Event Transcript Stavros Niarchos Foundation Lecture Driving Sustainable Economic Growth: Trade and Innovation in the Asian Emerging Markets Mari Elka Pangestu, Minister of Tourism and Creative Economy of Indonesia Peterson Institute for International Economics, Washington, DC April 29, 2014 Unedited transcript Adam Posen: Ladies and gentlemen, ladies and gentlemen, distinguished guests, ambassadors, honorable men and women, ministers, professors, scholars, aficionados of the race track, refugees from television, anyone else who doesn’t fit the above descriptions. It’s my distinct honor to request you come forward and listen to the wisdom about to be imparted. I want to make sure everyone is seated before you speak, Pete. Sorry. If we can ask people to please take their seats, there is no reserved seating except at the front two tables. Just grab your table and your table mates and we’ll be delighted to have you. I get to do the boring part which is introduce the introducer who’s a very exciting person. This is the 14th Annual Stavros Niarchos Foundation Lecture and dinner and signature event for us here at the Peterson Institute for International Economics. And this always takes place alongside our board meeting and we’re very grateful to have a number of our distinguished members of the board of directors here with us tonight. None of course is more important to us or more distinguished than the chairman of our board, the co- founder of this institute that bears his name, the Honorable Peter G. Peterson. And it’s my pleasure to turn you over to Petros Petropoulos. Peter G. Peterson: He sounded like he was kidding but actually Petros Petropuolos is correct. That’s the son of Peter, Peter son of Peter. So, that’s for real. It’s my pleasure to spend just a minute introducing a much admired and valuable executive committee and board member of this institution. As I think about Andreas, it’s kind of redundant because all of our directors are much admired and credible but you have made a great contribution to this board. And it seemed to all of us that you were the ideal person to introduce the speaker. You are after all Andreas Dracopoulos, Director and Co-president of the Stavros Niarchos Foundation. So, as a benefactor of this lecture, it seemed to me that you are the obvious person to introduce this year’s leading … this year’s acceptor of the award. So, Andreas, please accept our thanks and their warm welcome to you, sir. Andreas Dracopoulos: Distinguished guests, ladies and gentleman, welcome to the 14th Annual Stavros Niarchos Foundation Lecture at the Peterson Institute. On behalf of all of my colleagues at the Niarchos Foundation, I would like to thank you for joining us. Before I go on to speak to you about this evening’s speaker, I would like to take a minute to say thank you to Pete Peterson, a fellow Greek-American and founding chairman of this institute that carries his name. 1 Pete has led by example in all his different capacities throughout his esteemed career and we’re all very lucky and honored to work together in helping the Peterson Institute continue to offer a valuable insight about today’s global complex economic issues that confront us all as members of a global economy. All of us are also well aware of Pete’s extraordinary contribution to highlight, appreciate, and hopefully to find a permanent solution to today’s troublesome debt problems that the US economy is facing. We’re all honored to know him and to work with him. In last October’s Stavros Niarchos Foundation Lecture held in the institute, the prime minister of Greece, Mr. Antonis Samaras, spoke about the severe socioeconomic crisis in Greece and of the first glimpses of hope that the country had slowly entered the long and painful road to recovery. He identified, among other areas, tourism and culture as two of the most critical factors in the country’s efforts towards recovery and growth. Recently, we held an international conference in New York on youth unemployment in collaboration with the Peterson Institute. The conference was part of the foundation’s recent additional euro 100 million initiative to assist against youth unemployment in Greece. Tourism, culture and entrepreneurship were identified as the main areas with the potential to instigate growth and development and specific programs in these areas were introduced. The Stavros Niarchos Foundation is an international foundation. Since 1996, we have committed around 1.4 billion to 110 countries worldwide through 2,676 grants. But we also have strong ties to Greece, our founder’s motherland, where we have focused our efforts over the last five years as a result of the deep socioeconomic crisis. Today’s lecture carries other significance as Dr. Mari Elka Pangestu is the Minister of Tourism and Creative Economy of Indonesia, a term that represents an innovative way to deal with culture and tourism as important assets and also provides Greece with a great example of new 21st century ways to utilize creatively and effectively the country’s rich culture in history that goes back thousands of years. The selection of tonight’s speaker acknowledges in many ways the increasingly global and ever-changing nature of the world we live in and the emergence into the global stage of new rising regional powers in Southeast Asia such as the Republic of Indonesia. Dr. Pangestu’s approach in Indonesia signifies a unique understanding of the great potential of ideas, culture and creative assets to instigate growth and prosperity. This is a model of development that can become predominant in the 21st century and has the potential to create high-end jobs and attract the high end of the market. For countries with a long history and rich culture which lack the ability to utilize industrial activity and manufacturing in order to stimulate growth, creative assets, ideas and culture can be an alternative but equally important road to growth. Greece and many other countries in the world can learn a lot from Indonesia’s approach. So, let us turn to tonight’s speaker. It is my great pleasure to introduce Dr. Mari Elka Pangestu, the Minister of Tourism and Creative Economy for the Republic of Indonesia who’s going to talk about Driving Sustainable Economic Growth: Trade and Innovation in 2 the Emerging Markets. She was appointed to the newly created position in October 2011. From 2004 to 2011, Dr. Pangestu was the Minister of Trade for Indonesia. In that capacity, she played an active role in the World Trade Organization representing her country as well as groups of developing countries such as the G33. Prior to becoming Minister of Trade in October 2004, Dr. Pangestu was a member of the Governing Board of the Center for Strategic International Studies in Jakarta, the leading economic think tank in Jakarta where she provided outstanding leadership as Indonesia begun to liberalize its policies in the 1990s. From 2002 to 2004, she was the co-coordinator of the taskforce on poverty and development for the United Nation’s Millennium Project established by the UN Secretary General. Dr. Pangestu is regarded as one of the foremost economic experts in Indonesia and has had vast experience over 25 years in academia, second track processes, international organizations and government working in areas related to international trade and investment in multilateral, regional and domestic settings. Dr. Pangestu inspired the study co-authored by Gary Hufbauer and Sjamsu Rahardja towards the US-Indonesia Free Trade Agreement published by the Peterson Institute in June 2007. Her service and expertise were recognized last year when she was nominated to be a candidate to head the World Trade Organization. Please join me in welcoming Dr. Pangestu. Mari Elka Pangestu: Thank you, Adam. Dr. Adam Posen, President of Peterson Institute for International Economics, Mr. Peter Peterson, Founding Chairman of Peterson Institute for International Economics, Mr. Andreas Dracopoulos, Director and Co-president of the Stavros Niarchos Foundation, excellencies, distinguished guests, ladies and gentleman, and friends. It is indeed a great honor and pleasure for me to be able to be here with you tonight to do deliver the 14th Niarchos Foundation Lecture of 2014. I feel a little bit daunted because of all the eminent speakers that have spoken before me. I hope that I can be able to deliver a lecture tonight that will be giving you new insights about Indonesia and about emerging economies in East Asia. I had a long thought about what I would talk about tonight and I was a little bit confused about what I should talk about, whether I should stick to my trade issues which is where I have had such a long relationship with the Peterson Institute or should I talk about my new portfolio. In the end, I decided to talk more about trade issues but to focus it on how we are progressing towards sustainable growth in emerging economies such as Indonesia and how in today’s situation for sustainable growth, we will need to do structural reforms to be able to go to the next stage of more innovative-based and creativity-based growth. And I thought that I would focus on Indonesia as an example because I believe these series of lecture has been created to allow persons to be able to share their insights rather than talk in a very … this very august audience knows much more about the academics of all these topics than I would, but I can share with you the insights of my experience in government for the last 10 years in terms of how can we continue to have sustainable growth, implement structural reforms in the political economy context of our own country as well as the regional and global setting that we are in.