Central Java and East Kalimantan Seal Rp20.2 Trillion Economic Partnership
The Provincial Governments of Central Java and East Kalimantan have entered into a multi-sector cooperation agreement with an economic potential reaching Rp20.2 trillion. The partnership encompasses trade, food, industry, financial services, the creative economy, and support for projects in the Nusantara Capital City (IKN).
The agreement was signed at Odah Etam, within the East Kalimantan Governor’s Office complex in Samarinda, on Thursday (6/8). The memorandum of understanding was signed by Central Java Governor Ahmad Luthfi and East Kalimantan Governor Rudy Mas’ud, followed by technical agreements signed by respective heads of Regional Apparatus Organisations (OPD), regional-owned enterprises (BUMD), associations, and regents/mayors.
The Rp20.2 trillion figure represents an aggregation of various potential forms of cooperation and is not solely comprised of cash transactions or new investments at a single point in time.
In the food sector, the cooperation opens trade potential for commodities from Central Java to East Kalimantan, including approximately 778 tonnes of eggs, 873 tonnes of chicken meat, 321.6 tonnes of shallots, and 6,119 tonnes of rice, with a potential transaction value of around Rp237.75 billion. The partnership also includes the development of the livestock and animal health sector, with an estimated annual potential of Rp2.1 trillion.
In the industrial and trade sector, the potential cooperation is valued at around Rp36 billion per year. In the marine and fisheries sector, the collaboration is directed at strengthening trade and supply chains, with an estimated annual value of Rp2.238 billion. The tourism and creative economy sector also holds promising potential, with estimated direct transactions of around Rp21 billion per year and a multiplier effect of approximately Rp36 billion annually.
From the regional-owned enterprises side, one of the largest potential business activities is the synergy between Bank Jateng and Bank Kaltimtara, with an estimated annual potential of Rp15 trillion. There is also cooperation between Jamkrida Jateng and Jamkrida Kaltim through a co-guarantee scheme for projects in IKN, with a total projected project value of around Rp1.34 trillion and an estimated guarantee fee income of approximately Rp3.452 billion per year.
Governor Ahmad Luthfi expressed hope that the cooperation agreement would be realised immediately, enabling regional development efforts to continue despite fiscal constraints and global geopolitical conditions. Governor Rudy Mas’ud stated that the collaboration is mutually beneficial and complementary, with East Kalimantan possessing natural resources while Central Java has processing industries and MSMEs.
“This is an extraordinary breakthrough and hopefully can be emulated by other provinces in Indonesia, so that we do not depend on the state budget or central government transfer funds,” he said. He cited an example of this complementary relationship, noting that nearly 10,000 tonnes of rice for East Kalimantan is supplied from Central Java, while industries in Central Java require 1.5 million tonnes of coal from East Kalimantan, in addition to supplies for power plants, as well as crude palm oil (CPO). “The population of East Kalimantan is only around 4.2 million people, while Central Java has 38 million. Our coal and CPO production is abundant. So we complement each other. The point is that this is an extraordinary collaboration,” he said.