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)