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YOGYAKARTA - He has established direct air links with Singapore and is negotiating similar links with Malaysia. And now, the Sultan of Yogyakarta province in central Java wants to change the value system of his bureaucrats to make them more entrepreneurial and understand the needs of foreign investors.
'Economically, I have a process of five years to develop a government that is accountable, in which our bureaucracy also has a will to change and become more entrepreneurial, says Sultan Hamengku Buwono X. 'We are developing a culture and values not just to serve the public but also to develop a bureaucrat that is non-corrupt.'
According to the sultan, Yogyakarta 'was the only province in Indonesia that issued a balance sheet' in 2003. The urgency to change was sparked by external events. The sultan's economic agenda was dealt a severe blow by the Bali bombings. Tourism slumped, with hotel occupancy near rock-bottom levels at 28 per cent. The human development index slumped. Worse, international media reports linked the presence of militant groups in the province to the global terror network, forcing the sultan to launch a 'zero tolerance' campaign by working with local civic groups to weed the militants out of the province.
The efforts have worked. Tourism levels are up, with hotel occupancy at 68 per cent of some 9,000 rooms available, including about 2,000-3,000 in the 4-5 star category. The occupancy levels are higher even than Bali's 40 per cent levels. While foreign investment in Indonesia as a whole has been sliding, the sultan says Yogyakarta has seen rising inflows.With a thriving university student population - there are over 90 public and private institutions and thousands of students - he says the province is well placed for high-tech start-ups, besides tourism, agro-business and traditional crafts because of its rich cultural heritage.
He is a believer in lower corporate taxes to spur competitiveness. The province's tax regime, he says, is more business-friendly than in other parts of Indonesia - and he has invested in broadband technology and air and cargo links to strike a direct route out of the province for exporters. 'We had already noticed that exporters in Yogyakarta actually went to Bali first, and after the Bali bombing there was a stagnation,' he said. 'That was what forced us to quicken the process of internationalisation.'
In line with this, the province is now in negotiation with 'various airlines from all over the world'. Aides said the sultan held talks in Singapore with businessmen in the budget airlines and logistics industries, hoteliers, property developers and those in the retail trade, before flying to Kuala Lumpur. While Singapore investors have yet to tap Yogyakarta's potential, the sultan is hopeful, stressing the province's stability, consistency of rules and absence of labour strife. 'I am, right now, trying to open dialogue, but of course in terms of investment there is a process; and we have to go through that process,' he said.



Posted in Travel @ 30 May 2004 by Jeroen · 'Blog' RSS feed · permalink






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