Knowing that the once highly praised company, at least by his links, Mr. Habibie may be upset of the current big trouble at P.T. Dirgantara, a state-owned aircraft factory founded by Mr. Habibie. But millions of Indonesian may be infuriated. Habibie’s grandeur dream ends up nothing more than a grandeur illusion. His big push approach in building Indonesian economy turns out to be a big mess.

In an attempt to prevent the ailing company from becoming bankrupt, the management of state-owned aircraft factory PT Dirgantara Indonesia has locked out all 9,760 of its workers.  Edwin Sudarmo, president of Dirgantara announced the company was suspending its staff with pay for six months.

No doubt, Habibie is a smart individual. But brain without wisdom is lame. For almost 25 years, the multibillion dollar project had swept the nation’s resources away from other productive purposes.  When 70% of the country’s population still worked in agricultural sector and given the country’s vast natural resources, Mr. Habibie came with the idea that was totally untouched with the reality: Building an aircraft industry in order to bring the country to a higher level of development. No wonder, when the prototype of commercial airliner, the 50-seat N-250, made its maiden flight on August 10, 1995, Mr. Habibie dubbed it the "national awakening" of Indonesia's technology industry. He was right, in a different sense, that after eight year, the nation finally is awakened that his ambition is nothing but fiasco.

The cost to produce the first model was Rp.4.6 trillion (US$2.30 billion) and the investment and marketing costs amounted to Rp.8 trillion (US$4.00 billion). But the sales were far from promising. The government then, through PT IPTN which produced the aircraft, developed a barter strategy, trading its aircraft for glutinous rice and canvas bags from other countries, including for the Malaysian car Proton Saga.

A few months later, Soeharto and Habibie set up an aircraft development company, PT DSTP (Dua Satu Tiga Puluh). Soeharto, who was the chairman of the board, owned shares equivalent to Rp.103 billion or US$0.051 billion) of the company. The initial capital was Rp.920 billion ($0.46 billion), but this was insufficient, and it turned out an additional Rp.3.5 trillion ($1.75 billion) was needed. Soeharto stated that a total of 4.5 trillion rupiah ($2.25 billion) ought to be paid by the Indonesian people, and he called on them to buy stocks at Rp.5,000 per share. Provincial and prefectural governors were summoned to the presidential residence and urged to buy stocks.

To sale the aircrafts in domestic markets, the government employed political pressure and aggressive sales tactics. In November 1995, the government demanded that the Merpati aircraft company leased the national airplane at a high rental fee, 1.2 percent of the sales price of the aircraft, much higher than the market rate (0.8-1.0 percent). The Merpati management, which rejected this offer, suffered from a drastic reshuffling.

The multi-billion dollar project intended – if that’s really true - to bring the country to become a developed nation, was in big trouble. Its accounting reports were full of secrecy and nobody dared to question about it openly.

Mr. Habibie forgot that a nation is not like a soccer team. Genius players such as Maradona and Pele could lead their teams to become champions. Their magic plays, by passing three or four opponents and preparing a finishing touch to their teammates or shooting a beautiful goal, heavily affect their team super performance. The ambitious Habibie was once directors of more than eight strategic government institutions, including as the country's technology minister and the head of Agency for the Assessment and Application of Technology. Let’s do the math. He must have had at least 18 secretaries with at least 8 meetings a day.  Unless Mr. Habibie possessed a supernatural power, it’s difficult to imagine how he could manage eight strategic institutions at the same period. No single individual, no matter how genius he is, would be able to build a country single-handedly. But Mr. Habibie, in his heyday, was a grandiose dreamer and rather narcissistic that he may well deserve to be called as a megalomaniac individual.  A megalomania typically has infantile feelings of personal omnipotence and grandeur, and never admits his weaknesses.

He also failed to recognize that a better nation could only be achieved if it is built on a solid foundation, not a wobbly one. Vastly endowed with natural and human resources, what Indonesia needs to advance was - and is - technological and management development that could transform the country’s traditional agriculture into a modern sector. That is an agriculture which is supported by and simultaneously supports the industrial sector, and the sector that is smoothly linked to capital and good markets. On the contrary, the country is still importing basic agricultural products such as rice and soybeans. And the interconnection between agriculture and industrial sector is still a big concern.

In respect of human resources, what the nation greatly needs was – and is - a vast improvement in education, the development of strong research-based universities and the establishment of solid basic and applied research centers. The country’s higher learning institutions and research centers are among the worst compared to those of South Korea, Malaysia, Singapore and Thailand, countries which were relatively comparable to Indonesia three decades ago.

Put it simply, Indonesia should have focused on taking care of its land and its men, not Habibie’s unrealistic ambition.

In contrast, for almost twenty-five years the country has wasted more than 15 billion dollars on the aircraft industry. Even the supporter of the project such as Umar Juoro, a former aide to Mr. Habibie, acknowledged it. He said, “We can save this company [PT. Dirgantara] and we should do it because we have already invested so much.”

It’s unlikely that the industry could survive. After eight years of the first prototype’s maiden flight, only two prototypes of the N-250 exist and they have not flown since 1997. And Dirgantara's main business has long been limited to assemble the Spanish-designed Casa CN-235 and the occasional helicopter.

Considering the opportunity costs that have lost during the last 25 years, the trillions dollar spent on the industry is essentially all for nothing.

Outrageous

But apparently, after wasting a staggering amount of public resources, Mr. Habibie still wants to grab any left over. As reported by Laksamana.net, Mr. Habibie has offered a lifeline to ailing PT Dirgantara, in return for a 5% stake in the firm.

Enough is enough. The country must reformulate its long term development strategy and consolidate its potential resources. Mr. Habibie may still want to prolong his grandeur dream, but the industry must be now reviewed thoroughly by independent analysts of its economic feasibility. In addition, Mr. Habibie owes the nation a full explanation of the projects and an apology, because without him, the nation would likely never waste so much resource.