A hidden treasure in Sumatra

A hidden treasure in Sumatra

By Naswan Iskandar

Like it or not, this province is probably the most forgotten
region in the country. It seems many Indonesians have no idea
that, for instance, 60 percent of Jambi comprises forests. To
commemorate the 44th anniversary of this "hidden" province, The
Jakarta Post presents this page to explain the latest facts and
figures about Jambi and its people, businesses, cultures and
other important issues.

Jambi (JP): The dynamics of Jambi's economy are inseparable
from those of the national economy; the province was as badly
hurt as the rest if the country when the economic crisis hit
Indonesia in 1997. From an average 7 percent annual growth
between 1969 and 1993, Jambi's economy took a dip to 3 percent in
1997 and further declined until it reached a point of negative
growth, minus 6 percent, in 1998. Weak financial infrastructure
led to a high-cost economy and a decline of confidence of both
domestic and foreign economic and business players.

When the national economy took a turn for the better, Jambi's
economy showed signs of recovery as well, as indicated in an
improvement in the general level of prices. Following a drastic
increase of 49.77 percent in the fiscal year 1998/1999, Jambi
experienced a deflation of 3.3 percent in the next fiscal year.

An analysis of all industrial sectors shows that only property
still recorded a negative growth, while all other sectors
experienced a positive growth. The improvement of regional
economy has been accompanied by expansion of employment. The
total workforce, those in the age bracket 15 to 64, was 1,045,019
in 1998 and rose to 1,143,364 in the following year. Some 94
percent of the total number were "absorbed" by various sectors in
1998; the figure increased to 96.53 percent in 1999. This means
that unemployment has dropped from 5.89 percent to 3.47 percent.

Export-import

Both domestic and international trade play an important role
in an economy's growth, as do investments. After the 1997 crisis,
however, Jambi's exports and imports have yet to show signs of
rebounding.

The positive growth in international trade is the result of a
significant increase in Jambi's non-oil and gas export. In the
first trimester of 2000, non-oil and gas trade reached US$142.48
million, or 10 times higher than the amount recorded in the first
trimester of 1999. The figure declined in the second trimester of
2000 to $138.98 million, while the figure for August 2000 was
$46.95 million

Timber and rubber remain Jambi's two dominant export
commodities. However, since the first quarter of 1999 export has
diversified when a number of commodities including foodstuff,
handicraft and paper pulp penetrated the international market.
This has resulted in the sharp increase of combined-commodity
exports outside of timber and rubber.

Most of Jambi's imports is for industrial requirements. Out of
the eight imported commodities, machinery and equipment dominate
the import market followed by livestock, animal products,
vegetable/plant products, chemicals and metal products.

A comparison of export and import values shows that Jambi
enjoys a surplus in international trade, but a deficit in
interprovincial trade. The total surplus for 1999 was Rp 163.61
billion which was a balance from international trade surplus of
Rp 1.11 trillion. The international trade surplus has been
projected to increase from the first to the fourth trimester of
2000, but a projected increase in interprovincial trade deficit
balanced out the total surplus for the said year.

Natural potentials

Jambi is known for its various potentials. In addition to
agriculture, the subsectors of plantation, forestry, mining and
energy, and industrial are some of Jambi's natural wealth.

Jambi people traditionally till rubber plantations, turning
the commodity into the region's superior product and one of the
most-needed for world industries. Jambi's traditional rubber
plantations are among the big four in Indonesia. In 1999, Jambi
had 552,518 hectares of rubber plantation with an expansion rate
of 1.80 percent annually.

Although Jambi is one of Indonesia's rubber production centers
-- in fact, for Jambi, rubber is a "cultural" commodity -- its
quality and productivity remains low. A number of factors have
been identified as the causes, including the use of poor seeds
that do not respond well to fertilizing, the use of poor crumb
rubber equipments, illegal levies and the excessively long chain
of trade activities.

This situation calls for firm measures, in order to bolster
Jambi's position as a rubber producing area enjoying good market
shares. It has been projected that world rubber demands up to
2002 will still be higher than supplies. Exporting countries for
Jambi's rubber include the U.S., Singapore, Germany, Yugoslavia,
the Netherlands, China, Canada, Colombia, Italy, Taiwan, Belgium,
France, Turkey, Britain, Japan and Greece.

Most of Jambi's rubber is processed by Jambi crumb rubber
industries in the form of sheets and is exported through Jambi's
port. Some portion of the production is marketed to other regions
including West Sumatra, South Sumatra and North Sumatra. On the
other hand, some of the rubber processed in and exported by Jambi
originates from West Sumatra and South Sumatra provinces as well
as Riau, depending on the price differences of the commodity.

Another of Jambi's superior products is cinnamon, from the
Kerinci Regency. Up to 1999, the total area of cinnamon
plantations in Jambi was 59,518 hectares, with total production
of 24,359 tons. Total national production of cinnamon is 35,000
tons per year. For world demand of cinnamon today Indonesia is
the largest supplier (90 percent), while China, Sri Lanka and
other Indo-China countries meet the rest of the needs.

This situation shows how great a potential Jambi has to
develop the commodity, both in terms of agriculture, processing
and marketing. In addition to the question of marketing, the
processing of cinnamon is concentrated in West Sumatra. Jambi
produces raw cinnamon with both low and combined qualities.
Cleaning, grading, sorting and packaging is done in the
neighboring West Sumatra capital of Padang. This situation
certainly does not benefit Jambi, because off-farm contribution
is being enjoyed by other regions. This also shows that Jambi
still has great opportunities to develop its own processing
plants and export the commodity itself.

Palm-oil is another developing industry that interests many
investors to Jambi. Up to 1999, palm-oil production reached
1,352,357 tons annually, which was far below local demands. This
justified the government's plan to develop a million-hectare
palm-oil plantation. The government is also planning to issue
management licenses for another 373,717 hectares to investors.

In addition to agriculture and plantation sectors, Jambi is
endowed with considerable natural wealth in its forests.
Protected forest area accounts for 870,250 hectares, while
production forest accounts for 1,278,700 hectares and concession
forest 1,727,870 hectares.

Protected forests are one of the beneficial aspects of forest
management here, as they maintains a productive ecosystem and
help to ensure that animal and vegetation sources grow. This
will, in turn, aid related industries to grow. It has to be
admitted, however, that Jambi forest products have yet to be
managed efficiently and optimally for the interests of the Jambi
people as they have yet to be processed as finished products.

Minerals are yet another potential resource. Out of 32 C-class
mining materials, 18 (bentonite, limestone, marble, granite,
quartz sands and obsidian) are found in a number of Jambi
regencies and cities. Most of the mining potential is still being
managed on a small scale, but the minerals are indeed a source of
great benefit for small and medium industries.

Coal is found in 22 locations. Studies show that total coal
deposit in 10 locations has reached 369.57 million tons, with an
energy content ranging from 4,800 to 6,500 calories.

Oil and natural gas mining are found in four Jambi regencies,
spanning 14 locations with total reserves of 792,014,755 barrels.
According to the Santa Fe energy exploration company -- one of
the oil and gas companies operating in Jambi -- only two wells
out of the 48 with potential, are currently in operation. This
spells great opportunity for Jambi to progress in this sector.

In addition to oil and coal, Jambi has a number of other
energy mining potentials, including natural heat in Kerinci
Regency generating 30 megawatt of power, the Meranging hydropower
plant producing 340 megawatts, the gas-powered plant in Muara
Sabak, the microhydropower plant in Meranging, as well as a coal
power plant which produces 400 million tons of calories.

Jambi's natural wealth is already abundant, and still it is
endowed with the great Batanghari River. The largest river in
Sumatra island runs across Jambi, from its upstream in West
Sumatra going straight down to Berhala Strait. In addition to
serving the traffic of goods to and from various regencies and
cities, the river is an important connection to Muara Sabak
export port. Further, the river serves as the starting point for
the development of fishery production and commercial trade.

Tourism, art and culture potentials

Jambi's tourism development is considered to be most promising
venue for regional economic development. Tourism should develop
and make the most use of existing resources in order to attract
more visitors, and Jambi has an abundance of interesting places
scattered across its region.

Natural tourism, agrotourism, ecotourism as well as historical
and cultural tourism are all in existence in Jambi, each boasting
local specifics. Jambi has been recorded as having 70 natural
tourism objects, 42 cultural and historical tourism objects and
25 objects that cater to special interests.

One of the more interesting places to be developed as a
tourism object is the Kerinci Seblat National Park. Although the
park area actually covers the corners of four Sumatra provinces,
Jambi, or Kerinci Regency to be precise, is home to its largest
portion.

The park is one of world's largest tropical forests, serving
as part of the world's lungs and representing among the most
complete ecosystems known as Montana and Sub-Alpine ecosystems.
The park is home to 4,000 varieties of plants, and 1/50 of the
world's bird species. A total of 6 primates, 37 mammals, 6
amphibians, and 134 species of flora are found in the park,
including the endemic flora known as Kerinci Pines.

The Berbak National Park is another Jambi treasure, a unique
phenomenon of lowland forests that runs along the Berbak River.
Birds and primates, protected reptiles and wild animals, as well
as thousands of species of wetland flora can be found along the
park. The Ramsar Site world convention in 1991 recognized the
beautiful Cemara Berbak as the transit place of migrating birds
from Australia; the convention also praised the natural wealth of
the as-yet untouched 150,000 hectares of peat land. The park is a
heaven for research and education purposes, and also a great
tourism potential as it is the home to a number of interesting
objects such as the Orang Kayo Hitam tomb, Air Hitam Laut and
Berhala Island, and the tomb of Datuk Paduko Berhalo, who was the
forefather of the Jambi kings.

The Muaro Jambi complex of temples is another renowned
historical and cultural tourism object, a site of Melayu Kingdom
relics in the Sekernan district. The construction of the temples
and historical relics found there have revealed it to be a legacy
of the Hindu culture in the 4th century and 5th century.

Also in this complex of temples have been found fragments of
porcelain jars, bowls, containers and vases from the Sung dynasty
of China in the 18th century and 19th century. A number of
statues and gongs bearing Chinese inscription have also been
discovered here.

No less interesting are the tourism potentials of Jambi's arts
and culture. Interesting folk art and culture can be found across
the region, in the forms of dances, music, rites and plays. The
Kajanglako Art Center was established three years ago in the
heart of Jambi City, a nonprofit organization whose commitment is
to unearth and maintain the arts of Jambi as well as provide an
alternative venue for local artists to express their creations.
Managed by professionals, the art center is becoming a center for
the studies and information of Jambi's culture. Founded by the
Foundation of Bina Lestari Budaya Jambi, the Kajanglako Arts
Center is also host to Selarang Pinang Masak, a center for the
development of traditional crafts of Jambi especially the batik
of Jambi. To complete the picture is the Batanghari Restaurant
which serves menu specific to Jambi.

Since 2000, the Foundation of Bina Lestari Budaya Jambi,
through the Kajanglako Arts Center, has collaborated with the
Jambi government to hold two major annual events namely the Jambi
Play Arts Week and the Jambi Arts Festival. No less than 500
traditional artists from across the province were involved in the
staging of the first event last year. The Jambi Arts Festival, on
the other hand, is eying a bigger stage namely the national and
international arts forums. In the first staging of Jambi Arts
Festival, artists from various major cities in Indonesia,
Malaysia, Japan and Singapore took part. It is hoped that the two
events may prove to be an interesting tourism calendar for world
visitors.

Geographical potential and infrastructure readiness

Jambi has every potential to grow and develop rapidly, given
its geographical position. The province is included in the
regional development network (as stipulated by Presidential
Decree Number 4 1996) and neighbor to new economic centers known
as Sibajo (Singapore, Batam and Johor). Nationally, together with
South Sumatra and Riau provinces, Jambi is cultivating a new
economic center known as Sutanjari (South Sumatra, Jambi and
Riau) to complement the existing centers of growth. This promises
bright prospects for Jambi's economy in the future.

Ultimately, the prospects are expected to transform Jambi's
role and place in the national and international economic scenes.
It goes without saying that the interests of investors and
tourists depend greatly on political situation and regional
security. They also depend the availability of facilities,
services and supporting infrastructure. All aspects of a product
and its market are two factors that determine the added value of
a production activity.

Network of access roads

Among the more important supporting infrastructure for Jambi
are roads and bridges. In general land transportation is divided
into three major parts: the west, east and central zones. The
northern part of the western zone connects Jambi with cities in
West Sumatra, while access to the south connects it with cities
in Bengkulu and South Sumatra provinces. The network is
relatively established and well supports the transportation of
people and goods between regions.

The northern part of the eastern zone connects Jambi with the
cities in Riau while the southern access connects it with cities
in South Sumatra provinces. The network is relatively established
and adequate for the regional traffic, along whose side is a
scattering of production and services centers.

The central zone runs across the western and eastern zones
connecting the two Trans-Sumatra lines and connecting the various
areas of Jambi inland. The weakness of this particular access is
the fact that it runs alongside Batanghari River and so is
susceptible to flooding.

Another inseparable aspect to the development of facilities
for production and marketing is the construction of new roads.
The length of Jambi's roads (8,615 km) is considered inadequate
for its vast area and the scattering of regional potentials. It
is clear that attention should be given to the development of
roads connecting economic and production centers in the broadest
terms.

Other infrastructure

Another important infrastructure is the Sultan Thaha Airport
of Jambi, which serves both national and international air
traffic.

Business and tourism have both shown considerable growth; 78
percent of total domestic visitors to Jambi were businesspeople
and Asian and European tourists transiting in Singapore before
proceeding to Jambi. This fact shows that potential the is indeed
great for Jambi.

Muara Sabak Seaport is located strategically at Batanghari
River's estuary, facing the Berhala Strait, which is also on the
Sibajo threshold. This enables the Muara Sabak port to act as the
main port to facilitate export and import flows, while other
ports along the Batanghari River upstream act as supporting
facilities.

The Muara Sabak Seaport is also expected to benefit the growth
of Jambi's genuine income because exports and imports can be
facilitated through one main port. The resulting reduction in
transport and loading-unloading costs for Jambi's export and
import commodities would be added attractions. In addition, the
seaport has so far helped improve efficiency of river traffic to
and from Muara Sabak, especially for the transportation of
plantation, forestry and mining commodities.

In addition to having bright prospects, the Muara Sabak port
is also facing a crucial challenge, namely the silting up of the
riverbed. Studies blame this on the annually increasing rate of
sedimentation especially during the rainy season, and on the
coagulation of soft sediments of the river and the sea. This
situation calls for specific measure, including regular dredging
with medium or high technology equipment.

The topography and contour of the surrounding land poses
another challenge to the port management. The port is surrounded
by swamps affected by the ever-changing rise and ebb of tides.
Again this condition needs specific treatment, especially the
filling-up of the lowland surrounding the port. Other problems
include the inadequacy of facilities, including power sources.

Prospects

In order to take advantage of the prospects, regional
development policies as well as provincial spatial policy dictate
the need for the establishment of a united economic zone with the
western coast as the target of marketing. The policy demands the
establishment of industrial zones as the supporting facility for
Muara Sabak port, turning it into the gate for export and import
which is investment-efficient. This will also mean a closer
distance from Jambi to raw material sources, and facilitates the
creation of value added for Jambi's resources.

However, challenges loom ahead for the development of Jambi's
industrial sectors, the most important being flow of investment
which is lower than that to other Indonesian regions.

A number of factors are to blame, including lengthy
bureaucratic procedures, intangible costs which are sometimes as
high as 20 percent of the total value of investments and the
absence of incentives to lure investors to venture to the
province.

Other factors, such as the lack of accurate data and
information about the region's potentials contribute to the
existing poor image that investors have about Jambi. Then there
is also the inadequate infrastructure.

Limited capital for industrial development, especially for
small and medium scale business ventures owing to limited banking
assistance. Finally, there is also the need to develop the as-yet
nascent industrial management system.

The writer is a locally based journalist.