Programme description

Title: Local and Regional Economic Development in Central Java
Commissioned by: Bundesministerium für Wirtschaftliche Zusammenarbeit und Entwicklung (BMZ)
Country: Indonesia
Lead executing agency: National Planning Board "Badan Perencanaan dan Pembangunan Nasional" (BAPPENAS)
Overall term: June 2000 to May 2010

Context

Indonesia is not yet in a position to generate stable income and employment opportunities for its growing population. Economic development and competitiveness are hampered by unfavourable conditions, particularly for small and medium-sized enterprises (SMEs). Regional decision-makers have expressed their need for extensive advisory support in implementing pro-active regional development policies, with the aim of improving competitiveness.

Objective

The economic and investment climate in Central Java is significantly improved. SMEs in particular benefit from enhanced economic development and location promotion.

Approach

The GTZ programme advises decision-makers from the public and private sectors on developing and implementing cross-district economic development policies and location promotion, and devising a regional marketing strategy. The districts receive support in creating conducive conditions and improving the quality and availability of services and advice for local businesses. Fostering production clusters in competitive sectors, and, within those sectors, promoting selected value-added chains, are further elements of the regional economic development strategy.
Best practices identified during programme implementation are documented and used in  planning and realising similar programmes in other parts of Indonesia.

Results achieved so far

Local stakeholders fully appreciate the value of a regionally oriented approach and are actively implementing independently budgeted proposals, such as the establishment of a regional association for economic promotion. District authorities are currently revising regulations relevant to the local investment climate. SMEs now utilise private business development services as well as advisory and information services supplied by public providers, chambers and professional associations. SMEs also increasingly take the initiative in forming networks.
The provincial government of Central Java plays an important role in disseminating the concept and strategies of active economic development and location promotion and motivates other regions towards cross-district cooperation and joint marketing of the region. Concepts and instruments for regional economic development and location promotion have been adopted at national level.

Further information

• Locale Website of the programme
  Regional Economic Development Program
  www.red.or.id
• National Planning Board
  Badan Perencanaan dan Pembangunan Nasional (BAPPENAS)
  www.bappenas.go.id