This article first appeared in Indonesia in Melbourne, a blog site for the University of Melbourne, 7 December 2015
+++ It was one of the quieter visits in what has been a steady stream of senior Indonesian officials to Australia this year to talk business, but Andang Bachtiar’s mission and message were revealing.
In May, he was put in charge of a committee, under reformist Energy Minister Sudirman Said, which has the task of boosting Indonesian oil and gas exploration. And while he is grappling with a raft of complex issues that have dragged the industry down for a decade, he has also found it is being impeded by some of the simplest. This includes the way that crucial seismological data is made available so exploration companies can make smarter commercial decisions.
“It is not open to the public, it is held tight and there is surprise on that,” Andang said in a private interview in Melbourne.
Normally such data is readily released after a patent period, but Indonesia has a different approach. The 2008 Freedom of Information Law requires government bodies and institutions to routinely publish data on their activities and provide citizens with information on request. But the Law also contains a long list of exemptions from disclosure, including information that could “reveal the natural wealth of Indonesia”. There are also conflicting articles in the 2011 State Intelligence Law, which classify such information as “intelligence secrets”.
In picking apart the myriad of sticky regulations and practices surrounding the industry, Andang has made it one of his goals to free the data. “You know the data is very scarce in Indonesia, there is no openness in the data, although there are regulations about it,” he said. “But why don’t we have the data complete and open in Indonesia? Because there is a problem there. And it has been from years ago.”
Making the data more open and far less costly is just one of many changes the Indonesian Petroleum Association has been lobbying for. And according to the organisation, Andang is the kind of person the industry needs.
“He’s on the right track,” IPA President Craig Stewart said. “If you look at best practice around the world, if you own the resource, you want to encourage companies to come in and explore.”
Andang brings a background in geophysics and 23 years experience in the industry, and is also the secretary general for the Association of Oil and Gas Producing Regions (ADPM). He wants to encourage both domestic and international players back in but the task is immense.
Oil and gas exploration has been described as “in crisis”. In oil, the situation has been going backwards since the early 2000s. As fields have matured, governments have given investors little reason to risk tapping new sources, and production has dropped from more than a million barrels a day to about 800,000. The natural gas industry has also faltered despite expectations of it becoming a vibrant and alternative source of energy for a growing nation.
Andang’s examination has confirmed what many others know: that excessive and contradictory regulations mixed with an inefficient bureaucracy have been choking production and stifling a longer-term view. “There has been a long list of why we have failed exploring in Indonesia, creating more new reserves, and the long list has already been told several times to the government by the industry,” Andang said. And it’s a very, very slow response from the government.”
Even releasing the key data in a more timely manner is going to require reforms that include prising a government agency from a source of income. Andang is putting his ideas for reform forward.
“One of them is the possibility of abolishing the government regulation stating that the data is a source of government income,” he said. “We don’t want that. Because it’s stated as a source of government income, the data of oil and gas is very, very restricted.”
According to business representatives, there are many Indonesian professionals in the field who could create start-up companies but are stymied by costs. IPA President Stewart said: “A major oil company may find it’s not very expensive but as the industry matures it’s not necessarily the big companies that are the innovators.”
The industry is still waiting for a new oil and gas law to replace the one that was struck down in 2012 by the Constitutional Court, creating even further uncertainty for investors.
Despite all these concerns, Andang was keen to strike a positive tone in Australian about the new government in Indonesia and its commitment to change.
“I will tell them that we are changing, we are changing,” he said. “The new administration under Jokowi, of course it is already several months now but the changes in oil and gas with the new Ministry of Energy and Mineral Resources, and also my position in the National Energy Council, we are trying to balance all of this into the movement changing in the oil and gas industry.”
Andang believes that even seemingly small gains to improve data access and process will eventually force politicians to come support the mood for change.
This first appeared on Australian Outlook, Australian Institute of International Affairs, October 2015 .
Of all the many hurdles Indonesia faces in its efforts to develop, education is one core challenge which is vital to address.
The new President, Joko Widodo, has pledged to “lift-up the people” and has a vision to equip them with the skills and services to improve their lives. One of the most fundamental requirements to achieve this goal will be to improve education levels; a task that is both enormous and urgent.
Schoolchildren are lagging behind in a system that doesn’t serve them well, and reports have warned that even on the current trajectory those with an education are likely to be under-qualified to meet the needs of a growing economy. Meanwhile the tens of millions of factory workers reliant on low-skilled jobs are not being sufficiently trained for the next wave of manufacturing predicted for Indonesia.
The Minister in charge of early education, Anies Baswedan, has said that he realises there is much work ahead to capture the opportunity. There are some small signs of improvement. For example, as part of his promise to deliver growth and equality President Widodo has introduced a smart card that ensures financial support for the first 12 years of education for the nation’s poorest.
Mr Baswedan has spoken openly of his long-term vision and the challenge in implementing it. The country has more than 50 million schoolchildren who easily lose interest in the classroom and consequently lag behind their peers in other countries. “Looking at the quality of our education, you don’t have to be Superman to realise that something is wrong,” said Mr Baswedan told the audience at a conference held by The Economist group in Jakarta earlier this year.
Indonesia has a teacher ratio of around one for 16 students, but many areas don’t have enough teachers while others have too many. The Minister says that in some rural areas up to 60 percent of schools are under-staffed. He is concerned that children living more than two kilometres from a school face an uphill battle to continue their education. Teacher quality is another issue, with teachers scoring an average of 45/100 on a competency test, when it should be around 75.
In a private interview he set out a framework for the next five years, with the focus on several key areas which include, at the top of the list, empowering parents to be a part of their children’s education, supporting school principals and improving teacher standards.
He was asked at the Jakarta conference why the low-scoring teachers are still in their jobs. “That’s a good question”, he says. That’s a question we are asking.”
More of the Indonesian budget is now committed to education and while there have been gains it has not been evenly matched by an improvement in student capabilities. According to the survey known as PISA which measures OECD countries and others, 15 year-old students are well behind their peers in science, reading and maths.
Such a situation does not place them in an advantageous position to become the qualified professionals or skilled workers the country will need if it is to progress. A 2013 report by the Boston Consulting Group found that “by 2020 top companies will be unable to fill about one-half of their entry level position with fully-qualified candidates.”
At that same economics conference in Jakarta, the IMF Country Representative Ben Bingham said “education forms now are critical, so that in ten years time Indonesia has a labour force that can compete up the value-chain.” He also made the point that if the government does want to see a rapid increase in growth and social capital, it would require a significant rise in the amount of skilled labour.
The need to improve education levels, and also reduce inequality, is obvious in a country where more than half of the population rely on income from the informal sector.
There are also the tens of millions working in factories. Prominent unionists have been warning that these workers will be at a disadvantage when the trade barriers come down within the ASEAN economic community, as they cannot match the knowledge and training of their peers. And it is baseline training that is needed.
The Victorian Government’s office in Jakarta has identified vocational training needs for the private sector in certificates 1-4, improving low-level skills that would then help workers, and the country, to move into higher technology manufacturing. Training is done by local entities when possible, but more work is being done by VET entities offering courses and new players are entering the market.
There are other small programmes trying to close the gap and make a positive difference, such as one between Australia and Indonesia to train meat industry workers. Another initiative is looking at how to adopt and transfer some of the techniques used in Australian primary school classrooms into an Indonesian setting, which comes from Indonesian adults seeing their own children thrive in Australian classrooms.
The challenges are not unknown. How Indonesia deals with them is the larger question, and also whether it is willing to look outside for ideas and strategies on how to make the change.
Helen Brown, a senior journalist at the ABC, was based in Indonesia for 4 years as a correspondent from 2010-2014.
Published October 2, 2015