Read the Edited Highlights of Prabowo’s Interview With Bloomberg

Following are the edited highlights of Indonesian President Prabowo Subianto’s interview over the weekend with Bloomberg’s Ben Otto, Anto Antony and Daniel Ten Kate.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Following are the edited highlights of Indonesian President Prabowo Subianto’s interview over the weekend with Bloomberg’s Ben Otto, Anto Antony and Daniel Ten Kate.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Bloomberg: Mr. President, thank you very much for speaking with Bloomberg. How is this Middle East situation affecting your life?Prabowo Subianto: I think it’s affecting everybody’s lives. But for us, especially, you know, 85% of our population is Muslim. So whatever happens in the Middle East, in the Islamic world, will be followed closely here. So it’s very sad situation. We have very close ties to many of our Arab brothers in the Middle East, in the Gulf countries. A lot of Indonesians are working in Saudi Arabia, working in Qatar, working in the UAE. Also a lot of students. We also have a lot of students in Iran. And this is all very sad for us.Bloomberg: You had offered to mediate in the conflict if need be. Is there any update on that?Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Prabowo: Yes. Some of the leaders welcomed this, but they say, of course, there must be some support from, there must be a willingness on all sides. Basically on the side of the US and the side of Iran, and of course, Israel. So we just made known our willingness, and we want to keep all channels open. We offer ourselves as one of the mediators. I’m sure there are others more – perhaps more relevant, with more leverage than us. But at least we offered ourselves. I even offered to fly to Tehran.Bloomberg: What was the response?Prabowo: The response from the Iranians is that I’m always welcome; the president of Indonesia will always be welcome. But at that time, they said that they’re still very wary of negotiations because twice – twice – they felt that basically they have been tricked. That’s what they said.Bloomberg: Do you have a personal view of how long the war might last?Prabowo: I just follow from what the general media is saying. I have contacts everywhere, on both sides. Some are still bullish, you know. Both sides are still bullish. But if we see this type of asymmetrical war, the one that is defending – the one that is being attacked, they really just have to survive. And from the purely military point of view, I think it’s very difficult to conduct these operations just purely from the air, unless you go massively. Indiscriminate bombing. So I cannot really predict what will happen. We are all in the same – we are all confused. We are all confused. And I’m saddened. I don’t feel there’s any rationality in this.Bloomberg: Were you surprised? You’re on the Board of Peace and have known US President Donald Trump quite well.Prabowo: Yes. But you know, in the end, every country will assess their own national interest. And yes, I was pretty surprised. I was pretty sad. But what can I do, right? I can only deal with reality. My advice is always to look for the peaceful option. I was a soldier. I was in combat. And I’m the first one to realize that if we can talk, better talk. If we can resolve things on the table, better on the table.Bloomberg: Oil is stuck in the Strait of Hormuz and a lot of countries are trying to negotiate with Iran. Are you also in talks with Iran to get Indonesian ships out?Prabowo: I am not aware. Maybe my ministers are, maybe my national oil company. We are a bit fortunate in the sense that we also have other sources. Our oil comes from other sources, from Africa, from the US.Bloomberg: Over the longer term, you’re looking at building up reserves. In the short term, how do you manage higher oil prices, given that it’s been very hard to touch subsidies in Indonesia in the past?Prabowo: We have had these spikes before in our history. And we calculate the price of oil on a yearly average, so we have gone through all the simulations. I had several cabinet meetings and meetings with my experts, and we feel that we can face this as another crisis. It would be very difficult if the price is over $120 for a long period of time, but we hope rationality will be there. But Indonesia is actually, I would say, in a more fortunate situation than many other countries. We have a lot of alternative energy. We have a lot of coal. So for our national survival, I think we will use a lot of our coal. We plan to close our electric generators based on diesel oil. Very expensive. Coal is still the cheapest at the present moment. We also have a lot of palm oil, and with palm oil we can produce diesel oil, even gasoline. So we are actually in a very fortunate situation. I would say this crisis for Indonesia, of course, is a rude wakeup call, yes – but it will accelerate our move toward renewable energy. We have a lot of geothermal, we have a lot of hydro power. We have a lot of bio energy. For instance, we can get energy from cassava in a big way. We can get ethanol from cassava. And we are going big into solar energy. I plan to start on 100 gigawatts as soon as possible.Bloomberg: Your chief economics minister talked about different scenarios if oil prices stay high, and how it would be difficult to stay within the 3% budget deficit cap. And he raised the possibility of a regulation to change that cap temporarily.Prabowo: Well, there will always be that possibility, right? When we had Covid, it was two years. But we can take measures to control our consumption. For instance, during Covid, 75% of all government agencies worked from home. And I think Pakistan has announced they will go 50%. And they’re going in a big way on austerity measures. They also announced, I think, a four-day working week. I think the Philippines also. We are considering this for the working week. So we would like to do a lot of things online. So I’m mostly determined to bring down consumption, fuel consumption, in this time of emergency. But we try to maintain our fiscal discipline. We would like to always be – I mean, maybe I’m old fashioned, right? I don’t believe in deficits, actually. Maybe I’m old fashioned. I made a speech in my National Congress, our assembly. I said that our plan is to maintain the deficit below 3%. That’s by tradition and we’ve maintained this already for many years. Many other countries do not maintain at all, but we do. But I also mentioned that I hope to even bring down this deficit lower, and my hope is that one day not too far in the future – had this war not erupted, I think we could do it in two, three years. One of my [points of] pride would have been to present a balanced budget. I’m not too expert in economics, but, you know, that’s how my parents brought me up. That we must live within our means. Right? Do not spend more than you earn. I mean, this is the basics of life, to survive.Bloomberg: Have you ruled out the idea of temporarily raising the deficit cap?Prabowo: As I said, I personally do not like large deficits. Some of my advisers say, sir, be prepared. But other advisers say, sir, we must not have large deficits. And my own personal preference is really to live within our means. The most important thing is I, if you understand me and you see my program: I want to be very honest and transparent. The problem with Indonesia is not our revenue, it’s not our wealth. The problem is corruption. The problem is inefficiency. The problem is weak management control, weak oversight.In my first months after taking over the mandate, in January, I could save 300, 308 trillion rupiah. I think it’s about $18 billion. Just by going item by item by item. Cutting waste, cutting inefficiency. And I was convinced this would’ve gone straight to corruption. There was a big debate. So I’m using all this money for my free meals program, et cetera, et cetera. And I’m convinced there is more money being hidden and wasted.Bloomberg: Do you think the markets are misunderstanding you in some way? Because they’re constantly concerned about Indonesia’s fiscal prudence?Prabowo: I think the markets are not understanding me. You know, people like me, we are controversial. We have a lot of enemies. And I think they’re trying to bad mouth – but it’s part of politics. It’s OK. I feel confident in our economic strength. I feel the problem of Indonesia is not the wealth. It’s how we manage our wealth.Bloomberg: Your finance minister said recently that perhaps one area where you could trim spending is on the free meals program. Prabowo: Of course, the minister of finance is our treasurer, right? He’s always going to be very conservative. But that’s his job. I mean, if you have a treasurer who’s too loose, you’re in trouble, right? But I’m confident, as I said, we are spending our money of the money that would have evaporated by corruption.Bloomberg: So you wouldn’t touch free meals?Prabowo: I wouldn’t touch free meals.Bloomberg: Your finance minister has been in place just over six months now. How did you come to choose him, and what do you think of his performance so far?Prabowo: Well, many people recommended him at that time. And I attended one seminar and he gave a presentation. And I thought, hey, this guy knows what he’s talking about. He’s optimistic. He’s bullish. And I need people who are optimistic, you know? I don’t need pessimists around me. That’s not my nature. And then when I tried him, I think he’s doing well. He has a very good grasp of macroeconomics. Bloomberg: There was a stock market rout after the MSCI update, and then the credit agencies raised some concerns. In your view is there a communication gap or are they missing something?Prabowo: I must admit, yes. I think we have a communication problem because we are so concentrated on work. I mean, you’ve been here a long time, right? I appeal to your sense of objectivity as a rational man, as a common and decent human being. You must see. Compare us. Five years, I was in another cabinet. And those in the know know my administration is the fastest. The administration that works the fastest. Government decrees, government presidential legal documents in previous governments will take average six to nine months. One presidential decree will take maybe at the fastest six months. Average, eight, nine months. Some, one year or more. Bloomberg: So why do you think ratings agencies are penalizing Indonesia right now? Do you think they’re just wrong, or do they have a point?Prabowo: Oh, they’re wrong. They’re wrong. I think they’re wrong. And they will see reality.Bloomberg: And you’re not dissuaded in any way in your programs with things the ratings agencies raise; you feel like they’ve just got it wrong.Prabowo: Yeah. They, they got it wrong. They got it wrong. And they will see in the end.Bloomberg: How much do markets influence your decisions? You have a big vision for changing Indonesia, but then you have maybe the stock market crashing one day, or bonds.Prabowo: The stock exchange, as I said, it will influence maybe the perception from the foreign investors. But it will be, I think, temporary. They will see the real fundamentals. I mean the big guys with the real money, they have better intelligence than many other countries. Well, they will know what really happens. But yeah, I mean, we’ve regulated, we’ve taken measures. We want complete transparency. A lot of small people can get their money lost in a stock exchange that is not transparent.Bloomberg: Our understanding was that you were personally upset by what happened with MSCI and perhaps unnecessary tumult because messages weren’t getting through to you.Prabowo: I think there was a really, I would say clear maladministration. A clear dereliction of duty.Bloomberg: So you personally feel it’s important to reform the market, that MSCI has a point?Prabowo: Yes, of course. They wrote three or four letters with no answer. Can you imagine that? It’s idiotic. It’s complete idiocy. I’m thinking of carrying out litigation.Bloomberg: Against the regulators?Prabowo: Yeah, yeah. The officials. I mean, somebody writes your letter, you must answer. Immediately.Bloomberg: What about any tycoons or big companies that might have benefited from a lack of transparency?Prabowo: This is the challenge, right? This is a challenge. I mean, it’s the duty of the government, of the administration to provide good governance. Right? So, I mean, in a situation of weak governance, no transparency, everybody will do their stuff. That’s human nature, right?Bloomberg: Do you think you could do more about that? What else do you have planned about the tycoons to end corruption in general?Prabowo: I think they’re rational, and they’re very smart. So they will calculate, right? They will see in a country our size, an economy our size, with good governance, it will safeguard their interest in the long run if I take care of the poor, if I empower the poor, the lowest deciles of the country, there’ll be buying power, and then consumption would increase. They will benefit.I’m based only on common sense, rationality and common sense. And I approach them, I talk to them. I say, “Come on you guys, you know, my whole basic philosophy is – I like the idea of Indonesia Incorporated.” That’s always my dream. There was a Japan Incorporated, there was a Korea Incorporated. You know, that everybody, we are in the same boat, let’s do our stuff. You guys, the big guys in industry, the captains of finance and industry, go ahead. And then the middle level, we provide the atmosphere, we provide the level playing field. And then for the very weak, we have to give them a boost. Right? And then everybody benefits. That’s my point.Bloomberg: One of your messages has been that Indonesia is a country of abundance and wealth, but that that wealth isn’t always shared with common Indonesians, say, across the country.Prabowo: Exactly.Bloomberg: And that maybe the elite or the tycoons have some amount of blame in that.Prabowo: Yeah. Yeah.Bloomberg: Do you feel like they’re on board with your message, and that they’re doing enough now?Prabowo: I think they’re getting on board. I sense they’re getting on board because they are rational people.Bloomberg: What makes you say that?Prabowo: I meet them. I meet them and I give them a choice. And I say that, you know, please be fair. Look at what you have, look what this country has given you. And rationally you would want to continue this, right? And for that, you must be a good citizen, a responsible citizen.Bloomberg: What does that entail? You had the patriot bonds, but what else do you want them to do specifically to show that they’re giving back?Prabowo: Just rational, be rational, be common sense. Right. Don’t, don’t participate in the illegal economy. Smuggling under accounting, under reporting, tax evasion.Bloomberg: Danantara in some ways has spent its first year trying to convince investors that it’s not the next 1MDB. How do you ensure that it’s not?Prabowo: A lot of oversight. I think Danantara is the most watched institution in Indonesia. We have a board of supervisors, a board of control. I think most of the important ministers are there. The attorney general is there, the state audit agency is there. So they’re very highly watched. Risk committees. And we want the best practices, right? It’s very important. Because this is the asset of the whole country.Bloomberg: Are you happy with their performance to date? They just hit about a year.Prabowo: Yes, one year. At least we have something. We didn’t have it before. Before it was crazy – nobody controlled our state-owned enterprises.Bloomberg: Mr. President, thank you very much for all of your time. Thank you sir.Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.