign a resolution, common resolution articulating of specifying China's violations of the exclusive economic zone. But my question is this, certainly your position to be a great dialogue partner and you've already been one and you're doing it. But my question is if China continues as they still are using violent intrusions in violation of the UN 1982 convention on the law of the sea, which they signed many ratified in 1996. And if they continue to use violence, then dialogue per se maybe needs some very special ingredients. So my question is this, what kind of combination of incentives for China plus pressures could in your mind, sir, persuade Beijing that peaceful coexistence and adherence to international law is actually better for China since after all, we all want good relations with China. But we don't want to give up our Kermadec and our independence. Well, I think China like also to maintain their cooperation and relation with the countries surrounding China. ASEAN is one of the potential partner of China. This is a hundred million population of ASEAN. It's not a small number. So I don't believe that China could create kind of power game over there. I mean, using power to settle the dispute over there. I believe, I still believe that the dialogue is the best solution for this to achieve win-win solution. Because I think at the end, talking about from economic perspective, because I believe, I think everybody understand that they discover quite huge energy reserve in that particular area if you're talking about South China Sea. So again, the government in Indonesia, I think the Jokowi administration believe the dialogue is all the best solution on this particular issue. And we're not going to use any power to solve this problem. This is also against our constitution. But again, I believe the dialogue and personal relation between a head of state, China, Indonesia, China with some other countries among the ASEAN could also give some support on this agenda. But in the same time as in cooperation with the U.S., Indonesia and ASEAN with the U.S., I think it's also very important in the same time. So now, if you look at also the cooperation between government in Indonesia, Pertamina and the Chevron to explore the, the what do you call it, gas in Natuna area. This is one of the target, give the signal to the China, okay? You cannot play a game here because it's also the present of U.S. But at the same time, you also promote the dialogue with the China government, yeah. We're almost out of time and we've got a bunch of hands up. Maybe what I'll do is if you can each ask a very quick question, starting here and then there's two back there, but please keep your question short and then we'll have the answer all at once. Thank you, General. Alex Brooks from the UK Embassy. Thanks for coming along today. Could you briefly set out President Jokowi and his foreign policy advisor's vision for ASEAN and how it will evolve and perhaps also some of the fora on top of it such as the East Asia Summit, okay? Questions? Yes, and then you can answer. Okay, yeah, okay, go ahead, please. My name is Ribhanshu. I'm from the American University. My question relates to China's recently floated Asian infrastructure investment bank. Indonesia did not initially join. So my question is what were the reasons why Indonesia didn't join, but it did join later on. It didn't join with nine ASEAN countries when they joined. So what changed? And so your reasons for why not joining and why joining now. Thank you. Thank you so very much, sir, for very good. Okay, can I be heard? Okay, thank you so very much, sir, for honoring me to be asked to ask this question. My name is Rita Gerona-Adkins. I am a journalist. I write for US based Asian Pacific Americans as well as also readers in the Philippines and other parts of Asia. I'm a journalist, a freelance journalist. Sir, President Yokovi's policies prioritizes, among other things, maritime concerns. And this, my question is that considering that President Indonesia is in a very good position now to push the issues that also concerns other Asian Pacific countries, would you be able to address how Indonesia through the President Yokovi's priorities would be able to push the code of conduct, which is of course for maritime safety, which of course has connotations for trade, for maritime peaceful purposes. And it's important for the economies, not only for the Asian countries, but for the rest of the world. Sir, would you be able to address that as to how much clout would President Yokovi and his administration would be able to put, to precisely put the code of conduct in effect? The Asian, the Indonesian role in the future for the ASEAN, yeah? Yeah, ASEAN, I think like I mentioned earlier, yeah. We like to see again the dialogue is very important. We're not going to think that we're going to, you know, present power to solve the problem. Power is the last solution for Indonesia and we'll try as much as possible. I think the dialogue is a, to promote dialogue to solve the problem. If you look at Indonesia, maybe five to 10 years from now, maybe 15 years from now, I think our economy growth going to be much bigger than today. And at the same time also going to be one of the, maybe five or seven largest economy on the earth. So this is also give a good signal toward other countries that Indonesia not only the largest, fourth largest of population, but also at the same time also one of the economic largest in the world. Now, in the same time also we're going to promote our armed forces, enhance our weapon system and also to, what do you call it? To well train our own soldiers. So then I think Indonesia become of the strongest power in that region. So this is kind of also the terrain strategic for Indonesia but in the same time also like to play our bigger role in the future. But again in the peaceful approach, again we don't want to hurt, to disturb or against our constitution. Constitution said very clear, loud and clear. All the foreign policy have to be dialogue solution. And number two, well yes, very interesting question about the joint infrastructure bank. I think it's a bank. I think finally agreed by Minister President Jokowi. And again, because he believed, well we need to also the infrastructure fund. So this is a good opportunity for Indonesia. That's why he asked also the office of the, the office of the infrastructure fund in Indonesia. Although here we are a small equity contribution in that project in this organization but President Jokowi requested very much that this headquarter have to be in Jakarta. And I believe this is also part of his solution to solve the problem because we need like I mentioned my slide before the $545 billion is not small fund. So we like also to the participation of this bank in this program. So again, this may be one of his dream to make Indonesia become a very prosper country in the years to come. Number, the last one about pushing a cut of conduct at sea. Yes, of course, again a discipline. I believe the Jokowi can be a good role model for our people at sea. So to promote, that's the way we do it. That's the way we have. So, but we have to be firm that we have to protect any interest, every country's, interest of Indonesia, interest of other country. We respect that, but we have to respect also to our own sovereignty. Sovereignty in Indonesia cannot be negotiated. This is the way that we do it. So if we look at the before that we have problem that we lost our island because of, you know, no control by the government of Indonesia. But today we're going to deploy our own forces in that island, in the outside of our border. So we don't want to deal with this kind of problem anymore. So we are very, very firm on this. But of course, again, with the, you know, with the dialogue and also with the, you know, with the peaceful solution. So that's the thing, my answer. Yeah. Well, Lohut Panjatin, thank you very much for sharing the wide ranging overview of the priorities of the new president of Indonesia, President Jokowi, wish you and him all the best and please, everybody, join me in thanking Paolo. If I may say the closing statement on this beautiful gathering, I'd like to thank you again to all of you and I'd like to, yeah, hope that you can support the government of the Jokowi administration, which is, I think, very important. He needs support from all of you. And I can, I promise you that he is very, yeah, very eager to see Indonesia better than today. And when I met him before I came here last week, he asked me also to convey his message to all of you that we like to be a good leader in Indonesia, we like to bring prosperity to the people of Indonesia, we like also to enhance relationship between Indonesia and the U.S. and we like to see, to visit the U.S. very soon. And we like also to, you know, to see more U.S. investors to invest in Indonesia. Again, thank you very much from the bottom of my heart. I'd like to thank you to the CSS institution and to invite me to give the speech here and also to present the program of my government. Thank you very much.