Mobil Nasional

Indonesia rindu cerita sukses. Mobil Kiat Esemka langsung digadang-gadang sebagai mobil nasional dan optimisme tinggi diumumkan di teve dan surat kabar bahwa era mobil nasional telah tiba.

Optimisme ini mencurigakan dari awal, karena teknologi otomotif sarat dengan ilmu dan teknologi yang terus terang diluar kemampuan Sekolah Menengah Kejuruan (SMK). Ilmu dan teknologi yang perlu dikuasai untuk melahirkan industri otomotif yang tangguh meliputi sistem kontrol elektronik, mekatronik, pengecoran dan machining logam, metalurgi, mekanik, ergonomik, kimia pembakaran (combustion science), dan metal forming.

Investasi yang dibutuhkan juga sangat mahal. Satu CNC (computer numerical control) machine berharga sekitar Rp 2,5 milyar yang mampu memproduksi komponen dengan tolerasi sekitar 6/1000 inch. Taksiran saya, 2 jam dibutuhkan untuk menyiapkan dan membor empat silinder untuk mesin mobil. Jika ingin memproduksi 300 mesin tiap bulan untuk produksi 300 mobil tiap bulan, dibutuhkan 3 CNC machine. Investasi untuk manufaktur ini saja bisa Rp 15 milyar karena selain CNC machine juga dibutuhkan alat-alat kerja lainnya seperti cutting inserts, chucks, dan juga biaya pemeliharaan dan pekerja.

Pembuatan blok transmisi juga menyita modal dan ilmu. Gears harus dibuat dari material steel alloy khusus - biasanya AISI 4130 - dan CNC machine tambahan dibutuhkan. Berbeda dengan engine block yang bisa dibuat dari cast steel, material untuk gears ini sangat keras sehingga pembuatannya pun rumit dan mahal.

Ilmu dan resep pembuatan permukaan yang licin, tahan panas, dan kuat dibutuhkan untuk melapisi silinder agar piston yang bergerak dengan kecepatan 4000 rpm tidak rusak. Riset dibutuhkan untuk bisa mengembangkan teknologi ini karena saya bayangkan Jepang, Jerman, dan AS tidak akan memberikan know-how ini dengan cuma-cuma.

Vehicle dynamics juga dibutuhkan untuk mengatur toleransi dan design mobilnya. Berapa jarak antara axle depan dan belakang? Bagaimana design rangka mobil agar bisa menyerap energi tubrukan kecepatan tinggi? Berapa toleransi engsel dan washers agar kabin mobil bisa bergerak tenang dan tidak bising? Seberapa empuk shock absorber harus disetel agar penumpang merasa nyaman dan mobil tetap terasa kokoh? Ini semua perlu dimodel secara matematik, digambar memakai CAD (computer aided design), dan diuji coba.

Emisi gas buang juga harus dites. Berapa banyak konsentrasi NOX, CO2, dan yang lain. Berapa temperature di kamar pembakaran (combustion chamber)? Berapa campuran optimum antara bensin dan udara agar output power tinggi tapi tetap efisien dan tidak membuang gas beracun terlalu banyak? Teknologi catalytic converter juga harus dikuasai agar paling tidak pemilihan teknologi yang akan dibeli menjadi tepat.

Rasa dan kualitas kabin harus juga bagus. Kursi dan jok terasa mewah tanpa harus mahal. Teknologi injection molding harus dikuasai untuk membuat komponen-komponen kabin seperti dashboard dan lainnya.

Jika mobil nasional akhirnya menjadi industri karoseri, maka hemat saya ini tidaklah cukup dan tidak perlu digembar-gemborkan. Kunci kedigdayaan mobil nasional adalah penguasaan teknologi material dan manufaktur untuk membuat engine block, transmission block, chassis, dan drive train. Jika ini tidak dikuasai, kita harus jujur bilang kita tidak bisa.

Penguasaan ilmu dan teknologi tidak bisa dipolitisasi (baca: diakali oleh poli-tikus). Masalahnya tinggal: mau tidak membiayai riset jangka panjang, dimana uang akan terbuang untuk trial and error mencari teknologi baru. Pembuangan uang ini jauh lebih bagus dan mengena daripada pembuangan uang lewat korupsi dan ekonomi biaya tinggi pemerintah.

Jika ingin memulai industri mobil nasional, mulailah dari penguasaan ilmu material and manufaktur logam. Tiga hal yang perlu dikuasai cepat adalah (i) pelapisan logam agar permukaan licin dan tahan panas; (ii) precision manufacturing memakai CNC; dan (iii) CAD design and modeling.

Swastanisasi PNS

Korupsi di Indonesia sudah sangat parah dan pelik untuk diselesaikan. Dari yang terbawah sampai teratas. Memberantas korupsi sampai ke akarnya berarti mengganti sebagian besar aparat pegawai negeri sipil (PNS). Komisi Pemberantasan Korupsi (KPK) tidak akan mampu menyelesaikan masalah ini.

Masalah korupsi jika tidak diselesaikan tuntas 10 tahun lagi akan menjadi penghambat serius kemajuan Indonesia. Padahal selain korupsi, jeleknya infrastruktur transportasi akan juga semakin memburuk karena ditentukan oleh kualitas PNS.

Sistem PNS sendiri tidak akuntabel dan akibatnya membolehkan korupsi berlangsung, melembaga, dan tumbuh pesat. Pimpinan eselon atas dikaderkan dari bawah dan sistem pengkaderan ini bisa jadi sudah korup dari awal. Menteri adalah jabatan politik dan diisi orang parpol, tapi parpol sendiri juga banyak yang busuk. Intinya, PNS tidak mengerti konsep untung-rugi (reward & punishment) yang sangat dipahami pegawai swasta, apalagi sukar buat PNS untuk dipecat.

Satu cara untuk memberangus korupsi di jajaran PNS adalah menswastanisasi PNS. Jasa yang diberikan jajaran administrasi PNS sampai ke pimpinan dua level dibawah menteri sebaiknya dilelang lewat tender (outsourced). Jasa pengurusan administrasi tiap kementrian ditenderkan dan pemenang tender karena aspek harga, pengalaman, dan kualitas akan mengerjakan tugas administrasi kementrian tersebut.

Tidak perlu risau rahasia negara akan bocor karena (1) hanya beberapa kementrian saja yang strategis, seperti Luar Negeri, Pertahanan, dan Dalam Negeri; (2) pimpinan kementrian dua level dibawah menteri kebanyakan pelaksana keputusan; (3) pengambil keputusan dan perumus kebijakan strategis tetap ditangan menteri dan pejabat satu level dibawahnya.

Jika PNS menjadi pegawai swasta lewat proses tender maka (1) mereka akan takut dipecat jika kinerja tidak bagus; (2) ada atasan mereka yang sangat peduli kinerja mereka mengingat kontrak kerja berdasarkan waktu terbatas; (3) mereka akan lebih diawasi oleh perusahaan2 yang kalah tender jika ada penyelewengan; (4) target pencapaian dengan kriteria pemberantasan korupsi, biaya jasa, dan target kerja bisa disebutkan jelas dan mengikat di dokumen tender.

Proses tenderisasi jasa administrasi PNS ini juga akan memberikan peluang pemerintah memperbaiki upah buruh. Pemerintah bisa mendongkrak standar gaji lewat biaya gaji yang ditenderkan. Pemerintah berkompetisi langsung dengan sektor swasta yang lain dalam merekrut tenaga kerja berkualitas.

Sistem kaderisasi tetap bisa berjalan karena yang bagus kinerja bisa dipromosikan ke level yang lebih tinggi. Meritokrasi akan lebih berjalan karena perusahaan swasta yang menang tender akan terus memperbaiki diri dan memilih pekerja yang unggul untuk dipertahankan. Bisa juga pimpinan administrasi di level dua dibawah menteri dipromosikan menjadi PNS dengan menjadi pegawai satu level dibawah menteri.

Sistem pengawasan melekat akan berjalan. Pegawai kontrak dari perusahaan yang menang tender akan mengawasi atasan mereka, termasuk menteri dan jajaran satu level dibawah menteri, demikian juga menteri akan menuntut kinerja bagus dari pegawai tersebut. Karena tidak ada lagi status permanen, maka sistem perkoncoan yang mengakibatkan korupsi melembaga akan terputus cepat.

Dengan tenderisasi ini, PNS menjadi jauh lebih ramping. Selain menteri dan pimpinan dibawahnya, PNS juga bisa terdiri dari jajaran pengawas kinerja pemenang tender.

Overcrowded Jakarta

I biked today to work after a 2 month hiatus. The rain season contributed to my laziness, but I did not have a driver for more than a month as well. I experience again the massive traffic jam Jakarta is known for first hand since I cannot hide inside an air conditioned car cabin.

It is stressful to be trapped in traffic jams everyday. For a month I had to drive my son to school 20 km one-way. It took me 30 minutes in which 2/3 of the time is consumed by traffic jam due to cars entering and leaving a school on a narrow street. Driving back to work can take 1 hour due to a huge rush hour volume entering tool highway and a lane reduction. I spent 2 hours every morning and 1.5 hours every afternoon for this activity.

A 4 hour commute time for a worker in Jakarta is apparently not unusual. Some people in my office spend 5 hours everyday for commuting. The total cost due to this wasted time is staggering. A conservative estimate of 1 million commuter everyday will put the cost at about Rp 60 billion everyday. That's "Rp 60 milyar setiap hari" in Indonesian. Every year it will cost Rp 18 trillion, which is 1.5% of the national budget. It is simply ridiculous.

It amazes me therefore that there is no continued systematic effort by government to reduce this crippling traffic jam. I have lived in Jakarta for 10 months and notice three main reasons for the traffic jam:

1. Business and government activities are centered in Jakarta. People - including me - flock to Jakarta to find jobs. Jakarta simply cannot handle more than 10 million residents.

2. Minibuses (mikrolet, metromini, etc.), which are privately run, stop anywhere their passengers want them to. This includes picking up passengers. They idle at busy intersections to wait for passengers.

3. Lane markings are poor and not continuous when roads meet at ramps, intersections, and interchanges. These conditions are often the cause of traffic gridlocks in toll highways. Motorists do not know which lanes to pick at interchanges and have to slow down considerably.

No, I don't blame motorcyclists (pengendara sepeda motor) for the traffic jams. They are often squeezed in and out of their lanes by cars that fill up the entire width of a road. They zig zag their ways because they do not have dedicated lanes. They occupy opposing lanes for the same reason.

Jakarta has a population density of about 14,000/km². Beijing has a density of 1200/km², while Mexico City 6000/km². Tokyo also has a density of 6000/km², Singapore 7000/km², while Tehran 10,000/km². Two cities - Cairo and Mumbai - beat Jakarta as they respectively sit at 17,000/km² and 21,000/km². Does Jakarta want to be like Mumbai or Cairo?

A target density of 10,000/km² means that the population has to go down by at least 30%. Or Jakarta has to expand by 30%. The expansion, however, cannot mean that Jakarta incorporates nearby cities like Bogor, Tangerang, and Bekasi since they have their own populations. It is quite clear to me that a population reduction of 30% is needed to make Jakarta more livable.

This could only mean that Jakarta has to give up its business and government administration headquarters to other cities in this vast archipelago.

Indonesia's Presidential Airplane Purchase

Indonesia's State Secretary Office decided to purchase a new 737-800 Boeing Business Jet as the presidential airplane. It costs the country about Rp 800 billion (= USD 90 million). The cost is about 0.06% of the 2011 national budget. I heard this issue being discussed on the Sindo Radio on Friday, February 10th: whether it is fair and essential for Indonesia to purchase such airplane.

The Presidential Office's spokesperson cited efficiency and security as the two main reasons.  A Jakarta Globe article reports that the ROI is 35 years.

Operational cost of either rental or purchase, associated with fuel and personnel, should be approximately equal, so we can ignore this factor. We don't know the annual rental cost of airplane rented from Garuda Indonesia, which is currently used by the President. Let us call this variable x. The cost of airplane purchase - let us call it y - is obviously more expensive. The 35 years ROI roughly means

35x = y.

Given that y = Rp 800 billions, then a fair rental cost should be x = Rp 22.86 billion annually, or Rp 62.6 millions per day. The State Secretary Office should release the airplane rental cost data so that people can make informed opinion about the government's decision.

1. Income Per Capita perspective. The 2011 income per capita for Indonesia is USD 3469. Thus, the annual expense of Rp 22.86 billion is equivalent to what 730 Indonesians make in a year, or about 400 families. Based on this, the cost is reasonable. Even if the airplane lasts only for 20 years, the cost is still reasonable, as it means the cost is equivalent to 1278 Indonesians make in a year.

2. Investment perspective. If this money is instead invested by purchasing its own Government Bond, which has about 6% annual interest, then the amount of money at the end of 35 years would be

Rp 22.86 billions (1 - 1.06³⁴)/(1-1.06) = Rp 2292 billions.

The Rp 800 billions will have grown by about 3 times over 35 years. This is the future value of the money spent on buying the airplane and the decision does not look bad on this perspective either.

If, however, the Rp 800 billions payment is made as soon as the airplane is delivered by Boeing, then the future value will skyrocket to Rp 6150 billions in 35 years. It will have grown by about 8 times over 35 years. This payment scheme is the more likely scenario, and if this is the case, then the decision looks much worse. It would be good if the State Secretary Office releases information on the purchase payment schedule.

Rp 6150 billion could be spent on building a highway over 10 years. Assuming an interest rate of 6%, it is equivalent to spending Rp 467 billions per year for 10 years. The cost of building 1 km of road in Indonesia is about Rp 10 billions, so the decision to spend Rp 800 billions on the airplane is equivalent to cancelling a construction of 46.7 km x 10 = 467 km highway that will be useful for 35 years.

3. Leadership perspective. The absence of long term investment perspective is missing in this decision. I calculated in my previous blog that the Jakarta traffic jam costs about Rp 1 trillion monthly. The Rp 6.15 trillions value of the airplane purchase is equivalent of prolonging the Jakarta traffic jam by 6 months.

Another aspect is leadership. In a country where the majority of people live with a salary of USD 289, it is bordering on unethical to spend Rp 800 billion on a presidential airplane. The President could address the nation weekly on teve instead of zooming around the country in a luxurious airplane. These weekly addresses could be more effective when put in Youtube so that young Indonesians can listen on their computer tablets.

The airplane purchase does not give a good example to the government officials. In a country where people try very hard to conform to one another, the purchase decision does not set a good example.

All things considered, I doubt the purchase decision can enhance efficiency of the President's job since travel efficiency is a small part of his overall job efficiency. As for ensuring the security of the President, there is already Indonesia's Secret Service to guard him 24/7. Furthermore, I always wonder how secure the communication system in the Boeing presidential airplane, given that it will be designed and manufactured in the US.

Teaching Job v. Industry Job

I have been busy with work for the past 9 months in Indonesia. I haven't had time to hike a mountain. Two years ago during my 6-month sabbatical leave in Indonesia, I did that, backpacking, and biking intercity. That's my proof that teaching job is less stressful than industry job.

It is therefore okay to make less money as an academic because for me time is much more important than money. I enjoy outdoor sports - running, hiking, biking - where I can do fun stuff without buying something new. I just use my body - until I am dog tired - and enjoy the workout.

Free time is what I miss the most, now that I work in industry. Constantly arriving emails and phone calls keep the business go round - I guess - but we cannot work 24/7. I read a few weeks ago that Nokia stops forwarding emails to its employee's PDA's past office hours. It is a good idea.

I had a dinner with Indonesian alumnae of Canadian universities a couple of weeks ago, who are members of Calindo. Check Calindo website if you have time; it has a list of Canadian university alumnae in Indonesia. They feel the same way, that 24/7 business activities in the end do not matter in the long run. It is the legacy - what we leave behind after we die is what matters - and the families we raised.

I find Google's Do No Evil mantra makes sense now. Business - if it wants to grow - must have a purpose other than just making money. Making money should come from values it creates for customers and principles it holds.

I also don't think it is necessary for university courses to replicate what industry does. University is not for students to learn to work in a particular industry. University is a place for students to develop critical and independent thinking.

Why do not university courses replicate what industry does? First, most industry jobs are repetitive. Within a year or sooner, a new hire should be able to find the job rhythm and to work seamlessly. Second, each industry job often requires skills that combine these courses. For a great majority of jobs, it seems to me now, a well educated graduate should be able to adapt and work well within 1 year from his first day at the job.

Math Thinking Skills

It is obvious that a good majority of Indonesian science and math teachers are not used to and do not practice and develop math thinking skills. I roughly estimate about 75% of these teachers teach their students math and physics using formulaic approach, where math and physics problems are understood and solved using standard formulas given in classroom.

One can only blame Department of National Education (DepDikNas) for this bad teaching strategy. It does not produce tough students who have abiding interests in rigorous, consistent thinking. It only creates students who are lazy in thinking through problems; these students do not have disciplined, supple mind.

I am of the opinion that the mess Indonesia now experiences - corruption, bad infrastructure planning and network - is partially caused by state planners who are not rigorous and thorough in their planning deliberations.

It would be good if someone could share with me data that link bad infrastructure planning and execution with poor math teaching. The connection for me is obvious. These state planners are normally economists and engineers. They took math in high schools and universities, but they never learned it rigorously enough so that math thinking skills are never embedded in their thinking.

What are math thinking skills? They are learned when one solves math problems. Math problems are normally goal-oriented. To prove a theorem, or to show using algebraic manipulations a math formula. The way this goal-oriented problem is solved is, however, equally important.

Math thinking skills involve the following activities. One cannot use circular argument to get an answer. One must map the problem in terms of what variables he can manipulate and what the constraints are. One needs to know how to construct the answer based on previously available theorems and results. One must be diligent and careful to not make algebraic mistakes - mixing negative and positive signs, or forgetting a term in an equation, for example. One must be able to map a broad strategy to attack the problem; in fact, this broad strategy has to be available first before making a first step. A lot of thinking goes into getting this broad strategy. All these skills are practiced constantly when solving math problems.

When one spends enough time solving math problems, one develops an understanding of a standard for himself how a problem - any problem - is solved. One is not happy if a problem is not solved completely. One becomes an independent thinker since he applies his own thinking and standard.

A lot of Indonesians are not taking seriously what lacks in Indonesia's education system. At their own perils.

Poor's Numbers

I like to talk to a lot of people. Their problems seem limitless. I haven't found a compelling person to tell in this blog to update my interview with poor Indonesians. Their stories become increasingly ordinary as there are so many of them.

A husband had to move back to his village in Ungaran, Central Java because he got laid off as a restaurant cook. He has about 2500 meter square of land on which he plants corn and green beans. The price of fertilizer and herbicide is so expensive so that from Rp 1,000,000 investment he can get only Rp 300,000. A 30% return, of course, but the proceed is spread over 3 months and quite miniscule. And he cannot scale up his business since that's all the land he has. His wife works in Jakarta and wires Rp 1,000,000 per month. The snack for their 2 kids costs Rp 30,000 per day and pretty much eats up the wired money. To make ends meet, the husband becomes a farm laborer and gets Rp 35,000 per day.

They dream to open a food stall in the Ungaran market. They cannot save Rp 5,000,000 to realize this dream since what they earn is always gone by the end of each month. For most Indonesian poor, Rp 5,000,000 is an astronomical amount.

Another story is a driver with 6 children, from university age to 1.5 years old baby. He hopes to make Rp 2,500,000 per month to feed 7 people in the family in Jakarta. His rented house is leaky during rains and he looks like 60 years old although he is only 43. His eyes tell a life with many hardships.

I have grown more pessimistic with the human development prospect of Indonesia as I spend more time in Indonesia. There are 2 main problems. First, the capital owners are not willing to share their profits with their employees to allow for the workers to improve their children's education and health. There have been a lot of labor disputes in the past 2 months, mostly due to the minimum wage amount issue. Second, these employees have low quality. They form a vicious cycle. It is hard to unravel them until one has to give: either the capital owners or the workers.

The truth is that the Indonesian poor do not feel the impact of progress happening in Indonesia. The solution is education, but the quality of education is not good and education is getting more expensive as well. The government has to increase health and education subsidy for poor.

As I write this I am saddened. I left Indonesia 22 years ago. I have seen a lot of progress, but some things never change.

Training Ground

I feel good today. The driver who has been with me for the past 8 months makes more money working somewhere else. I told him he could move - I would recommend him to move - if he can make a better living for his family and get health insurance for them.

This experience reinforces my non-attachment principle. There is no need to hold on to something if it is time to let it go. Not a driver, a housemaid, a wife, a son, or anything else for that matter.

I have been criticized by my father to let my son live by himself in Canada. He is in grade 12. It was difficult for him, but he has so far adjusted well. He acknowledges that it would be difficult to start living by himself if he does this in his first year at university.

I have been told that I am a "western" dad despite my Asian heritage by one of my friends. I have to say that most parents in Indonesia really hold on to their kids, until they grow well into adulthood.

But a memory is like a box that I can lock if I don't want to remember about it. A glimpse of my son's photo reminds me of four of us having a vacation. It aches me. I looked at his photo and am grateful he has grown to an adult I am proud of.

I think the best thing for me to do is to allow my daily life to be a training ground for anybody who crosses my path. I simply work with this person and hope he and I can learn something along the way. When it is time to say good bye, then we will do so. No tears, no regret. Life goes on.

Trader's Mentality

I won't bother too much with the sad state of infrastructure in Jakarta if I don't have a family living with me here. But I do, so I become more critical as the lack of public infrastructure, such as decent sidewalks and bus stops, starts creeping into family's enjoyment of living in Jakarta.

We have been living in Jakarta for 8 months, and slowly - but surely - we feel the effects of lack of infrastructure in our daily lives. It is very difficult to walk around our neighborhood. The hot weather makes kids and women - mostly - uncomfortable when walking outside in the sun. The irony here is that Jakarta has fertile land and it shouldn't be difficult to grow large trees sheltering every road.

I can only blame for the sorry state of roads on a severe lack of planning on roads being built and maintained. This lack of planning happens everywhere. I see it in the roads, in the buildings where designs and construction materials seem haphazardly assembled, in houses where they have little regards for safety, comfort, and aesthetics. There are places in Jakarta - to name an example is the food court in Pejaten Village - that show good design and build, but it is a tiny minority. By and large, Jakarta is a complete design mess.

I often ask "How come the lack of planning seems to permeate many activities in Indonesia?" They seem related to a lack of thinking and putting this thinking into action. Why do people appear always in a hurry when they think about something? Indonesians are a relaxed bunch when they talk, but when they think they always want short cuts. Here is what I think the reason why.

I think most Indonesians have trader's mentality. A trader is someone who derives his money for living from trading activities: buying and selling stuff. A trader will pay a lot of attention to maintaining good relationships with different people: customers, suppliers, and informants. A trader will not try to offend someone for a possibility that this someone might be one day his customer.

A trader is a consummate deal maker. A trader maintains a balance of interests between suppliers and customers. It is not in the interests of a trader - I believe - to change a status quo once he learns how he derives profits from it. It is more profitable to have a stable network of contacts than to produce a quality product.

I think most of 66 years of independence have been governed by this principle where maintaining a status quo is more important than building a strong nation. Look at how the political elite get their money from and you will realize they have trader's mentality.

A trader is not a builder. A trader does not create something out of nothing. A trader brings products from one place to another. Indonesia has a strong trader's mentality since it is a vast archipelago and relies on abundant natural resources to make money.

A builder will not focus his energy entirely on building good relationships but also on building good physical objects, such as roads, building, and manufactured products. I see the trader v. builder dichotomy everytime I listen to discussions about infrastructure woes in Indonesia, from flood mitigation efforts to building safer roads.

Trader's mentality also explains why construction companies - despite having already assurance of winning contracts from their cronies and friends - still build shoddy buildings and roads. At least one thinks that these companies make an attempt to build decent products, but they don't. They are always in a hurry to make more money and are willing to sacrifice quality.

The problem with infrastructure, however, is that after it is built haphazardly - complete with their crappy qualities - it is very difficult to remove. You cannot easily remove badly designed roads and buildings. On the other hand, you can easily actually remove bad contact networks. In this sense, I think the rulers of Indonesia - the rich, the smart, the powerful - have been investing in the wrong kind of investment. Instead of building good infrastructure, it has invested in an infrastructure of network alliance by showering and exchanging each other with money and power.

Poor's Subsidy

For $250/month one can hire a driver in Indonesia. For as little as $60/month one can afford an unexperienced housemaid. They show that what slows down Indonesia's economy is the low quality of workers. It is practically impossible to expect them to improve their skills beyond their current and their ages are between 20 and 40 years old, the supposedly productive age bracket.

They received typically 6-9 years of school education which is not enough to improve their lot in real world. Most grow up in rural areas and cannot use their agricultural skills when they move to cities. I estimate about 60% of Indonesian workers have these characteristics.

These Indonesians are achingly polite, so much so that they would defer if they are presented with challenges. For instance, I was interviewing a driver, and before I said anything about driving out of town he already said that he did not have intercity driving experience. Such worker needs a lot of encouragements - which could be tiring for an employer - and suggests he does not have initiatives.

Low skill workers are also reluctant to improve their skills. What do I mean by low skills? They are those that can be mastered at acceptable proficiency within 1-2 months. Examples are household (simple) cooking, floor cleaning, and grocery buying. Driving is not a low level skill, but it is easy to get driver's license in Indonesia. It still takes 1-2 years to master driving skills though, but there are not many standard rules in Indonesia. All one has to do is an access to a car, a driver's license, and a willingness to drive in a chaotic traffic.

They are disadvantaged because of their low skills. They are, however, a boon to the Indonesia's upper middle class. The quality of living of the upper middle class is quite cushy since cooking, cleaning, driving, washing, gardening, and even house repair can be outsourced cheaply. It allows for the upper middle class to focus further on their jobs, and this is what I would call the poor's subsidy.

It is not a mistake of the upper middle class to give low salary since there are a lot of poor looking for jobs and the quality of these workers is low. What separates one from others is his loyalty and hard work.

This low economic class represents a huge untapped market. My rough estimate is that their purchasing power is about USD 15 billion per year. Unilever, Danone, and other multinational consumer product companies aggresively pursue business in Indonesia not only for their current purchasing power but for their future loyalty in 10 years.

Before their purchasing power can increase they have to improve their education and skills. This is not a realistic expectation, however. What is more likely going to happen is that their purchasing power will rise due to inflation. Demands of wage raise are getting louder. There have been labour demonstrations occuring in Batam island and Jakarta. I don't think they will subside since lives are hard for them.

This low economic class is - I think - the reason why Indonesia is not in recession. They spend all they have on lubricating the country's economy. They subsidize the rich with their low paying wages. I suspect money circulation in this economic class is fast as well since they borrow each other constantly. I know this since I have a microcredit business in Solo and watch how they struggle to make ends meet.

Kesehatan Bangsa

Sebelum kaya, kita sehat dulu karena aku
Belum lihat orang kaya mati muda
Mereka terbiasa olahraga dan jaga makan
Jadi sehat makanya lebih penting dari kaya

Rakyat miskin berdesakan di kampung
Makan seadanya, hampir semua laki laki
Kurus, pertanda sulitnya hidup walau
Ibu-ibu sering gemuk mungkin terlalu
Sering mencicipi masakan

Sedang yang punya "upward mobility"
Memenuhi mall dan makan suka cita
Banyak yang gemuk: bapak anak ibu
Sering aku pikir: hidup untuk makan
Atau makan untuk hidup

Kebanyakan rakyat jadinya tidak sehat
Kurang berolahraga beribu alasan
Bagaimana bisa bersaing dengan bangsa
lain yang lari, berenang, main ski
Melatih keberanian, jiwa, raga

Jangan salahkan masakan Indonesia
Karena memang cita rasanya luar biasa
Aku bisa gemuk tidak karuan jika
Menuruti lidah perut yang terus lapar

Tapi mungkin karena rakyat kurang arahan
Maksudku, kalau hobi ya mbok hobi olahraga
Presiden pun ikut gemuk pipi nyempluk
Makanya aku suka Jokowi karena dia
Orang kaya tapi kurus, tidak ngumbar nafsu

Work Life Balance

Last time I wrote my blog was 12 Dec 2011. It was my first feature on interview with Indonesian poor. It seems a long time ago, and although I tried to find time it was not possible. There were many things I had to do at work. Managing a team of people and at the same time adjusting to a new work environment in the past 8 months.

It took me 6 months to adjust from an associate professor job to a managerial position at an oil and gas company. Much adjustment rests with coordinating people; this took about 50% of the time. The other half is to learn and do the job at the same time.

Once 6 months have passed, I noticed I changed my work strategy. I become much more cooperative and try to find common grounds to settle issues. I prioritize better since the most challenging part of working in industry is to understand and manipulate the connections between time and cost.

Different business types have different time-cost correlations. For university business, professors do not worry about cost except costs of equipment and amount of grants as there are virtually no profit and loss calculations.

That is the work challenge and I survive so far. The other component I have to worry is life. My life. What I want to do with my life. What I want to achieve. Working for a company is good, up to a point, but I know at some point I have to be on my own.

The work life balance is tricky for me. I need good salary to support my family, but I myself prefer free time to do whatever I want. I am always attracted to become a traveling teacher monk. It is not a job; I mean: who gives a shit about job if you become monk, anyway.

I am one who believes my lifestyle should dictate what my job should be. Not the other way around. I am still working on making it a reality.

Rudi, Trash Picker

This is my first profile feature of people on the street in Indonesia. I am more interested in learning how the poor live and lead their lives. Occasionally, I may interview other types of people, you be the judge. It is presented in Indonesian and English.

Rudi, Pemulung (31 tahun)
Rudi, Trash Picker (31 years old)


1. Darimana asalnya? Desa Kutaraja, Kuningan (Jawa Barat)
1. Where are you from? Kutaraja Village, Kuningan (West Java).


2. Sudah berkeluarga? Belum. Ibu masih hidup di desa.
2. Do you have a family? No. My Mom is still alive in the village.


3. Sudah berapa lama tinggal di Jakarta? 2-3 tahun; lupa persisnya.
3. How long have you been living in Jakarta? 2-3 years; I forget exactly.


4. Bekerja apa dulu di Kutaraja? Jadi buruh tani di sawah.
4. What did you do in Kutaraja? I became a daily laborer at the rice field.


5. Kenapa pindah ke Jakarta? Pendapatan saya jadi buruh tani tidak menentu. Jika bagus, bisa 30-40 ribu per hari. Pertama di Jakarta, saya jualan gado-gado di Pasar Rebo dan dapat 150 ribu sebulan. Dapat makan dan penginapan gratis. Saya jadi pemulung sudah 2 tahun.
5. Why did you move to Jakarta? I cannot make a steady living working as a rice field laborer. On a good day, I can make $3-4 per day. In Jakarta, I first worked selling fruit salad in Pasar Rebo and made $15 per month. But I got free food and lodging while working as a fruit salad vendor. I have been a trash picker for the past 2 years.


6. Dijual dimana barang loakannya? Gak tentu. Kalau ada pengepul pakai gerobak, saya jual ke dia. Kalau tidak, dijual ke toko pengepul. Sehari bisa dapat 20-40 ribu per hari.
6. Where do you sell the trash you collect? It depends. If I see a mobile trash collector with a cart, I just sell my trash to him. Or I go to a collecting store. I can make $2-5 per day.


7. Tinggal di mana sekarang? Di Kramat Jati. Saya putar dari Kramat Jati, ke Pondok Gede, Kalimalang, Cawang, terus balik ke Kramat Jati, mengumpulkan sampah dari pagi sampai malam. (Rute jalan kaki melingkar ini sekitar 25 km.)
7. Where do you live now? In Kramat Jati. I circle from Kramat Jati, to Pondok Gede, Kalimalang, Cawang, and heading back to Kramat Jati, collecting trash from morning 'til late night. (The walking route he has is about 25 km.)


8. Ingin melakukan apa 1-2 tahun lagi? Ingin dagang, tapi saya tidak tahu berapa modal untuk jualan rokok.
8. What do you want to do in 1-2 years? Want to be a vendor, but I don't know how much money I need to have to be a cigarette street vendor.


9. Bisa nabung? Bisa pak, sekitar 15 ribu per hari dan uang tabungan saya titipkan ke penjual rokok dekat rumah.
9. Can you save? Yes, about $1.50 per day. I ask a cigarette street vendor I know to keep my saving.


10. Kenapa tidak mau saya potret? Malu. Saya bilang saudara saya di desa saya kerja jadi kuli.
10. Why don't you allow me to take your photo? I am ashamed. I told my relatives I worked as a construction laborer in Jakarta.

1.91 Juta Anak Indonesia Buta Huruf

Kompas 21 November 2011 memuat data statistik 2010 tentang manusia Indonesia yang bisa dianalisa lebih lanjut: 94.76% anak Indonesia pernah mengenyam SD dan sederajat; 67.73% pernah belajar di tingkat SLTP dan sederajat; dan 45.59% di tingkat SLTA dan sederajat.

Ini berarti sebanyak 67.73% - 45.59% = 22.14% bersekolah sampai tingkat SLTP, sementara 27.03% cuma bisa mengenyam sampai tingkat SD. Saya bisa simpulkan 49.17% calon tenaga kerja di Indonesia - paling tidak 2-3 tahun ke depan - akan mempunyai pendidikan tertinggi tingkat SLTP. Mereka inilah yang akan mengisi sektor informal, seperti menjadi penjual kaki lima dan jalanan, buruh bangunan, pemulung, dan pembantu.

Artikel Kompas ini juga menyebutkan 7.09% anak dibawah 15 tahun menderita buta huruf. Mungkin saja 49.17% anak Indonesia yang bersekolah dengan jenjang tertinggi SLTP juga menderita buta huruf, dan jumlah mereka sebanyak 49.17% x 7.09% = 3.49%. Sisa anak buta huruf di bawah umur 15 tahun sebesar 7.09% - 3.49% = 3.60% jadinya datang dari keluarga yang tidak mampu menyekolahkan mereka di tingkat SD.

Menurut saya, 3.49% anak Indonesia berusia di bawah 15 tahun yang menderita buta huruf adalah korban kegagalan sistem pendidikan Indonesia. Karena paling tidak sistem pendidikan tersebut bisa membuat anak Indonesia membaca.

Saya juga berpendapat 3.60% anak Indonesia yang buta huruf dan tidak bersekolah adalah korban kegagalan pemerataan pembangunan Indonesia. Karena pendidikan juga termasuk hak anak Indonesia, selain sandang, pangan, dan papan.

Pertumbuhan penduduk disebutkan sebesar 1.49% dan jumlah penduduk Indonesia tahun 2010 sebesar 234 juta. Jika persentasi pertumbuhan diasumsikan sama 15 tahun terakhir, maka penduduk tahun 2005 sekitar 187 juta. Karena jumlah penduduk tahun 2004 diperkirakan sebesar 214 juta, maka jumlah anak usia 6-15 tahun di tahun 2010 sekitar 27 juta orang.

Jadi ada sekitar 972,000 anak Indonesia berusia 6-15 tahun yang buta huruf dan tidak bersekolah. Juga ada sekitar 942,300 anak Indonesia yang bersekolah di tingkat SD dan SLTP yang masih buta huruf. 1.91 juta anak ini hidup dan tumbuh di tengah kita: 1 per 122 anak Indonesia berusia 6-15 tahun.

Cost of Jakarta Traffic Jam

I use Jagorawi toll highway connecting Jakarta and Ciawi at least once a month to give a teaching workshop in Cianjur. Every time I go back to Jakarta, there is always a huge traffic jam - a few kilometers - where cars line up to wait to pay at the toll booths. This traffic jam is caused by a misplacement of toll booths that actually block the traffic. It is a real example of mismanagement gone horribly wrong.

There are of course daily traffic grinds everywhere in Jakarta during morning and evening rush hours. These gridlocks are quite maddening even to watch and cost big time to Jakartans. How do I estimate the cost of the traffic jam?

It is not difficult to estimate the traffic jam cost. (No need for a Ph.D., LOL!) All I need are a few facts:

(a) End-to-end length of a traffic jam per hour = 3 km. This number comes from an estimated average speed of a car crawling through a traffic jam.

(b) The amount of fuel wasted per hour = 6 liters. This number comes the Consumer Energy Center, California Energy Commission website, which states that "For every two minutes a car is idling, it uses about the same amount of fuel it takes to go about one mile." When the car idles for an hour, then it is equivalent to travel 30 miles (= 48 km). With an average fuel mileage of 8 km/liter, an hour idling will thus consume 6 liters.

Note: Does 6 liters make sense? If a car moves with a speed of 90 km/hour, it will consume about 11.3 liters. The idling thus costs about 50% of the fuel consumption. When a car idles, the only car parts that do not move are the axles that turn the wheels and the drive shaft. The engine is still running though, idling or not. The 50% fuel consumption fraction during idle corresponds to the fuel consumed by the running engine.

(c) The loss of productivity per person per hour = Rp 62,500 (about $7/hour). I get this number by assuming an average salary of Rp 10,000,000/person. A month has on average 20 working days and each lasts 8 hours. Hence, the salaryman costs Rp 62,500 per hour.

Okay, now the traffic jam cost calculation goes like this. Calculate only the cost per hour of moving a 3-km traffic jam filled with cars. Since car-to-car distance is about 10 m, then there are 300 cars in the 3-km traffic jam per lane.

Each car can be assumed to have 2 workers with the mentioned salary. Thus, there are 600 salarymen got stuck and the labour cost is therefore Rp 37,500,000/hour per lane for every 3-km traffic jam.

In addition, the fuel cost is equal to 300 cars x 6 liters/hour = 1800 liters. The cost of premium is Rp 4500/liter, so that the fuel cost for such traffic jam is Rp 8,100,000.

The total cost = labour cost + fuel cost = Rp 45,600,000 per lane for every 3-km traffic jam. For a 1-km traffic jam that lasts for one hour, it therefore costs Rp 15,200,000 per lane. This is the unit traffic jam cost worth remembering!

I estimate Jakarta has about 500 km of main thoroughfares that experience daily traffic jams. Each morning and evening, these traffic jams last 1 hour (in which the speed crawls to 3 km/hour), so each day the traffic jams last for 2 hours. In addition, there are on average 2 lanes for each thoroughfare. Hence each day, the traffic jam cost is

500 km x 2 hours x 2 lanes x Rp 15,200,000/km/hour/lane = Rp 30,400,000,000!

It is a lot of money! It costs abour Rp 30 billion rupiah (with nine zeroes!) per day. In a year, it will cost Rp 11,096,000,000,000 = Rp 11 trillion rupiah (with twelve zeroes!).

Jakartans need to wake up and spend this money somewhere else, such as making more efficient rapid transit system.

Mechanics Problem 2: Friction of Box on an Accelerating Truck

A flatbed truck carries a load on its flat bed as shown in the picture above. The load is tied to the back of the truck cab with a steel cable to prevent it from sliding. Schematically it would look like below.

If we identify all forces acting on the load, then the free body diagram, whose purpose is to show these forces, would look like below.

This problem asks what should be the maximum acceleration of the truck as it accelerates from rest if we want to prevent the load from sliding, given that the load is being held by the friction force μ_s N, where N is the normal force and is equal to the load's weight m g, and the cable tension T.

1. Let us scrutinize this free body diagram. The first question is why the static friction force points to the right. The answer is conservation of momentum. Momentum p is equal to m v, where m is the object's mass and v is its velocity. The initial momentum is zero since it is initially at rest (v = 0). As the truck accelerates, it wants to conserve the zero momentum,

0 = m_truck v_truck + m_load v_load.

Since the truck velocity v_truck points to the right due to the acceleration a to the right (see the above diagram), the load tends to move to the left, i.e., v_load points to the left. Friction opposes the motion, i.e., the velocity; therefore, the friction force points to the right. The cable tension T also points to the right since it serves to prevent the load from sliding.

2. The sliding motion of the load represents a relative motion the load has with respect to the flat bed. The load accelerates with respect to the truck which is also accelerating. We say that the load moves in a noninertial frame. The Newton's second law, F = m a, does not work in a noninertial frame. F = m a has to be anchored in an inertial frame. The inertial frame is obtained when we regard the acceleration of the load is equal to the sum of the acceleration of the sliding motion and the acceleration of the truck,

a_load = a_truck + a_sliding.

Thus, the Newton's second law now reads

T + μ_s m g = m (a_truck + a_sliding).

3. We do not want the load to slide; thus, a_sliding = 0. The maximum acceleration is equal to

a_truck = T/m + μ_s g,

where T is maximum when it is equal to the tensile strength of the steel cable, which is about 400 MPa. For a cable with a cross section area of 0.25 cm², we get a maximum T of 10,000 N. Typical value of static friction coefficient is about 0.5, so that μ_s g = 4.9 m/s². For a 1000 kg load, we get T/m = 10 m/s². Hence, the maximum acceleration for these data is 14.9 m/s². 100 km/h = 27.8 m/s, so 14.9 m/s² is thus quite a high acceleration. But for a really heavy load, say a 10,000 kg load, the cable can now only bear 1 m/s² acceleration and in this case, the friction force becomes a lot more important. As a rule, therefore, the heavier the load is, the more it has to rely on friction to prevent the load from sliding.

Mechanics Problem 1: Pulley System

I want to start a blog series which focuses on applications of mechanics. I have been giving a math-physics workshop to high school teachers in the past two months. It is a problem-driven workshop, where concepts are discussed through problems. I am turning the concept of learning around. Usually, concepts are laid out first - laboriously - and then examples are given.

I find through this workshop that by working out problems my students - the high school teachers - understand the concepts better. I want to share this idea with you. If you find this blog series interesting, give me a shout. Thank you.

The diagram above shows a sytem of two pulleys, which is used to lift block B. The person who uses this pulley system exerts a force P to lift the block B. The two pulleys are connected by the blue cable that runs from A to C to D ... E, F and all the way to G.

Through mechanics analysis, you will find that this pulley system makes lifting B easier. P is only 50% of the weight of B. Directly lifting weight B without pulleys would mean requiring exerting a 100% of the weight B.

Our analysis relies on a formula called Newton's laws of motion, in particular the so-called Newton's second law. It states that an acceleration a of a body is equal to the sum of all forces T acting on the body divided by its mass m. That is, T = m a.

1. Let us apply T = m a to our problem. The blue cable and pulleys are assumed massless and rigid, so that the force P is transferred to the block B without dissipation. The cord that hangs the block B to the lower pulley transfers a force 2P since the cable wraps around the lower pulley and each cable section carries a force P. T = m a for the block B thus gives

2P - mg = m a.

The weight of block B, i.e., m g, is directed downward, while the force 2P is directed upward. This is the reason why they have opposite signs in the previous equation. Thus,

P = m (a + g)/2.

When the block B starts to be lifted, its acceleration a is not zero. But when it moves upward with a constant speed, a = 0. At this situation, we have P = m g/2. This shows that P equals 50% of the B's weight.

2. The pulley system thus provides a mechanical advantage. To lift B, one pulls only 50% of its weight. How is that possible? Is there a catch? The answer is yes. The block B moves 200% slower than it would if it were lifted directly without pulleys. You will spend the same amount of energy to lift the block over a certain distance regardless whether you exert a force 50% of its weight, or a 100%. The energy you spend per second is lower due to the slower upward motion of B, which makes the lifting work easier.

The key to understand this aspect is that the cable portion connected to the force P travels twice as far as the portion connected to the block. That is, x_A = -2x_B, where the negative sign means A and B move in opposite directions. This fact comes straight from the fact that the length of the cable is constant

x_A + 2x_B = constant,

so that by differentiating with time we get their velocity relation,

v_A + 2v_B = 0,

and another differentiation yields their acceleration relation,

a_A + 2a_B = 0.

These kinematic relations are constraints to the motion and arise independently of the dynamics dictated by the Newton's second law.

3. The work done is equal to force times distance travelled. Thus, when the block B moves at a constant speed

Work = P x_A = (m g/2)(2 x_B) = m g x_B.

This shows that the work needed to lift the block B remains the same: m g x_B. The conservation of energy is still obeyed. The beauty of the pulley system, however, is that it makes lifting it easier since per second the force needed is only 50%. The trade off is the distance travelled at A becomes twice as long.

Canadian Cost of Living

There are things I miss from Calgary: the snow-capped Rockies (I really miss backpacking in Kananaskis, Yoho, and Banff hiking trails!), clear water of Bow River and its running/bike paths, and libraries. My son would add Five Guys burgers and Banzai. It is fair to say I feel homesick while already at home now.

But there are things I don't miss as well. Cellphone rates are way too high in Canada. I pay $20/month for my smartphone in Jakarta, and yes, that includes everything you can imagine getting from a smartphone package. I paid $100/month in Calgary for an identical package, not including additional airtime charges.

House heating cost is not cheap in Calgary and Canadian winter is cold and long. It can cost $300/month to heat a house. Utilities - such as electricity, water, garbage removal, and sewage charge - add another $300/month. These costs get reduced when we moved to an apartment though as they got absorbed into a rental fee. In fact, I like the simplicity and frugality of living in a small dwelling space.

Housing cost in Canada is very expensive compared to Indonesia's. Roughly, the ratio of average house price to average salary is twice as high in Canada. We get what we pay. The road and residential infrastructure in Canada is indeed a lot better. The question is simply whether one is willing to pay for it.

The food cost in Canada is a lot more expensive than Indonesia's. It is about 500% more expensive. In my previous blog, I talked about paying $6 lunch for 6 people in Jakarta, while in Calgary I had to pay $10 for lunch. I believe this huge difference comes from stricter food and health regulations, building code regulations, and more expensive labour and transport cost.  And again, the question is simply whether it is too expensive for its benefits. We get what we pay, but in Canada this huge price increase does not translate into varieties of food choices. Indonesia simply has a lot more food choices due to its tropical climate.

If you factor in all these costs, Canadian cost of living is about 4-5 times more expensive than Indonesian. I have been asked before by Indonesians who planned to work overseas and I always advise them to not just care about salary. They have to pay attention to cost as well.

Are costs of living limited only to those I listed already? There are health and risk costs. I used to think that developed countries win hands down here, but there are many health and insurance companies - including Canadian - that operate in Indonesia now. Indonesians pay reasonable insurance rates for health and accident coverages. Health costs due to air pollution are difficult to assess, but Canada is clearly miles ahead here.

Car prices in Indonesia are more expensive than in Canada. Gasoline is, however, subsidized in Indonesia, unless you drive a fancy car that requires a premium gasoline. Roughly, transportation costs are similar, although Canada is better since roads are less polluted and less congested.

Canada though has one clear advantage: very good public school and university system. They are not free though. University tuition fees of reputable Indonesian universities are about a third of those in Canada. The quality, however, can be lower than that.

Bike-to-Work Challenges in Jakarta

Yesterday I decided to bike 14 km to meet a colleague in downtown Jakarta at nine-thirty in the morning. It took me 40 minutes through a huge traffic jam that always occurs every morning along Jakarta's main throroughfares. Had I driven a car, it would have been a lot longer. Biking during Jakarta's mad rush hours is a good alternative: cheap, healthy, and fast.

One big challenge of bike to work in Jakarta, however, is the hot weather. It makes me sweat profusely. My shirt was wet. Luckily, when I arrived at Wisma Mulia, the security staff gave me a run-around to park my folding bike and get a visitor tag; my shirt got dry during this delay. The motorbike and bike parking area is tucked way at the back of the office tower and is not easily found. (Office towers in downtown Jakarta are friendly to cars but not to pedestrians and bikes.)

The sweat issue is what concerns me when I want to bike to meet friends and colleagues. I have to pick what I wear carefully so that the sweat does not produce smell. A synthetic material wicks sweat fast but produces smell, while cotton can reduce smell if not too thick. A blend of the two seems the perfect combination so long as it is not thick. It is a good thing my head is bald; otherwise, my hair would still be wet despite the delay.

Another big challenge is the lung-clogging exhaust fume from cars and motorcycles. This problem worsens during a stand-still traffic jam since heat and fume conspire to choke a cyclist. I have resisted so far to wear a bike mask, but I have been thinking about it more and more since I bike everyday to work.

Yet another challenge is the rain season where roads will be wet and slippery. Not to mention messy and dirty clothing from dirt and muck splashes. My backpack has a rain cover and I have a thin raincoat, but I still have to get mud fenders for my bike. The prospect of mixing sweat, rain, and mud is not as exciting as mixing snow and sweat.

As it turns out, biking in a hot weather is more challenging than in a temperate weather around 0-20 °C. No wonder there are not many people biking unless you are physically fit to deal with the aerobic/agility demands or a daredevil - such as yours truly :-). The challenges of biking in Jakarta can be lessened by having dedicated bike lanes. Bike to work is actually a viable, healthy, and cheap alternative to rapid mass transit to reduce traffic congestion and improve air quality. During morning weekend, biking in Jakarta is very pleasant due to much less exhaust and less congestion. But the Jakarta government has done little to make the bike lane idea a reality.

$6 lunch for 6 people

We went to an ordinary food stall - aka warteg, a shorthand for 'war(ung) teg(al)', which means Tegal food stall, with Tegal being a city in Central Java where a lot of food stall vendors hail from - yesterday for lunch. It cost $6 for 6 of us. We had six full plates with sweet drinks to top them off. Go figure.

The cost boggled my mind. How come it cost only 6 bucks? $6 got me a decent Asian food lunch at the U of Calgary food court ... for one person, and I had tap water to drink. The food are similar in taste and use similar ingredients. Where does the price difference come from? I like to think about these problems. They always intrigue me.

The $1 lunch/person at the warteg could only happen if the vendor's cost of living is low or her sales volume is huge. The latter is not true, so her living cost is low. Where does the low living cost come from? Well, from the low food price to begin with ... and we are in an infinite loop now, trying to unravel it.

But the truth is that IT IS NOT AN INFINITE LOOP. The owner of the food court vendor drives a BMW X3 while the owner of the warteg lives in a small hut and rides a motorcycle. The BMW-riding owner is smarter and wealthier than the warteg owner. The former also has a higher expectation than the latter, and thus demands a higher rate of return from his investment.

My wife and I had thought previously of opening a small fast food place in Calgary, so I am not alien to its costs. A healthy revenue would be at least $12,000/month since the rent and utility would cost at least $2000. Two full-time staff would cost $4,000. It is reasonable to expect at least $4,000 monthly revenue. It is a hard work and actually does not make a lot of money. In fact, the food court vendor has more than 1 food outlet in Calgary.

The high cost of lunch in Calgary comes from high living cost of business and owner. The high standard of building causes the high cost and comes from continuous building code improvements over the years. The high standard of health and food regulations also make operating a food outlet expensive; I only saw an LPG stove and simple food utensils - no stainless steel friers and all - at the warteg. The continuing improvement process causes the living cost high since employees cannot be paid lower than the costs to rent a decent apartment and to buy food.

It is what I call the karma of technology. As technologies improve and get implemented, they create additional costs that banks will provide at additional costs. This increased cost gets rolled in to the next generation. When the current generation fumble and are not successful as the previous, things can get really difficult, which I think underlie the current recession in North America and Europe. Not a bad thought from having a $6 lunch for 6 people!