Gita Wirjawan: "This Is How Southeast Asia Can Succeed In An Era Of Superpower Rivalry"

Thank you for checking out The Front Row Podcast and my interview with Gita Wirjawan.

This podcast was recorded in front of a live audience at SCAPE Singapore. I would like to thank National Youth Council, the Singapore Global Network, *SCAPE and the Endgame team for helping us put this event together.

Gita Wirjawan is an Indonesian entrepreneur, investment banker, and philanthropist. He is the Founder and Chairman of Ancora Group, a business group with investments spanning private equity, natural resources, real estate, and sports.

Before founding Ancora in 2008, Gita held senior roles in global finance — including Vice President at Citibank Indonesia, Vice President at Goldman Sachs Singapore, and President Director at JP Morgan Indonesia.

Mr Wirjawan also served as the Indonesian’s Minister of Trade from October 2011 to January 2014. During this time, he also led the ninth World Trade Organisation Ministerial Conference held in Bali, December 2013. Where he chaired 159 WTO member countries in consenting to a set of policies to ease international trade barriers.

Today, he is the host of Endgame with Gita Wirjawan, a podcast by the School of Government and Public Policy (SGPP) Indonesia, co-produced with Visinema Pictures. Through Endgame, Gita explores ideas and conversations with visionary leaders, uncovering the stories shaping Indonesia and Southeast Asia's bright future.

TIMESTAMPS:
00:00 Trailer & Intro
01:35 Why Indonesia Championed RCEP Over TPP
08:18 - RCEP's Progress and Current Assessment
10:53 - The Chicken-and-Egg Problem: Education and Development
14:35 - Teachers as the Key to Regional Transformation
15:25 - Southeast Asia's Value Proposition to American Investors
19:09 - Why US Re-industrialisation Won't Work
20:36 - China's Role: Technological Capital for Southeast Asia
26:06 - The Nuclear Reactor Thought Experiment
31:50 - Singapore-Indonesia Complementarity
37:43 - ASEAN Research Council Proposal
40:39 - Q&A: Translating Education to Impact
41:24 - Q&A: De-dollarisation and G-1
42:07 - Q&A: Danantara Fund and Prabowo Administration
42:18- Pak Gita's Answers
55:34 - Q&A: Language as Growth Impediment
56:00 - Q&A: Learning from US-China Dynamics
58:00 - Q&A: Addressing Corruption Through Education
1:03:29 - Brain Drain as Brain Circulation
1:06:52 - ASEAN's Historical Multipolarity
1:10:56 - Final Advice
1:13:15 - Closing Remarks

This is the 62nd episode Of The Front Row Podcast

Keith

Today's episode is a live conversation we did with Pak Gita Wirjawan in Singapore when he was flying to the ASEAN Summit in Malaysia and stopped by Singapore to speak with some of the youth. I'd like to thank the National Youth Council and the Singapore Global Network for helping us put this event together and for allowing both Singaporeans and Indonesians to gather for this insightful conversation. By the end of the episode, I hope you'll feel optimistic about the future of ASEAN, and if you're Singaporean, that you will identify more strongly as a Southeast Asian. With that great privilege, I hope you will enjoy today's episode.

I want to start by first acknowledging that Pak Gita actually just came from the airport, thankfully not from Stanford but from Jakarta. He landed at 12:00 and he's here at 1:00 p.m., so we are thankful for the Singapore traffic that he managed to come here on time. My hope is that when we open the floor later, you'll ask the hard questions that I might not be able to. He also shared with me that he's going on a panel tomorrow with Howard Lutnick. For those of you who aren't familiar, he's President Trump's Secretary of Commerce. Today I'd say is a warm-up act for him, so I hope you can warm him up for the more intense panel tomorrow as well.

I'd like to start with his background in trade. One of the things I found out recently was that you were very instrumental in the formulation of RCEP in 2011 when Indonesia hosted the Bali summit. If you're from Singapore, everyone takes free trade as a given, something we want to pursue regardless. But you have a big country with no real reason for it, yet you were one of the early champions for greater economic integration of ASEAN. I want you to help us understand your thinking then. Why were you championing this cause of free trade so early on?

Pak Gita 00:02:48

Thank you so much for showing up in the middle of the day. I know many of you have to go to work. Thank you so much to Keith for hosting this event.

In 2011, most Southeast Asian countries had two choices in terms of framing their economic narrative for multilateral purposes. One was the Regional Comprehensive Economic Partnership, often called RCEP. The other was the TPP, the Trans-Pacific Partnership, which is now called the CPTPP.

At that time, I was not able to embrace the TPP on the basis that, as much as it was meant to be a geopolitical means by the United States to contain China, it just didn't resonate with me fundamentally. I strongly believed that if multilateralism were to stay, China should have been part of the TPP framework.

The second reason was that it was a little too 22nd century for me. It was too advanced by way of the propagation by the US and some other members regarding things like intellectual property, government procurement, and human rights, which many Southeast Asians at that time were not able to embrace as easily as they would have hoped.

The third reason why I was reluctant to embrace the TPP was the recognition of rising protectionism within developing economies. Believe it or not, at that time I already sensed that protectionism was about to happen in a big way in developed economies. My comment to the Americans for saying no to TPP was that they shouldn't think protectionism wouldn't hit them. I could understand the framing, but I thought it would be very difficult to sell the concept to parliament. That was fundamental, and with the benefit of hindsight, it may have seemed prescient. In October 2015, somebody running for president started fanning nationalistic protectionist rhetoric against the other candidate in the United States.

RCEP to me was not 22nd century. It was 18th century—a traditional framing for largely developing economies. Within my intuition, I felt it was easier to roll forward from a seemingly backward framework because as you try to move forward, you can see where the stones and rocks are and skip over them socially, culturally, economically, and politically. Whereas if you jump too far ahead into the 22nd century and need to roll back without being able to look back, you run a much higher risk of stumbling upon little rocks socially, culturally, economically, and politically.

With the benefit of hindsight, it worked out right. The framing of RCEP for the 10 countries within Southeast Asia, plus Australia, New Zealand, South Korea, Japan, China, and India. We purposely put an open-ended window for the Indians to join up. As you might know, the Indians until today have decided still not to join RCEP because of their anti-China sentiment. But I still believe that in the long run, India should be a big part of this equation, until such time they're able to feel more at ease with China's ability to send goods and services to all parts of the world. I do believe that at some point in the near foreseeable future, India will be able to join this framing of trading with each other in a much more liberal or free manner.

This is unusual in the days and years where we're seeing the decline of multilateralism in a big way since 2011. As you might have noticed, people have chosen to bilateralize at best, plurilateralize. They don't desire to multilateralize. I think it's a discount to how we're going to be able to trade goods and services, and we're exposed to this risk of increased bilateralism for the next 5 to 10 years. With the benefit of hindsight, I think RCEP was a beauty for Southeast Asia.

Keith 00:08:14

We're in 2025 now. I wanted you to give your assessment of how RCEP has evolved and what you think of it today. Have we inched closer towards the hope of greater economic integration? What's your assessment of the progress so far?

Pak Gita 00:08:28

If you take a look at Southeast Asia's trade with China last year, it was about a trillion dollars. Southeast Asia's trade with the US was about $530 billion. The question is whether we should be happy with a trillion dollars worth of trade with China. Implicit within that question is, are we also happy that we've only gone to the extent of mostly consuming as opposed to producing goods and services? I'm in the camp that believes we should be happier only if we can produce more.

The concern I have is that China has shifted from a low wage narrative to a full-fledged supply chain narrative, and that's not very easy to replace by anybody, including the United States, Europe, much less Southeast Asian countries. The way forward for Southeast Asians to be much more competitive goes back to what we discussed earlier. The investment in STEM for Southeast Asia needs to be punctuated a lot more because that will entail much greater marginal productivity, which will allow us to move up the value chain and the global geopolitical order. That would be the manifestation of how RCEP would entail good stuff for all members.

As of today, China may seem like a bigger beneficiary. The fact that the United States has articulated they're going to impose 155% tariff on the Chinese is creating a bigger concern for Southeast Asia because there's a higher likelihood of China sending goods and services to Southeast Asia at a lower pricing point. That will be much bigger homework for us to increase our marginal productivity, which underlines the point that investment in STEM is even more needed so we can increase our marginal productivity and move up the value chain.

Keith 00:10:52

It's a chicken and egg problem, right? Maybe you don't have a sufficiently developed capital market, so there's no incentive right now to heavily invest in STEM. If we look at the Singapore case study, Singapore is small, so you could afford to put that on steroids—really invest or overinvest in education. But if you're a bigger country, you might struggle to do that. I wanted to ask you a little more. We had this in our previous conversation where you talked about copycatting from each other, learning from each other. If you look at STEM education right now in Southeast Asia, what do you think still remains the biggest impediment from policymakers to fully double down outside of the external incentives?

Pak Gita 00:11:38

88% of the households in Indonesia are headed up by somebody without a tertiary education, university education. Skip over Singapore, and about 80 to 90% of the households in the other eight countries after Indonesia and Singapore are headed up by somebody without a university education. Within each household, there are about two to three kids. When that kid knows their parent doesn't have a university education, their only hope is to be exposed to somebody with great education at school, where the teacher is in front of 20 to perhaps 200 students.

I would argue that teaching is a lot more scalable than parenting. If we want to scale, as you alluded to earlier, we've got to focus on teachers. This is where most countries in Southeast Asia are not paying enough attention. They've got to be much more resolute in recruiting teachers from the top percentile the way Singapore has been.

We don't have to wait until we ASEANize this. We don't have to wait until ASEAN as an organization could impose upon each member country to recruit great teachers. It takes recognition by not just the leadership within each of the nine countries beyond Singapore, but within each community multiplier within civil society to realize that we've got to make the right investment in teachers because that's the only part that's scalable.

As it relates to STEM, I would argue for recruiting teachers of STEM from the top percentile, but it needs to be socialized within the social fabric, the cultural fabric of all communities in Southeast Asia until such time that the leadership takes ownership of the importance of recruiting the best teachers and compensating them commensurately.

That's not happening yet. Indonesia, I've talked about this frequently. Most teachers out of the 3.5 million teachers in Indonesia make only $200 a month, whereas your teachers in Singapore make $4,000 a month. Right there you know that Indonesia still does not have the ability to recruit the best teachers because all the best talents want to work at Amazon or Google where they're getting compensated disproportionately more. It takes teachers for scaling up anything, particularly STEM capability.

Keith 00:14:34

What you're saying is that you need a kind of grassroots cultural diffusion for bigger countries to create the right political incentives to invest in education.

We know where the gaps are given the current trade environment or operating environment we live in. You alluded to it earlier. Someone like President Trump has slapped tariffs across different Southeast Asian nations—20% to Vietnam, 19% to Indonesia, 10% to Singapore, for example. I'd like to invite you to pull your trade minister hat. You have to pitch to him. What's the case study for Southeast Asia? If you were courting American FDI, what's our value prop? How would you do it?

Pak Gita 00:15:24

The imposition of tariff is somewhat decoupled from anybody's effort to attract economic capital from anywhere, from the United States particularly. I've been saying that the United States is one of the few countries blessed with tremendous liquidity. Within the US, Western European countries, and their friends in the Middle East, they're managing about $140 trillion worth of liquidity, much of that not being diversified out to many places, including most parts of Southeast Asia.

In order to court economic capital formation, it's got to boil down to what we discussed earlier—those two things: the rule of law and the ability to translate from uncertainties to risks. Uncertainties are unknown unknowns, things you can't price, quantify, or predict. Whereas risks are known unknowns, stuff you can price, predict, measure, and quantify. That requires, like it or not, STEM capabilities to translate from anything to something.

Do I believe that the imposition of tariff at 19% for Indonesia and Malaysia, 10% for Singapore, 20% for Vietnam is highly likely to result in a massive degree of reindustrialization in the US? No. I think the US has forgotten that China has shifted from a low-wage narrative to a supply chain narrative that's not easily replaceable. In order for the United States to reindustrialize, they've got to build up massive infrastructure capabilities.

I've been living in California, where if you take the BART in the greater Bay Area from Berkeley to San Francisco and want to connect up to Amtrak, then connect up to Caltrain—these are three different rail systems within California—they don't connect at an intersection. You pretty much end up at some interchange, have to Uber to another interchange, then connect with a Caltrain. At the end, you've got to connect to another interchange and Uber again. That reflects upon the high degree of homework the United States would need to invest in for purposes of reindustrializing.

I think they're likely to realize sooner rather than later that the reindustrialization narrative on the back of the superimposition of tariff upon anybody, including some parts of Southeast Asia, is not going to work. Then I think there's an inevitable recalibration of policy posture by the Americans. Not to mention that there's going to be a midterm election in November next year where I would predict some recalibration, at least at the lower house, which will entail policy recalibration, hopefully towards normalization or renormalization.

If that's the case, then the homework for Southeast Asia is not to be preoccupied with the imposition of high tariff, but more with our requirement to move up the value chain. At the end of the day, whoever can move up the value chain cohesively and collectively is going to be a big beneficiary of whatever happens going forward.

Keith 00:19:08

To quickly condense that, the massive outlay of tariffs is not coupled with the required investment in infrastructure as you put it. There hasn't been a corresponding level of commitment to resources like we've seen in China, where you have what someone like Professor Khan talks about—this mayoral economy, something like in Singapore where you coordinate your policy to facilitate that kind of industrial investment. They're not matching up, so we shouldn't be really concerned about the tariffs but really focus on how we strengthen our value prop for these investments to eventually flow through here.

The other part of the equation is China. I want to open up the floor for questions in about 10 minutes. I spoke to Patrick McGee recently. He wrote this book called "Apple in China." He was talking about the fact that in China, the scale of Apple married the scale of China. The ability to scale skills was something that allowed Apple to become one of the most valuable companies in the world but also allowed China to become one of the best managed supply chains in the world. My question to you is, you talked about China giving technological capital to Southeast Asia for the next 10-20 years. How would that play out in your eyes?

Pak Gita 00:20:41

If we do it right, it will play out very nicely for Southeast Asia. This is on the back of my belief or hypothesis that Southeast Asia will be a big beneficiary of this geopolitical watershed that involves China and the US being competitive with each other in a much more technological, geopolitical, and economic manner as opposed to kinetic manner.

If it remains within those three attributes—geopolitics, economics, and technology—then it will entail a great geopolitical equilibrium for Southeast Asia. This is unlike what happened in the 17th century when the Qing dynasty in China decided to just domesticate and internalize, which resulted in a vacuum that caused a disequilibrium in Southeast Asia on the back of European powers coming into Southeast Asia without any countervailing element from China. That resulted in what I've called the three and a half centuries of humiliation in Southeast Asia.

I don't believe that's going to repeat in the 21st century, possibly into the 22nd century. If we believe in that premise, then there's tremendous reason for Southeast Asia to have great optionalities. We can go anywhere. We can swing with China, we can swing with the West.

I strongly believe that swinging into China paradoxically would have to be much more for technological capital allocation purposes, as much as the economic relations are much more humongous than that of Southeast Asia and the US, because the technology is cheaper from China. They're probably not great at zero to one yet. They're already great from one to the next digit. The US is already great at zero to one, but the problem is that one is much more costly than the next digit being procured and produced by China.

If we take ownership with the fact that many of our friends in Southeast Asia, including those in Laos, Cambodia, and Myanmar, are earning still less than $2,000, they're not going to be able to afford Western technology. They can only afford Chinese technology. But we've got to make sure that technological capital allocation will translate into our ability to move up the value chain. There's got to be some technological transfer into Southeast Asia so that we can learn how to procure and produce that technological capability.

We're not going to be able to get that technological capital allocation robustly until and unless we figure out a way to get that economic capital allocation. That economic capital allocation will much more likely take place from the West because of their tremendous liquidity capability.

China has tremendous liquidity, but compared to the West, they're much more limited. I'll prove it to you empirically. When they announced the Belt and Road initiative in 2013 for Southeast Asia, it was supposed to be about $800 billion for all of Southeast Asia. The cumulative realization of the Belt and Road initiative to this day is only about $80 billion, including the $8.5 billion for the high-speed rail in Jakarta to Bandung or Tegalluar and the hydro projects in Cambodia and Laos. The fact that it's realized only 10% of the aspiration that was articulated in 2013 has primarily to do with what is referred to as the dual economic circulation philosophy, which is really a conscious effort by the Chinese government to domesticate economic activities. You can see it—the domestic consumptive propensity of China has increased to more than 50%. If they're consuming more of their goods and services, their exportation of capital will decline. If their exportation of capital declines, they're not going to be able to export economic capital as much as they might have told people in the past, but they can certainly export technological capital.

If we recognize that there is technological capital allocation capability from China and there's economic capital allocation capability from the West, but it's not happening because they're still confused with many of the uncertainties which we're not able to translate into risks, then the homework is highly identifiable. We've got to invest in STEM and be able to translate from uncertainties to risk better so that we can get that economic capital from the West, get that technological capital from China, and that optionality is inherent geopolitically within Southeast Asia.

Keith 00:26:06

Practically speaking, if we look at it, first of all, all roads lead to STEM. I think that's what I've gotten away from talking to you for so long—all roads lead to STEM. The second part, interestingly, is like if you think about Southeast Asia, let's say use an example of Indonesia. If Americans invest in factories here, build infrastructure using American financial capital, the MNCs can build stuff, leverage the lower cost of production here, and maybe export back to their home markets or bigger markets. But the earnings we realize in Southeast Asia, we use it to import cheaper technology from China, and that's how we can potentially chart a road forward for better development.

I've got two more big questions I want to ask. One, where are the sectors do you think we start to see more of that dynamic happen? I'll save my one last question before we move on to the audience. For some of you feeling the post-lunch coma, now's the time to start waking up.

Pak Gita 00:27:12

I think the ultimate geopolitical litmus test for Southeast Asia for you to imagine is whether in the next few years it's possible for a nuclear reactor to be built somewhere in Southeast Asia using Chinese technology and financed by JP Morgan.

I want you to reimagine this. Is that something that's hypothetically possible? Not tomorrow, but somewhere down the line—could be 5, 10, 15 years from today. I say nuclear because I think it has to be within the menu of options to consider because it's scalable and it's proven to be clean. There's a lot of misunderstanding about nuclear now.

As it relates to how we splice the cake for Southeast Asia in terms of technological capital allocation and economic capital, I think Thailand and Indonesia have proven to be robust automotive players. Vietnam and Indonesia have proven to be relatively robust strategic industries players. Strategic industries include steel making. Steel is the mother of industrialization. Realize that Southeast Asia's consumption of steel on a per capita per year basis is still very low. Indonesia's steel consumption on a per capita per year is only about 65 kilograms per capita per year. The threshold for modernization or modernity is 500 kilograms of steel per capita per year. We've got a long way to go, and Vietnam is still below 100 kilograms per capita per year. Vietnam and Indonesia may be well positioned to move forward for strategic industry purposes.

Malaysia, I think, is at the forefront of precision manufacturing with the Nvidias and Intels of the world. They're suited for stuff like that—IT sector, though it's still below what Singapore has been able to do at the nano level.

I think Philippines and Singapore will play very robustly within the services sector, including education, healthcare, and the pre-existing BPO that the Philippines have been really good at. Thailand, in addition to playing a very robust role in automotives, will also learn to catch up in services, whether it's education or healthcare. So it's pretty well mapped out.

The question is, what will Myanmar, Cambodia, and Laos do? I think Cambodia and Laos have proven themselves to be robust energy creators or providers on the back of this massive hydro capabilities. Will they continue to do that? I think they could. But they're going to be beneficiaries of whatever happens around the region from Thailand, Vietnam, Malaysia, Indonesia, Singapore, and the Philippines.

That's how the picture has been drawn roughly in the eyes of captains of industries in China and the US. But we need to narrate this a little more clearly and back it up with numeracy and literacy. If we can do that in the next 10 years, there's no reason for Southeast Asia not to be able to get much more than $200 to $230 billion of capital formation per year. I see this region potentially being able to attract at least half a trillion dollars of foreign direct investment on a yearly basis once directionality can be ascertained.

What I mean by that is the thesis of investment is not absolutist. It's one of directionality. If they size up that Southeast Asian countries are highly likely to be better tomorrow than today, highly likely to be better the day after tomorrow than tomorrow, they're going to put money on us. But if they're not sure if tomorrow is going to be better than today, they're not going to throw that money. With that $140 trillion worth of liquidity, there's no reason for us not to be able to attract half a trillion dollars worth of foreign direct investment on a yearly basis.

Keith 00:31:47

On that note, it's interesting. I spoke to Parag Khanna recently. He's this guy who maps out geopolitical developments, and he said that if you were to map Southeast Asia as a country, we're the most unequal country of the world. But at the same time, you realize that people here in Southeast Asia in general are much more concerned about raising the floor than lowering the ceiling. If you go to an average Southeast Asian city, everyone's thinking, how can I develop? Not necessarily, oh, I want to tear down the rich guy.

My last question before I open up the floor to you is about Singapore and Indonesia. In Singapore right now, one of the big things we're paying attention to is the Johor-Singapore Special Economic Zone. It's going to happen in 2027, and I think from Singapore's point of view, it's a very complementary partnership between Singapore and Johor. I wanted to ask you, help us understand between Singapore and Indonesia. Indonesia is right now the third largest democracy, fourth most populous nation in the world. Singapore is just a small island, tiny city-state. What do you think is the complementarity? What do you think could be the complementarity between Singapore and Indonesia? Where could the future hold for us?

Pak Gita 00:33:02

The obvious complementarity is education and non-education, or education or lack of education. That can easily be remedied by crystallizing a common understanding that we can actually cross-fertilize between Singapore and Indonesia for educational attainment purposes. We can even heighten the crystallization at the regional forum level. We call that ASEAN.

As we talked some time ago, I'm arguing for a relook into the pre-existing principle of subsidiarity within ASEAN. I think the principle of non-interference is great for consensus building purposes—cultural, political, social, and all that good stuff. But by golly, the educational divergence is just a little too much of a mockery, and it doesn't serve the region well. That educational divergence has to be reduced. One quick way to do that is to actually relook at the pre-existing principle of subsidiarity of ASEAN so that there is some supranationalism at the ASEAN level to actually look at each one of the countries in ASEAN or Southeast Asia and say, "Dude, your educational attainment is not as good as it needs to be. We're going to adopt best practices from this country and we'll give you a certain number of years to fulfill that."

The complementarity between Singapore and Indonesia from an industrial standpoint can be varied. It doesn't necessarily have to mimic the complementarity we're seeing between Malaysia and Singapore because Indonesia is highly different from Malaysia. Malaysia has much better STEM capability on a relative basis and is at the forefront in terms of attracting precision manufacturing economic and technological capital formation. Indonesia doesn't have to copycat that for SEZ purposes, whether it's Singapore and Batam or Singapore and Bintan or Singapore and other industrial estates in Indonesia.

I do believe that Indonesia needs to work at the lower parts of the value chain, and there's tons to focus on. We can focus on that by way of addressing that complementarity in the sense that the higher educational attainment in Singapore is a complementary nature element that needs to be duplicated by Indonesia.

Keith 00:35:49

Indonesia might maybe start with a lower value chain, but the benefit is that you have scale—just tremendous scale that allows you to scale fast.

Pak Gita 00:35:55

The demographic bonus which is manifested in those aged 15 and younger in Indonesia, that's about 23 to 24% of the population, which is only 70 million—more than 10 times the population of Singapore. If we can only convert 250,000 STEM products on a yearly basis in Indonesia, it's only going to take us almost 300 years to convert everybody within that demographic bonus. That's completely irreconcilable with the aspiration of this gilded age or golden age in 2045, which is only 20 years away.

The only way out of this is to increase the denominator for Indonesia from 250 to hopefully 1 million. For Southeast Asia, from 750,000 STEM products per year to at least 2 million. Previously I said 1.5, then I rethought about this. I think 1.5 may not cut it. I think 2 million may cut it at the rate that India produces 2.5 per year and China produces 4.5 million per year. We should be within sniffing distance in terms of STEM graduates with these two powers.

Keith 00:37:04

Last full-on question I have to ask—I relooked at the earlier summit that President Prabowo and our Prime Minister Lawrence Wong had, and they talked about their close partnership in infrastructure development, defense cooperation, economic integration. Interestingly, education didn't come up. Now I'd like to imagine you're in the room with the two of them. Maybe three of you at the ASEAN summit tomorrow, I don't know. You have to give the pitch to them policy-wise on education integration between Singapore and Indonesia. What would that look like? What kind of things would you pitch to both of them?

Pak Gita 00:37:42

I have greater confidence that perhaps not in this meeting this week, but in the future meeting between the two, education will come up. First, I have confidence in the fact that some people around him listen to my podcast. I have confidence that if that were to take place, the potential relook into the charter within ASEAN could be part of the conversation. I have confidence if that were to take place, perhaps a pragmatic manifestation of how that will unfold could be the potential formation of some sort of an ASEAN Research Council that would attract talents from all 10 countries in Southeast Asia to just gang bust on research and development for the region. That could be a great start.

Keith 00:38:44

Or maybe an ASEAN Secretary of Education, right? For example.

Pak Gita 00:38:50

Don't glorify it. Just call it Research Council. Then invite the best scientists from Singapore, Laos, Cambodia, Philippines, and all the rest to work on whether it's genomics or precision manufacturing, what have you. I think that would be a great start—something realistic that could be a follow-up to the recognition and agreement that there needs to be an ability to reduce that educational attainment divergence.

Keith 00:39:19

With that, now we'll open the floor to questions. I know there are floor questions on Slido, but maybe we'll prioritize the mics. There are mic runners around, so if you have a question, just raise your hand. We have one lady over here. Then Alastair, we'll go to you next. So one here, one here, and then one there. We'll go to you later.

Good afternoon, Pak Gita. Thank you for your sharing. I'm Monica from Indonesia also. Actually this question is from my friend Essa. She cannot come here today because she has class, but she has been a huge fan of Pak Gita. Her question is this: Pak Gita mentioned a lot about the importance of learning public policy in order to set Indonesia to be a developed country. Pak Gita even founded a school focused on the topic. Currently there are many of us formally studying or have studied the subject in various prestigious universities. How do you think the best way to translate this number into the actual tangible impact for the country?

Keith 00:40:36

Maybe we'll take two or three. We'll go Alastair next. We have one lady there and then there's multiple there as well.

Hi, I'm Alastair. Thank you so much for sharing, really appreciate it. We talked just now about multilateralism and neutrality in terms of the global economy. But at the same time, there have been conversations about G-minus-one—reducing reliance on the US or decoupling with the dollar, for example. Just curious to hear your thoughts on that. Do you think we can do that? Do you think we need to do that? Do you think we would reach there? What's the pros and cons of it? Happy to hear that, thank you.

Hi, Pak Gita, my name is Stephanie. I'm an Indonesian working here. Thank you for your insights on Southeast Asia. If I may narrow it down a bit, Indonesia is such a key player in the region. I would like to ask two questions specifically about Indonesia. First, how do you see the country's direction under President Prabowo, particularly in terms of governance and reformation? Second, about Dananatara Fund—do you think it can truly serve as an investment pillar with accountability and transparency, or is there any risk that it could face challenges in oversight and management?

Keith 00:42:01

Maybe I'll just repeat the first question to something more general, which is if you look at translating education and public policy to tangible outcomes, how does that look like? What is the pathway?

Pak Gita 00:42:12

I'll do it backward from the last to the first, because FIFO—anybody an accountant here? I was, long time ago.

I think conceptually, Dananatara is a good thing because the fact that it's been shifted from a ministry to a quasi-government actually takes out a great degree of concern. The concern that would have existed when it was still within a ministry was this perceived conflict of the ministry serving as an operator but also at the same time as a regulator. When you're both a regulator and an operator, there's intuitively a conflict of interest.

From what I've witnessed so far, they've been recruiting great talents, including from Singapore and beyond—from the US, Europe, India, and all the rest. I've never seen anything like that in Indonesia. This is something Singapore has been great at since decades ago. This is something Indonesia should have done long time ago. The fact that it's been able to democratize talent, showing open-mindedness, is net positive. I've met some of these talents at the middle level and even lower level. They're great talents. I can account for them right now.

The concern that anyone should have is whether or not this will become an entity that is politically motivated in the wrong way. You can be politically motivated, but if it's for the right way, the right reason, it's okay. I think it depends on what the leadership will do. They'll need to prove, especially within the first year, that they can actually undertake a transaction that they can account to the international community hands down. To the extent that there's holes they cannot account for, it's going to be problematic.

Dananatara is the most logical translator or GPS for Indonesia. If the leadership of Indonesia goes out and meets with global leaders and says, "We're the third largest democracy, we're the fourth most populous nation in the world," it's not a certainty yet that leadership is going to be able to get a seat at the table. But beyond saying that, if you say, "By the way, we've got a vehicle that manages a trillion dollars, and that vehicle is ready to internationally engage with somebody in the US, in the Middle East, in Europe, in Africa, in Singapore for something that would be of benefit to humanity in the next 30, 40, 50 years," the narrative is near perfect.

If you can articulate that story and prove that you can actually do that, you immediately have a seat at the table. This is what the leadership of Singapore did decades ago by way of using GIC and Temasek to be the translators. If Singapore were to have just gone out and said we're a one-island country with a population at that time of about three to four million, now six million, without being able to say that we've got a Temasek and a GIC, each of which manages a few hundred billion dollars, it would have been very difficult to get a seat at the table. These two vehicles have been able to internationalize the narrative of Singapore by way of co-investing, collaborating with international institutions from around the world. That's how I would look at Dananatara.

In terms of the administration of Prabowo, I would look at his internationalism. He's got this natural inkling to be internationalist. Many don't know that he speaks Dutch, German, French, English, Manadonese, Javanese, and Indonesian. He's educated in Europe and the US and Malaysia. He's got a tremendous internationalist inkling. He wants to make sure that he can have a positive impression on the international community.

It depends on how the feedback loop is between him and the international community. To the extent that he creates a positive feedback loop with the international community, that's going to dovetail back positively to the government or the governance. But he also needs to surround himself with capable people. I'm still in the camp that believes that internationalism is going to translate positively, and Dananatara is still likely to translate positively for nation building in Indonesia.

On the G-minus-one, if we took a look at the time when China joined the special drawing rights until today, the renminbi has not occupied any more than 5% of the total SWIFT landscape. The dollar has oscillated between low 30s to high 40s, 40%. At some point it was like 49% of the total SWIFT landscape, and the euro has oscillated between low 30s to high 20s. The yen below that.

It tells me that the dollar is not easily replaceable as a currency. But does that mean that the renminbi is not going to be able to? I think it depends more on the degree to which they can popularize the renminbi internationally. If you go to some village in West Java where somebody is going to dig the ground, if you compensate him in rupiah, he'll be very glad. You compensate him in dollars, he'll be very glad. But if you give him renminbi, the psyche on the ground is not such that he's going to get excited or she's going to get excited about stuff like that. The popularization of renminbi is unproven yet. To the extent that the Chinese can popularize the renminbi, there is a chance for them to move the needle from 5% to a much higher percentage. Then there is a case to think that de-dollarization might take place. As of today and in the near foreseeable future, I'm not there yet to think that the de-dollarization narrative is going to hold water.

I think we also have to recognize—I alluded to earlier with respect to the Belt and Road initiative—they're not likely to become economic capital exporters because they have done a good job domesticating their economy. I think they still want to continue with this dual circulation economic philosophy. I'm not so sure if the de-dollarization narrative is going to hold in the near foreseeable future.

On the first question, I set up this policy school with the aspiration of increasing interest among civil society members to take ownership with policymaking. I can tell you it's not very easy to get people excited about policymaking. On the other hand, if you take a look at the Kennedy School of Government, to which I'm an alumnus, the registration of Indonesians into the Kennedy School has gone up significantly. When I was there 26 years ago, I was the only Indonesian. I was just there—I gave a couple of lectures there two and a half weeks ago. There's like 50 Indonesians.

The interest with respect to policymaking has gone up, but it hasn't been well distributed, including to the school that I helped create. So I came up with an alternative strategy. How about if we do it visually or digitally through the podcast? Endgame has reverberated in a very positive manner by way of the followership that we've gotten.

You have to basically go down to the basics. If 88% of the heads of households in Indonesia don't have university education, if 93% of the electorates in Indonesia don't have university education, stop complaining about the quality of politicians because they don't come from planet Mars. They come from ourselves. Our duty is not to just go to public policy schools to fix the problem. Our duty is to lower those percentages from 88% to zero as quickly as possible, or 93% to zero as quickly possible. That is the view I've taken. I've taken a much more structural view for purposes of creating a much better policy environment.

I think a much better policy environment doesn't necessarily just have to be done by way of registering disproportionately more people into public policy schools, but could be done alternatively by way of just reducing the percentages of those without university education within the households and the electorate.

Keith 00:53:04

On that note, I wanted to recommend a book called "Bold Vision." It's a book about GIC that details the story—almost the exact same story as you told about Dr. Goh Keng Swee looking to professionalize the department in MAS that was managing the reserves. He saw there was a conflict, an inherent conflict between being a regulator and investor. So he went on this journey across the world to the US, and there are lots of interesting stories in that book. If you have a chance, you can read that book. It's a really good book.

I wanted to—there were two people that raised their hand just now that I missed. And Kai, you guys raised your hand. Maybe we can get the mic runners to them, and then we'll have one more question after that. Maybe the gentleman in the green at the back and then another gentleman in the green at the front.

Hi Pak Gita, thanks for your time and thanks Keith for organizing this. I have a very basic question about working language in Southeast Asia. I have three points of context. First is yourself being an advocate for education and how that can be one of the tools to bring Southeast Asia from periphery to core. Second is my work experience in tech, having scaled products in Southeast Asia. It's as good as scaling it across nine different countries. It's not scaling it in one region. The last context is Singapore as a case study—its relationship with a dual language, Malay and English. How much do you think language could be the impediment to Southeast Asia's growth?

Pak Gita, my name is Kai from the Gulf ASEAN Exchange. At the same time, I also serve on the board of the Singapore Malay Chamber of Commerce and Industry. I think when it comes to FDI in Indonesia, we do see large Singaporean companies and also sovereign companies who are well investing in Indonesia. But where I'm coming from is that for our local SMEs in Singapore, they are still pretty much apprehensive to expand their business into Indonesia given the perception of corruption as well. For those who do not have access to capital and also have access to navigating the complexities of the administration, how do we maneuver around that as well?

Keith 00:55:27

One last question. The gentleman there.

Hi, thank you for the talk today. My question is, what cultural or personal characteristics from China and the US do you think would most benefit young ASEAN individuals to adopt in today's landscape? What can we learn from them, people-to-people from China, China and the US?

Pak Gita 00:55:57

I'll start from the last. Do you know how many Americans study in China at all the campuses? Less than 1,000. You know how many Chinese study in the US? Around 300,000 at any given time.

Right there, you can figure out why there is so much misunderstanding by the Americans about what's going on in China, and the Chinese have a much greater degree of understanding of what's happening in the US than the Americans. If I were to learn from the US-China dynamic, if we really believe in the premise or hypothesis that China will be the technological capital allocator and the US will be the economic capital allocator, we've got to do whatever we've got to do to reduce any potential misunderstanding about that capital allocation, whether it's technological or economic.

You've heard a lot about this debt trap diplomacy that's being undertaken by the Chinese. One way to remedy that is to make sure that there's a hell of a lot more Southeast Asians studying at Chinese universities and a hell of a lot more Chinese studying at Southeast Asian universities so there's a much greater degree of cultural comprehension with each other. The explanation for something that may not have worked out has been a little too mathematical, has been a little too economic. If there's one thing to learn out of the US-China thing, it is to culturalize the rhetoric, the narrative, that will help mitigate any slippage or risk.

On the question of corruptability, corruptability is manifested in many things. The first is when the guy at the top gives you a sense that you can get away with crime. If there is a sense that anybody in any society, any country can get away with crime, that only promotes corruptability. That's the first structural. But if the guy at the top would do anything to make sure that you can't get away with a crime, then corruptability will decline.

The second is that corruptability is structurally correlated with the degree to which people say to the boss what he or she wants to hear as opposed to what he or she has to hear. The more a society encourages people to tell the boss what he or she wants to hear, that will entail corruptability. But the more a society encourages everybody to say what the boss has to hear, that will help reduce corruptability. So that would be my take.

I hate to say this—I'm singing the same song over and over again. A great education will help people to say what the boss has to hear. A great education will help somebody in a position of leadership to give everybody a sense that you can't get away with crime. That's what I've extracted from my stewardship as an entrepreneur and as a policymaker and also as an academic.

On the first question with respect to language, LLMs are in English. As of today, 80% of economic activities are still done in English. 80% of documents about anything are still in English. I'm not the English marketing director here, but I'm a pragmatist. If Southeast Asia has its work cut out and it has the vested interest in moving up the value chain and moving up the global geopolitical order—I'm going to China in a couple of weeks to give speeches in Beijing and Shanghai. I have no issue communicating with Chinese in English. It doesn't compel me to learn Mandarin, but I think it's a great nice to have.

I do believe if Southeast Asians were to try to move up the value chain and global geopolitical order, the first thing they've got to pick up is English. If Southeast Asia were to AI itself to the hilt, to the extent that LLMs are still in English, they've got to learn how to speak English. Even the Chinese that are doing LLMs, they're doing it in English.

You take a look at Southeast Asians in terms of the number that can actually communicate proficiently in English. They don't number any more than 100 million in my rough calculation, including the 6 million in Singapore, perhaps 70% of the 33 million in Malaysia, about 60 to 70% of the Filipinos—more than 100 million there, 70% of that. So it adds up to about 100 million. I think for Southeast Asia to be a LeBron James in the global context, it needs to have at least 300 to 400 million people that speak good English. When we're there out of the 700 million and we've got 300 to 400 million people speaking English proficiently, I think we're going to have what it takes to thrive. We're not there yet.

Can we achieve that with AI in the next 10 years? I think so. I've seen case studies where AI has helped accelerate people's requirement to learn not just English but international languages.

Keith 01:02:08

If we were to look at the ASEAN education agenda, it's two things from Pak Gita. One is let's accelerate the widespread adoption of English to a level of working proficiency, and two, obviously, to not beat a dead horse, STEM education.

There are two more questions that maybe we can close off. One from Slido, two from Slido. The first one is on the question of brain drain. If you look at the landscape within Southeast Asia today, a lot of us still aspire to study in the West, like what you've pointed out, and many actually stay in the West. As you pointed out, if you have an option between a very comfortable big tech job versus being a teacher, one might choose the big tech job. The question is, how do we collectively as a region make it sticky, make it attractive for talent to stay here? Then the second question is a little bit more on geopolitics. If you look at this—this is something you talk about as well—you talk about the rise of BRICS economy. How can ASEAN band together to remain competitive and to manage over-reliance on maybe just one partner, the US or another partner, China?

Pak Gita 01:03:20

The first one is to choose between teaching in Southeast Asia or working at a big tech in Silicon Valley, so the question is more about how do we prevent brain drain in the region. I'm not a believer of brain drain. I'm a much bigger believer of brain circulation or brain linkage.

I've said this a few times already. If the CEO of Google, his name is Bambang instead of Sundar, I think Bambang is going to be able to deploy so much technological and economic capital to Indonesia and Southeast Asia. If the CEO of Microsoft, his name is not Satya but his name is Sri Wahyuni, she's gonna deploy much more economic capital and much more technological capital to Indonesia, Malaysia, Singapore, and all the rest of Southeast Asia. Why? Because Bambang and Sri Wahyuni take much deeper emotional, spiritual, cultural, familial ownership with Southeast Asia.

It's what we're seeing now when Satya visits Mumbai, Bangalore, Delhi, when he meets up with Modi—he's thinking $40 to $50 billion worth of investments for data centers for Microsoft. Similarly, when Sundar goes to India because this is home for me and I know how to manage the risks and I know how to translate from uncertainties to risks, he would be the first to be able to translate from uncertainties to risks.

It would have taken 20 to 25 years for Satya to get to the top of Microsoft. You can do that net present value calculation. He may not have gone back to Hyderabad or whatever upon graduating from the University of Wisconsin in Milwaukee. He went on to work for Compaq and went on to do his MBA at the University of Chicago while working at Compaq or Microsoft. But over the 20 to 25 years, so much has accrued to him that he can actually deploy so much capital to his home country, hometown, home village, home whatever. You do a net present value calculation, it works out to be a much better brain circulation narrative as opposed to a brain drain narrative.

I might sound a bit contrarian to encourage Indonesians here, Indonesians in Silicon Valley, Indonesians anywhere—dude, if you get a great job in Singapore or in Silicon Valley, just stay and hopefully you become the CEO of Microsoft someday or Amazon someday or Google someday or whatever someday. Then when you go back to Semarang or Lahat or Tarakan or Manado, then you can add value and we'll do a present value calculation of whatever value you deploy. That underlines the argument that the brain drain argument is somewhat oftentimes misplaced. We need to focus on brain circulation and brain linkage.

I forgot the other question.

Keith 01:06:44

On trade, the second question on trade—basically how do we diversify on it? The popular term is de-risking.

Pak Gita 01:06:50

Look, the beauty about some members of Southeast Asia—if you recall 1955, we set out to meet up with Zhou Enlai, Nasser, Nehru, Sukarno, and a few other guys, 28 of them in Bandung. We call that the Asia-Africa Conference. That was basically an assertion to themselves, to ourselves, and to the rest of the world that we're sick and tired of this colonialism and neo or potential neocolonialism. That was the first mission of Asia-Africa or Bandung Asia-Africa conference, and it led up to a meeting that was hosted in Yugoslavia at that time, which was hosted by a guy by the name of Tito in 1961. It became the Non-Aligned Movement meeting.

Then you fast forward to the ASEAN formation in 1967, which initially was an attempt to thwart communism that would have been coming from the north, but it became a common market narrative. I would argue that Southeast Asia is a great example of being able to embrace multipolarity, not just in the last few decades but in the last 2,000 years. We've been able to deal with the Indians that were coming here with Martabak and also religions—call it Buddhism and Hinduism and to some extent Islam—without bloodshed or great degree of bloodshed.

Going forward, our ability to embrace multipolarity inevitably has to be manifested in our ability to diversify. I don't argue that diversifying out of the US is of permanence. I think it's recognizing that the United States is going through some sort of episodic stress. But we've got this common market called the BRICS, which Indonesia has officially joined on the 6th of January this year. Vietnam, Malaysia, and Thailand are on a wait list. I think this is a recognition that we are good at embracing multipolarity. We're good at basically making sure that whatever is happening with the US is an episodic stress. It's a stop area. It's a rest area that we're stopping by, but we're going to get back on to the highway where multilateralism is going to take place.

At the rate that the exports of Indonesia are less than 10% vis-à-vis the total exports, exports to the US by Indonesia are less than 10%. Being able to diversify to BRICS is surely a big help, but it's not going to help completely because we still have to depend on a market like the US. But we have to recognize that it's an episodic stress, and I believe in a potential recalibration of policies that we might see renormalization. This ability to embrace multipolarity is something that's been characteristic of us for a long, long time.

Keith 01:10:07

On that note, I'm starting to think that the reason why ByteDance has such a huge office is because the CEO is Singaporean. So maybe that's why ByteDance has a whole block right in CBD.

I really like the idea of recycling of human capital, creating brain linkages. I would like to ask one final question. You see the audience here in front of you. We have a huge mix of young Singaporeans, young Indonesians coming together in this room today. If there's one piece of advice you want to give to them as we make our merry way out of here later, what would that one piece of advice be?

Pak Gita 01:10:45

Just become a better storyteller. I mean, we suck at telling stories with numeracy and literacy. I've said this numerous times. The number of publications on Southeast Asia, most of which are written by non-Southeast Asians, are around 375,000 in a context of total publication numbers of about 130 to 140 million. That's only 0.27%. For a population that represents 9% of the global population, it doesn't jive. If we represent 9% of the global population, publications about Southeast Asia ought to be around 9% of all publications. Most of those publications on Southeast Asia ought to be written by Southeast Asians.

I've even argued that our inability or relative inability to tell stories to each other is empirically manifested in how little we trade with each other. Our intra-trade in ASEAN is only about 23% of the collective GDP. Our GDP is about four trillion. Our intra-trade, our trading with each other, is less than a trillion. Whereas the Europeans, they trade with each other to the extent of around 63, 64% of their collective GDP. I think that's largely because we're not telling stories to each other. I think that's a function of our inability to produce goods and services that are in complementarity.

In addition to our need to tell stories a bit more robustly, more cleverly, we just need to be open-minded more. I said this in the podcast a few days ago. I think open-mindedness is really key. Look, your brain formation takes place until you're nine. It's too late for all of us. Your IQ goes up until we're all 16. It's also too late for us. Our only hope to thrive or get better is to maintain open-mindedness because only with open-mindedness beyond anybody that's 16 years old will we be able to get better. That's the ability to combine the force of innovation with the force of preservation.

Keith 01:13:04

With that, let me sum up. For us Southeast Asians in the room, for us to go from periphery to the core of global consciousness, let us focus on educating ourselves, not just in maybe STEM, but storytelling. Let us try to understand each other better. I think for Singaporeans here, we need to go outside of Bali or maybe outside of Jakarta. We need to go to the other parts of Indonesia more to understand the region better and to understand each other better so that we can better tell stories to each other, to better work with each other, so that Southeast Asia can indeed become a huge force for good in the coming century.

With that, may we all just give a round of applause for Pak Gita for being our wonderful guest today.

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