Establishing Industries Outside Java

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Foreign tourists disembark from the Sun Princess on Tuesday (5/11/2019) at Gili Mas Port in Lembar, West Lombok regency, West Nusa Tenggara. The cruise ship departed from Fremantle in Western Australia.

JAKARTA, KOMPAS – The establishment of industries outside Java will be the key to increase employment opportunities and promote economic growth in regions. Downstream natural resources and aquaculture industries are among of the industrial sectors that can also be developed outside of Java.

This way, regional contributions to the economy will spread and no longer be concentrated on Java. The distribution of industry will also have an impact on employment in the area.

Citing data from Statistics Indonesia (BPS), Indonesia\'s economy grew 5.02 percent in the third quarter of 2019. Java contributed 59.15 percent, while Sumatra only 21.14 percent. Maluku and Papua contributed the least at 2.27 percent.

Based on data from the Investment Coordinating Board (BKPM), West Java remained a favorite destination for domestic investment in the third quarter, with a total value of Rp 15.19 trillion, while Jakarta became the most favorite investment destination for foreign investment with a total value of $1.74 billion.

Such programs can create employment and at the same time can help spur the economy in the regions.

According to BPS data, the province with the highest open unemployment rate as of August 2019 was Banten, with 8.11 percent. The lowest was Bali with 1.52 percent.

The deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin) for the development of economic zones, Sanny Iskandar, said that industrial development can also be carried out through the establishment of micro, small and medium enterprises (MSME).

"Such programs can create employment and at the same time can help spur the economy in the regions," said Sanny in Jakarta on Thursday.

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Customers browse mangos on sale on Thursday (7/11/2019) at a supermarket on Jl. Sudirman, Central Jakarta.

Such approaches can be realized by empowering the potential and skills of the community in the area, he said. "It can be in the form of handicrafts and creative economic products related to tourism in the region," said Sanny.

Institute for Development of Economics and Finance (Indef) senior researcher Enny Sri Hartati said industry played an important role in Indonesia\'s economic growth. Industrial activities can foster Indonesia\'s economic growth sustainably. In the third quarter of 2019, the manufacturing sector grew 4.15 percent year-on-year.

Industrial growth, Enny added, depends on the industrial area. At present, the industrial estates require integrated management from an authority agency. He cited the Malaysian Industrial Development Authority in Malaysia and the Industrial Estate Authority of Thailand.

With integrated management, investment procedures would be simple and provide certainty and a guarantee of low risk. Investors would also be facilitated in realizing their investments and running their businesses.

Sanny added that the government also needs to build infrastructure that can integrate the industrial estates and link them with other areas and ports. There are currently 93 industrial estates in the country, which cover about 90,000 hectares.

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Construction on the Jakarta LRT and office buildings proceed simultaneously on Tuesday (5/11/2019) along Jl. H.R. Rasuna Said in Central Jakarta.

Data

The Maritime Affairs and Fisheries Ministry has encouraged aquaculture as an economic driver outside Java. In this regard, the government needs to encourage the opening of processing industries near fish farms to reduce logistics costs.

"Fish farming can be promoted outside Java, namely in eastern Indonesia, which has good water conditions and high [cultivation] success rates," said the ministry’s aquaculture director general, Slamet Soebjakto.

Fish farming can be promoted outside Java, namely in eastern Indonesia.

Meanwhile, Indef’s deputy director, Eko Listiyanto, said the people relied on BPS data about economic growth and other economic indicators because in developing countries like Indonesia there was no comparative data on economic growth. He was commenting on reports that Capital Economics Ltd. economist Gareth Leather doubted Indonesia\'s gross domestic product (GDP) figures released by BPS.

In a press conference on Tuesday (11/5), the head of BPS, Suhariyanto, when asked about the doubts about Indonesia\'s GDP figures, said that BPS’ calculations followed strict guidelines and were monitored independently by a number of institutions, including the International Monetary Fund.