Reforms won't address regional gap<\/p>\n
MANADO, N. Sulawesi (JP): Deregulation measures alone will not
\neffectively address the development disparity between Indonesia's
\neastern and western regions, economists said here yesterday.<\/p>\n
The eastern region simply does not have sufficient
\npreconditions for growth and is therefore not able to benefit
\nfrom the market mechanism, analysts gathered at the 8th meeting
\nof the Association of Indonesian Economists noted.<\/p>\n
\"Deregulation is necessary but not a sufficient condition to
\nstimulate economic development in the eastern provinces,\" said
\nLucky Sondakh, professor of economics at the local Sam Ratulangi
\nUniversity.<\/p>\n
Mangara Tambunan, Managing Director of the Center for Economic
\nand Social Studies in Bogor, West Java, concurred that market
\nforces wouldn't stop the disparity.<\/p>\n
\"I'm even afraid that if the present system of infrastructure
\nfinancing is maintained the regional disparity will become
\nwider,\" added Rizal Ramli, director of the Econit economic
\nresearch center in Jakarta.<\/p>\n
Rizal saw infrastructure development as one precondition to
\nstimulate economic activities in the eastern region of Sulawesi,
\nNusa Tenggara, Maluku and Irian Jaya.<\/p>\n
He reckoned the central government should accelerate
\ninfrastructure development with public financing.<\/p>\n
\"State intervention is required at the early stage of
\ndevelopment in a region,\" he pointed out.<\/p>\n
Sondakh observed that North Sulawesi, for example, is the
\nclosest province to the Pacific region.<\/p>\n
\"But how could this province tap the market opportunities to
\nbe created by the free trade within the Asia Pacific Economic
\nCooperation forum in the year 2010 if its economy remains the
\nleast developed,\" Sondakh contended.<\/p>\n
The eastern region will benefit from deregulation only if it
\nis coupled with the decentralization of economic decision making
\nand bureaucratic reform, Sondakh contended.<\/p>\n
Conducive<\/p>\n
But he wondered whether the political environment is conducive
\nto such reforms because decentralization means sharing power.<\/p>\n
Improving economic competitiveness and efficiency in the
\neastern region is not therefore entirely an economic problem.<\/p>\n
Sondakh is afraid that if decentralization is not implemented
\nand licensing procedures are not further simplified, the process
\nof transfers of surpluses from the eastern to Java and Sumatra
\nwill continue.<\/p>\n
\"We are not asking for assistance but for justice in return
\nfor what our region had contributed to the western provinces over
\nthe past 25 years,\" noted Jusuf Kalla, Chairman of the South
\nSulawesi Chamber of Commerce and Industry.<\/p>\n
Kalla recounted that in the early 1970s when the government
\nstarted industrial development in Java, most primary commodities
\nin the eastern region such as coconuts, timber, nutmeg, fish and
\nrattan were subjected to regulated trade to secure cheap input
\nfor industrial firms in Java.<\/p>\n
\"As the prices of their primary commodities were controlled
\nthe income of the people in the eastern region was virtually
\ncapped,\" Kalla pointed out.<\/p>\n
Since the eastern region lags far behind the western region
\nthe government is obligated to help accelerate the development of
\nthe eastern islands, he said.<\/p>\n
\"We are only asking for what we sacrificed a long time ago,\"
\nKalla said, warning that the wide disparity between the eastern
\nand western regions could become a source of political
\ninstability.<\/p>\n
Tambunan suggested the central government design a special
\ndevelopment policy for the eastern region because its economic
\nproblems are structural in nature.<\/p>\n
\"Our development planners should undergo a mental switch to
\nfully understand that the economic condition and resource
\nendowments in the eastern provinces are different from those in
\nthe western region,\" Rizal pointed out.<\/p>\n
The government, according to him, should realize that policy
\ninstruments effective for high-growth provinces are not
\nautomatically effective for low-income and low-growth areas.<\/p>\n
The different approaches should, for example, be reflected in
\nresource allocation policy, Rizal argued.(vin)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/reforms-wont-address-regional-gap-1447893297",
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