Mari Pangestu, Former Indonesia Trade Minister, on Asia-Pacific Integration for All

You want to be able to continue on the openness agenda but to make sure that you deal with inequity issues then you have to make sure that the inclusiveness is there to balance the openness. In a way, it’s always been there in the three pillars of APEC.

Policy experts from the Pacific Economic Cooperation Council recently assembled in Singapore to examine collaboration underway between the 21 APEC members to build more “inclusive economies” and offer guidance for the road ahead. Helping to lead the discussion was a familiar face from Jakarta. Dr Mari Pangestu, Indonesia’s Trade Minister from 2004-2011 and Tourism and Creative Economy Minister from 2011-2014, has returned to academia while continuing to play an active role in PECC—an official observer of APEC.

In an interview, Dr Pangestu described her views on boosting regional economic integration and ensuring the benefits are widely felt among the three billion people of the Pacific Rim. She further explained its importance for strengthening women’s economic empowerment, drawing on her personal experiences. The remarks help to set the tone for the APEC Policy Partnership on Women and the Economy Meeting on 3-5 May in Port Moresby, Papua New Guinea and the 2015 APEC Ministers’ Responsible for Trade Meeting on 23-24 May in Boracay, the Philippines.

Click here to watch video interview highlights

Read the interview transcript below:

APEC: You helped lead collaboration in APEC to promote sustainable growth with equity – a priority during Indonesia’s year as chair in 2013 – and set the stage for work now to build more “inclusive economies.” Enhancing trade and investment while ensuring the benefits are widely felt is central to APEC’s agenda. What are your thoughts on this approach and what’s driving it?

Pangestu: I think it’s a very timely approach. The issue of the day is kind of a flashback against openness because of the increased inequity that’s happened. You want to be able to continue on the openness agenda but to make sure that you deal with inequity issues then you have to make sure that the inclusiveness is there to balance the openness. In a way, it’s always been there in the three pillars of APEC.

We don’t always just talk about liberalization—we also talk about facilitation as well as capacity building and economic and technical cooperation. But I think now the focus should be on the number two and number three pillars with very much in mind an inclusiveness agenda. But a real one. A lot of times you just pay lip service to small and medium enterprises or to gender or whatever. It’s just lip service. Okay, you just add it as an addendum. Now, how do you make it mainstream?

APEC: Regional economic integration and connectivity are a key focus for APEC. What is your take on the region’s progress in these areas?

Pangestu: We’ve on record achieved a lot in terms of opening up and openness despite not having a Free Trade Agreement. What APEC set out to do, which was confidence building for unilateral actions, for reforms and opening up, has actually worked to the extent that you can see the increased trade and investment, and people-to-people movement within APEC. And, obviously, APEC is one of the fastest, or if not the fastest growing region in the world.

So now, how to go to the next agenda which is making sure growth is shared more equitably between economies as well as within economies.

APEC: How can greater regional integration and connectivity promote more inclusive growth?

Pangestu: The way we always thought about liberalization and then the facilitation and the capacity building, and the inclusiveness agenda is very much that connectivity will bring isolated regions or groups that cannot participate in trade and investment, to be able to be part of it. And it is even the way we designed our national logistics blueprint in Indonesia—the objective of making sure that the regions are more connected with each other. Domestic integration while you’re talking about international integration is very important, not just for efficiency or competitiveness reasons but for inclusiveness reasons too. So that the price of rice in Papua is not three times the price of rice in Java, for instance.

Besides physical infrastructure, I believe that information and communications technology infrastructure is very important and it can really lead to a lot of inclusiveness by allowing SMEs, and people who are working from home, micro enterprises, to actually go global. We have a lot of examples now. How microenterprises or entrepreneurs working from home can get information and then sell online or sell products and services online. I think that’s one of the important priority areas.

APEC: Tell us about the work going on in APEC to promote inclusive growth and women participation in economies, in particular, bearing in mind the active role you have played in advancing this issue.

Pangestu: On inclusive growth, I would say on including SMEs in the picture, three to four years ago they started having the SME Ministers be more integrated with the mainstream APEC process. We started out the conversation with like, “Okay, we’ve got to solve all these problems of the SMEs” and then just understanding that what you want to solve is a cross-border issue for SMEs. Interestingly when they did the survey on this, it indicated that the problems faced by an SME in America are the same as the problems of an SME in any of the other Asian economies—access to information, not understanding the rules.

There has been some progress now and in the Philippine year as APEC chair I’m quite excited that they’ve actually focused very much on concrete programs that will help SMEs—like what was mentioned at the Pacific Economic Cooperation Council conference in Singapore, about if you’re exporting or importing less than a certain amount you don’t need to comply to the rules of origin, reducing the hassle for SMEs when they are trading and identifying who can be in the green lane even if you’re an SME. Things like that I think are very concrete.

On the gender and women empowerment issue, starting in 2011, there have been a lot of ideas out there: how to have women-owned businesses and how to have women SMEs be more participatory in APEC. There have been a few exciting initiatives where some of the big multinationals have actually come up with targets to say, “Okay, right now ten per cent of my procurement is from women-owned businesses. But in five years, it’s going to be 25 per cent.” And then they’ve coordinated with women empowerment groups in each APEC economy to make this happen.

So I think it’s concrete. That’s why I say targets and having something being monitored is very important. Once that happens and you see the positive results, then more companies hopefully will also do this.

APEC: What more needs to be done to achieve more inclusive, equitable growth that breaks the gender-based glass ceiling?

Pangestu: For the gender issue, we have found that the APEC Women and the Economy Summit in 2011 was quite a breakthrough. We have to thank Secretary Clinton at the time for that because after that in each part of the region we started doing similar studies to understand the obstacles faced by women—this kind of funnel effect where you have 50 per cent of the women enter the workforce in any corporation or sector and then when you go to the end of the career, at the top level of the management, there’s only five per cent left, or eight per cent left depending on the economy.

And then you try to understand the issues and the obstacles that are impeding that process and it includes not having the same performance requirements for men and women, or not having childcare facilities or support, etc., etc. I think, at least in Indonesia, because we have used that framework very effectively, a number of companies have already changed their policies.

It’s important to continue that and then there’s the slice with the women-owned businesses which will include procurement and getting linked to their market. And then what we haven’t talked about is the financing part of it: how to get micro-financing and financing to be more gender-focused. A number of banks actually now have programs which are just giving loans to women and recording that they have lower bad debt, etc., etc.

So it has to be a package. You can’t just address the finance issue, you can’t just address the market issue. You’ve got to address it as the financing issue, the market issue and then the capacity of the woman herself—how to build up the capacity and empower them through that process.

APEC: Please talk a bit about your journey – from your university studies in Australia and the United States to your experience in government and as a parent - and how you broke through the glass ceiling?

Pangestu: I didn’t really have any plan but basically I think we did it based on merit and performance. I always work on the basis of doing the best that I can. But then, when you are in a culturally different situation…in some cultures it’s acceptable for you to be equally good as a man.

In Asia, when I first came back, obviously culturally it was different. So you learn to adapt without sacrificing what you think should be your performance or whatever. But you do have to adapt to the situation that you are in. I think it’s always important to dare to do what you want to do and just be very clear about what you want to do.

I think in Asia or developing economies, compared to developed economies – it actually shows up in studies – we are relatively lucky because we have a lot of support systems. We have our families, extended families, as support to help us take care of our families so that we are able to work long hours or travel a lot. I think that helps. 

APEC: What advice do you have for aspiring women leaders?

Pangestu: Some people always think that, “okay, to be successful, I have to be successful in everything – I have to be successful in my career, I have to have a successful family, I have to have good children.” I think you have to just understand the reality that you can’t have it all. I don’t believe you can have it all. There will always ultimately be sacrifices. It’s just a question of how you can balance it well and something will give. But at the end of the day, you should not feel guilty about it because you’ve done your best. I think that’s important and I think we are helped and blessed that we can rely on quite a good support system.

As a women leader you have to be sensitive—whether it’s a cultural issue or a regulatory issue. And just be sensitive to it and be able to adapt to it but not give up. You should never give up. You should always continue to fight and try to impress upon people the importance of certain things. And being women, sometimes you are more sensitive to certain issues.

For example, when I was given the task as a Trade Minister to revitalize traditional markets and we were going to rebuild some of the markets—90 per cent of the traders are women, 90 per cent of the people who shop are women. Then you look at the way the buildings or the market is constructed – the toilets, the absence of childcare and so on – it was just not supportive of the women who were working there. And then we changed it so that the toilets would reflect that 90 per cent of the users are women, and that you need childcare facilities onsite. It’s not free, they will pay for it. But you need to pay attention to these things. To me, that’s part of the satisfaction of being a leader who happens to be a woman.