Local Autonomy

Local autonomy has been happily welcomed by many experts and regional government officials, which were declared to be in force at the beginning of January 2001. It would not be an exaggeration to describe the official confirmation of this celebrated system as like a dream, which became reality, for after 32 years of the very centralist New Order government, the introduction of local autonomy system had never been imagined before. The government aim to establish important principles like democracy, local empowerment, equity and justice, also obliging local diversity and potential[1]. The system establishment also proposes to reduce homogenization policies among variety regions which Indonesia has and to accommodate grassroots unsatisfied with the so-called centralistic absorbent of their natural resources.

Each region economic development is sustained by the state’s policy to explore local core industry; thus, various local industries are expected to improve according to each local government framework. Moreover, the structure established each region’s independency to profile unique economy based on its (human, culture, or mostly natural) resources. Industrial Department of Republic Indonesia defines the industry that prolongs each region as local core industry or what Porter identified as competitive advantage. It has ignites regions to have different economic development like in corn, tea, coffee bean, rattan, wood sculpture, etc. Local core industry offers each region to be focus in developing certain resources and to provide various investments for domestic or foreign investors. Investors will have the liberty to choose where to invest giving bigger probability for Indonesia to accelerate its economy and people’s equity of well-being.

One of the regions that have excelled in developing its local core industry is Gorontalo located in North Celebes surrounded mostly by ocean. Having a big potential in agriculture and maritime, Gorontalo choose to focus its local core industry in corn. Its leader from 2001-2011 (thx Elvin for the correction), Fadel Muhammad, also implemented an unusual management strategy of entrepreneurship unlike in most region governments’ bureaucracy. The local government commitment and integrity in developing corn as the core commodity has resulted in 2000 a 34.412 ha corn field increasing to 56.556 ha in 2003; so that, producing 245.284 ton. The community empowerment of corn production reflected on each harvest contributed 6 months farmers’ living cost, plus hybrid corn can be harvest 3 times a year. Nevertheless, Gorontalo’s corn production has not yet complies with domestic and international demand. Malaysia has frequently become consumer for the past years, followed by South Korea as another potential market in the following year challenging a ton corn per year. The region’s proximity with the ocean has become an advantage for the export transportation easiness. In the future the government campaigns to construct a local harbor; thus, can aid the increasing trade in the area. Furthermore, the local economic growth is most-likely to continue as the region’s plan to expand the production to corn processing will empowered the community to discover corn-based products like cosmetics, cattle-food, etc.

Gorontalo is the most-known province for its success in developing local core industry supported by the local government’s proactive policies. The success is real since the central government acts as a supervisor and supports with constructive policies, technology transfer, or knowledge sharing; and the local government has the vision and integrity towards local well-being and empowerment. Moreover, private companies and individuals are expected to contribute in this success by becoming investors or channels for local products distribution.

Local autonomy is a good incentive for regions to be creative in finding their local core industry. The local core industry will become a significant aspect to ensure the economic equity in Indonesia’s diverse regions. Obviously, more of Indonesia’s provinces delivering their new unique local core industry are yet to come, other regions like Gorontalo are emerging creating variety economic hubs of Republic Indonesia.
[1] Direktorat Jenderal Otonomi Daerah Republik Indonesia