Leading green light
Duggan Flanakin on an Indonesian entrepreneur who is championing his country’s energy transition, and investing in businesses that generate positive social and ecological change
Pandu Patria Sjahrir is one of Indonesia’s leading entrepreneurs. He serves as general chairman of the Indonesian Coal Mining Association. Yet the Boston-born entrepreneur is also leading the effort to increase his nation’s move towards green energy transition, as well as to develop its economic infrastructure.
As managing partner at Indies Capital and founding partner of a leading venture capital firm that focuses heavily on early-stage tech startups, Sjahrir has helped raise over $1bn to support over 100 of them. These companies have gone on to generate more than US$60bn in shareholder value, create 100,000 new jobs, and usher in more than 200 new entrepreneurs in Southeast Asia.
Shortly after Indonesia hosted the 2022 G20 summit in Bali, where US President Joe Biden and Chinese President Xi Jinping met for several hours, Sjahrir visited France. His mission was to recruit companies and capital investment, primarily for the deep tech and agritech sectors so important to Indonesia’s future growth.
France and Indonesia have long been trading partners, primarily in the defence industry, and the French company Veolia created half of Jakarta’s water system. Sjahrir hopes the two nations can collaborate on future tech projects and more. Other potential areas of French-Indonesian co-operation include green hydrogen and nuclear energy, for which France is a world leader. A third is developing carbon credit markets.
Since the nadir of the 2008 recession, Indonesia has become one of the world’s 20 richest nations, with its GDP over-doubling to $4,200 per capita today and rising fast. This growth, which McKinsey projects will soon elevate Indonesia into the G7 nation-state community, makes Indonesia a significant market for any nation or business that wants to tap into what Sjahrir calls ‘a fast-growing market with a stable political base’, and notably, one that adheres closely to rule of law.
Sjahrir noted that the three major themes at the G20 summit were healthcare reform, technology, and energy transition, all of which are important to the fast-growing nation of 280 million people. He is bullish on his nation’s youth, who have created numerous startups that seek to raise social awareness and foster community development. But these startups need capital to grow.
In Indonesia today, 70 per cent of domestic consumption stems from micro-, small-, and medium-sized enterprises (MSMEs). These enterprises, which also create many jobs, struggle to access capital, training, and product marketing. Sjahrir, who learned entrepreneurship at the University of Chicago, and later at Stanford, is, after achieving high success, now focused on creating businesses that are both profit-oriented and socially impactful.
He has often said that the coming decade will be the golden age of his nation’s digital economy, and is fascinated by the interest and enthusiasm in the digital economy – and in innovation as a whole — shown by his nation’s young people. But he is equally passionate about his own role in fostering the modern-day energy transition in Indonesia and then, worldwide.
The Indonesian government has a stated goal that one-quarter to one-third of the nation’s motorcycles and motor vehicles will be ‘EV’s’ by 2030. This is no small feat – Indonesia is one of the top two motorcycle markets in the world, with annual sales of about 10 million two-wheelers.
To that end, Toba in 2022 entered into a billion-dollar partnership with Gojek, Indonesia’s largest technology company, to replace all of its motorcycle fleet with electric two-wheelers. The joint venture, Electrum, for which Sjahrir became a director, is on a mission to build and serve Indonesia’s electric vehicle ecosystem.
Looking forward, Sjahrir says that at the upcoming ASEAN Summit, which again Indonesia will host, the three G20 topics will again be the primary focus – technology, healthcare transformation, and energy transition.
The latter, which was a main topic discussed at the recent World Economic Forum (WEF) in Davos, will continue to be a major global issue in 2023.
Sjahrir ultimately reflects that he sees himself as a generational partner to startups that are driving positive social change and improving the economies of Indonesia and the ASEAN nations at large. He is ebullient in the wake of the G20, the WEF, and his visit to France, a nation which he believes ‘is very excited’ about Indonesia’s potential, particularly as it relates to the energy transition and sustainability arenas.
The cancellation of the tournament is a big setback for the president. The games would have been a boon for local tourism and industry and would have helped the country’s stagnating economy to recover from the adverse impact of the pandemic. Tourism Minister Sandiaga Uno has claimed that industry stands to lose business to the tune of US$247 million.
A study conducted by the Institute for Economic and Social Research at Universitas Indonesia (LPEM UI) estimates that more than 44,000 jobs would have been created and that small and medium businesses, such as merchandise, food and beverage vendors, could have earned 1 billion rupiah ($67,000) a day during the 22 days of the tournament.
Moreover, the championships would have helped the country to overcome the bad publicity it received following the death of 135 people in a stampede, caused by the police’s inept handling of an unruly crowd at a football stadium in East Java.
FIFA’s kneejerk reaction to strip Indonesia’s right to host the tournament is questionable too. It vaguely cited ‘current circumstances’ in the country as a reason for the sudden decision even though President Joko Widodo had vehemently denounced the politicization of sport and gave an assurance that all measures would be taken to ensure the safety of players and officials. As if the cancellation were not enough, FIFA has also gone ahead and frozen funding to Indonesia’s national soccer association.
The fallout from FIFA’s actions could snowball further with Indonesia being banned from hosting future international FIFA tournaments. PDI (P) General Secretary, Hasto Kristiyanto, has accused FIFA of applying a ‘double standard’ by allowing Israel, despite its gross human rights violations, to compete in its tournaments while banning Russia from playing at the 2022 World Cup following its invasion of Ukraine.
Ultimately, the majority of Indonesians were not concerned whether Israel took part or not, and were simply looking forward to the championship kicking off. Will these same people teach the self-serving politicians, responsible for Indonesia’s biggest soccer fiasco, a lesson by handing them a massive defeat in the 2024 elections?
Duggan Flanakin is Director of Policy Research with the Committee For A Constructive Tomorrow who writes about a multitude of issues, innovations, and ideas