Sunday, December 19, 2010

Jakarta traffic: Yes, we're probably doomed

The solution to Jakarta’s traffic woes is well-known; the question is: will it be implemented?

Not long ago, the National Geographic Channel made a film about Jakarta in its Megacities episode. It highlighted the growing challenges facing the city (namely traffic, floods & population growth) and what the authorities are actually doing about them.

The film showed some of the successes in combating floods (with the operation of the Eastern Flood Canal) and also presented many forward-looking views on improvements planned for the city.

For a moment there it had me. After watching the film, I became a bit more optimistic about Jakarta's future as a place to work and live in.

Unfortunately that optimism quickly died-down upon my commute to work in the following days.

Recently state owned rail company PTKA announced to its customers that the speed of the trains is being deliberately slowed-down for safety reasons; i.e. to reduce the occurrence of accidents.

The result is of course chaos: train schedule delays have become unbearable. And for me, taking the train to work now could mean arriving 40 minutes late at the office, everyday.

Adding cream to the coffee, on December 14 they announced the cancellation of over 40 commuter train schedules due to “maintenance”, resulting in more hardship for commuters.

Honestly, seeing all this waters down what’s left of my hope on the city’s future. The commuter rail should be the answer to the city’s traffic problems, but in reality it’s been getting far less attention that it deserves.

When a dentist says the solution for your toothache is to just stop eating, that likely means he or she has no clue what to do.

Slowing down trains in the hope of reducing accidents very much corresponds to this analogy. It shows that rail officials are helpless—up to the point of ignoring the basic notion of progress (which is getting from A to B faster, not slower).

Of course the above example only shows a small part of the city’s (and nation’s) broader infrastructure and transportation problem, which stems from a mix of mismanagement, corruption and most importantly a lack of political will by those in charge.

Speaking of which, the latter is leading us to a very dangerous leadership deficit. The norm is to shelve unpopular policies for as long as possible, if not avoid them altogether.

For example, planned train tariff hikes have been cancelled numerous times due to popularity concerns. This obviously deprived us of the resources needed for rail development and problem fixing.

Furthermore the reform of transportation fuel subsidies (which have been causing a serious misallocation of resources) also remains a controversy that has dragged on for years.

Even up to now, we have yet to see concrete action being taken on the subsidies (apart from recent political show meetings and the all too familiar formation of taskforces), although it’s pretty clear that they contribute greatly to excessive use of private vehicles thus traffic gridlocks in the capital.

It is very ironic indeed. The train company is reportedly struggling to come up with 9 trillion rupiahs for making 400km of new rail-lines in Java. But actually that amount is ridiculously small: it’s not even 2% of the money spent on fuel subsidies since 2005.

So it’s no wonder the statistics show passenger train travel miles only growing by a snail-pace 4% per year (in 2004 – 2008), while registered passenger cars and motorcycles grew by a staggering 17 percent per year.

Politicians always portray Jakarta’s traffic woes as a massive and very complex problem. But actually the solution is far simpler than rocket science: limit the use of private cars and build a reliable public transport system (which every other major city in the world has done).

The real problem is that no one is there to make unpopular decisions, so that the mess is only left to grow bigger, bigger and bigger.

If this continues, then we better brace ourselves. Because total gridlock is probably coming.

Disclaimer: The views and writings posted in this site is provided as general information only and should not be taken as investment advice. They are solely the opinions of the author and do not represent the opinions of firms affiliated with the author.

Tuesday, June 29, 2010

Saigon and my AK-47 experience

Last weekend I went on a trip to Vietnam and tried out shooting this AK-47 in the jungle near Ho Chi Minh City.

This was a very exciting experience; mainly because I was aware that the AK is a legendary weapon. This machine gun has transformed the history of many countries; put up & toppled many dictators and has been used in countless revolutions and atrocities throughout the world.

So my hands were shaking with excitement (and respect) the minute I held that gun. The shots were surprisingly loud even though I was wearing ear-protection. But after 2 rounds, I asked the instructor to put it on auto and then fired away a whole clip. Must I say that was probably one of the most exciting 10 seconds of my life.

My trip to Vietnam was also full of other surprises. I didn't expect to see Ho Chi Minh city being cleaner, neater and more pedestrian friendly than Jakarta.

Many luxury cars and 2-door coupes wandered around which kinda reminds you of Singapore. Old cars were very hard to find; perhaps this had something to do with fact that gasoline there was sold at an equivalent of around Rp8,000/liter, which is double Indonesia prices.

Many people say Saigon is "Jakarta in the 1980's". I disagree. Although it has fewer high-rise buildings, it seems much better organized.

Vietnam has a GDP per capita of around $3000 ppp dollars, lower than Indonesia at $4000. However the vibe there feels very different... everybody seems to be busy doing something; whereas in Jakarta u can't help but see many young people hanging around on the street, wasting time doing nothing.

This dichotomy shows up in the statistics; Vietnam's GDP growth can easily exceed 7%; whereas here we only get 6% in the luckiest of years.

Interestingly all the progress in Vietnam is happening despite it still being a communist country. This makes me wonder whether democracy is really a gift or a curse for Indonesia.

Yesterday I returned to Jakarta, and today it's back to the sadness of seeing many stalled reforms. Sadly with Indonesia facing a status quo and acute leadership deficit, it could be a matter of time before the tables turn and the country becomes "Vietnam thirty years ago."

Disclaimer: Any views and writings posted in this site is provided as general information only and should not be taken as investment advice. They are solely the opinions of the author and do not represent the opinions of firms affiliated with the author.

Wednesday, October 21, 2009

Blame it on the rain-doctor?

In Indonesia, rain-doctors have managed to stand the test of time--partly due to a serious mispricing in their pay-system.

Recently an important and expensive outdoor event I attended was ruined by the rain. The band, food and drinks already paid for, all went to waste as water poured down relentlessly.

It was clearly the organizer's fault. After all, rain had come down every afternoon in the three days prior to the event. And weather forecasts on the internet clearly said it was going to rain that day. But the show went on anyway without adequate precautions, and a lot of money went down the drain.

What surprised me was that most of the people I spoke to were very permissive of the screw-up. One of my friends didn't blame the organizer, but pointed the finger at the pawang-hujan/dukun or rain-doctor. She said the doctor wasn’t powerful enough.

At first I thought she was joking, thus I asked her if she really thought rain-doctors are still relevant in this 21st century. Surprisingly she defended the myth with vigor, as if defending a religion.

Okay, of course people are free to choose whatever they do or do not believe. And I respect that. But personally, I think that as modern day individuals, we should never believe in something without at least questioning it and trying to explain it with simple logic.

So I put on a provocative status update on facebook, and gathered dozens of responses from my friends about this rain doctor myth. Unsurprisingly, many were from die-hard believers.

My question was simple: If rain-doctors really exist, how come Indonesia still has droughts in poor harvests many regions? Why has the government been wasting money building irrigation systems knowing it could simply hire rain-doctors to do the job?

One friend of mine answered that there's a limitation to how far rain-doctors can make the clouds travel.

But that didn't make sense to me. Rain-doctors supposedly have powers to command ghosts/spirits that aren't constrained by the laws of nature. Here one believes in rain-doctors, yet say that the ghosts can get tired from walking too much just like us humans? Frankly, to me that just doesn't add up.

Another friend of mine told me about a 3-hour rule: rain-doctors are only able to delay the rain for 3-hours. So ghosts not only have distance constraints, but also working-hour constraints. Maybe ghosts don't like to work overtime... which also doesn't make sense.

I said in my opinion, the only reason there’s a 3-hour rule is probably because most outdoor events last 2-3 hours. If the dukuns had set a 24-hour rule, the probability of rain occurring within such a longer time frame is substantially higher. They would hence risk their reputation and people may stop believing in the myth if too many failures occur.

Meanwhile if they had set a half-hour rule, event organizers would see little use in hiring rain-doctors given that most events last 2 - 3 hours. The pawangs would then be out of the job, and the myth would disappear.

Another friend said: If rain-doctors were a hoax, how come they’ve managed to remain part of our culture for hundreds of years?

Well in my opinion this is due to at least two reasons. Firstly, hiring dukuns have become a tradition and this strengthens the demand side for rain-doctors. Secondly, there isn't a proper reward-punishment scheme for rain-doctors and this strengthens the supply side.

Indonesian culture is full of mysticism (just turn on the TV and you'll see). In case an event is messed up by rain, society blames the event organizer (EO) for not hiring a rain-doctor, not for failing to google the weather forecast and take necessary precautions.

Like the EO whose gig got ruined by the rain, his friends and employer would have directly blamed him had he not hired a dukun. So for an EO it's always nice to have a rain-doctor by his side, to make as a scapegoat in case it rains.

Meanwhile on the supply side, there will always be plenty of rain-doctors for hire. Anyone can be a rain-doctor as long as he can convince enough people that he possesses heavenly powers.

Why’s that? Because the remuneration system for rain-doctors is faulty. If it doesn’t rain, the rain-doctor gets paid in full; and if it does rain the rain-doctor gets paid little. So like a coin toss: heads I win, tails you lose! Who wouldn’t want a pay-scheme like that?

In my opinion, a rain-doctor’s pay scheme should be like a futures contract. If it doesn’t rain the doctor gets Rp2 million, but if it does rain he has to pay an equivocal penalty.

Better yet, it should be like purchasing an insurance or CDS contract. The EO pays the doctor Rp2 million, but if it rains the doctor pays a Rp100 million penalty to compensate damages! More likely than not, if such proper pay-schemes applied, the number of people who dare to take up the doctor's job would diminish fast, and the myth would be history in less than a month.

Again, people are free to choose what to and what not to believe. I’m not asking anyone to change their beliefs. Maybe someone out there has clever counter-arguments to all the points I’ve raised here... and that’s fine. May aim in writing this article is to make sure that if we do believe, we have a strong reason to do so.

Disclaimer: The views and writings posted in this site is provided as general information only and should not be taken as investment advice. They are solely the opinions of the author and do not represent the opinions of firms affiliated with the author.

Monday, July 16, 2007

What's in a name? Sometimes everything

What's in a name? Sometimes everything

Indonesia’s top business school should review the way it does business.

A few days ago I had a chat with an office mate. Apparently he went to the same school as I did: The Econ Dept. of the University of Indonesia (FEUI). Only he graduated more recently; i.e. in 2006, six years after I graduated.

Reminiscent of the good old days, I asked him what it was like during his time at campus. Surprisingly from what I heard, the common problems I encountered during my days unfortunately haven’t been fully sorted out.

For one thing, lecturer attendance was still not well managed, meaning at times some students still had to come to class for nothing because the lecturer was "too busy" to do what he/she was paid to do: give lectures.

Secondly, there were still instances where lecturers didn’t grade their student’s work. Imagine a whole class indiscriminately getting a C or “average” grade. This usually happens when a lecturer is, again, “too busy” to take a look at his/her student’s final exam.

Thirdly, the lecturing modality hasn’t improved substantially: lectures are still textbook-based, with little emphasis on research, information gathering and writing papers. I don’t know if it’s still the case now but a typical two-hour module during my days involved the lecturer arriving 30 minutes late, blah blah blah… then finishing 15 minutes earlier. The assignments given were limited to 3-4 questions which answers could easily be found in the textbook.

The lack of change after over seven years of my leaving Uni is, honestly, saddening. Current FEUI students may be used to living with the school’s shortcomings, as I was myself back then. I and other students at the time were very acquiescent or “legowo” with the many indiscriminate C grades that we had to accept for our hard work (or equivocally lack of work).

It wasn’t till I left Uni and took my masters degree overseas that I realized the flaws of FEUI, which supposedly is one of the best schools in the country. In the West I noticed how dedicated the lecturers were to their students. It was completely unacceptable for professors to skip lectures or give out non merit-based grades.

Furthermore the lectures given in class were very up-to-date with the recent empirical research, of which many of the professors did themselves. And in many subjects the students were urged to write papers using various references, as opposed to being given questions which answers one can all find in the textbook.

So I figured, what does this country still see in FEUI graduates? Why do many employers continue to have high hopes for FEUI alumni?

Well, the first reason is probably the school’s reputation for producing high profile graduates; many top professionals and high ranking officials are FEUI alumni. The second reason is probably, well, nothing.

During my first year at FEUI, the initiation rituals and self-boasting attitudes of the seniors made me and a lot of other freshmen actually believe that FEUI was on the top of the world, just because and many of our alumni were occupying prestigious positions in the government and private sector.

But looking back I think: what more could FEUI give to its students compared to, say Trisakti or Atmajaya (private Unis in Jakarta) give to theirs? The answer is: very little (if anything).

Many take pride in the fact that FEUI lecturers are respectable people occupying top positions. But that’s as good as it gets. What good are they to their students if they don’t bother coming for lectures or give-out proper grading? A dedicated full time lecturer in, say, Atmajaya University is probably of much more use to students compared to, say, the government minister FEUI professor whom the students can see only once a year.

The only apparent reason FEUI can still manage to stay popular is its past. Having high profile alumni makes FEUI highly regarded by the public. So the number of applications every year is enormous—making selection very tight. Accordingly, most FEUI students are bound to succeed, regardless of the actual quality of education received in the school. The lecturers may or may not attend class, but FEUI continues to produce highly desirable graduates.

How long could this system last? Probably some time. But this is no grounds for complacency, especially if we are to stay competitive with the rest of the world. Mind that it’s no coincidence that FEUI is nowhere near the list of Top 10 business schools, even in Asia!

FEUI needs to be improved in many aspects. For one thing, it must start by employing dedicated lecturers. They don’t have to be highly decorated and work as government ministers. Research institutions such as LPEM, LD, etc. have many bright academicians who conduct actual academic research which students can learn from… plus they have offices located on campus. It’s a safe bet that dedicated academicians would be of much more use to students compared to the minister or CEO who’s never around.

Once dedicated academicians are employed, they must also be urged to incorporate their research into their class syllabus. This is to enable students to challenge current paradigms and schools of thought. Over reliance on textbooks must be avoided. Making students write papers, in contrast to questions which answers could be found in the textbook, would be a good way to achieve this. (But of course the lecturers must first have time to grade their work).

Thirdly, the school must expand its information database. Most western universities subscribe to online academic journals. I didn’t even know what a journal was when I was an FEUI student, and fellow students writing dissertations had to go to the library to physically sort out data.

Of course changes would need money, and one can say it’s always easier said than done. But it’s certainly not my job to figure out how to do all this, so for now this is where I get off. I hope all FEUI alumni and stakeholders who read this article take it as “constructive criticism”… as saying goes.