Role of Java Role Still Dominant

KOMPAS/HENDRA A SETYAWAN

Construction continues on a section of the Cinere-Serpong toll road on March 30, 2019 in the Cipayung area of South Tangerang, Banten. The 10.14-kilometer, Rp 2.1 trillion project, which connects the Cinere-Jagorawi toll road and the Kunciran-Serpong toll road, is targeted for completion this year.

The contribution of Java to the Indonesian economy is still dominant. The government is expected to intervene so that there will be no tendency to strengthen Java further.

JAKARTA, KOMPAS — The dominance of Java on the structure of the Indonesian economy is still large. The role of Java in the Indonesian economy, at least since 2008, has always been above 57 percent. Java has the most dominant role, followed by Sumatra, Kalimantan, Sulawesi, Bali and Nusa Tenggara, then Maluku and Papua.

Data from Statistics Indonesia (BPS) shows that the role of Java in the economy in the first quarter was 59.03 percent. This figure rose compared to the first quarter of 2018, which amounted to 58.67 percent. On the contrary, the role of Maluku and Papua in the first quarter of 2019 was 2.19 percent or declined from the first quarter of 2018, which amounted to 2.5 percent.

Indonesia\'s GDP in the first quarter amounted to Rp 3.78 quadrillion or grew 5.07 percent on an annual basis. During the same period, Java\'s regional GDP grew 5.66 percent.

National Development Planning Minister/Head of the National Development Planning Agency (Bappenas) Bambang Brodjonegoro acknowledged to Kompas that the contribution of Java to GDP tends to increase, especially since decentralization in 2001.

"If we do not intervene seriously, Java will continue to strengthen," Bambang said on the sidelines of the 2019 National Development Planning Conference, Thursday (09/05/2019), in Jakarta.

Bambang added Java would still be the pillar of economic growth until 2045. However, it does not mean that economic equality efforts will not be carried out. Efforts to grow new economic centers outside Java are the government\'s priority agenda in the next five years.

In the National Medium Term Development Plan (RPJMN) 2020-2024, Bambang added, the new economic centers would be in accordance with regional characteristics. Sumatra, Kalimantan and Sulawesi will focus on industrialization based on downstream natural resources.

"We will encourage industrial estates, special economic zones, including tourist areas, to be used to support regional economic growth," Bambang said. According to him, the construction of new economic centers is also needed because Java\'s capacity was increasingly limited. Java bears the burden of being the center of government and business.

In the 2045 vision launched by Bappenas, Java\'s contribution to GDP will be reduced from 58.3 percent in 2015 to 51.8 percent in 2045.

BPS chairman Suhariyanto further said there were a number of reasons why the contribution of regions outside Java to GDP tended to decline in the first quarter. The most dominant factors are shifts in the harvest period and planting season.

Infrastructure

Deputy chairperson of the Indonesian Chamber of Commerce and Industry (Kadin) for Economic Zone Development Sanny Iskandar said that the availability of infrastructure and facilities made many businesspeople engage in economic activities in Java. "The infrastructure and utilities needed to support manufacturing are found in Java," he said.

Sanny added since Joko Widodo became President, development had begun to move outside Java. "At present, several new industrial areas have been built along with their industries, such as in Morowali in Central Sulawesi; and Sei Mangkei in North Sumatra," he said.

KOMPAS/P RADITYA MAHENDRA YASA

An aerial photograph captures the development of an industrial area on April 8, 2019 in Kaliwungu district, Kendal regency, Central Java. A section of the fish ponds and marshes along the northern coast of Java was acquired for the development as part of the government’s infrastructure strategy to attract investors.

According to him, the central government must seriously realize the provision of fiscal incentives for investors who build are active outside Java. Cooperation with strategic partners who have technological capabilities and financial support is believed to be important in the success of development outside Java.

Synergy

At the 2019 National Development Planning Conference in Jakarta, President Joko Widodo stated that the coordination of central and regional governments must be improved. In that way, Indonesia can become a top four economy in the world.

"To move there [countries with the strongest economy in the world] is not easy. Many challenges must be solved," said the President.

Important things to be synergized by the central and regional governments include equal infrastructure distribution, licensing and human resources.

President Joko Widodo expressed hope the central and regional governments would simplify licensing for export-oriented and import-substitution-oriented investments. The President also said that the old patterns of work and old traditions that complicated the bureaucracy should not be continued.

KOMPAS/WAWAN H PRABOWO

Consultants of the Online Single Submission (OSS) serve customers on Jan. 14, 2019 at the Investment Coordinating Board’s (BKPM) One-Stop Integrated Service (PTSP) in Jakarta. President Joko Widodo visited the BKPM-PTSP that day to ensure that the OSS system was working smoothly to provide speedy licensing services, following the system’s managerial transfer on Jan. 2 from under the Coordinating Economic Minister to the BKPM.

"Stop, we have to stop. In the next five years, I\'m sorry, I will have no burden. I can\'t be a presidential candidate again. Therefore, I will do whatever is best for the country," he emphasized. (KRN/INA/CAS)