Prof. Dr. Ginandjar Kartasasmita

From my experience spanning 20 years from 1980s to 1999, I feel that Japanese ODA for Indonesia has contributed a great deal to the development of Indonesia. Among all the countries which receive assistance from Japan, Indonesia is the largest recipient of Japanese assistance and Japan is the largest donor for Indonesia. A large part of existing infrastructure in Indonesia have been developed with assistance from Japan.

Indonesia’s development today cannot be explained without Japanese assistance to Indonesia. In 1993, Indonesia, together with other Eastern Asian economies, namely Hong Kong, Korea, Malaysia, Singapore, and Thailand, were referred to as the “Asian tigers”. They achieved miraculous economic growth. This was possible with the large amount of assistance from Japan. However, hit by the Asian economic crisis, the Indonesian economy collapsed and the country’s economic structure became less robust than expected.

When I was the head of the National Development Planning Agency (BAPPENAS), I thought it was necessary for Japanese aid to be provided for social infrastructure, including schools and hospitals, rather than just for economic infrastructure, such as roads and power plants, and promoted such projects. Among those projects is the Hassan Sadikin Hospital at the Pajajaran University in Bandung which was built with Japanese aid. Assistance was also provided to many other universities and higher education institutions, and furthermore, many Indonesian students are currently enrolled in masters and doctoral degree courses at Japanese universities. One of the characteristics of Japanese development assistance is the comprehensive support, covering economic and social infrastructure.

Japanese assistance was provided not only for economic development but also gave considerations to social and environmental aspects. Let me explain the example of the hydro-electric power plant project in Riau assisted by Japan. At the time, the project was halted because the local residents opposed being relocated. So, working together with the Japanese Government, I had a long discussion with the locals to explain to them that if relocated they could lead a better life and also preserve what they had cherished from ancient times. Our effort was fruitful. Furthermore, since the time when I was the Minister of Mining and Energy Resources, Japan had started to give considerations to environmental matters.

With regard to the economic relationship between Indonesia and Japan, Japan’s ODA was a driving force of the Indonesian economy and also its supporting pillar. Japanese ODA support with the development of infrastructure and human resources in Indonesia, and the improvement of the investment climate led to inflows of Japanese investment. Through such a process, the economic relationship between Indonesia and Japan has been forged. Many goods exported from Indonesia are processed goods which are produced by joint ventures between Indonesia and Japan. Many electronic equipments exported from Indonesia are produced by Japanese companies and exported to Japan. Such export activities are possible thanks to the infrastructure (industrial infrastructure) built with Japanese investment such as industrial complexes in Bekasi and Karawang. In this way, economic relationship between Indonesia and Japan is supported to a large degree by Japanese ODA.

Indonesia and Japan share the common interests, are both democratic nations and support market economy. Looking to the future, Japan is a strategic partner for Indonesia. Japan should strengthen its support for human resource development so that Indonesia can enhance its capacities. This is because economic development is supported by technology and human resources.