Daya Pertiwi Foundation: promoting socio-economic development in Indonesia

Interview with Made Dharsana Polak, President Director of Daya Pertiwi Mukti and Chairman of Daya Pertiwi Foundation

When did you decide to dedicate your personal skills to training and to start-ups?

I started in the early 1990s because of the idea that there are so many immigrants from the rural area to the urban areas and because of decreasing ownership of agricultural land due to factors like inheritance and a growing of populations.

I own a company and I felt that it should focus its attention towards the informal sectors and private sectors in the urban areas. First, the program is announced and then we receive the applications and we start with selection.

There are selection models we utilise, in cooperation with all of the stakeholders, such as banks and regional administrative departments. Then we come to a final result based upon the best entrepreneurial project. After which we start with the training and mentoring, to analyze the specific situation for each business model and then select the most appropriate business and to start putting their business plan into effect. Finally, at the last stage of the training, all stakeholders are invited to hear the presentation of the business plan. The company provides then them with services such as monitoring and consultancy for the entrepreneurs on an on-going basis.

What impact does this have?

Risk is always there, but can be mitigated by carefully selecting and evaluating the participants in each individual program and by doing regular monitoring.

The impact is in arresting and decreasing the failure rates of businesses. The company is trying to be a bridge between the unbankable and the banks. In the past, the Central Bank of Indonesia and the European Union supported the company. Currently, the company has programs in east Java and the Eastern part of Indonesia, as well as a program called “Recovery After Bomb Blasting” to help business recovery on the island of Bali.

How do you balance the investment each company needs?

It is a different approach between micro, small and medium sized enterprises. For micro and small-scale, the company tries to finance them by bridging them with the bank. But for the un-bankable, the company has its own micro program unit. The company then cooperates with some organizations outside of the country, from for example Australia and Europe, to finance micro skill business activities, for lots of different businesses. Then, in terms of investment, we connect businesses inside the country with a business from abroad. Such as in the past, in the gas sector we facilitated a collaboration between East Java in Indonesia and Petro China.

How do you find the balance between risk and profit?

Risk is always there, but can be mitigated by carefully selecting and evaluating the participants in each individual program and by doing regular monitoring and of course with our providing additional business services can minimize it.

You have facilities to provide training. Can you give us some more information on this?

In general, we cannot take beginners on certain business courses, such as accounting, but they do need to know how best to analyze the market, the consumers, their distribution channels and their competition, as well as the overall market needs. They have to start with this training in the real world, and then start with the business plan and in ensuring our on-going monitoring and in consultancy.

Should the government also be playing a role in basic business education?

It is in facet the main responsibility of the government. But of course, the private business and the private sectors are also helping to improve the education of the community.

What are the strategies the government should adopt?

It is good policy to develop infrastructure so that the investors have easier access to other areas in the hinterland of Indonesia, and with issues such as marketing and raw material provision. But the human resources should also be developed as a vital priority.

Could you highlight for us some of the projects you are currently working on?

One idea is in the tourism sector. The company has great resources and knowledge of the various tourism sectors and a positive environment, particularly in the local communities, as well as a profound understanding of the necessary culture, which supports the sustainability of this type of business.

What is it that you are specifically looking for from foreign investors?

The company is looking specifically for investors into the tourism sector and to develop the Eastern part of Indonesia. That offers a huge potential. The second aspect is for investors to work together in running a business such as a clearing house or specifically a business centre on the island of Bali, because this is a very strategic location with which to reach the untapped Eastern parts of Indonesia.

Having said that, the overall marketing for Bali is very good and a good example for the small and medium enterprises that exist in Bali, and also as a case study of how these kinds of businesses can thrive and this should be recognised and promoted internationally.

Would you be looking for a financial partner and/or a technology partner?

The company would ideally be looking for both. We need professionals to engage in a skills exchange and for greater Indonesian and international collaboration. Skills transfer is crucial.

What ROI should investors expect in the Indonesian tourism sector?

It is extremely promising, because the potential number of tourists that could visit Indonesia is so vast. Although we are still in need of accommodation facilities particularly related to enhancing business tourism.

What is the specific focus of the foundation?

The company is focusing on two main aspects: economy and environment. Our vision is that someday the economic backbone of Indonesia will be drawn from the small and medium sized enterprises.

In which part of the country are you the most active with the Foundation?

In East Java because it is the most densely populated province. The Foundation has created a micro program in East Java for the financing of small and micro businesses. In the Eastern part of Bali, it is not the same as the tourism areas in Bali itself. Rather it is very much an undeveloped and marginalised area.

The Foundation is trying to empower local women and farmers as well as the villages in the coastal areas to produce quality salt and cashew nuts. We are trying particularly to develop export markets such as the United States for cashew nuts. The Eastern part of Indonesia is where we have our main focus and programmes, because it was left so badly underdeveloped and neglected in the past.

Could you give us a little more information as to how your UN recognition was achieved?

The Daya Pertiwi Foundation is in the process of starting a project in an island called Nusa Penida. It was previously a very dry island, with no irrigation system, no water source, etc. The company has developed economic activities, as well as some extensive environmental programs. So it is an integrated development in the rural areas.

To answer your question directly, the company received an announcement from the United Nations to enter a competition. Competing with 17,000 other project applicants, we are very proud of the facts that we won at a national level. With the company now in the process of competing for the world award in five elements, earth, fire, water air and land-use.

What is the most important project your foundation funds today?

The company is supporting an economically integrated community development in the Eastern part of Indonesia, cooperating with the regional government and supported in this endeavour by a German organization who has made a long-term commitment.

What are the main areas where you should focus?

For geographic areas we should focus particularly on the Eastern part of Indonesia because it was so left behind in past development programs, it definitely needs more attention.

Why invest in your company? Why participate in your Foundation?

The Daya Pertiwi Foundation has a great track record going all the way back to the 1980s. Whilst the company itself has some professionals within the organization’s Foundation, as well as all of the consultancy companies.

In Indonesia, overall the company has many promising projects underway, as well as good resources. Besides that, Indonesia represents a huge potential market.

There are 260 million people in Indonesia, plus it is blessed with abundant raw materials. The government is also actively trying to put in place more attractive policies and cut off conflicting policy and red tape to make it easier for investors.