My Heart is Red & White, My Business Abroad: The Irony of Capital Flight
When we loudly champion the National Self-Reliance Movement (Gerakan Mandiri Bangsa), our collective imagination usually lands on the sovereignty of natural resources, defense capabilities, or food self-sufficiency. However, the true independence of a modern nation can never be realized without capital sovereignty and the availability of entrepreneurial talent growing on its own soil.
Regrettably, we are currently confronted with a heartbreaking irony. A phenomenon that is subtly, yet surely, eroding our economic foundation: the “Entrepreneur Drain.”
This is not merely brain drain involving academics or skilled workers. This is the flight of capital owners, job creators, and business risk-takers—a crisis that Paramadina economist, Wijayanto Samirin, likened to an “Indonesian Entrepreneur Emergency.” This relocation of operations, assets, and even residences is not only centered in Singapore but extends to Malaysia, Hong Kong, and Australia, as entrepreneurs seek friendlier jurisdictions.
The Irony of Players on a Muddy Field
For an entrepreneur, building a business in Indonesia should be a calling, a concrete contribution to the Motherland (Ibu Pertiwi). They are the ones who invest, employ, and pay taxes. The majority of them—as I have gathered from long interactions with this community—are genuinely Red & White in spirit; their assets are here, and they want their children and grandchildren to be educated and succeed here.
So, why are meetings with major Indonesian entrepreneurs now more likely to happen abroad, in a “land across the sea” that offers certainty?
The answer lies in the feeling of being treated unfairly by the system. Over the last decade, entrepreneurs have often felt like scapegoats, blamed for environmental issues, wage disparities, and termination of employment.
Yet, the actual root of the problem is not their intent, but the “Muddy Field” they are forced to play on.
Regulations are made complicated, deliberately steered into “grey areas,” and create unavoidable “Invisible Costs” (biaya siluman) or “Under Table Money.” Honest entrepreneurs striving to adhere to Good Corporate Governance (GCG) struggle, while those who are “adaptive” are forced to get dirty.
This is the irony: instead of being the engine of the National Self-Reliance Movement, they become victims of unclean governance. They are aware that if those “various monies” did not exist, they could pay at least twice the amount in taxes and significantly increase employee welfare.
The Consequence of Barren Innovation
The impact of this “capital flight” far exceeds GDP statistics. It is an attack on the nation’s future. The Entrepreneur Drain triggers a chain of consecutive crises that render self-reliance barren:
Capital Drain: Core capital is withdrawn, controlled from abroad, and the allocation of new investment is placed in jurisdictions with friendlier competitiveness.
Job Drain: The creation of quality jobs stalls, confining Indonesia to primarily resource base or market base sectors.
Innovation Drain: We lose global competitiveness. Businesses requiring high efficiency and technology are placed elsewhere. We fail to climb the Global Supply Chain and are content to remain producers of low value-added commodities.
Most tragically is the loss of talent. The best business schools in the world are not Harvard or MIT, but the families of these entrepreneurs themselves. When this second and third generation settle abroad—due to the ease of Permanent Residency and legal certainty—their attachment to Indonesia fades. They become foreign nationals, and the National Self-Reliance Movement loses its best inheritors.
A Warning: Philippines or Vietnam?
We are at a critical junction. History offers two mirrors:
On one side are Lebanon and the Philippines. The Philippines, once viewed as an Asian economic giant in the ’60s, is now stagnant because an unconducive system caused its talent and entrepreneurs to flee.
On the other side are China and Vietnam. The transformation of these two nations shows that drastic change can occur within one generation. Improvement began when their leaders—like Deng Xiaoping—adopted a pragmatic rather than ideological approach, focusing on simplifying business and guaranteeing legal certainty.
The Key: Washing the Broom, Cleaning the Field
If the elected President intends to champion the National Self-Reliance Movement, the focus must be directed at overcoming this crisis. Intensifying law enforcement against entrepreneurs won’t solve the problem if the field remains muddy.
Therefore, there are two fundamental steps that must be taken immediately:
Cleaning the Field (Regulation): Radically simplify regulations. Complex regulation is the mother of all corruption because it creates the need for bribes.
Washing the Broom (Bureaucracy and APH): Law Enforcement Agencies (Aparat Penegak Hukum – APH) and bureaucracy are the brooms used to clean the field. If the broom is dirty (corrupt officials), the field will never be clean.
The state must transform into a Key Partner, ensuring legal certainty and offering sincere incentives for those with the Red & White spirit to do business and innovate in their homeland.
True self-reliance is when Indonesian capital, by Indonesian entrepreneurs, is managed to world-class standards in Indonesia. The irony of “My Heart is Red & White, My Business Abroad” must be ended immediately through total reform, before the Entrepreneur Drain becomes a wound too deep to heal.
