governments were more focused in increasing income from PAD and only 14 

percent indicated that the local governments were more focused on establishing 

better business climate. 

Figure 3.3.8.  Perception of SME Exporters on Propensity 

of Local Government Prior to OTDA 

Encourage better business 

Don t Know

climate

46%

14%

Focus on increasing local 

revenue

40%

In the context of propensity of local government between the 8 cities as seen in 

figure 3.3.9, Lampung, Surabaya, Medan and Makassar, respectively were the 

most expensive place for the SME exporter to undertake their business activities. 

In contrast, the SME exporter in Yogyakarta has equal perception on either the 

local government were more interested on increasing income from PAD or more 

focused on establishing better business climate. However, it is quite interesting 

that SME exporter in the big cities like Bandung, Denpasar and Jakarta have the 

least knowledge on is happening on the business climate 20 month prior to the 

implementation of OTDA. 

VI    34