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.