Custom Content Representatives of
Voices of Leaders special feature on INDONESIA
In collaboration with FORTUNE magazine
Interview with Amir Sartono & Agus Nusantoro,
President Director and Vice President Director of Inacon
Interviewed by: Carla Pérez-Rosales,
Media & Editorial Director (Asia), Voices of Leaders
VoL: You’re one of the fathers of the company, Why did you decide to start this company?
Amir Sartono (AS): By accident maybe! Before we established INACON, I was working with an international photographic mapping company. It was around 1986/87. I suggested to Agus that we develop our consultancy business, he agreed and in November 1, 1988 we established our company. But at that time, I was still in the international company, I asked Agus to start operate the Company, and in 1990 I joined full time to manage Inacon
AS: During the first 10 years of INACON establishment (1988-1998)  there was a very big initiative from the Government bank to develop palm oil plantation. We started in that sector, because Agus and I had agricultural backgrounds, we were not engineers. We were both Soil scientists, Agus graduated from Faculty of Agriculture, Institut Pertanian Bogor (IPB) – Bogor Agriculture University and also took a Master’s degree in Planning and Public Policy from the University of Indonesia, Faculty of Economy. After that we started our business. From the private sector we went to the Government, then to international donors’ funded projects in Indonesia – such as projects funded by the World Bank, Asian Development Bank (ADB) and then, Japan International Cooperation Agency (JICA). It was mostly about poverty reduction for Indonesia, because as you may know, at the time, there was an economic downturn and there were lots of earthquakes and tsunamis.
We participated in the tsunami projects in Aceh and Nias in 2004 – 2009. That was the starting point of INACON going abroad for consultancy services. We signed a contract directly with ADB in Manila for grant project under ETESP (Earthquake and Tsunami Emergency Support Program for Aceh and Nias, then we got in touch with a partner in the Phillipines to search the global market for the ADB projects, and afterwards we got an education project in Mongolia. 
VoL: Can you tell us a little bit more about the projects?
AN: We grew in Indonesia and abroad because of the government’s difficulties. The tsunami project was the milestone of our growth. During the economic crisis of 1998, we entered big consultancy business because of the loans for social safety networks , poverty reduction and community empowerment.
Beforehand, we worked with private companies as we were agricultural scientists, and we offered the consultancy service to the big companies in Indonesia (like Sinarmas, Salim and Astra groups of companies) to help them selecting the areas for their palm oil and rubber plantations. That was our area of expertise, both of us.
After the crisis in 1998 everything changed. Investment slowed down, some private companies stopped their operations, investment from other countries stopped and as a result, some big companies in Indonesia closed down their operations. But this crisis gave us a chance to grow-up. The crisis and natural disasters were like blessings in disguise because they made us stronger. During that time, we realised that we should contribute to our country and advise how to work during economic crisis.
We grew quite quickly because of many loans and lots of aid from other countries.
After the crisis, around 2001 we got quite substantial projects with the government focused in poverty reduction and community empowerment. It was the first time we worked with the government for international donors’ projects, before, we only worked for private companies and government budget funded projects under the Ministry of Transmigration.
With the economic crisis we worked with the government because they needed our contribution, I think all the consultancy companies were involved in that kind of work – how to help people rise after the crisis.
VoL: What was the social impact of that project?
AN: It was very big. The community empowerment programme was the first, famous Kecamatan Development Programme. The essence of this programme was how to empower people to identify their own problems and their own potential. And then we made it easier for them to come out on the other side of the crisis. We helped facilitate them how to work together in community groups, how to make a living. We did not give the kind of training you get in class, but training in the field–participatory training. There were some different approaches to the community empowerment such as participatory rural appraisal, community based planning mechanism, community based monitoring and evaluation, community based saving and loan organisation. Through these programmes people can do their planning via community groups. So the villages then had their planning, and the central government would organise how to give funding for their programmes. So the result was very positive. We call it in overall as bottom-up planning or approach.
VoL: This gave you the trust of the government to carry on with other projects?
AN: Yes, that was a milestone. Nowadays we are still dealing with that kind of project – community empowerment. In Myanmar we are doing the very similar as we did in Indonesia but in different name or tittle. In Myanmar the program is called as National Community Driven Development (NCDD) funded by the World Bank. We are involved because of our experience in Indonesia. The NCDD is very famous in Myanmar and very similar to what we did in Indonesia before.
Before Myanmar, we did also a similar thing in Vietnam. The project is called Northern Mountain Poverty Reduction Project. That is for the Northern area of Vietnam near China. Most of them are living in poverty and need to be empowered and taught how to work together, how to plan, how to implement their livelihood, and grow their agriculture. It’s a very specific approach to empowerment. World Bank has a package containing the approach and methodologies of how to empower the people and make them self-reliant, although varies from contry to country due to local conditions.
VoL: Moving on from Indonesia to Myanmar and Vietnam, what markets are you looking to foster collaborations in the future?
AN: We have been growing in other sectors aside from community empowerment. Like in Laos, we are working in the infrastructure sector for the GMS East-West Economic Corridor Towns Development Project. In Laos we are the Construction Supervision Consultants for road, solid waste, and sanitation construction and also the Mekong River embankment as additional sub-project. We were selected as the winner in a very tough international bidding competition evaluated by Asian Development Bank (ADB). Our competitors in the bidding for the project were from Laos, Korea, US, Spain, and Sri Lanka, So it was very competitive. Luckily ADB said our proposal was the best and we won.
VoL: Why do you think countries, governments and private companies choose you over your competitors? What is your competitive-edge over them?
AN: The result of the ADB evaluation showed we were number one in the technical area. This shows our competitiveness is not only in price, but also technical areas, so we can compete amongst global competition.
VoL: We see you’ve been diversifying your different consultancy services from agriculture to construction to poverty reduction. What is your focus?
AN: In education as well we have some projects in Indonesia. And I think not many companies are doing that. We realise we should be focused, but the market led us to open to all sectors.
VoL: What are the sectors right now that are in most need of consultancy? And in your experience, what are the sectors that have the most potential?
AN: I would say they are still in infrastructure. There are huge potential projects to develop infrastructure from many cities in Indonesia and other developing countries. In addition, all countries are nowadays concerned on the climate change and environment. So I think all sectors associated with climate change and environment are our concern and focus as well in the future.
VoL: Is it local companies or companies from abroad who develop those infrastructures?
AN: We are not involved much in the technical part, we are more into project management, project implementation support, and construction supervision. We work with other companies when we are facing the many technical aspects like engineering design, equipment, how to measure bridge deflection for example. We don’t have that expertise, but we work together with others.
We are not engineering or IT people, but what we try to do is have all our experts and lines of work in one site. We call it INACONNECTION or we name it in short as “Icon”. Everything is there in our online system – ICon. For procurement, we have everyone connected there, including all our experts. There are currently around 1000 international experts in our system and around 3000 local experts. We just started.
In Europe, IBF International Consulting for example, have a sister company which offers services on how to recruit experts and provide experts, provide information on bidding and organisation. We also have a database which we’re trying to improve. This will make us different from other companies. How to connect to countries and people all over the world is very important to us.
VoL: You have international, national, the experts, private, public connections. How do you approach and gather all these connections?
AN: Slowly. Step by step. We’ve been doing those for 32 years. So we are trying to gather 32 years of experience in our database and not let it get messy. Our target is around expand the database to 50,000 experts from all over the world.
VoL: Taking into account that Indonesia is not very well-known globally, how do you approach connections from all around the world?
AN: That’s actually a very tough process. I went to some countries to introduce INACON face to face, personally!
I remember how I convinced one partner in Vietnam. I said we had the type of programmes no-one else in the world had. No country in the world had our kind of community empowerment programme. Then the second was the tsunami project and the third was the infrastructure (because Indonesia was building all kinds of infrastructure).
So I could convince partners saying – “I am ready to share with you our experience in Indonesia, which I am sure you do not have”.
….All of them actually did not believe me. But I got one partner in Vietnam who told me “Agus, I know you are very honest and passionate, if you really want to come here and work together using your experience in your country, ok, why not? Let’s be friends”. We shook hands and then we worked together. That was at the start.
In Mongolia, we also got the deal because of the community empowerment project which contained the education component that was similar to what Mongolia needed. The process of approaching was around the same time as with Vietnam.
We only liked having local partners at first. But after that, decided we should compete to win in international competitive market. International competitive bidding isn’t easy.
However, after the first two projects, everything felt really easy. When we submit the expression of interest to the bank or to the project funded by international donors, it is easy now. Even in Africa.
VoL: It is unique, that you actually went and approached in person. That is unheard of.
AS: It’s because he is a musician.
AN: It’s in my nature. I’m not professional but I can sing and compose. I can make friends through music.
VoL: What are your insights on sustainability in Indonesia? What have been the government and private sector initiatives directed at achieving UN Sustainable Development Goals in Indonesia?
AN: Because of the continuous effort of the government poverty has been reduced. Poverty has been reduced but still exists. The Government and NGO’s have successfully implemented community empowerment programmes. People are being empowered to make their own plans and business, market their products.
Community empowerment is about education. Inside this programme is education, training and capacity building. Now, people are already smart. So the participatory approach sometimes results in false participation. So there is no need to continue with exactly the same approach of community empowerment. Sometimes, if we have a community group discussion, they only want to come if there is money paid by the government because they need money, but they do nothing. [an4]
VoL: What does Indonesia have to offer to be competitive in the global market?
AS: We have a lot of natural resources, like in marine resources we have shrimp/lobster, tuna for example. And the Government for example in Bitung North Sulawesi developes Special Economic Zone to provide fish processing and seaport for export facilities. In agriculture as well, we have 12 milion hectares of palm oil plantations, we are the biggest producer of the commodity in the world, and now government of Indonesia needs for replanting 2.49 million hectares of palm oil that has been already more than 25 years old. For the oil palm replanting needs more than USD 18 billion, is a good investment opportunity for the investor to participate in this program.. Also minerals resources like coal, nickel, gold, copper – mining is still an opportunity to invest in Indonesia. We also have the geothermal potential to develop electricity. We also has huge potential areas for tourism development. Indonesia has more than 17.000 islands, beautiful beaches, flora, fauna, diving sports, wildlife and culture. All of this are very attractive to invest in this sector. INACON has being appointed by ITDC (Indonesia Tourism Development Corporation) as a Project Management Consultant to manage Mandalika Urban Tourism Infrastructure Project (MUTIP) in Lombok Island. Lombok is one of 12 tourism destinations priority under the Indonesia Tourism Development Program.
AN: Indonesia has everything. I can assure you. Indonesia has everything from A-Z in nature. We have different islands, different types of geology, soil, forests. And we also have very unique people, unique culture, unique nature, everything is there. Even inside the Earth of Indonesia (for mining as Amir mentioned). This means everything – gas, geothermal, coal mining.
In other side, investment benefit to country is still debatable under political point of view. Some political parties and Indonesian people want Indonesia be totally self-reliant. Let’s say 50%, whilst the others think – of course we need partners and investors from other countries, we need them and they need us, like every country. But not everyone’s mindset is like that.
Democracy is a good thing in Indonesia. You know after the Suharto era, we are very different? People are free to talk. The truth is that because of democracy, we are more open to other people, like investors from other countries. We are more open to investors in terms of economic activities directly coming to Indonesia – it brings money, brings people, brings equipment. And the money from international donors we can invest on our own. I think now everybody agrees with globalization, we cannot close our country.
VoL: As a last question for both of you, what is the legacy you want to leave behind?
AS: As Agus said, we want our company to still operate in 50 years, because the capability of the founding fathers of consultancy companies is decreasing. To do this we’re developing the 4.0 system. From the system we can manage all the business process – searching for the business, partners, projects.
VoL: It is quite hard to find human capital in Indonesia. Has it been difficult to find local experts and capable people?
AN: We had some difficulty but not much because we have the same culture. Maybe other people have difficulties but we don’t. It’s also easy in other countries, through the internet, google, e-mail.
We are very competitive. Like for a project in South-East Asia. Of course, we are more competitive than a company from Europe or the U.S. For example, cost of flight tickets and overhead costs of course ours are lower than companies in Europe and US. May be afterwards when Indonesia grows as a developed country, a modern country, we will have the same competitiveness everywhere. The world is the same everywhere.