EAST JAVA: NEW BREED, OLD PROBLEMS, LOCAL OFFICIALS CHART

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SUBJECT: EAST JAVA: NEW BREED, OLD PROBLEMS, LOCAL OFFICIALS CHART
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1. (SBU) Summary: Since elections started changing the face of
Indonesian politics nearly a decade ago, cities and regencies in
East Java are increasingly electing officials with private
sector experience and clear plans for local development. Congen
Surabaya visited Trenggalek Regency and Kediri city in southern
East Java to meet with two such leaders and discuss their plans.
The new Mayor of Kediri noted that improved health care would
yield budgetary advantages. Kediri's Mayor and the Regent of
Trenggalek cited infrastructure development and regional
integration as key to their success. However, the lack of a
coordinated provincial strategy, particularly in building new
infrastructure, continues to retard potential growth. End summary


2. (SBU) Dr. Samsul Ashar, a practicing physician, was sworn in
as Kediri's Mayor on April 3. Supported by the National Mandate
Party (PAN),Prosperous Peace Party (PDS),and United
Development Party (PPP),Ashar and his 28 year old Vice Mayor
Abdullah Abubaker, (the youngest vice Mayor in Indonesia)
received 40% of the vote, dispensing with the need for a run-off
against a crowded field of seven pairs of candidates. According
to Dr. Ashar, voters liked his focus on health and education and
his support for small and medium enterprises. According to the
Jawa Pos Pro Otonomi Survey, the city of Kediri ranked 19 out of
38 East Java regencies and municipalities in the delivery of
health services. The Kediri Regency, which has ranked last or
next to last since 2005, surrounds the city. If the Jawa Pos
survey is any guide, dissatisfaction with healthcare might
account for Dr. Ashar's convincing win.

A Doctor in Every Village


3. (SBU) Kediri is a company town and enjoys a healthy tax
base. Some 37,000 of Kediri's 250,000 residents work in the
Gudang Garam clove cigarette factory, which dominates the local
economy. While most of Gudang Garam's plants are in Kediri
Regency, the lion's share of the company's taxes goes to the
city, where its corporate head offices are located. If health
education was doing its job, Dr. Ashar estimates a savings of up
to 36 billion rupiah (USD 3.1 million) would be recovered for
the city. Similarly, stopping the spread of easily preventable
infectious diseases would save a lot of resources.


4. (SBU) Dr. Ashar said that, while many in Kediri have adequate
insurance and access to services, improved health education and
disease prevention could radically cut costs. While Indonesia's
public health center system (puskesmas) is still the main rural
health provider, it is a one-size-fits-all approach to
Indonesia's diverse rural health challenges. Dr. Ashar has
proposed a Doctor in Every Village program as a way of
accounting for local conditions.

Business Sense Brings Development Partners


5. (SBU) While Kediri's new mayor approaches reform through the
lens of healthcare reform, the Regent of Trenggalek is using his
business management and communication skills to link his regency
to the outside world. Fresh from giving a presentation on his
Regency's success in providing clean water and sanitation at
World Bank Headquarters, Trenggalek Regent Soeharto said his
business acumen helped him compete for assistance from donors
such as the World Bank and USAID, who have both cooperated on
sanitation programs there. Soeharto mobilized local Muslim
clerics to help promote his programs. Despite the isolation
from markets exacerbated by poor infrastructure, Trenggalek has
consistently received awards for economic empowerment from the
Jawa Pos Pro Otonomi Institut.

Where Good Ideas Meet Lousy Infrastructure


6. (SBU) Famous for marble quarries and cattle farms, Trenggalek
boasts significant agricultural and mineral wealth. The
regency's 96 km of coastline is also the home of a fishing fleet
that produces 66,900 tons of fish annually. Yet regency
estimates put the haul at barely 10% of sustainable potential.
Tuna is a profitable export to East Asia but poor roads to
nearby airports mean the fish must travel by ship to Bali.


7. (SBU) The mining sector is also waiting for infrastructure to
take off. Chinese and Australian companies have expressed
interest in mining manganese, gold and other metals, but
profitability is questionable due to poor transportation links.
The roadbed of a planned southern highway across East Java is

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already staked out and much of the land has been acquired in
Trenggalek. However Soeharto told us that delays in freeing the
patchwork of land required in adjoining regencies are holding
back construction. Once this East-West highway is complete,
Soeharto is confident that Trenggalek and its neighbors will see
a real spike in economic growth.
MCCLELLAND