Wasti Atmodjo, Denpasar – The Eastern Indonesia Region (KTI) is still lagging behind the economic development in Java and Sumatra – despite its rich natural resources – as indicated by its low economic growth, says a Bank Indonesia senior official.

"The KTI's economic growth has always been lower than the national or Bali averages. In the first semester of 2011, the region recorded economic growth of 5.34 percent, while the national average was 6.5 percent, and Bali recorded 6.22 percent," Bank Indonesia's Denpasar office head, Jeffrey Kairupan, said on the sidelines of the Evaluation of Bali and East Indonesia Region Economic Development seminar.

Jointly organized by the regional office of the country's central bank and The Jakarta Post, the seminar featured economist Faisal Basri and Udayana University's professor I Ketut Rahyuda as speakers, and the Post's senior editor, Vincent Lingga, as moderator.

"It is quite an unfortunate reality since the geographical size of the KTI is two-thirds the total size of the country. This region includes Bali, West Nusa Tenggara, East Nusa Tenggara, Sulawesi, Maluku and Papua," he added.

The slow economic growth of the region has also affected its contribution to the country's gross domestic product (GDP). KTI's contribution to the country's GDP was 19 percent, lower than the 23 percent contributed by Sumatra, and far below the 58 percent contributed by Java.

"This [low contribution] takes place despite the region's huge economic resources. This is the reason why the acceleration of economic development within the KTI is a must, and should be carried out in a comprehensive manner based on accurate information," Kairupan stressed.

The agricultural and mining sectors remain the primary engines of the region's economic activities. The two sectors contribute 39.7 percent of total economic output. Palm oil, rubber and cacao are the primary commodities produced by the agricultural sector, while mining produces oil, coal, nickel and copper.

"On the other hand, the contribution from secondary and tertiary sectors, especially sectors that could provide a large number of jobs, remains small. So, there is a need to accelerate the development of economic activities in the secondary sector, such as manufacturing companies to process the raw materials generated within the primary sectors," he added.

Similar opinions were echoed by Faisal Basri and Ketut Rahyuda.

"The poverty level is worsening the further east we go. This region has the most natural resources in the country, and yet it fails to extract itself from poverty. I don't know whether it is caused by government incompetence or that of the people," Ketut said, adding that poverty levels have reached 20 percent in the region.

Faisal Basri pointed out that the central and regional administrations had yet to issue policies that support the acceleration of economic development in the KTI. This lack of political initiative is further aggravated by the sorry state of the region's infrastructure.

"The region has virtually no good seaport, let alone a fine airport. Poor infrastructure has resulted in higher costs."