artikel _fadel & gorontalo_entrepreneurship gov't
TRANSCRIPT
I SPECIAL FEATURE I
ENTREPRENEURIAL GOVERNMENT
When Gorontalo was still part of North Sulawesi prov ince, the reqency administration could only earn Rp7.5 billion ($815,0 00) 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
Bureaucrats, accord ing
to University of Indone
sia economist Rhenald Kasali, are inclin ed to
spend as mu ch money as
possible in order to obtain a
bigger bud get the follow
ing year.
In contrast, entrepreneurs are concer
ned with how to manage their budgets
efficiently to obtain greater output or
revenue.
Fade l Muhammad, former businessman
and co-founder of the Bukaka Group who
was elected as the first governor of Goron
ralo in 2001, is among the few bureau
88 GlobeAsia I MA Y 2007
crars in the country who act like an ent re
preneur. In 2002, a few months after he was
officially installed, the M inistry of Hom e
Affairs cha nneled cent ral government
funds worth Rp35 billion as sran -up
capit al to develop the new province.
\X!hile other governors might have
used the funds to build new offices for
themselves or oth er provinci al institu
tion s, Fadel used the mon ey to build an
airport, sea port and roads. "W ithout these
£1cilities, the new province will never grow,"
he said . He had three obj ect ives. 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 the
market or sea pon so that it would not be left:
decaying in productio n cente rs. T hird, co end Coronralo's dependency on North
Sulawesi for air trans por r.
"Anyone visiting Coronralo no long
er has co go through Manado (the No rth
Sulawesi capital)," brags the governo r. who
admits to being a workaholic with an 1'
hour daily schedule. It was only later rhat rno nev was
allocated to develop a local legisbti\·c
cou ncil building on a sloping hill, and a governo r's office atOp the h ill with a com
-nand ing view of th e sea, lake, bay and
almost every part of the 12,445 sq krn province. Now, Fadel has also bui lt a
cubcrnarorial reside nce in from 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 industries at Bukaka, Fadel has
been focu sin g on th e agricultu re sector as
the basis for develop ing th e local eco nomy.
H is am bitio n is to turn G o romalo into
what he cal ls an "agropolitan p rovin ce,"
wh ich essent ially me ans that the agricul
ture and fishery secto rs will become the
province 's eco no m ic backb one, with co rn
p rod uctio n as an em ry point.
"Agrop olitan is th e m ost feasible
altern ative lfl developing G oronta lo,"
asserts Fadel, po inting o ut the facts
that the province has a sizable stock of
arable land , and tha t m ost of its peop le are
farmers - con centraring m ain ly on corn
pr oduction - wh ile h um an resources in other
eco no m icsccto rsarevcry lim itedandski llsand
ed uca tion levels are low.
NO EASY TASK The 54-year old Fadel realized from the
star t th at it wo uld not be easy to car ry out
h is plan . Arn in Mootalu, an econom ist and
local lawm aker, says th at th e people ini t ially
doubted the govern or 's concepts, bu t as
th ey too k note of how seriou s he was abo ut
implement ing h is plan , suPPOrt sta rted to
flow in .
"Fade l won a landslide victory (With
81 % of votes) for a seco nd term in th e 20 06
elect ion . This clearly shows th at the peop le
support hi m ," says Amin. Fadel is, inciden
tally, h on ored in the Ind on esian Reco rd
M useum as the governor with the b iggest
share of votes.
Ahmad Pakaya, regent of Coronralo
(bo th th e province and a regency with in it
sha re th e same name) until 2006, remai ns
one of Fadel's stro nges t critics.
But , says Stalin Sam ad , an em ployee at
th e local airport, "the presence 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 nded 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 rnor and th e former regent are in
structive. Ahma d , a reti red senior army
officer, was fond of develop ing "presti
g ious" pro jects such as the Plaza sho p
ping m all (which rem ain s vaca nt) , an
Eiffel-sryle tow er, and a zoo (which is st ill
flnd ing tro uble in locating animals) tha t
togethe r cost the local budge t aro und Rp 7
billion .
In contrast, Fadel's policies have bee n
focuse d on de velop ing h uman reso urce
capacity, improvin g th e ed ucat io n sector
and peop le's welfare, says local economist
Ma nto Rahmalo.
Fade l has freed po o r people from
ed ucati o n fees and hospital b ills. T he
n um ber of pub lic healrhcarc cente rs has
inc reased from 33 un its in 200 1 to 52 in
2006, plus extra mobile hea lt hca re servic e
and doctors,
T he G oront alo
provin cial ad m in istra
tion claims tha t the
number of people
living in pover ty has
d rastically declined from
72 % in 20 01 to 26 % last
year.
THREE PILLARS C ha irman of the Goron
ralo cha p ter of th e In
donesian C hamber o f
Com me rce and Ind ustry
(Kad in), Ru sli H abibic,
fishermen's income has "Fadel's policies have more than trip led from an
been focused on ave rage Rp282,000 per
mont h to Rp 987 ,000. Indeveloping human just o ne in itiative in this
sect o r, th e ad ministration resource has launched a p rogram
that p rovides cap ital an d capacity, improving ot her facilitie s to help
fish ermen increase o ut-the education sector put.
Fadel has been even and people's welfare," m ore agg ressive in the
Manto Rahmalo. agric u lture sector, deplo
saysrhreepillarshavcbeenpu tin placeb y Fadel
th at will influ en ce th e fu ture develop m ent of
Gorontalo.
T hese are the accele ration of h um an
resource development via ed uca tion , turn
ing G orontalo into an agropolitan province
based in itially on co rn production, and de
velop ing th e fishery sector in coastal areas,
wh ich also fun ctio ns as a showcase for the
tourism sector.
"Fade l has worked hard for all of these,"
says Rusli, who is also president o f co nstru c
tio n firm PT Cahaya Mandi ri Persada.
Fadel und erstands that ed uca tion 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 rovince. " I asked
ed uca tion experts to design a regio nal-based
curriculum . \'V'e are the first (p rovince) to
do this,"
H e explai ns that the natio nal cur
riculum is intended to serve the human
resources needs of b ig cities, so it's not
sur prising th at scho olleavers have no inter
est in th e agr icu lture, fishery and anim al
hu sbandry sectors.
"Even th ose who could not gradu
ate from junior high schoo l are no longer
w illing to co rne down to the paddy fields, I
didn't want thi s to happen in G orontalo ," he
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
developed for ou r welfare."
T he results, aside fro m th e grea ter
budget fo r the ad m inistration, include
impressive economi c grow th of 7 .06% in
20 06, the highest in th e co un ny.
Fishery o ut put jumped to 43 ,000 tons
in 2005 fro m 19,0 00 to ns in 200 1. The ad
m inistration claims tha t
ying new tech nol ogies to
boost agr icultu ral o ut put an d qual ity. H e
mob ilizes regem s, m ayo rs, d istri ct heads
and village heads to assist farmers.
In the past , corn production had been
in the range of two to three to ns per hec
tare. \X/ith th e int rod uction of better
q uality seeds im ported from Makassar in
Sou th Sulawesi, omput doubled to between
fou r an d five to ns per hectare.
O ut put was then pushed even 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 Bogor
Agriculture Institute. Um ar H asan Sapurra, an d prod uct io n is claim ed to have increased
to 10.9 tons per hectare, wi tho ut the use of
fert ilizer.
Goro nta lo's corn p roduction has now
MA Y 2 0 0 7 I GlobeAsia 89
I SPECIAL FEATURE I
reached 560 ,000 ton s, a 400% jum p from
the 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 ality or its so il is no different ro
G oronralos ," says the gove rnor.
Desp ite higher production , pri ces have
not been under pressure, but instead have
m oved up ward as quali ty improves and
thro ugh the wor k of a logistics agellLY set up
by the ad m inistra tion 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 price 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 traders and spec u lato rs [rom
mam pu laring pr ices," says Fadel.
Does thi s means he's agains t the
m arket mechan ism ? "I'm respo nsible fo r
improving the weifI re o f farm ers 1Il
C oron ralo, not letting them become the
easy prey of spec ulators and traders," he
respo nd s.
"Under the cur ren t co nd itions, I do n't
believe in free mark et mechan isms.Throu gh
the bu ffer system, the govern me nt can
interven e," he argues.
90 GlobeAsia I M A Y 2 0 0 7
SCOUTING FOR MARKETS Fadel has also been active Ir1 looking for
overseas markets. Last year, for instanc e,
the governor signed Mol.ls with Japan
and So ut h Korea to export Gorontalo
products.
Jap an now abso rbs around 36 1l-h of
Coron ralo's agricu lrure expo rts, Sou th
Korea 34.55()lo, wh ile the rem ainder goes
to Hong Kong , India, th e Philippines,
Taiwan and Mal aysia.
C orn farme rs claim they are now
enjoying be tter lives. "People in my village
have been bu yin g TVs and motorcycles
with cash. T hey have plenty o r mon ey
afte r their harvests," says Muchrar Baabura,
head of Paris village in Goronralo regen cy.
A sim ilar accounr is given by corn
exporter Leonard Yokorn, w hose WIfe is
the local Mi tsubish i car dealer. "Since the
beginning of thi s year, my wife has
man aged to sell abo ut 20 cars per month .
Some of them (bu yers) have even swapp ed
the ir co rn for cars. We accepted ir."
Fadel has also set up the G or omalo
Internation al Mai ze Information C ent er
(GIM lC), the world 's second cen ter for
info rmatio n and tech no logy on co rn after
on e in Brazil.
T he Rp 15 billion facility sits on a five
hectare b lock of land in Bone Bolan go
regen cy. Fadel hopes that peop le from
various parts of the co untry and the worl d
will on e day com e to Gorontalo to learn
everythi ng about co m.
After his success in increasing corn
production, Fadel now wa nts to tu rn
Go ron talo into the center for hybrid rice
pro du ction in the country, He wan ts
Go ron talo to contribute 200,000 tons ro
the 2 m illion ron national rice reserves.
It's an am biuo us target. Goro ntalo now
prod uces 130,350 to ns ofrice per year, wh ile
consum ption In the province, w ith some
1 m illion peo ple. IS about 128 ,250 tons,
giving an excess of only about 2, 100 to ns.
"\XTe'll expa nd our pad dy fields (fro m
the existing 25 ,000-30 .000 hectares)," says
Fadel. "But rlus is not enough. What
is more important IS to develop the hu
man resources capacity through training so
tha t we can ado pt hybrid technology and
impro ve infrastr ucture. particularly irriga
tion systems."
T he ad m inistration ho pes that these
steps will help to boost production 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 ture development is
biodiesel. T he adrmnistra non has laun ched
a campa 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 ucuon .
In February, the ad ministrati on signed
an MoU with Singapore-based firm Clean
Fuel to develop a biofu el m anu fact uring
plant In Bon e Bolan go regen cy with total
investment of arou nd Rp 1.7 trillion. The
plant will have a product ion capac ity of 300
mi llion liters per year.
No t everyone is happy with what is
happening in C oronralo. Corn exporrer
Leonard Yckom, for instance, com plains
about the lack of infrastruc ture faciliries.
"The Coronralo sea POrt is roo small. It
must be further expanded so that exportS
can be accelerated," he says.
Poor roads and a sho rtage of po\\"er are
oth er pro blems. Brown outs are regular. an d
on ly a relatively small road lrnks jalaludin Airport and the prov incial capital. :-'!anv be
lieve tha t their eng inee r gO\'erno r wi ll also fix
those problems when the tim e comes. GA
T he straigh t talking former business
man and min ister as usual gets to the po int
o n the hurd les he faces in developing his
province. A former ind ustr ialist, he is now
widely acclaimed as a successful agricu lturist
having d ram atically increased corn produc
tion and improved th e fisheries sector ill his
province.
D espite his success, he acknowledges
that the odds are still Stacked against provin
cialleaders in the latitude th ey have to run
add Muh ammad still cut
an imp ressive figure as he
sat dow n for a breakfast
interview 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 how ent repre
neur ial gove rnmen t can transfo rm a poor
backward region int o one of Indon esia's
fastest growing econom ic areas.
rr the ir provinces. H e says rhar rhe Region al
Autonomy Law which unleashed eco no m ic
dynami sm in Indonesia's far flung region s is
str uctura lly flawed and that unless changes
are made, the cent ral govern ment will con
tinue to pull the strings.
"All the autho rity to concep tua lize the
law was in the cenr ral govern me nt and in
facr the govern ment in Jakart a was reluctant
to push the law," he no tes. "For instance the
impl ementing regulations to support th e
M AY 2 0 0 7 I GlobcAsia 91
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I SPECIAL FEATURE I
produ ct growth last year was a stirling 7.3%
as compared to the nationa] GOP growth of 5.6%
"We need ro adopt entrepreneurial
thin king with in government," he notes.
\Vhen I was starti ng out on my programs
I searched the internet for information
and infact contacted the Kenn edy School
of Govern ment and comm unicated with
the dean to learn more. W hat I have done
is not new and the programs have been intro duced in many other count ries."
\Vhat he has don e is introd uce corpo
rate culture into local bureaucracy where
perform ance is rewarded. H is best perform
ing staff, for example, receive remuneration
in terms of bonuses tha t is 300% higher
than their salary.
"I am not a commo n man," he not es."
If I do some something, I have to do with
excellent performance. JUSt doi ng thin gs so, so is not my style."
Fadel is now courting investm ents to
improve the region's woeful infrasrruc
rure by getting rid of regulations that were
deemed unfriendly to business. He 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 Indonesia 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
governments 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 governmem 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 the central govern ment and he says
that Jakarta tends to use a one system fits
all approach to man aging the provinces. "T hat is wrong because each region has
92 GlobeAsia I MA Y 2 0 07
different needs and we have to implement
regulations accord ingly. The bureaucrats in
Jakarta are still stuck in the old mindset .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 and use
my connections 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. Over the past six years,
he has increased Corontalo's budget from
Rp407 billion and a turnover of Rp 300
billion ro a budget of Rp407 billion and
a turnover of Rp3.2 trillion. Domestic
national economv,
"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. Despi te grow
ing criticism of President Susilo Bamb ang
Yudhoyono, Fadel adds that he cont inues to
support the president because if the govern
ment fails, the count ry could fractur e.
"'\{le are in a critical period today because we have a large popu lation and
some critical problems to tackle but only a
limited budget to run the count ry. !ndone
sia is still susceptible ro Balkan ization and
the only way to prevent it is to have strong
economic grov.'th in the regions." GA