Triangle of cooperation will encourage investment
SIDOARJO WANTS TO ATTRACT LARGE-SCALE BUSINESS INVESTMENT AND RECENTLY WON AN AWARD FOR SHOWING OTHER AUTHORITIES HOW IT SHOULD BE DONE

Though one of the smaller regencies in Java, close to the industrial center of Surabaya, Sidoarjo is one of the most progressive in terms of seeking foreign investment. It recently scooped an autonomy award for being a model example to other regencies, partly because of the efforts of its investment bureau.
The main economic activities in the regency are light and agriculture-based industries such as chicken processing – which it hopes to export to the US – leather, flowers, animal feed and sugar, as well as fish, shrimp and prawn exports to Japan.

WIN HENDRARSO Regent of Sidoarjo

The local administration is clearly pro-business. It has set up a joint-cooperation program with Surabaya and five other neighboring regencies to attract large-scale industrial projects.
Win Hendrarso, Sidoarjo regent, personally coordinates this initiative. He says that the local administration is “very responsive” to the needs and requirements of foreign investors. “We realize that development in Sidoarjo and other regencies would be impossible without investment,” he says.
Specifically, Sidoarjo is looking to cash in through its relationship with the more developed and industrial area around Surabaya.
“Recently, the regional government said that Surabaya is too overcrowded with industrialization,” says Mr. Hendrarso. “So based on this data, Sidoarjo – as Surabaya’s hinterland – is making plans for the future to respond to the investment needs.”

THE SIBORIAN growth triangle, in collaboration with Krian and Jabon, has been earmarked for industrial development.

There is increasing cooperation between Sidoarjo and Surabaya. One major project coming up is the extension of a toll road involving partnership with the private sector.
Sidoarjo has also created the Siborian growth triangle, in collaboration with the territories of Jabon and Krian, an area earmarked to house the anticipated influx of industrial investment. The Sidoarjo corner of the triangle will develop an industrial estate for trade, services and industry, with supporting offices, hotels, banks and residential accommodation. It has developed a slick promotional CD-ROM to generate awareness of the initiative.
For the time being, Sidoarjo’s ambitions are simpler. “Investors are still sizing up the country,” he says. “As Indonesia’s image moves towards that of a low-risk country, we are beginning to develop the right conditions between all the regions. At the moment, here in Sidoarjo, we are still programming for small to medium sized investment.”

Nevertheless, Mr. Hendrarso believes that attracting large-scale foreign investment has to be the long-term goal.
Sidoarjo is taking purposeful steps forward. The attraction of capital is facilitated by a one-stop bureau within the local government to assist with information and work permits. Closer collaboration with other regional administrations includes developing the infrastructure and protecting the environment.
It also means fostering a new democratic tradition among the ordinary people of the regency. Mr. Hendrarso believes that “rapid democratization” is an integral part of the overall Sidoarjo development plan and an essential ingredient in making autonomy work.

The local government is reaching out to the people through state-of-the-art initiatives like e-government and video conferences as well as more traditional approaches to educate them in the political process. This also includes labor relations.
“Sidoarjo has many factories and sometimes there are labor demonstrations,” says Mr. Hendrarso. “We now have a team that goes to the factories and teaches the workers that, even though demonstration is their right, it should be balanced with their obligations.”

In the long-term, acceptance and understanding of the democratic process will help to improve the image of Indonesia overall. This will pave the way for more foreign investment and greater prosperity.
Under the autonomy laws, the local regime is ready and willing to change and has started to implement the process. This means cutting red tape and introducing an entrepreneurial spirit among officials to react to investors’ needs.
“We want to implement a pattern or a mindset where investors are regarded as our guests. We should give them good service, so they can do their business,” he says. “They will be more confident and feel more secure to make long-term investments and not just short-term investments. We want to project our country’s image as an investor-friendly country,” says Mr. Hendrarso.