DISCUSSION 1. Bureaucracy culture Investment theory
towards that target. A manager has a responsibility seriously to report completely and honestly to the shareholders. In considering business, an investor will really
focus on a management quality. The bought companies must be executed by an honest and competent manager. Specifically, investor must consider some main
aspects, for instance : a rational management, a free mind and a strict manager.
3. Financial doctrine. The doctrine or financial principle used by investor to value up both the managerial strength and the economic performance is based on a good
principle. There are some important principles which must be guided by an investor, in particular: centralizing of profit or equity, calculating the profit of owner
to get the real value estimation, looking for other companies which have the high margins and for retained currency. Ensure that the company achieves the high
market value.
4. Market doctrine. All the principles of doctrines above lead to one point of decision: purchasing or not in one company.
In autonomy regions, these investment theories can be applied in development process. However, the existence potency in these regions must be attempted to
attract more and more investors. Moreover, the security of the regions must guarantee the dynamic investment. In this case, there is a relationship between a
big authority in regions, in increasing the competitiveness in increasing the regional investment.
C. Research methodology This research is quantitatively descriptive
III. DISCUSSION III.1. Bureaucracy culture
The politic condition in Indonesia, basically cannot be separated from the history of bureaucracy itself. Before Independence Day, our young bureaucracy has never been
released from primordial practice. Since the liberal democracy system had begun, some authorized parties appeared to perform bureaucracy politic. If a minister comes from a
certain party of a department, a majority of officials in the ministry will be recruited from the party department in which the minister leads the department. If a minister is from
ethnic who leads the department, it will be consisted of some staffs whose ethnic is similar to the minister. It is not secret anymore, that forming a patronage, involves the use of
position to give privilege to specific clients. It can be called as privacy meddled with public affair.
In new era, the bureaucracy still remains. It is from primordial into bureaucracy politic. It is even becoming more and more terrifying, when authority has dominated the
bureaucracy. Its role is getting exaggerated and a proliferation happens. As the previous regime, the position in bureaucracy has been full of “political appointment” which ignores
meritocracy. Nepotism and collusion, has found its huge form Makmur, 2004. In reformation era, bureaucracy has changed itself. Politicians suddenly get
another place. Most of them are chosen to be ministers, governors, and Head of regency in some regions. As a leader in the party, they infect a bad habit called “conflict of interest”.
They feel reluctant to decide which are the public interest and the real constituent that becomes party interest. With legislative, the executives create oligarchy and latent
interest cooperation by ignoring ideology and society affair. The pragmatism is set up as either a group affair or privacy.
Tragically some of them not only care about the supported party interest, but also sometimes involves their passion as businessmen who also work in the party. They
become an authorized businessman in the bureaucracy. In different way in the region, they are afraid of the existence of “Shadow state”, the private mass who handle
bureaucracy from outside. They suddenly appear to demand after succeeding in general election.
Be sides actually without the worrying “Shadow state”, since then bureaucracy had been “bureaucracy business”. If we go to public service in each region from central to the
village, bribing is considered as a common thing. Therefore, it appears to be the authority abuse. The weaker observation cause
imperishable intere st. They are called as “interest bureaucratic” and “kleptomania”, the
bureaucracy who robs nation’s and society’s wealth. This kind of bureaucracy makes it more blur and the losing of functions as public service without any discrimination and
efficiency. The improvement of public service should be there in region autonomy. The wide
authority of the region is faster to absorb and apply the community need and interest. Consequently, the authority given is to enhance the public service including service in the
labor sector. In addition, the regions become more competitive. At least, it eases the
community’s effort to work, so that the investment will be bigger and bigger into the region. III.2. Competitiveness in Local Investment
There are some indicators which determine the degree of local competitiveness known in literature Piter, et all, 2002, for example, local economy, openness, financial
system, infrastructure and natural resources, science and technology, human recourses, institute, government policy and management and macro economy.
If we analyze the principals in each indicator, it appears that such principal actualization is very dominant set by bureaucracy policy according to the authority. We
can see from the local government policy for example, the principle which supposed to be local government focus on actualizing a predictable social condition, including the role
in minimizing the business risk from the investments and also local government administration effectiveness for providing infrastructures and influential regulations for the
economy competitiveness in a region.
From institutional aspect, local bureaucracy is expected to create policy corresponding with the availability of human recourses and support the competitiveness
for local economy. The results of the research factors and the competitiveness improvement are in competitiveness ranking form in Indonesia’s provinces.
Comprehensively, the competitiveness ranking shows a relative position in a region towards another region by concerning all factors which each region has and how far the
region can actualize all potencies which a region has.
Furthermore, each region’s competitiveness can be decomposed in to ranking based on each main indicator nine indicators, they are; local economy, openness,
financial system, infrastructures and natural resources, science and technology, human
resources, institute, governance and government policy, and also management and micro economy.
Calculation and competitiveness ranking conducted in 26 provinces in Indonesia reflects ranking image comprehensively. research result Piter and friends, 2004 shows
that DKI Jakarta province is in the first rank of national competitiveness with its six exceeding main indicators. The main indicator of DKI Jakarta is in the first rank in national
scale. It generally describes economics performance in macro and the best micro level company throughout Indonesia. Although DKI Jakarta is in the first rank in national
competitiveness but the decomposition according to the main indicator shows the weakness of this area in institutional, governance, government policy and local
government policy aspects. DKI Jakarta is in the 21
st
rank in governance and government policy indicators, and it is in the 18
th
rank in institutional indicator. The similar competitiveness portrait can be seen in conflict areas such as Maluku
and Irian Jaya. None of the areas which ever had a great conflict is in the above average of national scale. As an example in this case includes west Kalimantan province which is
in the 22
nd
rank and Central Sulawesi is the 19
th
. Although Peter’s research does not show any casualty between potency and conflicts in a area with local competitiveness but it can
be seen from competitiveness rank from the conflict areas. Another portrait that can be inferred from area ranking is the domination of the big
ten provinces in Java and Bali. Based on the province ranking result in Java, except DKI Jakarta, shows the factors that form the local competitiveness strength particularly in Java
and Bali. For example, the decomposition result concludes that main strength of East Java Province is in aspect of: openness, physical or non physical infrastructure, science
and technology application, the quantity and quality of human resources and micro economy management in the level of industry and enterprise. However, the same case
as DKI Jakarta, East Java province is weak at institutional the 14
th
rank and governance and government policy the 16
th
rank aspect. West Java province is categorized in the lowest rank, the17
th
rank, left behind among DKI Jakarta, Central Java, East Java and Jogjakarta. The main weakness of West
Java is in financial management the 15
th
rank, infrastructure and human resources the 13
th
rank, institutional, the 16
th
rank, governance and government policy the 19
th
rank. Two provinces excluded from Java which are in the big five national scale are East
Kalimantan the 2
nd
rank and Bali province the 5
th
rank. The competitiveness strength of east Kalimantan is not merely in infrastructure ownership and human resources the
2
nd
rank but also in local economy, openness, institutional, governance and government policy micro aspects in enterprise level aspects. The factors considered as weaknesses
are the limit and high capital cost, the lack of financial institution in overall, and a backward in science and technology application. It shows that this province has a great potency in
improving competitiveness in the future, especially in local autonomy era comprehensively.
East Nusa Tenggara is strong in openness and financial system but bad at science and technology and human resources. On the contrary, West Nusa Tenggrara province
is fairly even in the main indicators except in governance and government policies are in the 13
th
rank Piter, et all, 2004.
III.3. Local Competitiveness and Investment
Generally Economists are interested in discussion with the competitiveness Country. The competeveness of Indonesion nation get lower from year to year and it is
under level. That is informed by word compotetivenesss report in reporting approximate year of age for 5 years
lately. It is caused of bureaucracy service under quality, business
is not efficient, the cost worker is higer, infrastructure quality is low, and fee investation is high in indonesia. It is not asthonising, country risk of indonesia is high, of course, it is not
balance. This is one of the problem the odd investor is reluctant tocome Indonesia. To see from competiteveness of product “ considered superior” Indonesia than
other country, it looks low competetiveness. Survey proves that accomodation price the superior of Indonesia is higer around 22 than word price. It shows that production fee
fortune margin producer produce the product can not compete the same product in word market. So domestic price from such as flour, suger, cement, plastic, car is the highest
than International price.
Uninterested indonesia can see with ow investation since 1998l. BKPM data showed that value of PMDN Investation in country in 1997 was Rp. 119 billion with the
amounth of project 717 unit. 1998 slip off Rp. 58 billion with 320 projects. Data in 2002 proved Rp. 25 billion with 81 project. How is the strange investment that came through
PMA Penanaman modal asing in 1997 the value is 33.8 trillon with 783 projects slip off 13.6 trillion, and in last year 9.7 trillion eventhough to see from project is higher 1.135
units Mudrajat kuncoro, 2009. In territory level, the increasing of investation is influenced by condition and realisation of investment which is influenced by condition and realisation
of investmen in national level and the ability of territory compotetiveness influenced of birocration facility in that area itself.
III.4 Investment Policy Unconsistency
If it is seen by investment such as strange people that came into Indonesia it followed out investment directly is negative in 1998, from year to year is getting big. Leaving two
shoes industry Rebook and Nike, and also Indonesian sony electronic move to Vietnam and close their factory in Indonesia strengthen the fact : Indonesia is not good location
for investments.
But, it is necessary to know that crisis monetary for Indonesian wasn’t balance all of the areas are there in Indonesia. At the time national economic got higher income 3.5
, it is clear tha t country risk isn’t identical with regional risk, risk to make business in
area, nevertheless, although it is not the same but regional investment very influenced by regional investment.
Scientist of region autonomy investment lately advertises that region competitiveness also need to increase. KPPOD Region Autonomy Carry out Monitoring
Committee recently publish competitiveness level is 134 regency city to look from dimension of investment. The interesting of investment from indicator intuitional, safety
condition of social, politic nature, area economic worker and physic infrastructure, ironic,
some areas are included “high” by amount of indicator proved that a few investments are
interested. This is admired by some head of region that got reword from KKPOD. Nevertheless, by factual, the competitiveness are better, give more chance investment
than area is low competitiveness.
Nevertheless, concept and implementation of competitiveness, is not the same between public organization and private organization. According to Paul Krugman 1994,
Jargon increasing of competitiveness of country are different with company competitiveness. Why?
There are two reasons. First in reality, the competi tion isn’t country, but company
and industry. Most of people analogy the country competitiveness. Impossible all of companies and Indonesian industry have competitiveness both domestic market and
international.
Secondly, to give definition of country competitiveness more complicated than company competitiveness. If one company cannot pay the salary workers, to pay material
from producer are divided, so company will be bankrupt and stop. Company can de bankrupt, but country doesn’t have bottom line or always get competition Mudrajat
Kuncoro, 2009. Government of region, especially in one year, consistent of doing rule and policy
region, so give assurance to afford world from consistent rule aspect, some of the region such as south Sulawesi, middle Kalimantan, east Kalimantan, DKI Jakarta, Jambi, middle
Sulawesi, southern Sulawesi, central java, south Sumatra and Bali have more competitiveness. From aspect of time which is needed about bureaucracy, more
competitiveness, namely middle Kalimantan, east Kalimantan, Maluku, southern Sulawesi, central java, riau and bali.
By phenomena of region autonomy, after reformation 1998, where of region autonomy are successes to interest many investors in its region, so region bureaucracy
get demanded to change paradigm from local orientation to global orientation, from pragmatism orientation to global orientation, from pragmatism orientation to be continued
orientation. Therefore region government can improve his area become a good place for growing of investment and industry, by stressing on policies based on special and local
potential, as well as make relationship with around of region. Region bureaucracy policy give easilyness for company. And it is not dominant of region income orientation.