Ti milis tatanggi ... Mudah2an tiasa janten bekel milih Jabar nomer #1...
Dhani - ----- Original Message ----- From: Hananto To: undisclosed-recipients Sent: Thursday, March 06, 2008 11:58 AM Subject: Go go Sragen ...!!INTERESTING AND TRUE STORY ON A SMALL REGENCY IN INDONESIA eye opener that we still have brilliant people ! wrote: THIS IS AN INTERESTING AND TRUE STORY ON HOW A SMALL REGENCY IN INDONESIA COULD IMPROVE ITS LIVING STANDARD IN SPITE OF FINANCIAL CONSTRAINTS If you have been living, working, and doing business in Indonesia over the past decades, it is very easy for you to be trapped in your own negativity. While the political and press freedom have improved dramatically since the downfall of the Suharto regime in mid-1998, your perception on the ability of the government to provide basic public services as well as the level of corruption have decreased. No wonder, I feel that the sense of "nationalism" among the local, especially the youth, has steadily been eroded over the past couple of years. In an attempt to show that Indonesia could be a totally different country, if it is managed properly, I accompanied a number of my office colleagues to Sragen last week end. FROM UNHEARD TO BEING STUNNED Sragen is one of 650 Kabupaten (regencies) in Indonesia. It is situated 30km north east of Solo in Central Java. >From Jakarta, you could take a 55 minutes direct flight to Solo, continued by a 45 minutes drive to Sragen. Alternately, you could also take a 55 minutes direct flight to Jogja (there are more scheduled flights from Jakarta to Jogja than to Solo), then a two hours drive to Sragen. The Kabupaten has never been in my dictionary until I saw Untung Wiyono, the 58-year old Bupati (the head of regency) of Sragen, appeared on a nationwide TV station in mid 2006. He told the audience how his "e-government" program has completely changed his territory. I was shocked and initially did not believe what I saw and heard. I told one of my long time US-based clients (who has been investing in the Indonesian equity market since early 90s and has an exceptional attention on my country and its people) that we should meet this exceptional "leader". The meeting took place in Jakarta in late 2006 and both of us were impressed and began to believe that the administration reform led by Mr. Wiyono is "for real". However, like every analyst and investor in the equity market, we never completely believe what we read and hear until we visit the site. So, I and my long-time client went to Sragen in March 2007. There, we were stunned by the Kabupaten's one-stop service. I've never imagined that a territory, which its name has never popped up in my mind, is able to provide public services hundred times better and faster than the relatively much more modern and sophisticated big cities like Jakarta. THE IRRATIONAL MATH HAS BEEN WORKING RATIONALLY The one stop service was set-up based on Mr. Wiyono's personal working experiences in the private sector. While he worked in the manufacturing, oil and gas, and trading sectors, he witnessed how local businessmen and multi-national companies had to deal with "high cost economy" due to the lack of transparency, especially on the licensing. Accordingly, businessmen faced uncertainties and, as you could guess, these uncertainties could only be minimized by paying "extra" monies. Simply put, the lack of transparency has encouraged corruptions. When Mr. Wiyono entered the political ring in 2001, he only had one objective: "to get rid off these uncertainties" . It was not an easy ride. A lot of people, including those in the central government, were skeptical to his "e-government" idea. Given the Sragen's indigenous revenues of less than Rp20 billion (US$2.2 million) in early 2000, the Bupati's multi million dollar "e-government" idea was perceived by many decision makers as an irrational math. But, Mr. Wiyono didn't give up. Rather than opting for expensive IT platform, relying on optical fiber networks, to electronically hook up his district offices, the Bupati and his team came out with a brilliant idea. They connect these offices using the Wide Local Area Network (WLAN) on the wireless mode. Thus, they didn't have to roll out hundred thousands of dollars of optical fibers in the 94,155 hectares area. Moreover, as the network runs on the radio (5.8 Ghz) frequency, it could be used for 24 hours/7 days for a minimal cost. By only initially spending Rp450 million (or US$50,000 versus experts' estimate of multi million dollars) to buy required hardware and software, the team instantly connected these offices. Et voilà! Once the system was set up, prospective investors could apply their licenses and monitor the progress of their applications on-line. Assuming all prerequisites are fulfilled, the One Stop Service could issue most of investment and trading licenses in one or two days (maximum is 12 days). Furthermore, the Bupati and his team also use the wireless IT platform, which is now available at Sragen's 208 villages, for issuing birth certificates, IDs, and other documents for the Sragen citizen on-line. Accordingly, Sragen is probably one of few Kabupatens in Indonesia which know exactly the demographic profile of its citizens on-line, while most of Kabupatens obtain these profiles via annual sampling undertaken by the Central Bureau of Statistics. I also feel jealous to Sragenians because it still takes roughly 5-10 working days to get a birth certificate or ID in Jakarta. Finally, we also saw a demo, in which the Bupati conducted video conference call via the wireless IT platform with one of his district heads, located at roughly 60km away from his office. By the Jakarta standard, this conference is unimaginable! In the nutshell, by putting transparency and getting rid off bureaucracy, prospective investors and its almost 900,000 citizens are happy. As a result, Sragen indigenous revenues soared from Rp22.5 billion in 2002 to roughly Rp88 billion (US$9.8 million) in 2007 or 31% CAGR! The irrational math has been working rationally in Sragen. My long time client was so impressed with the Bupati and he decided to donate a sizeable amount of monies for the educational purpose. EXPORTING BODIES Fast forward. In addition to show my office colleagues Sragen's fabulous government system, my main objective to go there last week end is to physically inspect what they have done with my client's donation. Having had an almost 60 minute private session with the Bupati, I and my colleagues were ushered into an integrated private polytechnic. We were told that our client's monies have been used to buy a number of modern lathes as well as for the construction of library. Honestly, I was not too impressed with physical infrastructures there until I passed on a room with the sign of "Korean language course" hanging in its door. I immediately asked the polytechnic dean what is the relationship between the Korean language and his school? It turns out that, setting aside its humble infrastructure, the school has been sending its graduates to work in Korea. I instantly became a proud Indonesian. Yes, I do admit that given the general unfavorable investment environment for the manufacturing sector over the past couple of years, the chance for local polytechnic graduates to obtain jobs has somewhat been reduced. However, rather than blaming the authority for not being able to improve the investment environment, the Sragen integrated polytechnic is a micro example how Indonesia could actually follow the Philippine's path in exporting its skilled labors. There is no doubt in my mind that the Sragen integrated polytechnic has somewhat played role in increasing remittances sent by Indonesian Overseas Workers from US$1.3 billion in 2004 to roughly US$4.7 billion in 2007. PROFITING FROM ORGANIC WASTE... Having visited the integrated polytechnic school, we were taken to Sragen's traditional/ wet market. For us, the market is not different with other traditional/ wet markets in Indonesia. But, what really struck our eyes there was the cleanliness of the market and that is what the Bupati and his staff are keen to show us. As you may have been aware, waste management is one of nightmares for many big cities around the world, especially in developing countries. Imposing high discipline among relatively low educated population to put their waste in designated trash boxes has been becoming a mission impossible. The Bupati realizes it. However, rather than waiting until all of his people graduate from the university, Mr. Wiyono and his staff come out with a spectacular idea--creating incentives to put these organic waste in designated places. These organic waste are then processed into organic fertilizer (the simple process is called composting) with the assistance of environmental friendly bacteria, called EM4. Note that the composting only requires a waste storage (the bigger, the better), plastic sheets to cover processed organic fertilizer, and EM4 bacteria. Simply put, no production process is required other than collecting the waste, putting the bacteria into the waste, and covering the blended waste by plastic sheets. The fertilizer is then sold to organic farms around the Sragen area. Indeed, Mr. Wiyono is simultaneously promoting the composting and organic farming to his people. He intends to bread EM4 bacteria, distribute it, and teach the composting technique freely. On the other side, he encourages his farmers to switch into organic farming. While the production yield generated under organic farming is somewhat lower than inorganic farming, given the strong "back to nature" movement overseas and among affluent Indonesians, organic agriculture products command significant premium. The organic rice made in Sragen, which is now exported to Australia and Singapore, is sold at my nearest supermarket for Rp9,500/kg (vs. the inorganic rice of Rp6,000/kg). According to the supermarket owner, the organic rice is one of hottest items today. ...AND TURNING ANIMAL WASTE INTO ELECTRICITY Our last stop was a private cow farming, where the Bupati is conducting an energy experiment. We all know that the animal waste can be converted into biogas, comprising of methane and carbon dioxide, via anaerobic digestion or fermentation process. While I have read the process many years ago, I have never seen the conversion facilities. Thus, I was excited to see blue cooking gas produced out from ten cows waste. However, what really surprised me and my colleagues was when the project head pulled out a household power generator (made in China), inserted the gas pipe into one of the generator intakes, turned on the machine, and et voilà, 2,000W electricity power at 220V were generated! The Bupati apparently aims to apply the technology to supply renewable electricity power for hospitals and penitentiaries in Sragen area over the next one to two years. However, instead of using the animal waste, the process will take sewage as its input. Given the recent black out, thanks to the disruption of supply of coals into main coal fired power plants in Java island due to the weather, I wonder why the Indonesian central government has not adopted the Bupati Sragen's brilliant idea. On the way back to Jogjakarta, one of my colleagues said: "He is a good, a damn good Bupati". And I replied: "If this country only has 20 Bupatis like him, Indonesia will be a different country and its equity market will trade at significantly higher multiple". Best regards, Rizal B. Prasetijo
