Newsmakers / July 2018

Lifting Indonesia's Brand Through Asian Games

By Muhamad Al Azhari It was just two years after Erick Thohir, along with some partners, bought a controlling stake in Italian football club Inter Milan when the government asked him to lead the Indonesia Asian Games Organizing Committee, or Inasgoc. "The request came to me in 2015. I was quite occupied back then with my business activities, as you know in 2013, we just acquired Inter Milan," the Indonesian media entrepreneur and sports investor told GlobeAsia in a recent interview. "With all humility and respect, I finally took the job as it was a very crucial time for us with strong prospects back then when China could take the job. Still, I can't do it alone. This is the work of the entire nation," Erick said after attending a sponsorship announcement by a private company in Jakarta in May. Back then, it was a critical time for Indonesia to secure its bid to host the 2018 Asian Games, as the country was on the verge of losing out to Beijing. Jakarta had a bad record in hosting international sports events, such as the 2011 Southeast Asian Games, which ended in disaster when two people died in a stampede after the football final between Indonesia and Malaysia. The Vietnamese capital, Hanoi, was another strong contender to host the Asian Games, considered the second-largest multisport event after the Olympics. However, the city later withdrew from the bidding process due to financial constraints. Indonesia eventually won the right to host the 18th Asian Games after it managed to convince the Olympic Council of Asia in 2014 that it had the capacity to host the event. It will be the first time the pan-Asian multisport event is co-hosted by two cities – the Indonesian capital and Palembang, the capital of South Sumatra. The event, which is recognized by the International Olympic Committee, is scheduled to take place between Aug. 18 and Sept. 2, when athletes from 45 countries will compete for gold. International Figure The administration of President Joko "Jokowi" Widodo had limited options when it came to appointing a local figure with a strong grasp of the international sports business so Erick, with his solid track record in the industry, was almost an automatic choice. The businessman, who is the founder and chairman of Indonesian media conglomerate Mahaka Group, agreed to take on the responsibility, on condition that the government take care of the venues and athlete's preparation. Erick comes from a family with a strong business background. He is the brother of tycoon Garibaldi "Boy" Thohir, who owns a majority stake in PT Adaro Energy Tbk, Indonesia's second-largest coal miner by production capacity. His family also has large investments in the food and property industries in Indonesia. Besides Inter Milan, Erick also acquired stakes in other sports clubs outside Indonesia, such as Washington-based football club D.C. United, and the Philadelphia 76ers, a professional basketball team. Although Erick has become a minority owner after selling most of his stake in Inter Milan, he retains the title of club president. He also has a track record in basketball, having been president of the Southeast Asian Basketball Association (FIBA) since 2006. He was also chef de mission of the Indonesian contingent at the 2012 Summer Olympics in London. On a national level, Erick plays an important role as chairman of the National Olympic Committee (KOI) for 2015-2019. KOI is responsible for preparing Indonesia's athletes for both the Asian Games and the Olympics. On top of all that, he also owns the Jakarta-based basketball team Satria Muda and serves as an honorary board member of the Indonesian Basketball Association (Perbasi) for 2015-2019. Positive Image Erick shared his vision of how this year's Asian Games can lift Indonesia's sports industry, while also making a positive economic impact, both directly and indirectly. "It is a great opportunity for Indonesia. The Games are not just a sports event, it has a lot to offer," he said. Erick said there are four important potential outcomes if the country successfully hosts this year's Games. First, he said the event can boost the country's reputation and it is a good opportunity to project a positive image of the country to the world. The world's largest archipelago nation, spread out over more than 17,000 islands with a combined surface area of more than 1.9 million square kilometers, offers many breathtaking tourism attractions and the government is currently actively promoting 10 destinations beyond Bali, the country's most popular destination among tourists. Second, he underlined the economic impact the Games will have, starting from tourism, ticket sales, to the money sponsors will potentially spend during the multinational event. "Last time, Bappenas [National Planning Agency] calculated that there is potential revenue of almost Rp 3 trillion [$213 million] if we calculate it based on ticket sales. In terms of the long-term benefit, this event is indeed good for our tourism industry," he said. The Asian Games will see competition in 61 sports disciplines, with 41 being broadcast live on TV. There will be 462 sports events, held in four sports clusters – three in Jakarta, including in the national sports arena, Gelora Bung Karno Sports Complex, and one in Palembang's main sport facility, Jakabaring Sport City. Third, he said the government's investment in supporting infrastructure and facilities and the event itself will also create more jobs in the country. Cosmopolitan Jakarta, which serves as Indonesia's economic, cultural and political center, also has enough good hotels and other forms of accommodation for international guests. The government is renovating the Gelora Bung Karno Sports Complex at a cost of Rp 770 billion. It is also building a $40 million velodrome in Rawamangun, East Jakarta, and a $30.8 million equestrian facility in Pulomas, North Jakarta. In a bid to improve transportation, the government is currently also building a 5.8-kilometer light rail transit system that will allow spectators to travel between the various sports venues. The government is also renovating facilities at Jakabaring in Palembang, while the private sector has enthusiastically welcomed the multilateral sport events, with local media reports that around 20 new hotels will be opened to host athletes, sports ambassadors and spectators during the event. Last, but not the least, he said it is important for the current generation to leave a proud legacy for the next generation, while on the other side, the expected improvement in athletes' performance should serve to boost the nation's morale. Indonesia has faced a long series of sports scandals, including the suspension of the national football association, PSSI, by the sport's world governing body, FIFA, over the government's alleged meddling in the country's domestic league. The country's athletes also delivered lackluster performances in international events, with a 17th position in the medal tally during the previous Asian Games in Incheon, South Korea, underlining Indonesia's mediocrity. During last year's biennial Southeast Asian Games, Indonesia delivered its worst performance since 1977 in terms the medal tally. Hosting the 2018 Asian Games may revive Indonesia's collective memory of when it hosted the event 56 years ago. Despite controversy surrounding the Sukarno government's refusal at the time to issue the Israeli and Taiwanese delegations with visas to participate in the 1962 Games, Indonesia exceeded all expectations by securing a second place overall in the medal tally among the 10 participating countries. Some analysts however, believe this achievement is unlikely to be repeated this year, given that the number of participating countries has since more than quadrupled. Erick said he is well aware of the challenges facing the country's athletes but added that the government is currently doubling down on efforts to improve the nation's sports industry. "As you know, the government will pay a Rp 1.5 billion bonus for every gold medal. This is a direct instruction from the president," he said. This means the bonus amount will be more than triple what athletes received in 2014. The government has set an ambitious target for Indonesia to finish in the top 10 in the medal tally. Athletes will also receive bonuses of Rp 400 million for silver and Rp 200 million for bronze medals. Behave, Please However, aside from all of the preparations, Erick said the most important aspect is public support for this year's event. While the government is spending extra money and increasing security measures, both physical and cyber, to ensure that the Games are a success, the public's support is of greatest importance. He called on every citizen and resident in both cities to be considerate and supportive during the event. "Let's use this momentum to start improving the character of our nation. Let's say, from something simple: Can we maintain the city and keep the sports facilities clean? Don't let it to happen that after watching a football match, people can see garbage everywhere like what typically happens. And for Jakartans who complain about traffic every day, can they refrain from using private cars and start using public transportation?" The entrepreneur said a country like Indonesia, which has already joined the trillion-dollar club in terms of gross domestic product, should think seriously about reviving its sports industry. "With a growing middle class, when people have enough money for food, shelter, clothing, they start to spend more on entertainment. Our entertainment industry – our music and movies – is already booming, sports need to follow, especially as we know we have a young population. We expect that millennials will be more active in participating and supporting the sports industry. Let's use the Asian Games as strong momentum for that," he said.