Govt eyes investment of US$9.6 billion in border areas in Indonesia
The government plans to attract investment worth Rp 130 trillion (US$9.6 billion) to border areas in the next five years to help propel development there.
“We will work hard to attract investment to border areas, as they are the gates of international trade, the main routes for cross-border transportation and central to economic development,” said Villages, Disadvantaged Regions and Transmigration Minister Marwan Jafar on Tuesday.
According to Marwan, special regulation was key, especially for easing the process of attaining permits. Although the regulation could be issued as a ministerial regulation or presidential instruction, Marwan said he would prefer a separate law.
“We can draft a law on disadvantaged-regions development and add a special investment regulation for border areas as part of it,” Marwan explained.
He also said that regional governments in border areas were all in support of his plan. They enthusiastically welcomed the development plans, he said, agreeing that investment would indeed benefit them.
“Three governors and 12 regents from Kalimantan and Riau Islands have signed a memorandum of understanding with the ministry,” said Marwan.
The ministry has started developing infrastructure in border areas this year, including comprehensive integrated transmigration to border areas. In the near future, it plans to develop integrated plantations and livestock farms to boost regional economic growth.
“One of our programs is the planting of 1 million hectares of rice paddies near Papua’s border. We’ve currently completed 30,000 hectares,” said Marwan, adding that the ministry also planned to develop plantations in Kalimantan.
Marwan opened the Border Investment Summit in Bidakara Hotel on Tuesday, where attendees included local administrators, foreign and domestic investors, academics and representatives of state-owned enterprises and private companies.
The ministry held the summit aiming for all stakeholders to gain a comprehensive understanding of the investment opportunity presented in 41 regencies and municipalities across the 13 provinces that share land and/or maritime borders with neighboring countries.
Southeast Asia’s largest economy shares land borders with Malaysia, Papua New Guinea and Timor Leste and maritime borders with Singapore, Thailand, Vietnam, Philippines, India, Palau and Australia.
“Investors need accurate information on local physical conditions, accessibility and alternatives to top commodities for developing the border areas, including feasibility analyses,” Marwan said.
There are primary, secondary and tertiary business opportunities available for private sectors, he said.
Primary business is that relating to agribusiness, including plantations, cattle farming, fisheries, forestry and mining. The secondary industry is mainly comprised of manufacturing, where raw materials are turned into consumer goods. Tertiary business involves services such as construction and trading services.
Marwan added that investors must also combine natural resources, human resources and careful planning in choosing a line of business as each area holds unique features in terms of market potential.
The government is pushing for development in border areas, in fields such as basic facilities, transportation and inter-island connectivity, to in turn support further investment.
“Our border areas have abundant potential. We need to ask investors to come in and take the opportunity [for their own benefit] while at the same time accelerating development in villages located near state borders,” Marwan said.
The assets would serve as initial capital used by all parties to help lower investment costs.
“We need a wide mix of stakeholders — in capital participation, technology implementation and marketing management — to bolster the economy of border areas. We are certain that border areas will have strong competitiveness,” he said.