Luhut Rejects Tesla’s Dictation: Indonesia Is Not a Banana Republic

KOMPAS.com – Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan ultimatum Tesla to fulfill his requirements if he intends to invest in Indonesia.

Quoted from Between, Friday (25/3/2022), at the Closing Ceremony Business Matching Domestic Product Shopping 2022, Luhut said that the US electric car manufacturer had just expressed interest in re-entering Indonesia after previously canceling.

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Luhut also firmly reminded that two years ago the company owned by Elon Musk had expressed interest in developing lithium batteries in Indonesia. However, the plan was canceled because the company was considered to be dictating too much.

“I said, ‘Hey You two years ago already called me wanting to make a lithium battery’. You… all want to dictate, I said, ‘Hey you cannot do this. Today is different. We have to be the same’,” said Luhut, trying to imitate his ultimatum to Tesla via telephone.

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“I said, ‘You can’t do that anymore. This country is not banana republic! This country is a great country!” continued Luhut in the story.

Banana republic or banana republic is a nickname for several Latin American countries in the past whose economies were poor due to unstable economic and political conditions because they were often hit by power struggles.

Because of this chaotic economy, many Latin American countries rely solely on banana exports to the United States. In addition, many large US corporations follow local rulers for economic gain.

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Already partnering with Chinese investors

Indonesia, said Luhut, is not a banana republic that US companies want to dictate. In fact, Indonesia already has business agreements with electric vehicle battery companies from China and South Korea, namely CATL and LG.

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Both are claimed to hold nearly 55 percent of the world’s lithium battery market. The cooperation with the two companies is believed to make Indonesia a global player for lithium batteries. Moreover, in 2024, Indonesia is targeted to start producing lithium batteries.

Luhut reminded that if Tesla wanted to enter, the company had to comply with the conditions given by the Indonesian government. This, Luhut continued, also applies to other investors, including China.

A number of conditions have been requested by the Indonesian government for foreign investors, including technology transfer, environmentally friendly technology, the obligation to educate local workers, and provide added value.

“I don’t want a deal, don’t you (Tesla) make conditions for us. I make conditions for you because that’s what I did for China,” said Luhut.

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“China has never given me conditions, I (who) gave conditions. Do you want it or not if we have to?” B to B? Must transfer technology, must first class technology, must be environmentally friendly. He said he could, (so), okay deal“he said.

Reprimanded by the US Ambassador

On the same occasion, Luhut also admitted that he had been reprimanded by the United States Government. This is because the Indonesian government has removed US products from the government e-catalog.

This is considered detrimental to the exports of Uncle Sam’s country. Luhut then replied that it was done because of the example of the US.

“Indeed I was criticized by the American government, the ambassador (USA) came to me with his team saying, ‘Why Mister Luhut, many of our products have been removed from the e-catalog?’ Compass TV.

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He said that many developed countries would actually not want to help developing countries become equal to them. That’s why, don’t ever expect other countries to help make Indonesia’s economy grow.

“So what I want to say to all of us, if this nation wants to be a developed nation, never dream of a developed nation pushing a developing country like us to become a developed country. Never dream. We must make our country advanced,” said Luhut .

According to the former Indonesian Ambassador to Singapore, the thing that can accelerate economic growth is to reduce imports and use as many local products as possible through e-catalogs.

“We are trying to fix it here and there, left and right kung fu is not going right. I reported it to the President, there must be reform about e-catalogs, “said Luhut.

“Because there are Rp 1,170 trillion (APBN funds) and every year that figure goes up. This is the problem. In fact, if we spend it domestically, it will create a tremendous impact,” he continued.

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