Minister calls for more investment in eastern provinces

JAKARTA (JP): State Minister of Population Haryono Suyono called for greater investment in eastern Indonesia to help speed up the government's drive to eradicate poverty there.

At the current rate of investment, efforts would be painfully slow for many regions in the east, he said in a seminar looking at discrepancies in the rate of development in the east and economic potential there.

Without more investment, it would take East Nusa Tenggara 301 years to completely eradicate poverty, he said.

East Nusa Tenggara is one of the poorest provinces in Indonesia with 749,000, or 20 percent of its population, categorized as poor in 1996, according to the latest study by the National Development Planning Board.

The province, which borders West Nusa Tenggara and East Timor, has also been the slowest in reducing poverty, with only 7,500 people being lifted out of poverty between 1993 and 1996.

Other provinces in eastern Indonesia would also see slow progress in poverty eradication, although not as slow as East Nusa Tenggara, Haryono said.

In Irian Jaya, where 21 percent of the population is poor, it would take 92 years; West Nusa Tenggara (17 percent) would need 50 years; South Sulawesi (8 percent) 44 years; North Sulawesi (10 percent) 43 years; East Timor (31 percent) 32 years; Maluku (19 percent) 20 years; Southeast Sulawesi (8.5 percent) 18 years; and Central Sulawesi (8 percent) 16 years.

The board said that by the end of 1996, some 22.5 million, or 11.34 percent of Indonesia's population, were poor. This is down from 25.9 million or 13.7 percent of the population in 1993.

The poverty level is calculated based on monthly spending. In urban areas, people who spend less than Rp 38,246 a month are categorized as poor, while in rural areas spending is set at Rp 27,413.

Eastern Indonesian provinces are particularly susceptible to poverty with most investment going to developed western provinces in Java and Sumatra and some parts of Kalimantan.

Haryono said additional investment was needed in eastern Indonesia, particularly in education and the development of natural resources.

Private sector investment, he said, would complement various government programs such as the presidential instructions on backward villages program launched in 1994.

The aid, in which the government gives Rp 20 million to villages to be used as seed capital, has won international acclaim for reducing the number of poor people.

Yusuf Kalla, a South Sulawesi businessman and president of PT Bumi Karsa, told the seminar that the government should provide more fiscal and monetary incentives to attract investors to eastern Indonesia.

These incentives were necessary to compensate for difficulties in starting up businesses and for higher transportation and marketing costs incurred because of the relatively smaller market and long distances traveled, Yusuf said.

He blamed government policies favoring the development of western Indonesia for widening the disparity between the east and west in the last 30 years.

"Because eastern Indonesia has a smaller population but a larger area, infrastructure development there has been very slow," he said. (09)