VZCZCXRO3428
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJS #0033/01 0990915
ZNR UUUUU ZZH
R 090915Z APR 09
FM AMCONSUL SURABAYA
TO RUEHC/SECSTATE WASHDC 0389
RUEHJA/AMEMBASSY JAKARTA 0376
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHWL/AMEMBASSY WELLINGTON 0162
RUEHBY/AMEMBASSY CANBERRA 0186
RHHMUNA/HQ USPACOM HONOLULU HI
RUEHJS/AMCONSUL SURABAYA 0397

UNCLAS SECTION 01 OF 02 SURABAYA 000033 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MTS, EAP/RSP 
 
E.O. 12958: N/A 
TAGS: ECON EAID PGOV ID
SUBJECT: EAST JAVA: NEW BREED, OLD PROBLEMS, LOCAL OFFICIALS CHART 
THEIR COURSE 
 
SURABAYA 00000033  001.2 OF 002 
 
 
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accordingly. 
 
¶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 
 
SURABAYA 00000033  002.2 OF 002 
 
 
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