An Adventure Capitalist’s Notes on Indonesia (Part II)

The BlackBerry

Indonesia’s middle class youth prefers the Blackberry as their mobile device, and I’ve never seen its penetration beat out the iPhone more than here.  Every email we get from newly introduced friends seem to include something like “Sent from my BlackBerry® smartphone from Sinyal Bagus XL, Nyambung Teruuusss…!” in the footer.  Of course Facebook integration is extremely important (one might say the killer app.) for these users, but Facebook on the iPhone is even more robust.



I confess, I am a Blackberry user myself on AsiaWheeling.  The physical keypad makes typing quick and deliberate, and the speed of the OS means no waiting around for bells and whistles.  But why does the Blackberry succeed when the iPhone has better haptic interaction, visual sensuality, and application extensibility?  The Blackberry, first used by executives and bankers on Wall Street and in London, broadcast to onlookers that “I’m important, I’m connected to money, and people need to reach me to get their jobs done.”

Extending to fashonistas, tastemakers, and socialites, these Blackberries became a symbol of the snobbish cool yearned for by age groups as young as tweens and as old as the newly married.  This, and the walled garden of Blackberry messenger, which allows only Blackberry users to communicate with each other, creates the ability for RIM to buy their way into groups of friends who are “cool.”  It is this proximity to the business and social elite that makes the Blackberry a handset of choice over the iPhone, which is more utilitarian than it is social or businesslike.

While skinny jeans, plastic sunglasses, slip-on shoes, and white tank-tops are all relatively cheap and hip clothing, the Blackberry serves as the Accessory to broadcast wealth.  In developing Asia, where a credit history is rare, but required for a post-paid Internet-enabled phone contract, the Blackberry even serves to say “I have assets, “I have an address”, and “I pay my bills.”  That stability can go a long way.

To the partygoer, the Blackberry represents social sophistication.  Ask a recent Ivy League graduate working in investment banking, and she’ll tell you that the Blackberry represents a ball and chain.  Many would even argue that in the business arena, mobile email makes communication inherently unsophisticated.

Indonesia’s Banking Sector

In Indonesia, Woody and I both find ourselves comparing and contrasting the country to India.  The differences seem to outweigh the similarities, but it makes for valuable assessment of data points as we move from city to city on Java.

One striking difference is the presence of foreign banks in Indonesia.  Jakarta’s skyline features prominent HSBC, Standard Chartered, and Deutsche Bank skyscrapers, where Mumbai’s does not.  Our bureau chief confirmed that regulations governing international banks are less stringent, with lower costs associated for operating permits.  This no doubt helps fuel the culture of entrepreneurship that is seen in Indonesian and ethnic Chinese Indonesian industry, since credit is more widely available.


We also see in Indonesia corporations financing themselves primarily by these bank loans, as we see in Japan.  This is unlike the U.S. where financing is dominated first by bond (trade-able debt) issuance, and second by public stock (trade-able equity) issuance.  This seems to be a more appropriate stepping stone for a developing market, rather than rushing to illiquid bond or equity markets spoiled by abuse of insider information. In India, the Bombay Stock Exchange alone has 4,700 equity names listed, and the National Stock Exchange of India has 1,587, bringing the total to 6,287.  With only 380 companies listed on the Indonesian Stock Exchange (formerly the Jakarta Stock Exchange), the sleeping tiger of Indonesia has a Nominal GDP per capita of USD $3,600, compared to $1,016 of India.  Why a penchant for all this more costly and complex public issuance if the country isn’t better off?



While a much more rigorous argument with much deeper supporting data would be needed to do justice to this question, a first glance shows bank financing and private investment a more effective form of financing for medium-sized enterprises than small public share offerings resulting in illiquid markets and small float for those names.  What are the forces at work here?  What impetus could be given to Indian CFOs by regulators or markets for better results?

If you’re curious about all the financial regulatory factors that contribute to economic growth and development, pick up a copy of Ross Levine’s book, Rethinking Bank Regulation.  A lot of people ask me why I’m interested in finance, and part of it is the power of insurance to prevent suicides, bonds to pave roads, and venture capital to enable the use solar energy.

Letters From the Kids Part II

From the First Graders:

How do you ride for so long every day? –Autumn

Hi Autumn,

When we are riding, our bodies are demanding more nutrition than if we were just chilling out. A big part of being able to ride all day in the sun is hydration. We drink tons of water and stop for snacks and small meals all day long. By never being too full, but also never being too hungry we keep a good flow of energy. Also we drink gallons and gallons of water so we can keep sweating enough to stay cool even though it’s boiling hot out.

Thanks,
AsiaWheeling

What kind of animals have you seen? –Molly

Hey Molly,

We’ve seen lots of animals. In the cities, we see lots of dogs and cats wandering around. We also see rats and mice picking at things. In some cities, there are even monkeys wandering around digging through the trash and begging for food from people.  Also, it is common to see cows and goats both in town and in the country. Especially in countries where people practice Hinduism (a religion where the cow is holy), cows will wander all around and no one seems to care.

Elephants are not so common, but we’ve even seen them. Most of the time when we see them it is because a fellow has one and is using it to make money selling rides.  Horses we see more often.

We also see chickens and roosters all over the place. Most of these are destined to become satay (this is a food kind of like a shish kabob with peanut sauce on it). Careful… the roosters will get a little feisty with you if you get too close!


People also trap many kinds of beautiful (though probably very sad) birds. They sell them in wooden cages by the side of the road.


In many of the cities we visit, there are lots of bats at night, big and small ones, which we are always happy to see because we know they are eating bugs that might otherwise bother us.  Spiders help us out by doing the same.

When we are in the ocean, Scuba diving or even just swimming we see tons and tons of different colored animals.

We see fish, rays, sharks, turtles, sponges, and even jellyfish (a few of those stung us).

And we see lots of coral. Did you know that coral is an animal?

I am sure I forgot all kinds of cool animals that we have seen. But we’ll try to take more animal pictures for the website now that we know you are interested.

Thanks,
AsiaWheeling

Do you have fun every day? –Cailey

Hi Cailey,

I know it sounds crazy, but we actually do have fun every day. I certainly can’t say that the whole of each day is fun, but the two of us are really quite good at enjoying ourselves even when we are put in somewhat harrowing conditions.

Hope you’re having fun too,
AsiaWheeling

Does it ever snow there? –Presley

Hi Presley,

Since we are traveling all over Asia and the Middle East, we will be visiting plenty of places where it snows. Right now, we have been in a part of the world called South East Asia. We are very near to the equator, so most of the time it’s either quite hot or raining like crazy. But even here in South East Asia, it gets plenty cold, and even snows on the tops of mountains, assuming the mountains are tall enough.

Enjoy the snow in Colorado!
AsiaWheeling

What is your favorite place so far? –Sammy

Howdy Sammy,

That’s a tough one. I’ll assume you’re asking about just the places we’ve visited so far on this trip (in part because it makes it easier for us). In that case, I might say Jogjakarta. Jogjakarta is a city on the Indonesian island of Java. It’s called the cultural capital, because it’s where a lot of arts and crafts (like fabric and painted masks) are made, and where there are a lot of local bands that play a style of music called Gamalan music. The people are very friendly there, and many of them are willing to sit down and chat with you even if they don’t speak much English.


The food is great, and the traffic is very friendly to bicyclists. You can also get to and from Jogjakarta by train. We love trains, here at AsiaWheeling.

Thanks for asking,
AsiaWheeling

Is it really hot there? – Cayley

Yes. It’s really hot in most of the places that we travel (at least during the times that we’ll be there).

Right now it’s 29° Celsius in Singapore.  Do you know what that is in Fahrenheit?

Luckily, we like it hot.

Thanks, Cayley.
AsiaWheeling

Second Grade

Hi my name is Hannah. What’s your favorite fruit?

Hi Hannah (#1),

Our favorite fruit is the Durian. It’s known as the king of fruit and it smells a little bit like feet but tastes like a delightful lemon custard. The outside of the fruit is pointy and green and the inside is pale yellow with big seeds.

The entire thing is about the size of a bowling ball, but not as heavy.

For more on Durian, read the wikipedia article.

Keep eating fruit!
AsiaWheeling

Hi my name is Hannah. Do you like were you are right now? P.S. Peace and love!

Hi Hannah (#2),

Yeah, we love the place that we are right now. It’s called Semporna, and it’s on an island called Borneo, which is claimed by a few different countries, including Malaysia. Can you name the other two?


It’s a great place, full of interesting people and interesting animals.

Peace and Love right back at you!

AsiaWheeling

Third Graders

My name is Julia. Do you have TV?  You can write in Chinese if you want.

亲爱的Julia小朋友:

当然我们有电视,我们还可以收到美国的很多频道。你们同样的也可以看到中国的频道对吗?
希望你好好学习中文,长大了可以到中国旅游。

高洁

Did the coffee taste like American coffee?   –Konne

Hi Konne,

The coffee is different than American coffee to be sure. Often the coffee is made by pouring the grinds into a cup, and just pouring hot water over the top. This means that there is always a delightful layer of sludge at the end of the coffee. Otherwise, they use powdered instant coffee, which is generally better than American powdered coffee.


Also, rather than using milk and sugar, often we find that they use sweetened condensed milk, which is a yellowish goo made out of boiled milk and sugar. In fact it’s sometimes tough to order a cup without the goo. So we are just learning to love it.

Nice question,
AsiaWheeling

From the Fifth and Sixth Graders:

How many lizards have you seen that are the size of a small dog? Also what other strange looking animals have you seen? –Brandon

Hey Brandon,

Good question! We see lizards a lot. Usually crawling on the wall. However, most of these are tiny guys. Maybe the size of a GI Joe. However, we have been seeing a few larger lizards as well. So far the count is at three. One in the Jungle in Bali (he ran away when we came up).

One in an open sewer in Borneo (he was alive and breathing, but I think he was pretty sick of being in the sewer) and another laying on the ground in an empty lot in Semporna. This monitor lizard was just hulking in the sun, soaking up the rays, and watching people go by. At first it’s shocking to see such a giant lizards, but we try to respect their space, and admire them from a distance.

Be Safe,
AsiaWheeling

Have you met any kids our age? Is their school-time/ schedule similar to ours? What kind of houses do they live in?

Dear 6th Graders,

We meet loads of kids on the trip. Unfortunately, we often cannot talk very much with them because they don’t speak any of the languages that we speak. Even if we can’t talk much, we often find kids who are yelling at us or waving at us while we drive by. Some of them are asking for us to give them some money or to buy things from them; others are just saying “hi” or wanting to play with our bicycles.

School times for students in the countries we visit during AsiaWheeling are very different depending on where we are. We have been on some islands and farms where the kids don’t even get a chance to go to school at all. Instead, they work with their parents trying keep the house together and put food on the table. In a lot of other places in Asia, children go to school for much longer during the day than in the U.S., and also have a much shorter summer holiday. My guess is if you visited a school in any of these countries you would find it to be very different from yours, though the things they are learning might be familiar.

Kids live in all kinds of different houses depending on where we travel as well. Where we are right now, in Borneo, many people live in houses made of wood, held up on stilts over the water. In Singapore, many people lived in apartments inside tall buildings, with special devices to let them dry their laundry out the window. In Indonesia, many people lived in little cottages, made out of concrete, if they were wealthy, or if they were not so wealthy, houses made out of whatever they could find — plastic, wood, stones, and metal sheets.

Good question!
AsiaWheeling

Do you ever get sick of each-other? –Hannah

Hi Hannah,

I think the short answer here is “no.” But to leave it at that would be misleading. When you are traveling for as long and to as many places as we are, you experience a full range of emotions. We think the trick to any friendship is communication. So no matter what is bothering one of us, we do our best to talk about it, and work on it together.

Your Friend,
AsiaWheeling

In your pictures it looks like more people ride bikes and motorcycles than cars. Why is that? -Kiera

Hi Kiera,

There are two reasons for this. The first is that bikes and motorcycles are cheaper to buy. Many families can’t afford to buy a car, and in the city one has to have a place to park the car as well. The other is that, gas is expensive in most of the places that we travel (even worse than in the U.S.). Motorcycles and Mopeds use only a tiny fraction of the gas used by a full size car, so people choose them over the car to save money.

Wheel Safe,
AsiaWheeling

What kinds foods of do you eat? –Taylor

Hi Taylor,

We try to eat local foods whenever we can because we find it exciting.

From time to time we are in a place where we cannot find any local foods that we think would be safe to eat. In that case, we might go to a restaurant designed for foreigners. These places serve familiar foods like pizza and hamburgers.  However, they are generally more expensive and the food is sort of like someone played telephone with the recipe, passing it from person to person and in the end it’s been changed a bit from what you might recognize in America. Usually the change is in the less tasty direction.

Cheers,
AsiaWheeling

Loading image

Click anywhere to cancel

Image unavailable

Loading image

Click anywhere to cancel

Image unavailable

« Previous Entries |