To Build New Economic Centres, Government Cannot Rely on Infrastructure Alone
Developing new economic centres outside Java faces challenges beyond providing infrastructure and investment. Workforce readiness, people’s skills and protections for local residents will help determine whether economic growth improves welfare or leaves surrounding communities behind.
Transmigration Minister M. Iftitah Sulaiman Suryanagara said the development of economic zones must go hand in hand with improving human resources. Without adequate education and mentoring, communities will struggle to make use of emerging economic opportunities.
The issue was discussed during Iftitah’s public lecture at Peking University in Beijing on Monday (12 October 2026). Local academics raised questions about the challenges of developing new growth centres in Indonesia, from workforce skills to meeting communities’ social needs.
Huang Yiping, dean of the Institute of South-South Cooperation and Development (ISSCAD), highlighted the factors most important to the success of new zones, including infrastructure, financing and the availability of skilled workers.
Iftitah said changing the way people think was also important. Education and mentoring are needed so residents can develop skills and adopt new working methods to raise productivity.
“Take agriculture in Papua, where communities face a shortage of fertiliser. With support from academics, residents were introduced to using cow manure to make compost,” he said in a statement quoted on Wednesday (14 October 2026).
The example shows that raising productivity does not always require expensive technology. Knowledge of how to process resources available in the community can also offer a solution, provided it is accompanied by appropriate guidance.
This approach is being implemented through the Patriot Expedition Team, which brings together academics, researchers and students to help address problems in transmigration areas.
Beyond workforce skills, industrial development also faces the challenge of ensuring that local communities share in the economic benefits.
At the forum, Professor Lei Xiaoyan of Peking University asked how industrial zones could meet communities’ social needs, including education, healthcare and the welfare of older people.
Iftitah cited Rempang as an area facing the challenge of reconciling investment interests with the needs and rights of local communities.
He said developing an area involves more than bringing in companies or providing housing. The government must also ensure access to education and healthcare facilities and employment, as well as the sustainability of residents’ livelihoods.
Certainty over land rights and involving communities from the planning stage are also important. This would help ensure investment not only boosts economic activity but also creates opportunities for local residents to improve their welfare.
Another challenge lies in developing the regions’ leading commodities. During the discussion, a Chinese participant, Ji Quanling, asked how Indonesia could make its durian supply chain more efficient to meet demand in China while ensuring farmers received a fair share of the benefits.
Iftitah said Sulawesi had the potential to become a durian production and export centre. However, developing export markets requires a stable supply, consistent quality and sufficient production volumes.
If output is not yet sufficient for direct shipments, distribution can still rely on logistics hubs elsewhere, including Java. This shows that developing regional commodities must be accompanied by improvements in logistics, post-harvest handling and market access.
The government hopes that development in transmigration areas will go beyond opening land and building infrastructure. These areas also need productive economic activities connected to supply chains that generate added value for local communities.
Iftitah also referred to China’s experience in reducing poverty as a lesson for Indonesia. However, development approaches must still be adapted to the geographical, social and cultural conditions of each region.