I SPECIAL FEATURE I

ENTREPRENEURIAL GOVERNMENT

When Gorontalo was still part of North Sulawesi prov ince, t he reqency administration could only earn Rp7.5 billion ($815,0 0 0) in 2000 from local taxes. Five years after Gorontalo became the 32nd prov ince of Indonesia under the leadership of former businessman Fadel Muhammad, that fiqu re had multiplied by more than six times to Rp46 billion in 2006. BY ISHAK RAFICK
Bureaucrat s, accord ing to University of Indone­ sia economist Rhenald Kasali, are inclin ed to spend as mu ch money as possible in orde r to obtain a bigger bud get the follow­ ing year. In contrast, entrepreneurs are co ncer­ ned with how to manage their budgets efficiently to o btain greater output or revenue. Fade l Muhammad, former bu sinessman and co-founde r of th e Bukaka Group who was elected as the first governor of Goron ralo in 2001 , is among the few bureau­
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crars in the country who act like an ent re­ pren eur. In 2002, a few months after he was officially installed, th e M inistry of H om e Affairs cha nneled cent ral government fu nds worth Rp35 billion as sran -up capit al to develop the new pro vince. \X!hile other govern ors might have used the fu nds to build new offices for th em selves or oth er provinci al institu­ tion s, Fadel used the mon ey to build an airpo rt, sea port and road s. "W ithout th ese £1cilities, the new p rovince will never grow," he said . H e had three obj ectives. First was to resolve the severe lack of intr astruc­

ture facilities in C oronralo, Seco nd was to help ensure that agriculture pro ­ du ce could be qu ickly transpo rted to th e market or sea pon so th at it would not be left: decaying in productio n cente rs. T hird, co end Coron ralo's dependency o n N orth Sulawesi for air trans por r. "Anyone visiting Coro nralo no long­ er has co go through Man ad o (the No rth Sulawesi capital)," brags the governo r. who ad m its to being a workaholic with an 1' ­ hour daily sched ule. It was only later rhat rno nev was allocated to develop a local legisbti\·c cou ncil building o n a sloping hill, and a governo r's office atOp the h ill with a com­

GlobeAsia I

MA Y 2007

H e m ob ilizes regem s. turn­ ing G orontalo into an ag ropolita n province based in itially o n co rn production. ying new tech nol ogies to boost agr icultu ral o ut p ut an d qual ity. riculum is intende d to serve the human resources need s of b ig citie s. an econom ist and local lawm aker. h on o red in the Ind on esian Reco rd M useu m as t he governor with the b iggest share of votes. \'V' e are the first (p rovince) to do this. was fond of develo p ing "presti­ g ious" pro jects such as the Plaza sho p­ ping m all (w hich rem ain s vaca nt) . In contrast. the local administration in­ trod uced the use of a new nu trition agent develop ed by an alu m ni of the Bogo r Agricu lture Institute. so it's not sur prising th at scho olleavers h ave no inter­ est in th e agr icu lture. su PPOrt sta rted to flow in . Fishery o ut p ut jumped to 43 . and tha t m ost of its peop le are farmers .". I didn't want thi s to happen in G orontalo . who is also presiden t o f co nstru c­ tio n firm PT Cahaya Man di ri Persad a. th e ad min istration has laun ched a p rogram that p rovides cap ital an d ot her facilitie s to help fish ermen in crease o utp ut.0 00 to ns in 20 0 1. a retired senio r army officer. an em ployee at th e local airport. In contrast to h is backgrou nd as an engineer and his years of expe rience deve­ lop ing heavy in d ustries at Bukaka. This clearly shows th at the peop le support hi m . po inting o ut the facts that the province has a sizable stock of arable lan d ." wh ich essent ially me an s that the ag ricul­ ture an d fishery secto rs will become the province 's eco no m ic backb one. wi tho ut the use of fert ilizer. remai ns o ne of Fadel's stro nges t critics. Fadel has been focu sin g o n th e agricultu re sector as th e basis for d evelop ing th e local eco nomy.00 0 tons in 2005 fro m 19. says local econom ist Ma nto Rahmalo. bu t as th ey too k no te of how seriou s h e was abo ut implement ing h is plan . include impressive economi c grow th of 7 . Now. particu larly farmers and sma ll bu sin essm en . In just o ne in itiative in this sect o r. Fadel u nd erstand s th at ed uca tio n plays a key role in th e develo pment o f his pro ­ vince. an d a zoo (wh ich is st ill flnd ing tro uble in locating animals) t ha t togethe r cost t he local budge t aro und Rp 7 billion . improving the education sector and people's welfare. saysrhreepillarshavcbeen pu tin placeb y Fad el th at w ill influ en ce th e fu ture develop m ent of Go ro ntalo.06% in 20 06." T he results.44 5 sq krn province. His first move was to revise the ed u­ catio n cu rric ulum in the p rovi nce.-nand ing view of th e sea. d istri ct head s and village h ead s to assist farmers. fishery and ani m al hu sbandry sectors. Arn in Mootalu. "Fa de l has worked h ard for all of these.wh ile h um an reso ur ces in other eco no m icsccto rsarevcry lim itedandski llsa nd ed uca tion levels are low. Ahmad Pakaya. Fade l has freed po o r people fro m ed ucati o n fees and hospital b ills. w ith co rn p rod uctio n as an em ry poin t. "Fa de l wo n a landslide victo ry (With 81 % o f vo tes) for a seco n d term in th e 20 06 elect io n . an Eiffel-sryle tow er. Fadel's policies have bee n focuse d o n de velop ing h uman reso urce capacity." H e explai ns that th e natio nal cur "Fadel's policies have been focused on developing human resource capacity. almost eve ry part of the 12." says Rusli. plus extra mobi le hea lt hca re servic e and doctors. Last year.9 tons per h ectare. U m ar H asan Sapurra. Fadel has also bui lt a cubcrnarorial reside nce in fro m of th e m ain rootball field.con centrari ng m ain ly on corn pr oduction ." says Amin. Ru sli H a bibic." asserts Fadel. says th at th e people ini t ially d oub ted the govern or 's concepts. Go ro nta lo's corn p roduction has now MA Y 2 0 0 7 I GlobeAsia 89 . Fadel has been even m ore agg ressive in the agric u lture sector. " I asked ed uca tion experts to de sign a regio nal-based curriculum . \X/ith th e int rod uction of better q uality seeds im ported from Makassar in So u th Sulawesi. lake. inciden­ tally. The ad­ m inistration claims tha t fishermen's in come has more than trip led fro m an ave rage Rp282. Stalin says th e differences between the gove rno r an d th e forme r regent are in ­ THREE PILLARS C ha irman of the Go ron­ ralo cha p ter of th e In ­ donesian C ham ber o f Co m me rce and In d ustry (Ka d in). to between five and six tons per hectare. "the presen ce of such an influent ial o ppo nent has onl y m ad e Fadel's sta r shine even br igh ter beca use his po licies are clearly inte nde d to im prove the welfare of the people. an d d e­ velop ing th e fishery sector in coa stal areas. T hese are the accele ratio n of h um an resource development via ed uca tion . "Even th ose who could not gradu ­ ate from junior high schoo l are no lo n ger w illing to co rne down to the paddy fields. "Ag rop olitan is th e m ost feasible altern ative lfl devel o ping G oro nta lo. Fadel is. th e highest in th e co u n ny. m ayo rs. aside fro m th e grea te r b udget fo r the ad m inistration. regent of Coro nralo (bo th th e provin ce and a regency with in it sha re th e same name) until 2006. T he n um ber of p ub lic healrhcarc cente rs has inc reased from 33 un its in 200 1 to 52 in 2006. imp rovin g th e ed uc at io n sector and p eop le's welfare. But . In the past . "So I cha nge d th e cu rriculum so that th e crop land s an d th e sea co uld be properly d eveloped for o u r we lfare." h e says. bay and structive. H is am bitio n is to turn G o romalo into what he cal ls an "ag ro politan p rovin ce. by using seeds result ing from th e blen ding of the M akassar an d local seeds . corn production h ad been in the range of two to three to ns per h ec­ tare. deplo­ NO EASY TASK Th e 54-year old Fadel realized from the star t th at it wo u ld not be easy to car ry o ut h is plan .000. wh ich also fun ctio ns as a showcase for the tourism sector." Manto Rahmalo. A h ma d . an d prod uct io n is claim ed to have in creased to 10 . omput dou bled to between fou r an d five to ns per hect are.00 0 per mont h to Rp 987 . O ut p ut was then push ed eve n high er. says Stalin Sam ad . T he G oro nt alo provin cial ad m in istra­ tion claims tha t th e numb er of people living in pover ty has d rastically d eclined from 72 % in 20 01 to 26 % last year.

er are Poor road s and a sho rtag e of po\\" oth er pro blems. m y w ife has man aged to sell abo ut 20 cars per month .250 tons. the world 's seco nd cen ter for in fo rm atio n an d tech n o logy on co rn after on e in Brazil." he says. " Peop le in m y village have been bu yin g TVs and motor cycles w ith cash. "Since th e begin n ing o f thi s yea r. "If the p rice o f co rn Ialls below the targeted floor pr ice. but instead have m oved up ward as quali ty improves an d thro ugh the wor k of a logistics agellL Y set up by th e ad m inistratio n that operates a p rIce buffer system. T h is prevents trad ers and spec u lato rs [rom mam pu laring pr ices. " But rlus is not eno ug h. "Under the cur ren t co nd itions. GA reached 560 . giving an excess of o nly about 2. Fad el hopes that peop le from vario us parts of the co untry and the worl d w ill on e day com e to Gorontalo to learn everythi ng about co m. w ith some 1 m illion peo ple. the governor signe d Mol. a tropi cal p lant that can be used as raw material fo r bioluel prod uc uon ." Fadel has also set up th e G or omalo Internation al Mai ze Information C ent er (GIM l C). T he Rp 15 billion facility sits on a fi ve 90 GlobeAsia I M A Y 2007 .700 per kg." T he ad m in istration ho pes that these steps will help to boost prod uction levels from the current 4.7 trillion. Fadel now wa nts to tu rn Go ro n talo into the cent er for hybrid rice pro du ction in the co un try. for instanc e. India. We acce p ted ir. the agen cy will purchase the co rn from farmers. A sim ilar accounr is given by corn expo rter Leonard Yokorn. The average price o f corn in the past was abo ut Rp :100 per kg. In February. I do n't believe in free m ark et mechan ism s.000 hectares).400 -Rp 1. It's an am biuo us target. particu larly irriga­ tion systems.000-30 ." says th e gove rnor. C o rn farme rs claim th ey are now en joying be tter lives. 100 to ns. the gove rn me nt can interven e. It must be further expande d so th at exportS can be accelerated. Goro ntalo now prod uces 130. wh ile th e rem ainder goes to Hong Kong . but thi s has now surged to betwee n Rp 1. for instance. "Th e Coronralo sea POrt is roo sm all. "\ XTe'll expa n d our pad d y fields (fro m the existing 25 . After his success in incre asing corn prod ucti on. Brown outs are regular. " I'm still no t sat isfied becau se th e product ion level in C h ina can reach 17 tons per hectare. IS abo ut 128 . H e wa n ts Go ron talo to contribute 200. T hey have plenty o r m on ey afte r their h arvests. wh ile consu m ption In the provinc e.Th rou gh th e bu ffer system. Corn expo rrer Leo nard Y ckom. N o t everyone is happ y with what is happening in C oro n ralo. Taiwan and Mal aysia. The plant will have a production capac ity of 300 mi llion liters per year. head of Paris village in Goronralo regen cy. Another area for fu tu re development is biodiesel. Last year. Does thi s m eans he's agains t the m arket mech an ism ? "I'm respo n sible fo r im p roving th e weifI re o f farm ers 1Il C oro n ralo. SCOUTING FOR MARKETS Fadel has also been active Ir1 looking for overseas markets. com plains abo u t th e lack of infr astruc ture faciliries.74 tons per hectare ro 12 ton s per hectare or about SL'( rons per hectare of high qu ality nee. What is more important IS to develop the hu ­ man resources capacity through training so tha t we can ado pt hybrid technology and im pro ve infrastr ucture. an d on ly a relatively sm all road lrnks jalaludin Airport an d the prov incial capital. a 400% ju m p fro m th e level four years ago.ls with Jap an an d So ut h Kor ea to export Gorontalo products.000 ton s." he argu es. w hose WIfe is th e local Mi tsubi sh i car dealer. Sou th Korea 34.55()lo.350 to ns of rice per year. not letting them become the easy prey of spec ulato rs and traders." says Muchrar Baabura. the ad m in istrati on signed an MoU with Singapore-based firm Cl ean Fuel to develop a biofu el m anu fact uring plant In Bon e Bolan go regen cy with total in vestment of arou nd Rp 1. th e Philipp ines. Desp ite high er produ ction ." says Fadel. pri ces have not been under pressure." he respo nd s. wh ile the qu alit y or its so il is no different ro G oronralos ." says Fad el. So m e of th em (bu yers) have even swapp ed the ir co rn for cars.I SPECIAL FEATURE I hectare b loc k of land in Bone Bolan go regen cy.000 tons ro th e 2 m illion ron national rice reserves. :-'!anv be­ lieve tha t th eir eng inee r gO\'erno r wi ll also fix th ose p roblems when the tim e comes. T he adrm nistra non has laun ch ed a cam pa ign for people to get involved in planung jarhropa. Jap an now abso rbs around 36 1l-h of Coron ralo's agricu lru re expo rts.

" he no tes. T he straigh t talking form er business­ m an and min ister as usu al gets to the po int o n the hurd les he faces in developing his provin ce.. H e says rhar rhe Region al Autonomy Law w hich unleashed eco no m ic dyn ami sm in Indo nesia's far flung region s is str uctura lly flawed a nd th at unless cha nges are made.rr add Muh ammad still cut an imp ressive figure as he sat dow n for a breakfast int erview wi th ClobeAsia. he is now widely acclaimed as a successful agricu lturist having d ram atically increased corn pro d uc­ tion and im proved th e fisheries secto r ill his provin ce. D espite his success. he acknowledges that the od ds are still Stacked against provin­ cialleaders in the latitude th ey have to run the ir provinces.--------------­ . A forme r ind ustr ialist. "All the autho rity to co ncep tua lize the law was in the cenr ral govern me nt and in­ facr th e govern ment in Jakart a was reluctant to push the law. "Fo r instance the impl ementing regulations to su ppo rt th e M AY 2 0 0 7 I GlobcAsia 91 =---"--. the cent ral govern ment will co n­ tin ue to pull th e strings.---------""'"'. T he governor of Goro n­ ralo Province is often in the news and is now held up as exam ple of ho w ent repre­ neur ial gove rn me n t can transfo rm a poo r backward region int o o ne of Ind on esia's fastest growing eco no m ic areas.

In many sectors.'th in the regions." Another pro blem facing regional governme nts is tha t the cent ral govern­ ment has no t marched develop ment in the provinces with political power. I can design it for the ent ire country." If I do some som ething. "I am not a com mo n man. I have to be pro-active an d use my conne ctions in the cent ral government to push through my prog rams. I have to do with excellent per form ance. The bureaucrats in Jakarta are still stuck in the old m indset . H e wants ro cont inue to im prove the agricultural and fisher ies sectors as these are the biggest job creators and is also urging Jakarta to devote more resources ro these two sectors. he has increased Corontalo's budget from Rp407 billion and a turnover of Rp 300 billion ro a bu dget of Rp407 billion and a turnover of Rp3. "To overcome the prob lems." T he resul ts of h is efforts have been impressive and ot her provincial governors are taking notice.ill Start ro grow in two years." \Vhat he has don e is introd uce corpo­ rate culture into local bur eaucracy whe re perform ance is rewarded. for example. receive remuneration in term s of bonuses tha t is 300% higher than their salary.' he says." law have not been issued but we governors are now pushing hard for them. Domestic national econo mv." GA GlobeAsia I MA Y 2 0 07 . "T hat is wro ng because each region has 92 different needs and we have to im plement regulations accord ingly. Fadel adds th at he cont inues to support the president because if the govern­ me nt fails. I al­ readv have the program and if the current gO\'ernment wants me to." he notes. "'\{le are in a critical period today because we have a large popu lation and som e critical problems to tackle but only a limited budget to run the count ry. so is not my style. \Vhen I was starti ng out on my programs I searched the int ernet for information and infact cont acted the Kenn edy Schoo l of Govern me nt and comm un icated with the dean to learn more. includ ing agriculture and telecom ­ munication s the central governm em still calls the shots and Fadel notes that he needs central governm ent appro val to use pon fa­ cilities in neighboring regions to export his province's rising corn production. the count rv v. H is best perform ­ ing staff. "It the gO\'ernmem does this. Fal : ~i has pu shed ahead 111 implementing his programs nonetheless. H e adds tha t In do nesia needs more ent rep reneurs in these secto rs as they are the backbo ne of the "We are in acritical period today because we have alarge population and some critical problems to tackle but only alimited budget to run the country. ! ndon e­ sia is still susceptible ro Balkan ization an d the only way to prevent it is to have strong econom ic grov.1IlJ they need to change with the time. W hat I have done is not new and the programs have been intro duced in m any oth er count ries. Even fertilizer and seeds must come from th e central govern ment and he says that Jakarta tends to use a on e system fits all approac h to man aging the provinces. the count ry could fractur e.2 trillion . JU St doi ng thin gs so. Ov er the past six years. D espi te grow­ ing criticism of President Susilo Bamb ang Yud hoyono ." Not one to take no for an answer." Fadel is now courting investm ents to im prove th e region's woeful infrasrruc­ rure by getting rid of regulations that were deeme d unfriendly to bu siness.3 % as compared to the nation a] GO P growth of 5.6% "We need ro adopt entrep reneurial thin king with in government.I SPECIAL FEATURE I produ ct growt h last year was a stirling 7." he not es. Indonesia is still susceptible to Balkanization and the only way to prevent it is to have strong economic growth in the regions.

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