Jakarta. President Joko Widodo has left Indonesians flabbergasted with his decision to appoint a little-known company led by a political supporter as the local partner for a joint venture to build a national car.

Joko, on a state trip to Malaysia, visited the factory of local car manufacturer Proton on Friday, where he witnessed the signing of a memorandum of understanding between the automaker and Indonesia’s Adiperkasa Citra Lestari to set up a joint venture looking into the feasibility of developing and producing an Indonesian national car.

Signing on behalf of ACL was its president director, Abdullah Mahmud Hendropriyono, a former intelligence chief and retired Army general dogged by allegations of gross human rights abuses.

Proton chairman Mahathir Mohamad, a former Malaysian prime minister, was also present at the signing.

Hendropriyono is known to be close to Megawati Soekarnoputri, Joko’s political patron and the chairwoman of the Indonesian Democratic Party of Struggle (PDI-P).That the president picked his company — which is not registered with Indonesia’s Industry Ministry and whose history and line of business remain unknown — to represent Indonesia in the joint venture has prompted speculation of yet another concession being made by the president to his party chief.

“Out of [dozens of] potential partners, why Proton? And why Hendro? Why, why…” tweeted Ulil Abshar Abdala, a Democratic Party official. “Suharto was in power more than 25 years before he granted the concession for a national car to his cronies. Just FYI, bro,” he added.

That earlier project was helmed by the late strongman’s son, Hutomo Mandala Putra, better known as Tommy Suharto, and essentially rebadged Kia cars from South Korea as Indonesian-assembled Timor vehicles.

It ran from 1996 to 1999, before the combination of the Asian financial crisis of 1997-1998 and Suharto’s fall from power in 1998 forced its closure.

Hendropriyono appeared to have served as the president commissioner of Kia Mobil Indonesia from 1999 to 2001.

‘Publicity stunt’

Joko has long expressed his ambition to launch a new national car project, and in early 2012 championed the Esemka car assembled with parts imported from China by students at a vocational school in Solo, Central Java, where he served as mayor at the time.

Critics later said his endorsement of the venture was simply a publicity stunt to pave the way for his candidacy in the Jakarta gubernatorial election later that year, which he went on to win.

With the national car project on the verge of becoming a reality, the question being asked is why it was ACL and not the makers of the Esemka who were picked for the joint venture with Proton.

“If I was Joko, I would have brought Esemka into the cooperation with Proton Malaysia to produce a national car,” Fahri Hamzah, a deputy speaker of the House of Representatives, wrote on Twitter. “He could have used this moment not just to launch the national car project but also to repay his friends at Esemka who he used,” Fahri added.

It is also unclear why Joko chose Proton to help develop an Indonesian car. The Malaysian manufacturer has a 1 percent share of the Indonesian car market, while Japanese auto giants Toyota, Daihatsu, Honda, Suzuki and Nissan dominate the market with a wide range of mostly locally made or assembled vehicles — including quasi “national cars” produced under the so-called low-cost, green car program, in which 80 percent of the components are locally produced.

There are already indications that the new venture will mirror the Timor fiasco, with Proton simply rebadging some of its existing models for the Indonesian market.

Sofyan Djalil, the chief economics minister, said in Jakarta on Saturday that a prospective Proton assembly plant might be set up in Bekasi, east of Jakarta.

“I asked Hendropriyono … and he said he already had land in that area [for the plant],” Sofyan said as quoted by business news portal Bisnis.com.

Hendropriyono, in a separate interview, said the factory would employ up to 6,000 people.

In Malaysia, Mahathir said Proton would first see whether its own cars “can be modified or be suitable for the Indonesian market.”

“Initially, we may export the Malaysian-made car,” he said as quoted by Malaysian state news agency Bernama. “Subsequently, we will assemble the car in Indonesia and then progress toward producing parts in that country, so that it will become a real Indonesian car.”

Mahathir added, “When you are a baby you need somebody to hold your hands.”

Car sales last year in Indonesia, presumably the “baby” in this context, amounted to 1,208,019 units, while Malaysian car sales in the same period were 666,465 units.

‘Misleading’ term

Hendropriyono on Sunday asserted that his company’s joint venture with Proton was “business-to-business,” that the Indonesian media’s use of the phrase “national car” to describe future products of the partnership was misleading because the Indonesian government in fact has no stake at all in the project.

“It is incorrect to call what we will build ‘national cars’; why don’t you first properly learn academic terms [before commenting],” the former chief of the State Intelligence Agency (BIN) responded to his critics in a written statement to Indonesian news portal Tribunnews.com.

“This a business-to-business partnership. We’re a private company and so is Proton,” he added.

Hendropriyono likened Joko’s appearance during the signing of the memorandum of understanding between ACL and Proton in Malaysia with that of US President Barack Obama during the signing of an MoU between Indonesia’s Lion Air and US aircraft maker Boeing in Bali in November 2011 — that both are mere displays of support from the two heads of state for their respective local industries.

“Obama witnessed the transaction conducted by our fellow private company [Lion Air] and America’s Boeing because we purchased [their aircraft],” Hendropriyono said. “Now [Joko witnessed the ACL-Proton MoU signing] because we want to build our own factory.”

He added that it was more cost efficient for ACL, who he had built in 2000 after retiring, to join hands with Proton rather develop its products on its own, citing infrastructure, after-sales service and networking needs.

He also admitted to having secured foreign loans to finance the project, although stopped short of mentioning the amount of money involved.

Hendropriyono added that he had been dreaming of Indonesian-made cars since the Timor era, blaming the fiasco on the acquisition of Kia by Hyundai, another South Korean carmaker.

“Building a made-in-Indonesia car factory has been my dream since the Kia failure… Sticking with the slogan ‘Old Soldiers Never Die,’ in these late days of my life I still want to dedicate myself to the nation [by producing locally-made cars],” the retired general added.

He further said it was time for Indonesia to produce its own cars, recalling the past era when the archipelago had been able to produce its own bikes while Malaysia had not.

“Now they [Malaysia] have built their own automobile factories and we have not,” Hendropriyono said. “Our nation will continue to become a loser because there are always individuals who are not ashamed of badmouthing their own people while having done nothing for the nation.”

Furthermore, Hendropriyono slammed accusations that Joko had appointed his son, Diaz Hendropriyono, as a commissioner at Indonesia’s largest mobile operator, state-owned Telkomsel, and son-in-law Andika Perkasa as the commander of the presidential guard Paspampres in exchange for political favor.

Hendropriyono said both Diaz and Andika had built their career and made professional achievements on their own. He said that Diaz was organizing Joko’s supporters together with his friends, who several of them becoming ministers.

Odd choice

Ray Rangkuti, director of the Indonesian Civil Society Circle (LIMA), questioned why it seemed that Hendropriyono received so many favors from the president.

“What is it that makes Hendropriyono so special to Jokowi? His son in law become the chief of presidential guards while his son occupies highest position at Telkomsel. Now, he got this contract,” he said, referring to the president with his popular nickname.

He demanded Joko to explain to the public why Hendropriyono received so many privileges, saying that while Hendroprioyono may help him get elected, he should not give to many to the retired three-star general.

“So? Many people help Joko to the presidency. But it seems that only Hendropriyono is special,” Ray said.

House Deputy Speaker Taufik Kurniawan urged Joko to provide Asemka with the opportunity to take on the task of building a national car, and show the company the same support he had given as mayor and governor.

“We have Esemka, which seems to be able to build a good car. Also, rather than cooperating with Proton, why not with Japanese companies, which have better technology and experience?” the House speaker said.

Taufik added that Indonesia’s relations with Malaysia could be rocky at times and could endanger the contract.

Better public transportation; not new cars

As governor, Joko battled against the mass production of low-cost green cars (LCGC), arguing that Jakarta was already burdened with so many cars and what it needed was more roads and better transportation.

Joko and his then-deputy Basuki Tjahaja Purnama even clashed with several ministers who accused them of taking an anti-industry stance that could threaten the jobs of thousands of workers.

Populi Center director Nico Harjanto questioned Joko’s sudden shift before arguing that a national car was not one of Indonesia’s main priorities.

“What people need now is better public transportation. The government is just not sensitive [to what the country needs],” Nico said.

A recent survey crowned Jakarta with the title of producing the worst traffic in the world, with Surabaya, East Java, ranking fourth on the list.

According to the Castrol-Magnatec Stop-Start Index, drivers in Jakarta make 33,240 stop-starts annually, using global positioning system data to determine how frequently motorists driving in the city have to stop in traffic.

In contrast, drivers in Rotterdam, the Netherlands, recorded 6,360 stop-starts.

Basuki agreed with the survey, saying that infrastructure and facilities in the city are not suitable for the capital of Southeast Asia’s biggest economy. He said Jakarta needed about 30 to 40 years to overcome its chronic gridlock.

Nico urged the government to sign deals with other countries that would fix Indonesia’s chronic problems with infrastructure and public transportation, instead of even contemplating producing a national car.

Political communication expert Effendi Gazali boiled the controversy down to wrong “timing,” with many Indonesians still angry at neighboring Malaysia for insulting Indonesian migrant workers.

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Source: The Jakarta Globe