To: Prof. Bruce Trumm
From: Nesreen Makhdom
Subject: Asia’s Stumbling Giant
Date: 11/15/2015

Business Brief (Case Analysis 1)

General Description of Indonesia:
In the early 17th century Dutch settled Indonesia. In 1942 to 1945 japan took over Indonesia. In 1957 first president Soekarno set up “Guided Democracy”. After that Suharto was the second president of Indonesia for 31 years until he resign in 1998. In 1999 the “fair legislative election” occurred in Indonesia. Indonesia is 255 million in population the world’s largest Muslims nation. It is located in the Southeastern Asia. 87% of the populations are Muslims. People speak more than 700 languages in Indonesia (CIA, 2015).

The Central Issue of Indonesia:
During Suharto rule, from 1967 to 1997, he utilized “crony Capitalism” and using the business enterprise for his personal and family support. That lead Indonesia to a “black hole” for ten years facing economic crisis and political issue. In 2004 Indonesia started its first fair election. However, at this time Indonesia faced many issues in the economic and politics, which let it behind the Asia neighbors such as China, Malaysia, and Thailand. The GDP fall, inflation declined, the unemployment stayed high, and the foreign investors left the country. The main central issue in the Indonesia was high level of endemic problem of corruption. According to the Transparency International, studies shows that Indonesia is ranked 100 out of 183 counties as most corrupt. Indonesian Lawyer Todong Mulya Lubis mentioned, “Change is inevitable” (Naomi, 1998) and requires long time for normal level of the economic growth. Moreover, he pointed out there were corruption in every stage in government (Naomi, 1998).

Indonesian’s Goals:
Indonesia has a lot to do to improve its economic and politics environments. In September 2000, the Millennium Summit was issued in New York and called for the Millennium Development Goals (MDGs). They set eight goals stated as follows: * To destroy poverty and hunger. * Improve basic education. * Develop gender equity and support women. * Decrease child death rate. * Develop maternal health and fight another diseases like malaria and HIV * Secure environmental sustainability. * Develop global partnership. * Other development goals.
The MDG first report symbolize Indonesia’s government to get the stocks of the country’s human development and apply the first seven goals od MDGs by setting up new policies and regulation, and analyze their economic process to reach the MDG’s goals. The main process of this report was to assent and accomplish the agreement of Indonesia’s MDG’s goals (Millennium Development Goals, 2004).

Constraints of the Indonesia’s problems:
The Government of Indonesia has an envision plan 2005 – 2025 to develop an independent nation and flourish the country. Accomplition this need to elevate and afford overall economic and political issues. According to the Critical Development Constraints’ Report, Indonesia welcome this reports in assisting Indonesia Government to identify their constraints of their problems that country faces. The report mentioned three main constraints that Indonesia has: * Unsuitable and bad quality of Infrastructure:
The quality of infrastructure of Indonesia led the country behind the southeast Asian economics. The lack of the transportation and power supply shortage also affect another sector of the investment area of the country (ADB, 2010). * Powerless Governance and institution:
The expansion of corruption, lack of regulations to follow and low government efficiency with poor policies decrease the investment and reduced the foreign and public investor’s in search for detecting business in the country. The availability of terrorism and violence also has a bad impact the investment environment (ADB, 2010). * Low quality of education:
As the progress in education is well shown in Indonesia, still there are difficulties in entering secondary and vocational education. Due to poverty in education and poor people can’t enter to school because of unsuitable infrastructures, which keeps employment producing low in the country (ADB, 2010).

Relative Alternatives of Indonesia issues:

In 1998, Indonesia faces huge challenges of improving wide economic and political to repair them together. Indonesia required free – market economics remedy and political repair and be democratic. Furthermore, political repair should link with the military to promote development of the country’s economic and political repair. But Indonesia has enormous natural resources e.g. oil, natural gas, timber, minerals, excellent farmland. In addition, Indonesia tries to improve their communication, education, and transportation (John, 1998).

Reduced Poverty:
Indonesia has many potential natural resources that can be used to improve the development of the country and extend the welfare. In 2013, poor people are 11.37% of total population. The government set up some specific programs to eliminate poverty in the country. In 2005 to 2006 the poor people raised, while from 2006 to March 2013 the number starts to lower. People in Indonesia believe government can lower the poverty according to the statistic numbers. In addition, poverty becomes worse in Indonesia since the destructive 1997 financial crisis that reaches the Asia. The Poverty in eastern sector of Indonesia is more than the western sector. There are programs that president of Republics Indonesia; Soesilo Bambang established them to reduce poverty in the society. The Programs called BLT (Bantuan Langsung Tunai / Direct Cash Assistance), Jamkesmas (Jaminan Kesehantan Masyarakat / Community Health Protection Scheme).
BLT is a program to support the poor family by registering to BLT program and family withdrawal the money from the post office in any place in Indonesia. This money is from the oil price that government sells. In 2013, government use the same program with different name which called BLSM (Temporary Direct Cash Assistance) due to oil – subsidy lowering.
Jamkesmas is a program to assist the health care for the poor people. It was financed from the government and collected by Ministry of Health in 2008. This program was to provide health services to poor family by using health insurance through the SJSN (The Social Security Provider), which is universal health insurance (Dewi & Whyu, 2014).

Fighting Corruption:
According to the economic directory, the Increased level of corruption in the country considerably decreases the investment, especially the foreign International trade, and also reduces the rate of the economic growth. By stealing the profits, politicians are corrupted, that minimize the returns of the placement business of the country and decreases the stimulation of the foreign and local investors in the country.
Corruption in Indonesia considered a huge problem, even with making several repairs in the country e.g. decentralization, and set up anti-corruption agency, increasing the quality of business regulation, judiciary, natural resources. Moreover, many factors that linked between structural factors e.g. income standard, and inequity, to the poor judiciary all these factors create strong corruption in the country. All these factors are challenges for the government and should try to boost the transparency and liability to ban and combat the corruption.

Education System:
To have a great country we have to have good education system. Education improves individual’s life and, also our generation can improve themselves and become perfect human resources and can run our natural resource to beneficial value. Education can modify our society from poverty to prosperity (Mulyadin, 2014). The Ministry of National Education, and Ministry of Religious Affairs are managing the education in Indonesia (Nick, 2014). Indonesia has inequality education system, and not on a par with each other’s of the school. Indonesia education does not include feature teachers, training tools, and good kind of lesson style. For example, the cities and big towns have best school; while in the villages have worst ones. Furthermore, the government set up SBI (The International Standard School) and RSBI (The International Stub Standard School) with very high price, which make big difference with the regular schools. The SBI and RSBI schools only rich kids can enter them because are very expensive. The quality of the infrastructure affects the education and society (Mulyadin, 2014). The infrastructure is good and facility people can go and be educated well. The government should subsidy the universities in fair way, because the government subsidy is changing from one university to another and this is not fair. The curriculum in the Indonesia always changes. This affects the students because some students cannot adapt to new curriculum fast, which make education hard for them. Government need to set up the new curriculum and apply it to several schools and universities, and then can publish it (Wiji, 2007). To make any changes in Indonesia economically or politically, it will take too much effort and costs by long-term reform. The best alternative to choose for the reformation of Indonesia is to find solutions for corruption and to make system that reduce the corruption in the country.

Best Alternative Selection (Fight Corruption):
“Corruption in Indonesia is just like Coca – Cola” (Daniel, 2011). Corruption impacts every level and stages of the country economically and politically. The business in Indonesia also been affected by corruption. According to the non-governmental organization that take action to enucleate corruption, corruption can be found everywhere, any time, any place. After president Suharto last in 1998 Indonesia transfer to democracy and had fair election. It was a success way, yet, corruption became worse until today. Corruption was widespread in the country from “the soccer league to the Supreme Court” (Daniel, 2011). Also, due to autonomy, Indonesian mayors and regents have the power to rule and specify the budget where the corruption occurs. This is a big challenge that Indonesia needs to tackle it. In 2013 the committee was originated to put out government and corporate corruption and has, successfully, explore and prosecuted more than 10 government ministries, 68 commissioners of parliament and a couple of “high – ranking chief executive officers” (Daniel, 2011), and judges. All have gotten more than 55,000 accusation of corruption e.g. in Jakarta you need to pay for the residency card which supposed to be without payment. One businessman mentioned that you have to pay bribes to the government officials to get your shipment. But most of the expert and US government officials say that Indonesia did good job to the transition to democracy and did excellent experience as a huge success. The great ratio of economic growth has improved the rich people and left the rest without any right to dividend from democracy. On the other hand, US government sees Indonesia as a successful experience, and they will support Indonesia by setting up several programs to promote the law in the country. The president of Indonesia pointed out that to immaculate corruption it is a long – term effort.

Implemented Plan for fighting Corruption:
Indonesia with over 250 million population, need to complete the e-government so it will get information and knowledge to society. This will flourish and elevation competition. According to the National Electronic Commerce Coordinating Council in 2000 pointed out that e-government can save up to 70% by using online services and with improvement of the economy of the country. The advantages of developing the e-government is to progress public duty and extend citizen empowerment as they can enter and get more information and excess liability and lucidity, which may alleviate corruption. In addition, the reduction of resources in Indonesia involves affecting the infrastructure and public services. This make the defy to improve e-government. Government can set up an anticorruption tool which permit people to report any negligence from the Indonesian government that can people send online, SMS, and mobile app. Government must establish laws and regulations that provide services to the citizens and their right about using the information access. The laws and regulations should be clear to the individuals and show them their responsibilities and authority on how to use public services (Sri & Ibrahim, 2015).
When the transaction of the government takes place by online and done during couple of days this will reduce the corruption in the country and in the government, at this time the country’s economic and political will be improve and develop and the society also will be affected in positive way. This development of the e-government will take time until the people understand how to use it and apply the steps correctly. Government needs to make the people more aware about e-government by keeping teaching them. Indonesia can have Singapore and Malaysia as good example of e-government and how they serve their citizen. E.g. in Singapore’s government drives service to their citizen and stay linked to them properly. The Indonesia government needs to establish re-thinking about the government services and how to have best of the technology to improve the internal situation in the country. Indonesia’s government claim to spread in every part of the country to at this time can provide services to their customers by effectiveness and efficiency way (Ministry of Information & Communication, 2015).

References

Anti Corruption Resource Center. (2012). Causes of Corruption in Indonesia. Retrieved 13 November ,2015 from file:///Users/mistore/Downloads/338l.pdf
Asian Development Bank. (2010). Indonesia Critical Development Constrains. Retrieved November 13, 2015 from http://www.adb.org/sites/default/files/publication/27497/indonesia-critical-development-constraints.pdf
Central Intelligence Agency. (2015). East and Southeast Asia: Indonesia. Retrieved November 12, 2015 from https://www.cia.gov/library/publications/resources/the-world-factbook/geos/id.html
Dewi, I., & Whyu, M., (2012). The Unsuccessful Poverty Reduction Strategies in Indonesia and the Alternatives Solutions (THE STUDY ON BLT AND JAMKESMAS)*. Retrieved 13 November, 2015 from file:///Users/mistore/Downloads/75-135-1-PB.pdf
Daniel, S., (2011). Corruption Challenges Indonesia’s Government. Retrieved 15 November, 2015 from http://www.pbs.org/newshour/updates/world-jan-june11-indonesia_05-26/
John T., D., (1998). Indonesia's Economic and Political Crisis:  A Challenge for U.S. Leadership in Asia. Retrieved November 14, 2015 from http://www.heritage.org/research/reports/1998/08/indonesias-economic-and-political-crisis
Millennium Development Goals. (2000). Indonesia. Retrieved 14 November, 2015 from http://planipolis.iiep.unesco.org/upload/Indonesia/Indonesia%20MDG.pdf
Ministry of Communication and Information. (2014). Establishing Good Governance through Information Technology. Retrieved 15 November, 2015 from http://www.mci.gov.sg/web/corp/press-room/categories/speeches/content/establishing-good-governance-through-information-technology
Mulyadin, P., (2014). The Problems and the Best solution of the Education System in Indonesia. Retrieved 14 November, 2014 from https://mulyadinpermana.wordpress.com/2014/01/06/the-problems-and-the-best-solution-of-education-system-in-indonesia/
Naomi, R., (2012). Indonesia is one of the world’s most corrupt countries. Here’s why there’s new hope. Retrieved November 13, 2015 from http://qz.com/25891/will-indonesia-become-the-next-republic-of-congo-or-like-japan/
Sri, R., Ibrahim, K., (2015). Challenges in the E-government Implementation. Retrieved 15 November, 2015 from http://www.thejakartapost.com/news/2015/07/27/challenges-e-government-implementation.html
Wiji, R., ( 2007). The Solution for Educational Problem in Indonesia. Retrieved 13 Nonember, 2015 from https://wijiraharjo.wordpress.com/2007/12/10/solution-of-educational-problem-in-indonesia/

Appendix
Case Analysis Rubric
Total 90 points

Criteria | Unacceptable | Acceptable | Proficient | Student Points and Comments | Describes the company. | Vaguely describes the company or completely off topic.(0-3 points) | Describes the company and, for the most part, fulfills assignment requirements.(4 points) | Accurately describes the company and demonstrates solid ability to accomplish the assignment.(5 points) | | Defines the central issue of the case. | Vaguely defines the central issue of the case or completely off the topic.(0 - 7 points) | Defines the central issue of the case and, for the most part, fulfills assignment requirements.(8 points) | Accurately defines the central issue of the case and demonstrates solid ability to accomplish the assignment.(9-10 points) | | Defines the general goals of the company. | Vaguely defines the general goals of the company or completely off the topic.(0-3 points) | Defines the general goals of the company and, for the most part, fulfills assignment requirements.(4 points) | Accurately defines the general goals of the company and demonstrates solid ability to accomplish the assignment.(5 points) | | Identifies the constraints of the problem. | Vaguely identifies the constraints of the problem or completely off the topic.(0-7 points) | Identifies the constraints of the problem and, for the most part, fulfills assignment requirements.(8 points) | Accurately identifies the constraints of the problem and demonstrates solid ability to accomplish the assignment.(9-10 points) | | Identifies all the relevant alternative solutions. | Vaguely identifies all the relevant alternative solutions or completely off the topic.(0-7 points) | Identifies all the relevant alternative solutions and, for the most part, fulfills assignment requirements.(8 points) | Accurately identifies all the relevant alternative solutions and demonstrates solid ability to accomplish the assignment.(9-10 points) | | Selects the best alternative and justifies the selection. | Vaguely selects the best alternative and justifies the selection or completely off the topic.(0-7 points) | Selects the best alternative and justifies the selection and, for the most part, fulfills assignment requirements.(8 points) | Selects the best alternative and justifies the selection and demonstrates solid ability to accomplish the assignment.(9-10 points) | | Develops an implementation plan for the selected solution. | Vaguely develops an implementation plan or completely off the topic.(0-7 points) | Develops an implementation plan and, for the most part, fulfills assignment requirements.(8 points) | Develops an implementation plan and demonstrates solid ability to accomplish the assignment.(9-10 points) | | Integrates established international business principles into the discussion. | Rarely integrates established international business principles into the discussion.(0-7 points) | For the most part, does a good job of integrating established international business principles into the discussion.(8 points) | Consistently does a good job of integrating established international business principles into the discussion.(9-10 points) | | Synthesizes relevant information and materials to provide evidence of critical thought. | Synthesizes information at a minimal level. (0-7 points) | For the most part, effectively synthesizes information, which supports main ideas. (8 points) | Consistently and effectively synthesizes information, which provides strong support to main ideas.(9-10 points) | | Considered holistically, demonstrates the ability to write at the graduate level. | Considered holistically, the student demonstrates an inadequate ability to write at the graduate level.(0-7 points) | Considered holistically, the student demonstrates an acceptable ability to write at the graduate level.(8 points) | Considered holistically, the student demonstrates a proficient ability to write at the graduate level.(9-10 points) | | | | | Total Points = | | Turnitin.com | Did not turn paper into Turnitin.comMinus 5 points | ---- | ---- | | Revisions based on the originality Report | Did not revise paper based on the originality reportMinus 5 points | ---- | ---- | | | | | Total Points = | |