Eastern region's plight

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.