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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

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-nand ing view of th e sea, lake, bay and

structive. A h ma d , a retired senio r army officer, 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) , an Eiffel-sryle tow er, 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 . In contrast, Fadel's policies have bee n focuse d o n de velop ing h uman reso urce capacity, imp rovin g th e ed uc at io n sector and p eop le's welfare, says local econom ist Ma nto Rahmalo. Fade l has freed po o r people fro m ed ucati o n fees and hospital b ills. 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, plus extra mobi le hea lt hca re servic e and doctors, 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.

almost eve ry part of the 12,44 5 sq krn

province. Now,
Fadel has also bui lt a

cubcrnarorial reside nce in fro m of th e m ain

rootball field,
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, 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. H is am bitio n is to turn G o romalo into what he cal ls an "ag ro politan p rovin ce," 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, w ith co rn p rod uctio n as an em ry poin t. "Ag rop olitan is th e m ost feasible altern ative lfl devel o ping G oro nta lo," asserts Fadel, po inting o ut the facts that the province has a sizable stock of arable lan d , and tha t m ost of its peop le are farmers - con centrari ng m ain ly on corn pr oduction - 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.

riculum is intende d to serve the human resources need s of b ig citie s, so it's not sur prising th at scho olleavers h ave no inter est in th e agr icu lture, fishery and ani m al hu sbandry sectors. "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, I didn't want thi s to happen in G orontalo ," h e says. "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." T he results, aside fro m th e grea te r b udget fo r the ad m inistration, include impressive economi c grow th of 7 .06% in 20 06, th e highest in th e co u n ny. Fishery o ut p ut jumped to 43 ,00 0 tons in 2005 fro m 19,0 00 to ns in 20 0 1. The ad m inistration claims tha t fishermen's in come has more than trip led fro m an ave rage Rp282,00 0 per mont h to Rp 987 ,000. In just o ne in itiative in this sect o r, 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. Fadel has been even m ore agg ressive in the agric u lture sector, 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 . Arn in Mootalu, an econom ist and local lawm aker, says th at th e people ini t ially d oub ted the govern or 's concepts, bu t as th ey too k no te of how seriou s h e was abo ut implement ing h is plan , su PPOrt sta rted to flow in . "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 . This clearly shows th at the peop le support hi m ," says Amin. Fadel is, inciden tally, 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. Ahmad Pakaya, regent of Coro nralo (bo th th e provin ce and a regency with in it sha re th e same name) until 2006, remai ns o ne of Fadel's stro nges t critics. But , says Stalin Sam ad , an em ployee at th e local airport, "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, particu larly farmers and sma ll bu sin essm en ,". 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), Ru sli H a bibic, 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. T hese are the accele ratio n of h um an resource development via ed uca tion , turn ing G orontalo into an ag ropolita n province based in itially o n co rn production, an d d e velop ing th e fishery sector in coa stal areas, wh ich also fun ctio ns as a showcase for the tourism sector. "Fa de l has worked h ard for all of these," says Rusli, who is also presiden t o f co nstru c tio n firm PT Cahaya Man di ri Persad a. 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. His first move was to revise the ed u catio n cu rric ulum in the p rovi nce. " I asked ed uca tion experts to de sign a regio nal-based curriculum . \'V' e are the first (p rovince) to do this," H e explai ns that th e natio nal cur

"Fadel's policies have been focused on developing human resource capacity, improving the education sector and people's welfare," Manto Rahmalo.

ying new tech nol ogies to boost agr icultu ral o ut p ut an d qual ity. H e m ob ilizes regem s, m ayo rs, d istri ct head s and village h ead s to assist farmers. In the past , corn production h ad been in the range of two to three to ns per h ec tare. \X/ith th e int rod uction of better q uality seeds im ported from Makassar in So u th Sulawesi, omput dou bled to between fou r an d five to ns per hect are. O ut p ut was then push ed eve n high er, to between five and six tons per hectare, by using seeds result ing from th e blen ding of the M akassar an d local seeds . Last year, 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. U m ar H asan Sapurra, an d prod uct io n is claim ed to have in creased to 10 .9 tons per h ectare, wi tho ut the use of fert ilizer. Go ro nta lo's corn p roduction has now

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hectare b loc k of land in Bone Bolan go regen cy. 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. After his success in incre asing corn prod ucti on, 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, H e wa n ts Go ron talo to contribute 200,000 tons ro th e 2 m illion ron national rice reserves. It's an am biuo us target. Goro ntalo now prod uces 130,350 to ns of rice per year, wh ile consu m ption In the provinc e, w ith some 1 m illion peo ple. IS abo ut 128 ,250 tons, giving an excess of o nly about 2, 100 to ns. "\ XTe'll expa n d our pad d y fields (fro m the existing 25 ,000-30 .000 hectares)," says Fadel. " But rlus is not eno ug h. 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. particu larly irriga tion systems." T he ad m in istration ho pes that these steps will help to boost prod uction levels from the current 4.74 tons per hectare ro 12 ton s per hectare or about SL'( rons per hectare of high qu ality nee. Another area for fu tu re development is biodiesel. T he adrm nistra non has laun ch ed a cam pa ign for people to get involved in planung jarhropa. a tropi cal p lant that can be used as raw material fo r bioluel prod uc uon . In February, 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 1.7 trillion. The plant will have a production capac ity of 300 mi llion liters per year. N o t everyone is happ y with what is happening in C oro n ralo. Corn expo rrer Leo nard Y ckom, for instance, com plains abo u t th e lack of infr astruc ture faciliries. "Th e Coronralo sea POrt is roo sm all. It must be further expande d so th at exportS can be accelerated," he says. er are Poor road s and a sho rtag e of po\\" oth er pro blems. Brown outs are regular. an d on ly a relatively sm all road lrnks jalaludin Airport an d the prov incial capital. :-'!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. GA

reached 560 ,000 ton s, a 400% ju m p fro m th e level four years ago. " I'm still no t sat isfied becau se th e product ion level in C h ina can reach 17 tons per hectare, wh ile the qu alit y or its so il is no different ro G oronralos ," says th e gove rnor. Desp ite high er produ ction , pri ces have not been under pressure, 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. The average price o f corn in the past was abo ut Rp :100 per kg, but thi s has now surged to betwee n Rp 1.400 -Rp 1,700 per kg. "If the p rice o f co rn Ialls below the targeted floor pr ice, the agen cy will purchase the co rn from farmers. T h is prevents trad ers and spec u lato rs [rom mam pu laring pr ices," says Fad el. 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, not letting them become the easy prey of spec ulato rs and traders," he respo nd s. "Under the cur ren t co nd itions, I do n't believe in free m ark et mechan ism s.Th rou gh th e bu ffer system, the gove rn me nt can interven e," he argu es.

SCOUTING FOR MARKETS

Fadel has also been active Ir1 looking for overseas markets. Last year, for instanc e, the governor signe d Mol.ls with Jap an an d So ut h Kor ea to export Gorontalo products. Jap an now abso rbs around 36 1l-h of Coron ralo's agricu lru re expo rts, Sou th Korea 34.55()lo, wh ile th e rem ainder goes to Hong Kong , India, th e Philipp ines, Taiwan and Mal aysia. C o rn farme rs claim th ey are now en joying be tter lives. " Peop le in m y village have been bu yin g TVs and motor cycles w ith cash. T hey have plenty o r m on ey afte r their h arvests," says Muchrar Baabura, head of Paris village in Goronralo regen cy. A sim ilar accounr is given by corn expo rter Leonard Yokorn, w hose WIfe is th e local Mi tsubi sh i car dealer. "Since th e begin n ing o f thi s yea r, m y w ife has man aged to sell abo ut 20 cars per month . So m e of th em (bu yers) have even swapp ed the ir co rn for cars. We acce p ted ir." Fadel has also set up th e G or omalo Internation al Mai ze Information C ent er (GIM l C), 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. T he Rp 15 billion facility sits on a fi ve

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add Muh ammad still cut an imp ressive figure as he sat dow n for a breakfast int erview wi th ClobeAsia. 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. 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. A forme r ind ustr ialist, 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. 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, the cent ral govern ment will co n tin ue to pull th e strings. "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," he no tes. "Fo r instance the impl ementing regulations to su ppo rt th e

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produ ct growt h last year was a stirling 7.3 % as compared to the nation a] GO P growth of 5.6% "We need ro adopt entrep reneurial thin king with in government," he notes. \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. W hat I have done is not new and the programs have been intro duced in m any oth er count ries." \Vhat he has don e is introd uce corpo rate culture into local bur eaucracy whe re perform ance is rewarded. H is best perform ing staff, for example, receive remuneration in term s of bonuses tha t is 300% higher than their salary. "I am not a com mo n man," he not es." If I do some som ething, I have to do with excellent per form ance. JU St doi ng thin gs so, so is not my style." 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. 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. 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. Indonesia is still susceptible to Balkanization and the only way to prevent it is to have strong economic growth in the regions."
law have not been issued but we governors are now pushing hard for them." 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. In many sectors, 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. 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. "T hat is wro ng because each region has
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different needs and we have to im plement regulations accord ingly. The bureaucrats in Jakarta are still stuck in the old m indset .1IlJ they need to change with the time." Not one to take no for an answer. Fal : ~i has pu shed ahead 111 implementing his programs nonetheless. "To overcome the prob lems, I have to be pro-active an d use my conne ctions in the cent ral government to push through my prog rams." T he resul ts of h is efforts have been impressive and ot her provincial governors are taking notice. Ov er the past six years, 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 Rp3.2 trillion . Domestic

national econo mv, "It the gO\'ernmem does this, the count rv v.ill Start ro grow in two years. I al readv have the program and if the current gO\'ernment wants me to, I can design it for the ent ire country,' he says. D espi te grow ing criticism of President Susilo Bamb ang Yud hoyono , Fadel adds th at he cont inues to support the president because if the govern me nt fails, the count ry could fractur e. "'\{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. ! ndon e sia is still susceptible ro Balkan ization an d the only way to prevent it is to have strong econom ic grov.'th in the regions." GA

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