Eastern region's plight

It is understandable if the people living on Indonesia's eastern islands of Sulawesi, Nusa Tenggara, Maluku and Irian Jaya, now want to see more concerted efforts by the central government to accelerate the pace of development in their region. After all, it is now almost five years since President Soeharto declared what economists call the "go-east policy".

The stage of economic development in the eastern islands lags so far behind the western region, notably Java, that the regional disparity will tend to widen if the pace of development in the eastern islands is not sped up. Even with an accelerated rate of development, it may take more than 10 years for those provinces to catch up with the western region.

We don't want to even try to seek a scapegoat for the dichotomy as there really is no one to blame. The problem is mostly the consequence of having to set a scale of priorities for the development of such a vast archipelago with such limited resources.

It was legitimate and economically sensible that when the government started well-planned development programs in the late 1960s the emphasis was on Java where the majority of the population lived. It was also rather a standard industrial development policy at that time to begin with the building of import-substitution manufacturing industries because the primary objective was to meet domestic demand. Obviously, the infant industries were protected from import competition and were granted various incentives and facilities.

It was also part of a normal development process if at that time the bulk of economic activities in the eastern region consisted of extraction industries, such as logging, and the harvest of other forestry products, such as rattan and resin, besides fishing, mining and cultivation of such crops as coconuts, vanilla, nutmeg and cloves. And quite a portion of the primary commodities from the eastern region were shipped to Java where the development of manufacturing industries was still concentrated.

It was also true that many of the primary commodities were subjected to regulated trade to secure adequate supplies of cheap input for the industries in Java. The policy was not unusual for a country which had just started its industrialization process. After all, Indonesia is a unitary and not a federal country.

Nonetheless, what was at that time seen as a normal and acceptable development process could become a source of political disillusionment for the people in the eastern region if development there is not accelerated. It is indeed their turn now to get bigger resource allocations to help their provinces catch up with the development in the western region.

Numerous seminars have been held to discuss developmental problems in the eastern region. So we reckon the government has received various sets of policy recommendations on how to speed up the eastern region's development. The main point in almost all of the policy recommendations suggests that a pure market approach will not be effective for such a least developed region. The private sector will not be interested in establishing operations in the eastern region. Businessmen follow the market. That means, whereas the government has increasingly withdrawn from many sectors in Java in line with the deregulation and privatization process, it should instead directly and heavily involve itself in building up infrastructure and support services in the eastern region. While subsidies are being phased out of most economic sectors in Java, that kind of financing is largely needed to develop basic industrial infrastructure and services in the eastern provinces.

We fully sympathize with the plight of the people in the eastern region. We share their worries about their region's economic competitiveness in the year 2003 when the ASEAN free trade area begins and in the year 2020 when the free trade area expands to cover the Asia-Pacific region. It is indeed high time for the government to embark on a massive program to lay strong foundations for accelerated development of the eastern provinces.