VZCZCXRO5909
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJS #0060/01 1620303
ZNR UUUUU ZZH
R 110303Z JUN 09
FM AMCONSUL SURABAYA
TO RUEHC/SECSTATE WASHDC 0425
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBY/AMEMBASSY CANBERRA 0194
RUEAIIA/CIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI
RUEHJA/AMEMBASSY JAKARTA 0412
RUEHJS/AMCONSUL SURABAYA 0434

UNCLAS SECTION 01 OF 02 SURABAYA 000060 
 
SIPDIS 
 
DEPT FOR EAP/MTS, INR 
 
E.O. 12958: N/A 
TAGS: PGOV ID
SUBJECT: EAST JAVA: A DUEL OVER THE ROLE OF INDONESIA'S GOVERNORS 
 
SURABAYA 00000060  001.2 OF 002 
 
 
¶1. (U) Summary:  Do Indonesian governors represent the central 
government?  Or, are they independent local leaders who must 
operate like corporate CEOs?  Two well-known governors debated 
their roles during decentralization at a seminar sponsored by 
the Jawa Pos Institute of Pro Otonomi (JPIP).  Decentralization 
in Indonesia is the transfer of power from the central 
government to local governments.  But eight years on, what 
decentralization and local autonomy really means is still 
unclear.  The role of the governor in managing resources and 
increased budgets was debated by Fadel Muhammad, Governor of 
Gorontalo, and Gamawan Fauzi, Governor of West Sumatra.  Crowd 
support was clearly behind Fadel and his opinion that governors 
should function like a corporate CEO and run their provinces 
like companies. End summary. 
 
Dueling Governors 
----------------- 
 
¶2. (U) Jawa Pos Institute of Pro Otonomi (JPIP), a research body 
belonging to media giant Jawa Pos Group and supported by USAID, 
held a seminar on the relations between the central and local 
governments on May 27, 2009, in Surabaya.  JPIP conducts annual 
research on the performance of local governments in East Java 
and other Indonesian provinces and awards top perfomers. 
USAID's Local Governance Support Program encourages better local 
governance in 9 provinces, including East Java.  This May 
seminar was part of a broader, ongoing dialogue between 
Indonesian lawmakers, civil society, and regional governments 
about the proper role of local officials.  The seminar presented 
two well-known governors Fadel Muhammad from Gorontalo and 
Gamawan Fauzi from West Sumatra.  Both exchanged sharply 
different opinions on the role of governors in decentralization. 
 Under current law, the Governor is both representative of the 
central government and the directly elected head of the 
province.  This dual role leaves room for interpretation, 
however.  Fadel Muhammad is a businessman known for using modern 
management practices, while Gamawan Fauzi insisted that the 
governor should do no more than represent the central government. 
 
Governor as CEO 
--------------- 
 
¶3. (U) Fadel Muhammad worries about the lack of management 
capacity in local governments.  During his remarks he said that 
civil servants are still trapped in a 'yes sir' culture. 
Moreover, a governor is like a corporate CEO and should behave 
like one, daring to break rigid rules imposed by the central 
government for the good of the province, according to Fadel.  He 
has made drastic changes in Gorontalo by restructuring the 
bureaucracy and salary system, introducing information 
technology, and sending employees to study management and 
finance at Gadjah Mada University.  In one instance, Fadel 
abolished the government's motorpool and converted to leased 
vehicles, reportedly saving money on maintenance.  Fadel's 
changes met with strong resistance from many who regarded 
official cars as their personal vehicles.  Fadel explained that 
motorpool savings were given out as bonuses. 
 
Governors Represent the Government 
---------------------------------- 
 
¶4. (U) West Sumatran Governor Gamawan Fauzi strongly disagreed 
with Fadel.  He said that the governor is a representative of 
the central government and should do what the central government 
says.  He added that governors who do not play by the rules 
could be arrested.  He urged all provincial leaders not to adopt 
Fadel Muhammad's methods and reminded the audience that the 
provincial government is not a company.  Gamawan Fauzi 
contrasted decentralization in Indonesia is with federalism in 
the U.S or Europe.  A governor cannot demand total freedom of 
authority.  Fauzi also said that decentralization is not a 
transfer of all powers from the central government to local 
governments.   He proposed rolling back the current law and 
appointing governors by the president, as was the practice 
during the Suharto era.  He pointed out that gubernatorial 
elections are a waste of money since the governor has limited 
powers. 
 
Be Brave, Prosecutors will Understand 
------------------------------------- 
 
¶5. (U) Fadel Muhammad retorted that local governments should 
have the freedom to innovate for the sake of public welfare.  He 
complained about reprimands and questions from the Ministry of 
Home Affairs, police, and the Attorney General's Office 
regarding his creativity based on modern management principles. 
He noted that he is able to maintain his reforms by 
 
SURABAYA 00000060  002.2 OF 002 
 
 
demonstrating the results of his innovations.  Fadel urged all 
local governments to be brave and creative as the central 
government, police, and Attorney General's Office will 
understand provided that the governors are able to provide clear 
reasons and practical results. 
MCCLELLAND