First, the bad news. More than a third of bylaws that local governments have issued have turned off investors.

The Finance Ministry reported that as of Aug. 14, 2009, it had recommended the cancellation or revision of 36 percent or 9,715 local taxes and levies.

"They hurt businesses that want to expand and thus cause slower economic growth," Finance Minister Sri Mulyani Indrawati told a forum at the Regional Representatives Council (DPD) on Aug. 19.

Another indicator of bad performance in local government is a finding by the Supreme Audit Agency (BPK) that very few local governments produce financial reports that get an "unqualified opinion", meaning an excellent grade. Many get a "qualified opinion" grading, or good. A number of others, however, do not get a passing grade at all.

The crux of the problem of underperforming local governments is they do not manage their local budget (APBD) well.

Much of the public money (70 to 80 percent) goes into the bureaucracy's operations rather than for financing infrastructure, economic growth and social welfare.

Related to this inefficient use of public funds is the proliferation of new municipal, regency and provincial administrations. Since decentralization effectively began on Jan. 1, 2001, after the passing of two local-autonomy-related laws in 1999, the number of cities rose from 59 before 1999 to 92 in 2008. The number of regencies increased from 234 to 399, and provinces from 26 to 33 in the same period.

The emergence of these new autonomous regions that ceded from previously larger regions has strained and dragged public resources to pay for their upkeep. This situation has impeded the altruistic intent of local autonomy: to provide public services closer and faster to the people.

That's the bad news. So what's the good news? The good news is, a number of newly autonomous regions have turned out to be achievers. Their administrators, through inventiveness and innovation, have shown what good governance can do.

One such can-do administrator is Joko Widodo, 47, the mayor of Surakarta, a town of 560,000 people in Central Java. Jokowi, as he is popularly known, started his 2005-2010 term by polling the people on what they most wanted. Get the street vendors off the main thoroughfares, the public demanded.

The conventional method was to mobilize public order personnel and the police to forcibly remove the traders. Jokowi, however, took a humane approach.

He invited the traders to a meal - not once, but 54 times over a seven-month stretch. The nearly 1,000 traders sensed the mayor would ask them to leave their place of business, a busy central area - the Banjarsari Monument.

But the mayor did not once raise the issue of eviction, at the beginning at least. Patiently he explained his intention to provide them with space at Pasar Klitikan, a traditional market. The vendors voiced no dissent. They moved to their new market and now pay Rp 2,600 (26 US cents) a day for the spot they use. The mayor expects to get the city's Rp 9.8 billion investment back in eight-and-a-half years. The Banjarsari Monument, an obelisk to honor the nation's 1945 independence struggle fighters, is now a pedestrian-friendly walk belt.

Jokowi realized that Surakarta's economic heartbeat was in its small businesses and traditional markets. He methodically moved to renovate 12 more markets, the most recent being the Pasar Windu Djenar flea market.

Widening his sights, Jokowi, a former furniture dealer with sharp business acumen, now wants to make Surakarta a conference and exhibition center. In 2008, Surakarta successfully hosted the Word Heritage Cities Conference.

What is Jokowi's formula for successful local autonomy? In a dialogue in Jakarta on Aug. 13 to mark eight years of local autonomy, hosted by the Regional Autonomy Watch (KPPOD), Jokowi underscored five points. First, good governance.

Second, professional financial management. Third, focus on a priority. In Surakarta's case, it was traditional markets.

Fourth, central government management supervision. Here he chided Jakarta over the fact that when regional government leaders are invited to the capital, they don't want a speech but a dialogue. Fifth is ethics in politics.

Joko Widodo is not alone in the vanguard of good local governance. Another is Fadel Muhammad, governor of Gorontalo province, who also spoke at the dialogue. Fadel agreed with Jokowi that a local government should focus on something it can do well. In Gorontalo's case, it is growing and exporting quality corn. Three other key points for regional success are innovation, making breakthroughs and networking, declared Fadel, formerly in the construction business.

Indonesia has other reformist local leaders. They include Untung Wiyono, regent of Sragen in Central Java. The one-time oil-and-gas executive reformed the local bureaucracy. This became his priority when he became regent in 2001, after a bitter experience with business failure due to bureaucratic snags. Untung established a one-stop service for the fast approval of numerous papers and permits.

The IT-savvy administrator also placed camera-equipped laptops in all of Sragen's 208 villages and 20 subdistricts. Not only did the Internet setup allow for teleconferencing, it also drastically reduced phone bills, as communication was done by voice over Internet protocol (VoIP). In 2006, Untung (Indonesian for "Lucky") won a second term as regent with a whopping 87 percent of the vote.

Another mover and shaker is Pahri Azhari, regent of Musi Banyuasin in South Sumatra. His program of free education up to high school has pumped more than 20 percent of the local government budget into that sector.

Meanwhile, Mazat Amirul Tamim, mayor of Bau-Bau in Southeast Sulawesi, has taken on environmental issues as the first item in his in-tray.

The mayor cleaned the river that flowed through the city and built a wide asphalt road along the river. The road that ran in front of local homes discouraged people from throwing their trash onto the road or into the river, Tempo magazine reported in its Aug. 17, 2009, issue.

All these leaders have their own out-of-the-box ideas they followed through with passion. That's what helps make local autonomy work.

The writer teaches journalism and has conducted workshops on development reporting at the Dr. Soetomo Press Institute (LPDS) in Jakarta.

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