Resource-rich Natuna still underdeveloped

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.