Ayomi Amindoni, Jakarta – Investment to the country's easternmost province is increasing at a rapid pace, as Papua's provincial government expects both domestic and foreign direct investment (FDI) to grow stronger in 2016.
Increasing investment from within and outside of Indonesia was fostering economic development and helping small and medium enterprises (SMEs) in Papua, said Muhammad Musaad, the head of Papua's Regional Development Planning Board (Bappeda).
The increase in investment had significantly reduced unemployment, open up business opportunities and increased people's income, Musaad explained, adding that the realization of investment in Papua reached US$41.13 billion of FDI and Rp 33.32 trillion of domestic direct investment in 2014.
In the first half of 2015, Papua's economy grew by 7.26 percent from the same period last year. "This figure exceeds the average national growth," Musaad pointed out. The unemployment rate in Papua stood at 3.7 percent of the total workforce as of February 2015, far below the national average rate of 5.8 percent.
"We expect investment to grow by 20 to 25 percent next year," Musaad said in Jakarta on Friday at an event called "Papua Investment Year 2016". He added that the province's macro-economic conditions were very supportive for turning Papua into a center of industrial growth and investment.
In terms of natural resources, Musaad added, Papua had various potential resources, including mining, forestry and tourism. These were the biggest contributors to income in Papua, he said.
Meanwhile, agriculture, fisheries and the plantation sector had not been fully developed, the official acknowledged, despite the fact that Papua had vast land and sea territories.
To ensure continued progress on investment, Papua's provincial government introduced several key policies, including designating and offering extra support for five centers of economic development, namely Mamta, Saereri, Mee Pago, La Pago and Anim Ha.
"In line with [this policy], the provincial government has proposed special economic zones (KEK) to the central government, which has responded by preparing a food-industry based KEK in Merauke and a mining-based KEK in Mimika," he said, adding that to improve the business climate, the local administration had established a unified licensing and investment body.
The Papuan government has decided to develop specific commodities in certain areas. Canning, fisheries and tourism will be developed in Saereri, Cendrawasih Bay. The palm oil, coconut, chocolate and tourism industries will be developed in Mamta, North Mainland. Sago, coffee, sweet potatoes and tourism will be developed in Mee Pago in the West Central Mountains, while La Pago in the East Central Mountains will develop coffee, red fruit, sweet potatoes, horticulture, livestock and tourism as its key drivers of economic development. Meanwhile, Anim Ha, South Mainland, will develop rice, sugarcane, oil palm, rubber, fisheries and livestock industries.
The provincial government also encourages community and village-based economic development through SMEs. "We have declared 2016 the Papua investment year. We believe Papua is a prospective place to invest in," Musaad said. (bbn)
Source: http://www.thejakartapost.com/news/2015/12/04/papua-expects-rapid-investment-growth.html