Robert Go, Nusa Dua – Something unexpected happened while Mr Iin Arifin Tahyan was speaking about the need for Indonesia to get more energy-sector investments during a high-profile conference in Bali on Friday.
Power supply to the auditorium was cut off, rendering the Energy Ministry official speechless and leaving hundreds of bankers and analysts – and a few investors – in the dark. The hotel explained that there had been a cut in the power supply from the state-owned power provider, PLN. "Maybe it was an act of God. I hope the audience found it funny," said Mr Iin.
The embarrassing disruption proved a point: Indonesia desperately needs billions of dollars injected into its infrastructure and energy sectors if it wants to get the national economy ticking again.
Analysts said that in these two sectors, Indonesia was not competing against China and other countries and therefore could still attract foreign investment.
Dr Martin Panggabean, a top economist at Bank Mandiri, said: "China has a big market and lower labour costs, Indonesia just can't compete. But energy and infrastructure are a different story." Officials said Indonesia's best chances of securing much-needed investment might lie in these two sectors.
Mr Kristiono, chief executive officer of Telekomunikasi Indonesia, said only 3.6 per cent of Indonesians had fixed telephone lines and 5.6 per cent used cellphone services.
He argued that room for growth was "robust" and the sector could absorb between US$2 billion and US$3 billion in investments annually for the next decade.
PLN boss Eddie Widiono, who followed Mr Iin as a conference speaker, said more than 100 million Indonesians did not get a steady supply of power and his company could use a total injection of US$28 billion from foreign players in the 10 years ahead.
Mr Iin also spoke about the need for more oil and gas exploration. Known oil reserves were expected to last only until 2020, and the government planned to offer 20 new exploration blocks to investors each year, starting this year.
The good news was that investors seemed to be getting interested again, at least in energy and infrastructure. Last year, Jakarta invited bids for the rights to explore 14 areas for oil and gas projects, but only one was taken up. This year, 16 such projects were begun. This is good news for the government budget because oil and gas revenues account for up to 30 per cent of the state's annual income.
PLN's Mr Eddie said foreign companies were welcome to work with newly empowered local governments to build smaller power plants, especially in Indonesia's outer provinces in Borneo and Sulawesi islands.
Two pilot programmes for that model of developing power infrastructures had yielded some success in Riau and East Kalimantan provinces. They involved British investors and Mr Eddie wanted to see more of such projects.
But there were potential stumbling blocks. Conference delegates were of the opinion that Indonesia needed to fix lots of laws to make energy and infrastructure more attractive investment targets for foreigners.
Mandiri's Dr Martin said the two sectors were still hugely dominated by political and government control. "Some steps towards liberalisation have been taken, but the government needs to do more on this," he said.
Another concern cited during the weekend talks dealt with a decentralisation programme launched in 2001 which was aimed at giving regional governments more power to decide on local political and economic issues.
Analysts said investors remained concerned about the ability of local governments to deal fairly with foreign business interests.