Land Biased Development
Two things have remained unchanged since the colonial era. First is that population distribution and economic contribution of each region in the national aggregate income are relatively stagnant. Second, exports are dominated by extractive mineral commodities or their derivative products with limited added value (Hal Hill, Unity and Diversity, 1989).
The wide gap between Java and outside Java, or between western and eastern Indonesia, both in social justice and development is caused by a lack of an adequate stimulus to mobilize sources of economic growth and prosperity in the region. Another fact is the lack of attention given to island areas to get vital public service facilities (education, health and economic access).
Hundreds of inhabited islands, such as those in Maluku province (92.6 percent of which is ocean), Riau Islands (96 percent), East Nusa Tenggara (80.8 percent), Bangka Belitung (79.9 percent) and Sulawesi North (95.8 percent), experience even more difficulty in improving their people\'s welfare and offering quality public services.
According to Government Regulation No. 131/2015 on determination of disadvantaged areas 2015-2019), there are 122 disadvantaged areas in Indonesia, most of which are located the eastern region. The five least developed provinces are all in the eastern region, namely Papua, West Papua, Central Sulawesi, West Kalimantan and East Nusa Tenggara. The condition is clearly reflected in the Human Development Indices – with medium category (with a score of 60 <70) and with low category (with a score below 60) in eastern Indonesia reaching 66.4 percent and 18.1 percent, respectively (BPS, 2015).
Asymmetry and affirmation
Until now, the budget balance through the central-to-regional fund transfer formula in the state budget (APBN) has two main defects. First, the calculation of general and special transfer funds to regions are based on the size of the population and land area rather than the size of the sea or water area and the problem of isolation. The formula does not take into account the potential maritime resource-based development and facts of chronic backwardness in the island areas.
Second, absence of regulations and a lack of special attention in the archipelago (land areas) are not accompanied by discretion and affirmation policies as the embodiment or recognition of asymmetric decentralization.
The situation is reflected in the profiles of the 2017 regional budgets (APBD) of 85 regencies or municipalities categorized as islands. The local revenues of the 85 regencies or municipalities account for only 9.2 percent. The remaining 76.7 percent came from the transfer of funds from the central government (DAU, DBH, DAK) and 14.1 percent from other income.
Of the total revenues of the regions of Rp 1.05 quadrillion in 2017, only Rp 105.58 trillion was allocated for the island areas or the archipelago (eight provinces and 85 districts /municipalities). The figure is far lower than Rp 945.75 trillion allocated for non-archipelagic or land areas (27 provinces and 428 districts/municipalities).
The huge fiscal deficit in the regional budgets is very worrying if it is further maintained without any changes to help generate revenues for the archipelagic areas. If the condition continues, the gap in development and basic service access will not only further widen, but also led to vulnerability in the future.
President Joko “Jokowi” Widodo’s Nawacita development program that prioritizes "building Indonesia from the marginal areas" and "prioritizing maritime development" as the reflection of the “presence of the state” is awaiting its.
Introduction of Law
The number of Indonesian islands officially listed on the United Nations Conferences on the Standards of Geographical Names reaches a total of 16,056 (Kompas, 21/8). The total length of the coastline is 99,093 kilometers and the sea area is about 5.8 million square kilometers, with 2.7 million square kilometers included in the Exclusive Economic Zone (ZEE).
As an illustration, Vietnam -- the coastline of which is only 3 percent of Indonesia\'s (3,000 kilometers to 99,000 kilometers) and ZEE is only 33 percent of Indonesia\'s (1 million sq kilometers versus 2.9 million sq kilometers) -- earned US$7 billion from its fish exports in 2016, while Indonesia earned only $4 billion.
Indonesia is also the largest producer of seaweed in the world with a contribution of 56 percent (dried seaweed production was 237,800 tons compared to world production of 424,000 tons in 2016). However, Indonesia is only a supplier of raw materials instead of high value-added processed products. For a comparison, China produces at least 17 types of processed seaweed products with high added value.
The cultivation and the processing of potential maritime resources cannot be optimally developed because of classical issues: lack of infrastructure and facilities, especially electricity for the processing industry, low inter-island shipping transportation, limited regional government authority, production development that does not focus on export-led commodities and minimal fund allocation.
Special provincial status and empirical facts of disadvantaged regions in all these aspects indicate the need for a legal umbrella, not just policy discretion. If the state recognizes the special status of Jakarta, Yogyakarta, Aceh, Papua and West Papua because of their unique nature, islands should also get similar recognition. Unlike the five provinces, special status would not require the establishment of a new authority but would simply address three important needs: space, authority and funding.
The initiative taken by the Regional Representatives Council (DPD) to propose a revision to the Island Territories Law, which has been listed for deliberation by the House of Representatives this year, should be responded to immediately. The idea of revising the law has been floated for 12 years but has never been realized.
Judging from the philosophical, historical, social, economic and empirical aspects, implementation of the law is urgent and necessary, as mandated by Article 18 A (Paragraph 1) and Article 18B (Paragraph 1) of the Constitution.
The reluctance to apply the principle of proportionality and subsidiarity in the policy of the transfer funds to the regions and instead the continued implementation of the standard budget formula from one regime to another has proven to have failed to overcome structured inequality.
Although the government\'s attention toward archipelagic areas that are remote, isolated and lag behind has begun to increase, it is not enough without legal certainty.
From the 2017 budget simulation, the amount of special funds for islands needed for development should at least be equal to non-archipelagic areas, which reached Rp 92.5 trillion (Rp 52 trillion for eight island provinces and Rp 40.5 trillion for 85 island districts/municipalities).
If the government and the House agreed to allocate 5 percent of the general transfer funds (general allocation funds plus profit-sharing funds), the island provinces would receive an average additional revenue of Rp 1.05 trillion and 85 islands/municipalities an average of Rp 216 billion.
The amount would be significant enough to boost provincial and archipelago/island budgets by 30.4 percent and 21.3 percent, respectively. The use of the additional funds would need to be strictly monitored, and especially used to develop maritime economic sector priorities: fishing and fish farming, fishery product processing and biotechnology, mining and energy, shipping, maritime services, mangrove forests and renewable resources. In addition, the development of transportation and infrastructure facilities (sea, land and air) should be also carried out thoroughly to improve connectivity and cope with isolation.
Opportunity
The opportunity to develop the maritime sector is not as big as previously as the sources of economic development are currently under severe pressure due to the decline in the role of oil and gas and the volatility of the exportation of primary commodities, which has resulted in a drop in state revenues.
The phenomenon of growth without development in the form of the absorption of natural resources in the archipelagic areas should be terminated. The economic potential of marine, fisheries, marine tourism, renewable energy, biofarmatics, marine transportation, offshore oil and gas, and others that could generate hundreds of billions of US dollars could be realized if special treatment and acknowledgment were given and tangible and measurable priorities made.
In the past, the song “Nenek Moyangku Seorang Pelaut” (My Ancestor was a Seaman) was often sung as an expression of pride and deep love for the existence of our maritime prowess. Jalesveva Jayamahe (victorious in the sea) is only possible if we honor and restore this dignity.
SUWIDI TONO
Coordinator of "Become Indonesia" Forum