Resource-rich Natuna still underdeveloped

Tony Hotland, The Jakarta Post/Natuna, Riau Islands

As an emerging regency, Natuna has great potential for development.

Located near Singapore, it groups some 272 islands and intersects with one of the world's busiest trade routes, the Strait of Malacca, with about 280 ships crossing through the region daily.

The potential for tourism and fisheries is obvious. Natuna's islands have clean white beaches -- but it is the annual catch of 75,000 tons of fish that currently drives most of the local economy.

Natuna also had produced about 38 million tons of natural gas during the past few decades and its estimated 45 trillion cubic meters of gas reserves help make Indonesia the world's largest liquefied natural gas (LNG) exporter.

The area is believed to have huge still-untapped reserves of gas and minerals deposits, including 5.3 billion cubic meters of mine-able granite.

The region is also home to 40,000 hectares of coconut palm plantations and 6,000 hectares of clove plantations.

And with a population of less than 90,000, the inhabitants should be able to enjoy the prosperity that the inevitable investment into the area would bring, Coordinating Minister of the Economy Dorodjatun Kuntjoro-Jakti and Minister of Culture and Tourism I Gede Ardika said on their first visit to the regency.

Despite their big words, the regency is still largely underdeveloped and most of the villages are run-down looking with dilapidated public amenities.

About half of Natuna's population are categorized as poor, and less than 3 percent of working people are graduates of senior high schools or universities.

There were no high-rise building or evidence of any hectic economic activity when The Jakarta Post paid a visit recently.

Only few cars, mostly belonging to local administration officials, passed through the quiet and rugged roads, which were often unsealed. The best view, besides the area's its white beaches and blue seas, was perhaps the vista of the gigantic regional government office under construction, which is expected to cost a whopping Rp 35 billion (US$3.88 million).

Addressing local officials, Dorodjatun said the regency needed to identify market opportunities in which it could outstrip other areas.

"You can reap many benefits from your location. You're near Singapore, (Malaysia's) Johor Baru and Trengganu and also Pontianak (West Kalimantan). You should also improve the quality of your human resources and introduce technology like motor boats or (oil) well drills," he said.

He said the regency should quickly adopt a city plan to be later endorsed as a bylaw -- a guideline for the administration and investors to regulate investment activities.

"This way, you can arrange which parts of the city should be developed. You can also centralize residential areas which need less infrastructure like telecommunications or electricity," he said.

Natuna Regent Abdul Hamid Rizal said the slow development of the region, especially infrastructure development, was because the area was dependent on the central government for funding through the general allocation fund (DAU), special allocation fund (DAK), and revenue sharing schemes.

The regency's 2004 budget is about Rp 310 billion, down from Rp 390 billion last year with the largest portion from the DAU.

The region only received 30 percent of the revenue earned from its large natural gas reserves, he said and its dependence on central government would last for some time yet, he said.

Asked about the feasibility taking over the management of several national taxes, including land and property taxes, Dorodjatun said this would be a difficult task and would need comprehensive and detailed planning.

"We haven't looked into this, but (the process) could be really difficult. But in the meantime, we can only (get money) through the DAU and DAK mechanisms, and through revenue-sharing based on the proposed 2005 state budget draft," Dorodjatun said.

However, the regency was still ready to discuss this idea if it was proposed by the next government, he said.

The government and the House of Representatives are currently in the process of revising the Law No. 22/1999 on regional autonomy and Law No. 25/1999 on regional budgets, and are expected to complete them by the end of the month.