Asian executives mull future with Trump – Nikkei Asian Review


Indonesia's investment co-ordinator Thomas Lembong, right, and media entrepreneur Steve Forbes in Jakarta on Nov. 29. (Photo: Simon Roughneen)

Indonesia’s investment co-ordinator Thomas Lembong, right, and media entrepreneur Steve Forbes in Jakarta on Nov. 29. (Photo: Simon Roughneen)

JAKARTA — On the face of it, Indonesian President Joko Widodo and his soon-to-be American counterpart U.S. President-elect Donald Trump could not be more dissimilar. Widodo, or “Jokowi” as he is known, is understated, self-effacing and wry, while Trump is abrasive, brash and loquacious. Before entering Indonesian politics, Widodo was a furniture exporter, while Trump, a real estate mogul, has long been one of the best-known U.S. businessmen. During a five-minute phone call on Nov. 28, it was reported that the two leaders hit it off.

“It seems because both are lifelong businessmen they really connect well, there is good chemistry,” said Thomas Lembong, chairman of the Indonesia Investment Co-ordination Board, the government investment agency, speaking to media at the Forbes Global CEO Conference in Jakarta. “They had a very cordial telephone conversation,” added Lembong, who was Indonesia’s trade minister before a cabinet reshuffle in mid-2016.

If true, the rapport between Trump and Widodo could offset any Indonesian disappointment over the incoming U.S. administration’s intention to ditch the Trans-Pacific Partnership, a far-reaching free trade pact between the U.S. and 11 other Asia-Pacific countries.

Indonesia was not among the initial 12 signatories to TPP, but had wanted to join the bloc. In the wake of Trump’s announcement, Lembong said Jakarta would continue to try to liberalize its trading arrangements with other countries.

“President Jokowi reaffirmed our commitment to free trade, to international investment. We are very committed to concluding our free trade agreements with the European Union, with Australia. Our economic agenda remains unchanged,” Lembong told the Nikkei Asian Review.

Despite his stated opposition to globalization in general and free trade agreements in particular, Trump’s plans for the $18 trillion U.S. economy, which accounts for around a fifth of global output, will have knock-on effects elsewhere. Trump plans to cut U.S. corporate tax from the current 35% to 15-20% and to spend massively on U.S. transport infrastructure, much of which was built a half -century ago or earlier.

“We believe President Trump will stimulate the U.S. economy, which will be good for the world economy,” Lembong said.

Trump recently named some key economy-focused cabinet members, including businessmen Wilbur Ross as commerce secretary and Steven Mnuchin as treasury secretary, while Taiwan-born Elaine Chao was given the post of transport secretary. Several other Asian Americans are on Trump’s various advisory committees.

As well as appointing both entrepreneurs and Asians to his cabinet, Trump said he would relinquish control of his scattered, multibillion dollar business empire, before taking office in January 2017, and would retain some aspects of President Barack Obama’s controversial healthcare reforms.

Spirit of compromise

To regional executives attending the Nov. 29-Dec. 1 gathering in Jakarta, the announcements suggest that for all his outsider rhetoric, Trump has shown a streak of pragmatism, and willingness to compromise on some of his more audacious campaign trail pledges.

Nepalese tycoon and philanthropist Binod Chaudhary in conversation with the Nikkei Asian Review on Dec. 1 (Photo: Simon Roughneen)

Nepalese tycoon and philanthropist Binod Chaudhary in conversation with the Nikkei Asian Review on Dec. 1 (Photo: Simon Roughneen)

“There is the international community, his office, public opinion, systems and processes that have been put in place,” Binod Chaudhary, a billionaire entrepreneur from Nepal, told the Nikkei Asian Review.

One of Trump’s Asian business partners, Abhishek Lodha, managing director of India’s Lodha Group, said that Trump’s commercial instincts mean that his presidency will be more pragmatic than some fear.

“He is a dealmaker in the right manner,” said Lodha. “He takes into account what the other side’s perspective is and moves on to get things done.” Lodha Group is building the Trump Tower in Mumbai, a replica of Trump’s signature residential complex in New York.

Some of Asia’s leading businesspeople see a kindred spirit in the incoming American president and believe that his administration will be less controversial than suggested by his inflammatory campaign speeches.

“His wisdom as a businessman and his desire of leaving the legacy of a successful presidency will prevail,” said Chaudhary.

As well as speaking to Indonesia’s Widodo, Trump has also met with Japanese Prime Minister Shinzo Abe and spoken to numerous leaders including China’s Premier Xi Jinping. Among other Asian leaders to have phone conversations with the U.S. president-elect are Pakistan’s Nawaz Sharif, who, according to a Pakistani account of the exchange, was lavishly praised by Trump — a reversal from Trump’s declaration that Pakistan was “not our friend” in the aftermath of the 2011 killing of al-Qaeda leader Osama bin Laden in Pakistan by the U.S. military.

During his campaign, Trump targeted China, accusing it of undermining the U.S. economy and raising fears that a Trump presidency could see a damaging trade war between the world’s two biggest economies. Regional business executives are keenly watching to see if Trump moderates his stance on Beijing, a key trade and investment partner for most of the Asia-Pacific region, is already suggesting that its proposed Regional Comprehensive Economic Partnership, which does not include the U.S., could fill the gap left by the TPP, which did not include China.

“One of the main themes of the election campaign was ‘Make America Great Again’ which suggests Trump wants to create more jobs in the US and not rely so heavily on imported goods. If implemented this could have implications on the manufacturing sector within the Indochina region and exports to the US and the number of US companies that may wish to set up businesses in the region,” said Stephen Wyatt, head of Vietnam operations for real estate firm JLL.

U.S. President Barack Obama fields questions at Yangon University on Nov 14 2014 (Photo: Simon Roughneen)

U.S. President Barack Obama fields questions at Yangon University on Nov 14 2014 (Photo: Simon Roughneen)

If the U.S. adopts a hands-off approach to Asia, or if Trump’s penchant for gratuitous insult translates into diplomatic fiascos in a region where “face” is everything, it could play into Beijing’s hands.

If Indonesia is disappointed by America under Trump, “there’s always China,” said Jonathan Tahir, deputy chairman of Mayapada Group, an Indonesian company with interests in banking, real estate, health provision and insurance.

Pivot fizzles

Either way, the U.S. is unlikely to maintain the so-called Asia pivot implemented by Obama, which, rhetorically at least, saw a greater emphasis on Asia in U.S. diplomacy, and resulted in Washington’s high-profile outreach to Myanmar, long an isolated military-run country but now an electoral democracy.

There are concerns in Myanmar that the Republican administration will ignore the country, which Obama visited twice.

Serge Pun, a leading Myanmar businessman, said at the conference: “Myanmar’s relationship with Obama’s administration was very good and Secretary [Hillary] Clinton was the one who came and opened up Myanmar’s relations with the world. Our concern is whether Trump will continue that very constructive opening.”

But despite the trickle of cabinet nominations and smattering of policy proposals, nobody knows what Trump’s intentions are in many areas, not least foreign affairs, where he is yet to name his secretary of state.

“I think we’re still trying to learn how to spell Trump,” said Pun, discussing public perceptions of the incoming U.S. president.

“I would personally echo Wang Jianlin [chairman of Dalian Wanda Group, a Chinese property giant], it behoves us to be open-minded, we should not prejudge, we haven’t seen that much policy detail yet. On the whole, we’re optimistic,” noted Indonesia’s Lembong.

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