Eko Putro Sandjojo (JP/Seto Wardhana)

President Joko “Jokowi” Widodo was thinking about management overhaul when he appointed National Awakening Party politician and former businessman Eko Putro Sandjojo as the villages, disadvantaged regions and transmigration minister in 2016. The former CEO of publicly listed agribusiness firm PT Siread Produce later did just what he was tasked to do: Reform the ministry and transform villages across the country. Since 2014, the government has allocated a total of Rp 187 trillion (US$13.14 billion) for 73,670 villages to empower and kick-start economic activities in each of the country’s smallest administrative units. While there is much room for improvement, he shared with The Jakarta Post’s Nezar Patria, Damar Harsanto, Adisti Sukma Sawitri and Gemma Holliani Cahya what the government has achieved and beyond. Here are some excerpts from the interview:

Question: It has been five years since the Village Law was passed, mandating the disbursement of the Village Fund. How is the country progressing so far and how has the fund impacted villages?

Answer: In the National Medium-Term Development Plan (RPJMN), the government asked us to alleviate poverty in 5,000 underdeveloped villages and create 2,000 independent villages by the end of this year.

At the beginning of 2018, Statistics Indonesia (BPS) reported that we had surpassed the target by creating 6,500 developed villages and 2,665 independent villages.

It is also historical for Indonesia that we have built 191,600 kilometers of roads across villages — maybe now it has reached 200,000 km. People tell me, with roads that long we can go around the world many times. I told them this is Indonesia; we are a big country, we have 74,957 villages across the archipelago.

Each year in each village they only build 600 meters of road. We still need more.

If people in villages become more prosperous, they could build their own toilets and wells so that they could have better access to clean water and healthy food, and send their children to schools with their own income. We can also solve stunting problems not only by helping them and making them rich, but by alleviating them from poverty.

What makes your programs successful?

In the past, our villages were not focused. That’s why they stayed poor. If we are talking about the agriculture industry then naturally it has to be big and integrated. Because if the size is small then the production cost will be high and it also has to go through a very long post-production chain. High price, little production. It would be hard to alleviate them from poverty in that situation. To release them from this circle we must create a big agricultural operation that involves them.

We are successful because now we use the right business model and because we can attract stakeholders who have resources. I started a program called the Village Flagship Product (Prukades), working with related ministers, state-owned enterprises, companies and banks to create one prominent product from every village. We work together as we share mutual benefits. We managed Rp 240 trillion last year under this cooperation.

In Prukades, basically we created an agricultural economic cluster. I asked each regent to propose one or two of their flagship products. Don’t propose too many because they would not be focused. After that I helped to connect them with the related parties. We’ve documented their ideas, and if it’s successful, other villages can just copy their products.

What it is the role of villages for future Indonesia?

Since the market is currently constrained with protectionist policies [in other countries], I think we have to push the domestic spending sector because 60 percent of the country’s gross domestic product (GDP) relies on spending. So the easiest way to push spending is to push spending at the village level. There are currently 120 million people living in villages and they currently spend very little, so we [need to] increase their disposable income. It can be done by building infrastructure to reduce a high-cost economy in the villages.   

When their costs are reduced, their disposable income increases. They can spend more.  And I think it will help the economy in Indonesia to grow beyond 5 percent.

After the end of the Jokowi administration, do you think these village programs will still be around?

That’s why I always push the villages to stop relying on the Village Fund. These past four years we have built better infrastructure. If we only focus on building infrastructure, the fund will not be enough. So why don’t we focus on empowering the villagers? The villages will have their own money, which would be greater than the village funds that they usually receive, so the programs can be sustainable.

How did you reform the Villages, Disadvantaged Regions and Transmigration Ministry?

The first thing that I did when I became the minister is I called a consultant and the consultant told me that the ministry was over-employed and the organization was not objective in placing people at several positions.

There were around 3,700 staff members at that time. After restructuring, we now have around 2,500 staff members. With that we were able to save Rp 80 billion. With the money, I sent the remaining personnel to various training programs at business schools on weekends.

After I restructured the ministry and after the six months of short business courses, in 2017 the budget absorption increased to 94 percent. Our document management quality increased so much that we ranked fifth among 34 ministries. Our public services improved significantly. An assessment on public service showed that [among government institutions] we climbed from 82nd place to third place.

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