Newsmaker Interview: Endah Wahyu Sulistianti
The Creative Economy Agency’s Deputy for Inter-Agency and Regional/International Relations on how stakeholder ego poses the biggest coordination challenge
By Christ Ponderosa
Thursday, April 12, 2018
President Joko Widodo has made it a priority that the creative economy should become the backbone of the Indonesian economy. The Creative Economy Agency (Bekraf) is a non-ministerial, cabinet level government agency established by President Joko in accordance with Presidential Regulation (PR) No. 6 and No. 72 of Year 2015, to materialize such a vision.
Coordination challenges are at the heart of many creative economy issues in Indonesia. While this is apparent in some subsectors, such as in the film industry with respect to shooting location permit issuance, coordination also poses challenges when it comes to regional creative economy regulations and relations.
AmCham Indonesia sat down with Bekraf’s Deputy for Inter-Agency and Regional/International Relations, Endah Wahyu Sulistianti, to discuss issues related to interagency coordination within the creative industry in Indonesia.
AmCham Indonesia: What is the role of your division? What is Bekraf’s vision in terms of enhancing interagency coordination within the creative economy sector?
Endah Sulistianti: Bekraf has six deputies: for research and education, funding access, infrastructure, marketing, facilitation and regulation, and interagency coordination.
Bekraf’s focus is to encourage the creation of added value in the creative economy. The president determined and mandated us a set of macro targets to reach, including contributing to gross domestic product, creating job opportunities, and increasing exports. In our efforts to achieve these, we mainly target business players in the creative economy to stimulate the creation of added value based on intellectual competitiveness sourced from cultural roots, technology advancements, and innovation. All Bekraf deputies work together to push this, because all value chains are comprehensive. Any value chain covers creation, production, distribution, and consumption. Thus, it is necessary that all deputies are involved in implementing the president’s mandates.
My department’s main responsibility is to ensure a conducive institutional and business climate, to enable other deputies to execute their responsibilities effectively. Thus, it is necessary for us to reach out to other government agencies so that regulations can be simplified to make navigating Indonesia’s creative industry easier for business players.
This has been difficult, especially because Bekraf is a younger institution compared to the other government agencies that were mandated to handle creative economy issues before Bekraf was established. In 2009, there was a presidential instruction (PI) issued by President Susilo Bambang Yudhoyono, PI No. 6, which mandated 27 agencies to handle creative economy issues. When PI No. 6 expired, regulations related to the creative industry were already embedded within those 27 agencies. Here at Bekraf, we identified the spread of creative economy regulations within various agencies. It became apparent that there was a need to synchronize the different creative economy strategic plans various agencies have set independent of each other, and combine them into one cohesive national strategic creative economy plan.
My department’s main responsibilities can be summarized as follows: to formulate, make decisions, coordinate and synchronize policies at the interagency level. Together with the coordinating ministry we drafted a master plan outlining how we can synchronize all creative economy regulations. The master plan will soon be established as a new PR. There will only be 18 government agencies involved in regulating the creative economy, instead of the previous 27. In line with President Jokowi’s interests, we eliminated overlapping regulations, and ensured that they are collaborative instead.
The facilitation and regulation deputy also created the Coordinating Team for National Creative Economy Development Acceleration. This helped us to continue what other agencies have done.
Bekraf’s vision is to establish Indonesia as one of the world’s creative economy powers by the year 2030. To achieve such a vision, Bekraf has put in place six missions, and two are to create a conducive climate for creative economy development, and to broaden the public’s horizons and increase societal appreciation of all creative economy aspects.
For the latter two missions, not everyone understands what creative economy really is. To many, the scope of creative economy is limited to small and medium-sized enterprises [SMEs], while in fact creative economy can include so much more. The public needs to realize that if such SMEs wish to scale up their business operations and create added value for their products, they will have to work with Bekraf, so that we can help them register their intellectual property, and help them brand and package their products for marketing and distribution purposes.
How much progress has Bekraf made toward achieving these goals? Can you tell us more about the interagency coordination that has been built so far?
We are making progress, although there are still some regulations that we need to work on. For export issues, we coordinate with the Ministry of Trade. For investment related issues, we coordinate with the Investment Coordination Board (BKPM). For cultural aspects related to creative economy, we coordinate with the Ministry of Education and Culture.
An example of synchronization is one that we had with the education and culture ministry on the Cultural Utilization Law. It was established last year, and Article 32-36 of the law clarifies Bekraf’s authority to handle culture utilization in creative economy. With regard to Film Law No. 6, 2009, which creates overlapping authorities between Bekraf and the education and culture ministry over film industry regulation, we created a memorandum of understanding (MOU) with the ministry, outlining an action plan to implement Film Law mandates. It also outlines Bekraf’s action plan to synchronize film regulations. These action plans were then included in the ministry’s master plan as well. It is mutually understood that upstream activities, such as creation and production, will fall under the authority of the ministry, while downstream activities such as distribution, will fall under Bekraf’s authority.
We chose to create an MOU as a quick fix to accelerate things. We are also focusing on deregulating the industry, and seeking to map out regulations hindering investment and progress in the industry.
In terms of coordinating with local governments, we collaborate closely with the Ministry of Home Affairs, specifically with the Directorate General [DG] for Regional Development and the DG for Regional Autonomy.
Under my department, there are two subdirectorates: foreign affairs and home affairs. For the foreign affairs subdirectorate, we work closely with cabinet level agencies to create a master plan that I have mentioned. For the home affairs subdirectorate, our focus is on local governments. We have over 500 regencies and the government agencies regulating the creative industry do not have branches in those regencies. Therefore, Bekraf has to figure out how we can coordinate with these regencies directly, especially when there are already so many of them that have started developing their creative economy.
Right now, the home affairs ministry does not require regencies to have creative economy regulations. Those agencies that have initiated creative economy development have established regulations within different agencies, including the tourism, industry, SME, and trade agencies. They are all over the place and there is no standard. This is not a big issue, but the home affairs ministry wishes for the “creative economy” nomenclature to be at least established within each local government, because this nomenclature is to become the basis for setting regional development budgets [APBD].
Since 2015 we have already established 44 MOUs with local governments. These regions, such as Bojonegoro and Bandung, already understand where we are headed and each of them has established an agency to regulate it.
The film industry is heavily regulated by other agencies. Is this the case for every one of the 16 creative economy subsectors?
We adopted the subsector approach from Great Britain. It has 14 subsectors within its creative industry. We have 16 subsectors, from which we chose six – three to prioritize and another three as principal subsectors. Film, games and applications and music are the prioritized subsectors. Handicrafts, culinary and fashion are the principal subsectors.
For handicrafts, culinary and fashion, we collaborate with the trade ministry and the Ministry of Industry. We worked with them for regulation synchronization purposes to achieve the desired efficiency, especially in budget setting to ensure a more even distribution of funding.
While Bekraf sets the direction for the creative economy, it also works with numerous associations and agencies, including the Ministry of Cooperatives and Small and Medium-Sixed Enterprises, the education and culture ministry, the industry ministry, the trade ministry, and BKPM.
We decide who to work with by examining every component of the value creation chain that I mentioned earlier. We ask ourselves, who should we work with at the creation stage? Usually it is with the education and culture ministry. At the production stage, it will usually be with the industry ministry and educational institutions. For the film industry we work closely with BKPM regarding establishing one-stop services [OSS]. For applications and games we work closely with the Ministry of Communications and Information Technology. The music industry is under Bekraf’s sole authority for now.
The ideal is to apply the penta-helix stakeholder management model [a simple discussion tool to map interests and explore ways of keeping a project balanced] that involves academics, businesses, government, community, and media. But even with the model, it is difficult to decide the flow of issues between stakeholders. At least we are trying to enhance coordination between different stakeholders. The job gets harder when there are more associations in a subsector, such as in the music industry. Although Bekraf is the only government agency regulating the music subsector, we find it hard to work together with numerous music associations and business players in the industry. The same applies to the culinary subsector. For the film industry we have three associations: APROFI [Association of Film Producers], BPI [Indonesian Film Agency], and PPFI [Indonesian Film Companies Association].
Every association corresponds directly with Bekraf, and we have to ensure that no one is left behind. So the challenge is less regulatory, but more coordination. Associations are a great help in identifying problems business players are facing in the industry. It is important that we receive position papers containing the challenges they are facing, because we cannot create or change regulations without their input.
What are the key hurdles in fostering interagency coordination? How do you plan to address these challenges?
The biggest barrier to coordination is the strong ego of different stakeholders in different sectors. One, ego makes it really hard to convince stakeholders to sit together to solve problems. Two, ego stands in the way of creating a mutual agreement or achieving mutual understanding of issues discussed. Sometimes, even when mutual understanding has been achieved, ego again stands in the way of implementation. We need to be consistent and persistent.
Let me give you an example of a time when it is obvious that stakeholder ego got in the way. When promoting Indonesia’s creative economy overseas, we are supposed to present a united front, as Indonesia Creative Incorporated (ICINC), thus representing Indonesia as a country. However, each agency involved prefers to move on its own and represent its own agency. While doing so streamlines the budget processes within each ministry, it disadvantages our country as a whole. If the budgets from different ministries were pooled together, Indonesia could have secured better booking terms and conditions, and thus, could have obtained better deals.
There are many other challenges that we try to address as well, but this is the biggest. There are so many other examples of this that we can talk about.
What are the key determinants for successful interagency coordination within the creative economy sector? How, in your opinion, can successful interagency coordination within the Indonesian creative economy be ensured? How can the private sector contribute to this?
A model for successful coordination from Bekraf is the approach that we used in taking the film industry out of the Negative Investment List (DNI). It first started with us gathering position papers from stakeholders. In the beginning, not every stakeholder supported the idea of opening the film industry fully for foreign investment. But, as I mentioned before, consistency and persistence are paramount. We had to keep pushing for the dialogue to be continued, and held multiple meetings to convince opponents. At the end, tens of associations supported the motion. That became the basis for our next step; when we were done gathering input from business players, we took the proposal to government agencies. This is when BKPM decided to support Bekraf’s motion. The education and culture ministry, which at first was so hard to convince, through repeated attempts from us to explain the negative impacts of putting the film industry on the DNI list, finally understood and supported us when we took the issue to the level of the coordinating ministry. This is an example of how we can convince others operating under different frequencies from us. We made them see how adopting our proposal was good for the public interest. Convincing others to sacrifice their personal interests for a common good can be hard but remember that film producers and corporations often yielded too.
The private sector, both foreign and local, can bring in more capital or investment for the industry. When investment increases we can benefit from the multiplier effect that results, such as in the creation of more jobs.
For instance, let us talk about opening up a region in Indonesia for film shooting, especially in an area with no film regulating body. This is actually a program that we are working on; we encourage regional governments to make their regions available for film shooting. When the private sector invests in the region, local residents are the ones to obtain the benefits. Such is the line of reasoning that we use to convince the local governments.
These days we are working with BPI, the education and culture ministry, BKPM, and the Ministry of Foreign Affairs, to create the Local Film Commission Initiative. Currently, local governments do not have a film commission, but since we have decentralization through the concept of regional autonomy, each local area can and should form one. There is no prohibition under the existing local and national regulations to form one. We do not help them to make one, but we try to convince them to have one, and we guide them through the process of creating one. When local governments realize the importance of having a film commission, and as they provide incentives to attract investment, business players will be pouring into the region to invest, and this becomes an important promotional platform for local governments to advertise the region. Just look at Bangka Belitung, which was featured in the movie Laskar Pelangi. Who would have thought that Bangka Belitung could be such a popular tourism destination as it is now?
As of today, there are five local areas - Bandung, Jogja, Bojonegoro, Siak, and Banyuwangi - that we are preparing to open for film shooting. We took other countries’ best practices to institute a film commission in each region, which will take a form that is distinct from others. However, they will all serve the same function, which is to provide film shooting services, including permit issuance, incentives, catering, accommodation, ease for film crews to obtain equipment, and many others. It is a kind of OSS. We provide guidance for these regions because they already have the nomenclature, a creative economy vision, and MOUs with Bekraf. Out of 500 regencies, the majority still do not have the nomenclature for creative economy, but we are drafting a government regulation on regional autonomy that requires each regional government to have creative economy nomenclature within their structure.
We have talked about the approach of the home affairs subdirectorate to encourage the development of regional creative economy industry. What is the focus of the foreign affairs subdirectorate?
We identify our counterparts in other countries. Government-to-government MOUs have already been established with South Korea, Great Britain, France [for the film subsector], China, Italy, and Sweden. The process of establishing one with Australia and Thailand is ongoing this year.
Bilateral cooperation with these countries is based on our needs in the value chain, as explained earlier. In terms of production, we look for countries whose investors can invest in Indonesia. For distribution and consumption, we look for countries with markets that we can export to.
The cooperation is often sectoral. For instance, with Thailand it is cooperation in product design. With OzAsia [Australia's premier international arts festival focusing on Asia] the cooperation is targeted at performing arts show promotion, and with Italy’s Torino Film Lab, we do capacity building in the film industry. We send selected Indonesian film producers and screenwriters annually to study in the film lab.
We do not have one with the US yet, because we have not been successful in identifying our US counterpart. But we would like to have one with the US.
We are also focused on organizing the World Conference on Creative Economy (WCCE) in Bali on 6-8 November this year. Creative economy represents the fourth industrial revolution. Awareness of this is still low among the public, and each community has different languages to describe creative economy. In essence, we have shared issues but there is no one common language that we can use for productive discussions about creative economy.
Thus, during the conference we will put business players on stage to share their concerns and help governments to identify current or future challenges in the creative industry, while government officials and policy makers from all over the world sit in the audience and listen. This is especially important considering that this fourth industrial revolution is happening at a pace that is so much more rapid than the governments around the world can cope with.
Confirmed participants include countries from MIKTA [Mexico, Indonesia, Korea, Turkey, and Australia], the European Union, and ASEAN [Association of Southeast Asian Nations]. In May, there will be a senior official meeting for content discussion.
We hope that AmCham Indonesia can be involved in the conference, perhaps by having AmCham corporate members showcase their creative economy projects and by suggesting industry experts as speakers.
What are Bekraf’s priorities for the short and medium terms?
The master plan for creative economy that I mentioned before was already submitted into our regulation work plan [Program Penyusunan], and it will be established as a presidential regulation. Since we do not have a draft law for creative economy, this master plan will become the guideline for both Bekraf and other agencies to move together in regulating the creative industry. This master plan is also in sync with our National Medium-Term Development Plan (RPJMN) that lasts until 2025.
Furthermore, we would like to see increased understanding, especially in local areas, on how to foster creative economy development. We hope that through world summits such as the WCCE this year, all countries will end up having a common understanding of creative economy development worldwide that addresses the question of how we should respond to this fourth industrial revolution.