SBY and the English Language...

It has been a while since I have felt like writing a post about SBY, but not being one to pass up an opportunity to "bang on" about what a fraud the man has turned out to be as president, I figure that this story is as good as any to get started on. The president's spokesperson for international affairs, Teuku Faizasyah, has had to defend the president's use of English in a speech to an Indonesian audience at the Stock Exchange building recently.

There are a few legal issues to be considered here in light of Law No. 24 of 2009 (which you can read about here). However, in a more practical sense the real issue is why does the president need to use English at all in the context of a speech on the economy to an Indonesian audience? Admittedly, there will be the odd loan or borrowed term from English that is similar or even the same in Indonesian. Yet, on the whole, most English words, even some of the loan and borrowed ones, have Indonesian equivalents.

But back to the gist of the story, according to Faizasyah, the president felt the need to use English as a means of clarifying some difficult economic concepts. Now, with all due respect, he is making a speech at the stock exchange and on the whole the majority of those employed there are going to have a whole lot more knowledge of all things economy-related than the president. So, exactly what was he trying to clarify? The idea that the speech was intended for a broader audience is not borne out by those in attendance.

The majority of the speech was in Indonesian and some English words were thrown in. So, to suggest that the words were used to remind people of the foreign roots of the concepts is a furphy at best. At worst it suggests that Indonesia is behind the game when it comes to all things economy-related and therefore the English has to be used. If I was Indonesian, I would probably be offended with the suggestion that I was not as smart as those economists in the West.

Perhaps the real reason that the president uses English in these speeches is that he feels that he is intellectually inferior to his audience and he is trying to mask that intellectual inferiority by pretending to be knowledgeable in the use of the English language.

Or maybe he is angling for a job on the world stage. After all, it was not all that long ago that the Indonesian Democrat Party was suggesting that the president was a serious contender for the job of United Nations Secretary General. So, maybe the use of English is an attempt to convince people that he really is an international statesman.

In any event, there does not appear to be a legitimate or even an arguable, reason for the president to use English in the speech he gave at the Indonesian Stock Exchange.

I wonder if in hindsight Indonesians are beginning to wonder whether SBY was the right choice for a second term as President of the Republic of Indonesia?

Bakrie -- Will They or Won't They?

The Indonesian Stock Exchange (IDX) announced on Wednesday (5/11) that they were going to lift the suspension on trade that had been in effect on PT Bumi Resources. However, not long after this announcement was made, and presumably a few phone calls later, another announcement was made. The second announcement was that the suspension in trade would remain in force.

The issue is seemingly becoming less transparent and more complex. The press release issued by the Bakrie Group of Companies suggested that the deal was between Northstar and Bumi Resources with a number of SOEs also buying into the USD 1.3 deal. Word on the street is that the role of the SOEs is far from certain as is any stake they might take up. It seems that the current state of affairs is that there is a tentative deal in place for Northstar to provide finance.

In terms of the announcements, there are relieable sources suggesting that the current Coordinating Minister of Economic Affairs / Minister of Finance, Sri Mulyani, was in favour of lifting the suspension. This would suggest that the subsequent announcement to reinstate the suspension came from someone higher up the food chain. This would most likely be the President.

It is unlikely to be the Vice President. Simply, the more trouble Bakrie is in the easier it will be for Kalla to exert his influence over Golkar. It is reported that the current President ascended the top job in part because of funds supplied by Bakrie (this might explain the loyalty shown to one of cabinet's most poorly performing Ministers). The reality is that the deeper the hole Bakrie finds himself in the less likely it is that he can be King or Queen Maker in the upcoming elections.

Nevertheless, the mere fact that the government became involved in the lifting of the suspension is a loser in the "court of public opinion", as it will be seen as protecting the interests of a cabinet Minister and not about protecting the interests of the State. Whether this is true or not is irrelevant in the court of public opinion, if it smells bad and it looks bad, then it is bad! The fact that the presidential spokesman comes out and says that Bakrie companies are not his concern is hardly reassuring.

That said, the logic on keeping the suspension in place is that as soon as the suspension is lifted it is likely people holding Bumi shares will seek to offload even with a purported deal in place.

The deal between Northstar and Bakrie plus the SOEs is supposed to be complete within 28 days. I wonder whether the suspension will stay in place until the deal is signed, sealed, and delivered?

Ah, must be nice to be the Coordinating Minister of the Bakrie Family Welfare, oops I meant to say the Coordinating Minister of People's Welfare (photo -- always smiling and why wouldn't you be?).

The Bakrie Bailout

The title of this post is perhaps misleading, then again for those in the know perhaps not so misleading. I do not claim to be in the know but I do not mind engaging in a bit of wild speculation. Bad of me I know.

The mainstream media is now reporting that The Minister of State Owned Enterprises, Sofyan Djalil (pictured), is supporting the idea of State Owned Enterprises buying into the Bakrie Group, specifically PT Bumi Resources and PT Bayan Resources. The shares are certainly not at rock bottom prices. The reality is that a number of Bakrie companies are in trouble either with debts due or debts falling due between now and April 2009.

The fact a Bakrie company defaulted on a loan led to some wild speculation that saw other Bakrie companies hit in a rapid sell-off of Bakrie stock. It is reported that the Bakrie Group accounts for somewhere between 8% - 10% of the Indonesian Stock Exchange. So, any dramatic fall in the Bakrie Group fortunes is going to have a significant impact on the market. And, so it did last week when Bakrie companies lost some 41% of their value in a matter of days.

According to Djalil, both Bumi Resources and Bayan Resources have pretty solid future prospects. Maybe this is true, however if the State Owned Enterprises are going to snap-up Bakrie shares then they are also going to be taking on some debt.

Interestingly, the word is that the Bakrie Group has approached the Stock Exchange with the idea of suspending further trade in its shares until they get on top of this mess and make some decisions. Indonesian law would allow the Stock Exchange the discretionary power to permit a suspension. Yet, if it did then there might be some serious questions on the fairness of the suspension when there are other Indonesian companies in equally perilous financial positions. My guess is that the Stock Exchange will entertain the approach but will make it known that they will not allow the suspension to happen. I would also guess that the Bakrie Group will then deny ever having contemplated such an idea. Simply, to grant such a request would be sure to be interpreted as providing a get out of jail free pass (well, at least at a much reduced cost).

The idea of selling the shares to SOEs is probably a more attractive option to the Bakrie Group than selling them off to a competitor. The belief being that if in the future the Group was to raise the capital elsewhere to pull them out of their credit hole then they would be able to re-acquire the shares back from the SOE. This might sound good in theory however it sounds a little more complex in reality. This is notwithstanding the "court of public opinion" that is likely to frown on any inkling of favourable treatment to the countries richest man (if he still is after last week's mauling is unclear).

I would expect that any transaction that sees a SOE buying into the companies of the family of the Coordinating Minister of People's Welfare should come in for some additional and special scrutiny to ensure that any accusations of favouritism can be quickly snuffed out.