VZCZCXRO7451
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJS #0078/01 3320428
ZNR UUUUU ZZH
R 280428Z NOV 07
FM AMCONSUL SURABAYA
TO RUEHC/SECSTATE WASHDC 0114
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHJA/AMEMBASSY JAKARTA 0104
RUEHWL/AMEMBASSY WELLINGTON 0047
RUEHBY/AMEMBASSY CANBERRA 0049
RHHMUNA/HQ USPACOM HONOLULU HI
RUEHBJ/AMEMBASSY BEIJING 0003
RUEHJS/AMCONSUL SURABAYA 0116

UNCLAS SECTION 01 OF 02 SURABAYA 000078 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP, EAP/MTS, EAP/MLS 
 
E.O. 12958: N/A 
TAGS: ECON PGOV EINV SOCI ID
SUBJECT: EAST JAVA: SURABAYA-MADURA BRIDGE - COMMUNITIES UNPREPARED 
TO TAKE ADVANTAGE OF ANTICIPATED DEVELOPMENT 
 
SURABAYA 00000078  001.2 OF 002 
 
 
This message is sensitive but unclassified.  Please protect 
accordingly. 
 
¶1. (SBU) Summary: Residents originally opposed plans to build a 
bridge linking the island of Madura with Indonesia's second 
largest city Surabaya fearing Madura's unique culture would be 
destroyed.  With the Surabaya-Madura bridge scheduled for 
completion in late-2008, distrust has given way to anticipation 
as local leaders envision the revenues, prestige, and influence 
that will accrue in coordination with business opportunities 
linked to the bridge's opening.  With regency-level elections 
scheduled for the coming months, election officials and civic 
leaders lament the amount of money being spent to secure these 
lucrative positions. While local regents spin elaborate plans 
for new ports, airports, dams, and power projects, others worry 
that economic development will bypass communities with limited 
skills, poor infrastructure, and weak education systems. 
Bridging the gap between expectations and reality may be a 
bigger challenge than bridging the straits of Madura.  End 
Summary. 
 
¶2. (SBU) On November 20-21, Surabaya Principal Officer and 
Pol/Econ Assistant visited three of four regencies -- Bangkalan, 
Sampang, Pamekasan -- on Madura, an island of 4 million 
primarily ethnic Madurese lying less than five kms, or 45 
minutes by ferry, from East Java's commercial hub Surabaya. 
Throughout the visit, local officials, civic leaders, academics, 
and businessmen speculated on the impact of the Rp 3.6 trillion 
(USD 400 million) Surabaya-Madura bridge (referred to locally as 
Suramadu) on Madurese society, politics, and economics. 
Suramadu, 50% financed by the Chinese government and built by 
two consortia of Chinese and Indonesian contractors, is 
scheduled for completion in late-2008, creating the first 
permanent link between Madura and the Javanese mainland. 
Initially, local religious and community leaders opposed the 
bridge on the grounds that Madurese culture and identity would 
be destroyed.  Lured by the promise of much-needed economic 
development, the local community has now embraced Suramadu, 
hoping that greatly reduced transportation times/costs will 
attract industries, businesses, and investment to this 
impoverished area. 
 
Lacking Infrastructure, Skilled Population 
------------------------------------------- 
 
¶3. (SBU) According to Achmad Syaffi, the Regent of Pamekasan, 
Madura is home to three of the 199 most "backward" regencies in 
Indonesia.  An estimated 49% of the population is considered 
"poor" and 66% are farmers. Economic growth was only 4.2% in 
2006, and higher fuel costs and the weakening dollar are 
expected to slow growth in 2007.  Investment is limited by poor 
infrastructure, a lack of direct links to import/export 
facilities in Surabaya, and an unskilled population. A November 
2007 investors meeting in Pamekasan suggested that investors 
were interested in power plants and agriculture processing 
projects.  Hazin Mukti, the head of local NGO Research and 
Development Center of Madura (LP3M), commented separately to us 
that Pamekasan has the potential to serve as a business center 
for Madura, as it already hosts the head offices of various 
banks, the regional tax office, agricultural consolidation 
facilities, and has a business-friendly bupati.  But, he added, 
Pamekasan is not ideal -- it is "the best among the worst." 
 
Big Plans, Little Planning 
-------------------------- 
 
¶4. (SBU) Officials from the Regency of Bangkalan, located 
closest to East Java, used an elaborate power point presentation 
to outline the new development opportunities that would follow 
the opening of the Suramadu bride.  Recognizing that the bridge 
will terminate in Bangkalan regency, the local government has 
issued a "perda" (local regulation) announcing plans for five 
major infrastructure projects: a container terminal; an airport; 
a dam; a gas power plant; and transportation infrastructure. 
Although port officials in Surabaya have expressed skepticism 
about the demand for a new container port on Madura, Bangkalan 
officials assured us that a feasibility study completed by a 
Japanese consultant demonstrated the project was technologically 
and economically feasible. They added that a local investor 
already holds a permit to begin construction, with a target date 
of 2015. The proposed airport, they explained, would serve 
Madurese migrants in Jakarta and Kalimantan and relieve 
anticipated congestion at Surabaya's Juanda airport.  Although 
officials admitted that human resource capacity and economic 
 
SURABAYA 00000078  002.2 OF 002 
 
 
demand in the regency to support these projects was currently 
insufficient, they expressed confidence that the existence of 
the bridge would mitigate such obstacles. 
 
¶5. (SBU) Local officials acknowledge, while activists and 
academics complain, that Madura is ill-prepared to take 
advantage of the opportunities presented by the bridge.  The 
Pamekasan Regent said his office was focused on development of 
the education sector in an effort to strengthen local skills and 
in doing so attract investment.  The Bangkalan regency has 
opened a training center (BLK) to provide vocational skills 
training.  Everyone we met expressed a desire to improve English 
language training.  LP3M provides advocacy to all four regencies 
on Madura to help strengthen good governance and improve the 
investment climate.  Hazim Mukti noted that Pamekasan has been 
the most responsive, establishing a team made up of government 
officials, NGOs, and religious leaders in an effort to 
strengthen governance. 
 
Limited Coordination 
-------------------------- 
 
¶6. (SBU) To date, efforts to coordinate all four regencies' 
preparations for the bridge's completion have been limited.  The 
Regent of Pamekasan told us that the four regents have asked the 
East Java provincial government to work with them to develop a 
clear and integrated development program. The Regents also 
submitted individual development concepts and recommendations to 
the central government in Jakarta.  The Bangkalan regency said 
that it was the responsibility of the central and provincial 
governments to develop not only the bridge but also the 
surrounding areas.  Local officials explained that, following 
the bridge's completion, the central government will establish a 
"Suramadu Administrative Agency," an organization that will be 
responsible for coordinating and developing the area.  LP3M 
commented that decentralization has reduced the coordination 
among regencies as well as the coordination between the 
regencies and the provincial government. 
 
Money Politics 
---------------- 
 
¶7. (SBU) Given the expectations for economic development and 
influence associated with the completion of the Suramadu bridge, 
it is perhaps not surprising that candidates are eagerly 
anticipating the upcoming regency elections: Sampang December 
27, 2007 Bangkalan January 23, 2008; and Pamekasan March 5, 
¶2008.  The political process is expensive, with LP3M's Hazin 
Mukti estimating that a regent candidate needed at least Rp 10 
billion (USD 1.1 million) for the campaign, logistics, and 
"other purposes."  Other civic leaders suggested Rp 35 billion 
(USD 3.5 million) was necessary to run a successful campaign. 
Both NGOs stressed, however, that the outcome of the first 
direct elections for rgent was hard to predict, as it's no 
longer easy to "provoke" the people.  The Chairman of the 
Sampang Election Commission KPU noted that political parties may 
play a weaker role in this election, observing that the 
candidate supported by a small political party won the election 
in the Banyuwangi regency in East Java. 
MCCLELLAND