Govt to further speed up development in eastern area

Govt to further speed up development in eastern area

JAKARTA (JP): The government will continue to accelerate
development in eastern provinces so that economic conditions
there catch up with growth in the west, State Minister of
Development Planning Ginandjar Kartasasmita said.

He said in a hearing with the House of Representatives Tuesday
that the government, therefore, will increase investments in
eastern provinces during the current Sixth Five Year Development
Plan period.

According to data, the allocation of government investment in
eastern Indonesia for the 1995/1996 period is Rp 5.3 trillion
(US$2.3 billion) or 28.1 percent of the government's total
spending of Rp 19.02 trillion for development. In comparison, the
government allocated Rp 4.71 trillion or 27.1 percent of its
total development spending of Rp 17.38 trillion in 1994/1995.

According to Central Bureau of Statistics data, the percentage
of population in eastern Indonesia is only 18.4 percent, far
lower than the 28.1 percent proportion of the government's
investment there.

Ginandjar said that development in eastern provinces has so
far shown good results. During the Fifth Five Year Development
Plan period, gross non-oil products in eastern provinces reached
8.1 percent compared to 7.63 percent in western provinces.

However, he admitted that the participation of private
investors in developing the eastern provinces is still low in
number due to several factors which prevent their involvement.

The factors which have made private investors disinterested in
investing in eastern provinces are the limitation of
infrastructure and qualified human resources as well as the
weakness of the local economic structure.

Ginandjar explained that so far the government has made much
effort to encourage private investors to invest in eastern
Indonesia.

For instance, the government has tried to provide information
on business opportunities for investors, he said. (31)