# Habibie’s lasting legacy for Indonesia



## Indos

*Habibie’s lasting
legacy for Indonesia*
RETNO MARUTI SUAHASIL NAZARA
In his brief time as president, BJ Habibie enacted
economic and democratic reforms that endure to this day.







Bacharuddin Jusuf “BJ” Habibie, third president of the Republic of Indonesia, passed away on 11 September in Jakarta. After serving as vice president under Suharto, Habibie succeeded him when political and economic crisis forced the president of three decades to resign in May 1998.

Although it lasted only 17 months, Habibie’s presidency was transformational. Before entering politics, Habibie had been a prominent aviation engineer educated in Germany and the Netherlands. Serving in the research and technology ministry in the early days of Suharto’s New Order regime, Habibie was known more for his skill in aircraft building and other high-tech industries than for his political agenda.

But today he is widely credited with the democratisation of Indonesia after the Suharto era, overseeing Indonesia’s first democratic legislative elections in 1999, and broadening freedom of speech. His democratic principles also led him to allow East Timor, now known as Timor-Leste, to vote on a referendum for autonomous status within Indonesia or outright independence.

​He kick-started reforms that helped the economy recover from the 1997 Asian financial crisis and put Indonesia on the path to becoming the biggest democracy in the world. The economic reforms he established are still in effect today.

Despite much scepticism towards his economic capability, Habibie successfully led Indonesia out of the shocks of economic turmoil caused by the Asian financial crisis. Habibie understood that by 1998 Indonesia’s economic problems had become a crisis of trust, and not just the fault of neighbouring countries. He saw winning back investor confidence as the most critical issue.

Immediately after taking office as President, Habibie took steps to resolve the banking sector problem through a restructuring strategy, first by merging four state-owned banks, which then gave birth to Bank Mandiri, one of the biggest banks in Indonesia. He also established an independent central bank by separating Bank Indonesia from the government, so that Bank Indonesia would no longer be governed or pressured by the executive.

With the aim of restoring investor confidence, Habibie established the Indonesian Bank Restructuring Agency (IBRA), the State Asset Management Unit, and the Monitoring and Settlement Agency for foreign debt issue. Habibie also enacted policies to strengthen the national economy, including the _Monopolistic Practices and Unfair Competition Law_, _Consumer Protection Law_, the _Political Party Act_, and the _Regional Autonomy Law_, which collectively brought back political and economic stability, resulting in an increased influx of foreign investments and strengthening of the local currency.

A year into Habibie’s presidency, Indonesia’s economic growth had slowly improved. The country experienced 13.1% negative growth in 1998 and only a year later the economy grew positively by 0.8%, a sign that the crisis was coming to an end.




A woman votes in Indonesia’s 2009 presidential election. Habibie laid the groundwork for the country’s expansion of democracy (Photo: Department of Foreign Affairs and Trade/Flickr)

Fiscal decentralisation – and the local democratisation it enabled – was among the Habibie administration’s most noteworthy achievements, a long-overdue initiative, given Indonesia’s diverse population, geographical complexity, and uneven economic development across provinces. The two laws on political and fiscal decentralisation Habibie enacted in May 1999 – which promoted government response to local concerns, increased accountability, and strengthened governance – entirely changed the relationship between central and regional government.

Habibie’s love for technology clearly informed his approach towards economic strategy. “Habibienomics” was based on the belief that the added value of technology would support economic growth. During his time as Minister of Research and Technology, Habibie demonstrated his forward thinking in adopting research and technology for industrial purposes, and he aspired to build the quality of Indonesian human capital, envisioning the leap from an agrarian state to an industrialised country. Thus, he sent many young Indonesians overseas to study, and he initiated state-owned enterprises in advanced technology, such as aircraft, ships, communication equipment, and weaponry. It under the guidance of Habibie that Indonesia succeeded in manufacturing its own aircraft.

Years later, amid the rapid growth of globalisation, Habibie’s vision is still relevant. To survive, Indonesia needs to focus more on human capital, innovation, and productivity, as they fuel economic development. The country still lacks in innovation, especially in research and development activities, according to the Global Competitiveness Index 2018 – Indonesia spends less than 0.1% of GDP on research and development, ranking 112nd among 140 countries.

Current President Joko Widodo has set out the Indonesian Vision for his second term, promising to make the country a more productive and competitive nation by putting investment in human capital as the highest priority. Finance Minister Sri Mulyani Indrawati states that one of the focuses in the 2020 fiscal policy is to increase the competitiveness and innovation of the Indonesian people to drive a balanced mix between domestic consumption, investments, and exports.

These initiatives are part of the tremendous legacy Habibie has left behind. He laid a strong foundation for Indonesia to continue evolving into an advanced country. His thinking was way ahead his time, and made an invaluable contribution to even the current development challenges facing the country. This short piece will not be able to sum up the whole dedication of President Habibie for Indonesia. He will be dearly missed. 





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Habibie’s lasting legacy for Indonesia | Lowy Institute


In his brief time as president, BJ Habibie enacted economic and democratic reforms that endure to this day.




www.lowyinstitute.org

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## Indos

*A New Political System and the Start of Recovery*

Bacharuddin Jusuf Habibie, vice-president in Suharto's last cabinet and thus - by law - replacing Suharto as Indonesia's next president, turned to the economic technocrats to deal with the ongoing financial crisis. This resulted in a fourth agreement with the IMF. It was signed in June 1998 and allowed the budget deficit to widen further while new funds were pumped into the economy.

*Within the time-span of a couple of months there were some signs of recovery. The rupiah began to strengthen from mid-June 1998 (when it had fallen to 16,000 rupiah per dollar) to 8,000 rupiah per dollar in October 1998, inflation eased drastically, the Jakarta stock exchange started to rise and non-oil exports started to revive towards the end of the year.* The banking sector (center of the crisis) remained fragile as the number of non-performing loans were high and banks were very hesitant to loan money. Moreover, the banking sector had caused a sharp increase in government debt as this debt was primarily due to the issuance of bank restructuring bonds. But, albeit fragile, Indonesia's economy improved gradually through 1999, partly due to an improving international environment which caused a rise in export revenues.






Asian Financial Crisis - Cause & Effect | Indonesia Investments


The financial crisis in Asia in the late 1990s had a huge impact on Indonesia, evolving from a financial crisis into a social and political crisis.




www.indonesia-investments.com





*To understand the magnitude of Indonesia economic crisis during Asian Financial Crisis Period, you guys should know that Rupiah in 1996 is valued at around RP 2500 per 1 USD and then it skies rocketing into Rp 18.000 per 1 USD in 1997*


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## Indos

Habibie is leader of Islamist during Soeharto regime

*The Islamic Turn in Indonesia: A Political Explanation*
Published online by Cambridge University Press: *26 March 2010*
R. William Liddle


*Extract*
In December 1995, the Association of Indonesian Muslim Intellectuals, ICMI (Ikatan Cendekiawan Muslim se-Indonesia), held its second national congress in Jakarta (Kompas, December 4–10, 1995; Republika, December 4–10, 1995; Gatra, December 9 and 16, 1995; Forum Keadilan, January 1, 1996; Ummat, December 11, 1995). Twelve hundred delegates, representing 42,000 members from all Indonesian provinces and from many Indonesian Islamic communities abroad, participated. 

Minister of Research and Technology B. J. Habibie, generally considered President Suharto's favorite cabinet member, was chosen for a second five-year term as national chair. Sixteen ministers, nearly half the cabinet, were elected to leadership positions, and the president himself was designated ICMI's “Protector” (Pelindung).
TypeArticles





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The Islamic Turn in Indonesia: A Political Explanation | The Journal of Asian Studies | Cambridge Core


The Islamic Turn in Indonesia: A Political Explanation - Volume 55 Issue 3




www.cambridge.org


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## Indos

Habibie went to German for study actually didnt use government money, but his parents financial backing but he still want to dedicate his life in Indonesia

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*IV. ESTABLISHMENT OF INDONESIAN AIRCRAFT INDUSTRY

A. PIONEERING PERIOD*

Five main factors that lead into the establishment of IPTN are: There are some Indonesian who had dreamed since a long time to build an aircraft and establish an aircraft industry in Indonesia; some Indonesian who had mastery in science and technology to build an aircraft and aircraft industry; some Indonesian who, besides mastering science and technology needed, they are also very dedicated to utilize their skills in establishing aircraft industry; some Indonesian experts in aircraft sales and marketing for both national and international scopes; political will from the ruling government.

The harmonious integration from those factors has made IPTN as an aircraft industry with adequate facilities.

*Everything were started from Bacharuddin Jusuf Habibie, a man who was born in Pare-Pare, South Sulawesi (Celebes), on June 25, 1936. He was graduated from Aachen Technical High Learning, Aircraft Construction Department, then he worked in MBB (Masserschmitt Bolkow Blohm), an aircraft industry in Germany since 1965.

When he was about to get his doctorate degree, in 1964, he had a strong willing to return to his country to participate in Indonesia development program in the aviation industry. But KOPELAPIP management suggested him to keep seeking more experiences while waiting the possibility in establishing aircraft industry. In 1966, when Adam Malik, Indonesia’s current Minister of Foreign Affairs visited Germany, he asked Habibie to contribute his thoughts for the realization of Indonesia Development.*

*Realized that the efforts to establish an aircraft industry was impossible to be done by himself, Habibie decided to start pioneering in preparing skillful human resources at the fixed time could anytime be employed by the future aircraft industry in Indonesia. Habibie soon set up a voluntarily team. In the early of 1970s the team was sent to Germany to start working and learning science and technology in aviation field at HFB/ MBB, place where Habibie worked, to execute their initial planning.*

In the same period, a similar activity was also pioneered by Pertamina (Perusahaan Minyak Indonesia) on its capacity as an agent of Indonesia Development. With such capacity, Pertamina succeeded in establishing Krakatau Steel Industry. Ibnu Sutowo, current President Director of Pertamina at that time, contributed his thoughts that the process of transferring technology from developed countries should be carried out with a clear concept and national-oriented.

In early December 1974, Ibnu Sutowo met Habibie in Dusseldorf, Germany, where he gave an elaborate explanation to Habibie about Indonesia Development, Pertamina with the dream of establishing aircraft industry in Indonesia. The result of the meeting was the appointment of Habibie as Pertamina President Advisor, and he was asked to return to Indonesia immediately.

In early January 1974, a decisive step towards the establishment of aircraft industry had taken. The first realization was the establishment of new division that specialized in advanced technology and aviation technology matter. Two months after Dusseldorf meeting, on 26 January, 1974, Habibie was called by President Soeharto. On that meeting Habibie was appointed to be President Advisor in technology field. It was the first day for Habibie to start his official mission.

These meeting resulted the establishment of ATTP Division (Teknologi Lanjutan & Teknologi Penerbangan Pertamina) which became the milestone for the establishment of BPPT and part of IPTN.

In September 1974, ATTP signed the agreement to license collaborate with MBB (Germany) and CASA (Spain) to manufacture BO-105 helicopter and fixed wing NC212.


* B. THE FOUNDER*

When the efforts of the establishment has shown its form, there was a problem faced by Pertamina which later influenced the existence of ATTP, projects and its program, that was about aircraft industry. But, realizing that ATTP division and its projects were a way to prepare Indonesians to ‘take-off’ for Pelita VI, so the government decided to continue the establishment of aircraft industry with its all consequences.

Based on this thing, according to Government Regulation No. 12, April 5, 1976, the preparation of aircraft industry was started. Based on this regulation, all assets, facilities and potencies were accumulated covering Pertamina’s assets, ATTP Division which had prepared for establishing aircraft industry with LIPNUR assets, Indonesian Air Force, as the basic assets for aircraft industry. These basic assets hopefully can support the development of aircraft industry which is able to answer all challenges.

On April 26, 1976, based on Notarial Deed No.15, Jakarta, PT. Industri Pesawat Terbang Nurtanio was officially established with Dr. B. J. Habibie as the President Director. When the physical facility of this industry completed, in August 1976, President Soeharto inaugurated this aircraft industry.

On October 11, 1985, PT. Industri Pesawat Terbang Nurtanio was moved to PT. Industri Pesawat Terbang Nusantara or IPTN.

From this point, a new horizon of a modern and complete aircraft industry in Indonesia had just begun. In this period all infrastructure aspects, facilities, human resources, law and regulations, and those that related and support the existence of aircraft industry integrally implemented. Previously, in 1960s and 1970s this issue was never thought seriously. Moreover, this industry developed a progressive technology and industry transformative concept that apparently gave an optimal result in mastering aviation technology in a relatively short time, 20 years.

IPTN had a point of view that transferring technology should be implemented integrally and completely and covers hardware, software, and brainware where human as the core. That is human who has a capability of strong willingness, capability and perspective in science, theory and skill to implement them in a concrete work. Based on this, IPTN has applied a transferring technology philosophy that called “Begin at the end and End at the beginning”. It is a philosophy to absorb advanced technology progressively and gradually in a process that inseparable and based on Indonesia’s objective needs. Through this philosophy then thoroughly mastered, not only the material but also the capability and skills. This philosophy also can be adjusted with the development and advancement that achieved by other country.

This philosophy also teaches that in manufacturing an aircraft it does not always begin from components, but directly learned the end of a process (an already-manufactured aircraft), then reversing through phases of components manufacturing. Transferring technology phase divided into:


Phase of utilizing the existing technology/ License Program
Phase of Technology Integration
Phase of Technology Development
Phase of Basic Research
The target of first phase is mastering manufacture ability and at the same time sorting out and determine aircraft type that fulfill the domestic needs: the result of sales will be used to support the company business capability. It is recognized as the progressive manufacturing method.

The second phase is aimed to master the self-design capability. The third phase is intended to improve self-design skills. The fourth phase is aimed to master the basic knowledge in order to support the development of superior new products.








PT. Dirgantara Indonesia (Persero)







www.indonesian-aerospace.com


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## Titanium100

Indos said:


> Habibie is leader of Islamist during Soeharto regime
> 
> *The Islamic Turn in Indonesia: A Political Explanation*
> Published online by Cambridge University Press: *26 March 2010*
> R. William Liddle
> 
> 
> *Extract*
> In December 1995, the Association of Indonesian Muslim Intellectuals, ICMI (Ikatan Cendekiawan Muslim se-Indonesia), held its second national congress in Jakarta (Kompas, December 4–10, 1995; Republika, December 4–10, 1995; Gatra, December 9 and 16, 1995; Forum Keadilan, January 1, 1996; Ummat, December 11, 1995). Twelve hundred delegates, representing 42,000 members from all Indonesian provinces and from many Indonesian Islamic communities abroad, participated.
> 
> Minister of Research and Technology B. J. Habibie, generally considered President Suharto's favorite cabinet member, was chosen for a second five-year term as national chair. Sixteen ministers, nearly half the cabinet, were elected to leadership positions, and the president himself was designated ICMI's “Protector” (Pelindung).
> TypeArticles
> 
> 
> 
> 
> 
> __
> 
> 
> 
> 
> 
> The Islamic Turn in Indonesia: A Political Explanation | The Journal of Asian Studies | Cambridge Core
> 
> 
> The Islamic Turn in Indonesia: A Political Explanation - Volume 55 Issue 3
> 
> 
> 
> 
> www.cambridge.org



Indonesia badly needs prabowo subianto as next president... Just kidding with you I know you will get triggered by this... Jokowi should probably get a second or third term if it is legal in Indonesia..

But aside from Jokes Prabowo is good for the defense and his defense minister term has been successful imho


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## Indos

Titanium100 said:


> Indonesia badly needs prabowo subianto as next president... Just kidding with you I know you will get triggered by this... Jokowi should probably get a second or third term if it is legal in Indonesia..
> 
> But aside from Jokes Prabowo is good for the defense and his defense minister term has been successful imho



Jokowi is already in its second term which is its final term based on our constitution. Indonesian people also doesnt want our constitution is changed to make Jokowi get his third term Presidential Election.

Based on surveys from many survey companies, 74 percent reject the constitution changes. There is political power that wants to change constitution since 2020, but Jokowi has rejected the idea, he spoke about it directly.

This year another attempt made by a civil society to change constitution to allow Jokowi get his third term, but Jokowi spokes person has rejected as well






We need fresh leaders, younger generation.

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## Indos

Indonesia AlhamduliLLAH can stabilize the economy and paid our debt on IMF. We can see on the chart that Indonesia has seen the danger since 1996 thus increasing its IMF loan and become one of the largest debitors since 1997 until around 2005.


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## Titanium100

Indos said:


> Jokowi is already in its second term which is its final term based on our constitution. Indonesian people also doesnt want our constitution is changed to make Jokowi get his third term Presidential Election.
> 
> Based on surveys from many survey companies, 74 percent reject the constitution changes. There is political power that wants to change constitution since 2020, but Jokowi has rejected the idea, he spoke about it directly.
> 
> This year another attempt made by a civil society to change constitution to allow Jokowi get his third term, but Jokowi spokes person has rejected as well



I completely agree with you here tho.. The younger generations should take over and imo they are more globalists the younger generations hence would even further Indonesia on the international stage much more


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## Indos

*Dipo Alam Reveals Habibie and Benny Moerdani's quarrel over fighter jets*​






CNN Indonesia
Tuesday, 01 Feb 2022 14:35 WIB
Share : 

Jakarta, CNN Indonesia --Cabinet Secretary (Seskab) under President Susilo Bambang Yudhoyono ( SBY ) Dipo Alam revealed the feud between BJ Habibie and Benny Moerdani. He expresses this in his latest book, In the Whirlpool of Adab Led and Lead: A Biography of an Activist.

Dipo said the dispute between Habibie and Moerdani began in 1986. At that time, President Suharto was interested in strengthening the Air Force fleet by presenting fighter-type fighter aircraft.

"At the President's wish, Benny, who was then Minister of Defense and Military Commander, proposed the Mirage 2000, a French-made fighter aircraft, as an option for the Indonesian Air Force. Benny then conveyed the plan to purchase the Mirage 2000 to President Suharto," said Dipo in a written statement, Monday. (31/1).

After accepting the proposal, Suharto asked for consideration from the Minister of Research and Technology Habibie. The aircraft expert also provided a comprehensive study.

Habibie believes that the Mirage 2000 manufacturer is stingy in transferring knowledge about the plane. According to him, Indonesia will depend on the company for maintenance. This results in high maintenance costs.

"Because the plan to buy the Mirage was hampered, Benny then became fierce with Habibie. So far, the defense equipment business has only been in the hands of Benny and a number of his subordinates," said Dipo.

The book In the Whirlpool of Adab Led and Leading: A Biography of an Activist is Dipo Alam's latest work. The book was launched at the Bank Mega Tower, Jakarta, Monday (31/1).

The book tells of Dipo's experience while in the world of government politics. Apart from the Habibie-Moerdani feud, the book also reveals Dipo's political adventures from the New Order to the Joko Widodo administration.

(dhf/ptj)









Dipo Alam Ungkap Cekcok Habibie dan Benny Moerdani soal Jet Tempur


Dipo Alam mengungkap perseteruan antara BJ Habibie dengan Benny Moerdani terkait proyek jet tempur di era Soeharto.




www.cnnindonesia.com


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## Hakikat ve Hikmet

He was a friend of Prof Dr Nejmettin Erbakan (I think both were grad students in Germany), the father of the Muslim politics in Turkey. His followers have been ruling Turkey since 2002....

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## Indos

*Habibie legacy in ordering defense equipment*​
1. 12 F 16 A/B, Offset by making wings in Indonesian Aerospace, later the planes being refurbished and upgraded inside Indonesia that can make them launch AMRAAM C 7 and AIM 9X.






2. Previous 12 F 16 planes pave the way to get 24 F 16 C/D second hand from USA that later being refurbished and upgraded into 52 block level. 

3. 32 Hawk 200/100 that become our backbone until now for patrolling

4. Around 33 ships for Navy from ex East German fleet ( cheap acquisition ), including 14 corvettes that are still operating until Today, they get refurbished around early 2000.

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## Song Hong

Habibi was not wrong to say lots of Indonesia monies were parked in Singapore.

He was wrong to trying to get some back because it offended every single power poles in Indonesia.

He was being maligned and asked to step down. This guy is just a honest engineer.


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