October 25, 2023
JAKARTA – President Joko “Jokowi” Widodo promised a more even economic development throughout the country prior to assuming office, but data suggest Indonesia’s easternmost provinces are still left behind.
Nine years into Jokowi’s tenure and with one year left to go, Papua, a region of immense potential thanks to its abundant natural resources, continues to rank below the rest of the country in several ways.
The easternmost region of the country, which today comprises six provinces of Papua and two of Maluku, accounted for just 2.5 percent of national gross domestic product (GDP) in 2022, according to Statistics Indonesia (BPS).
While that marks an increase from 2.2 percent in 2014, the year Jokowi’s administration got to work, it still leaves the region, which is four times the territory of Java, relatively underdeveloped.
In terms of GDP per capita, the Papua region exceeds several Javanese provinces, such as Central Java and West Java.
Western Papua (the provinces of West Papua and Southwest Papua), home to the massive Tangguh gas project and renowned tourist destination Raja Ampat, logs significantly higher per-capita GDP than the national average. The same was true until 2018 for the rest of Papua (which was a province unto itself before being subdivided into four provinces last year).
However, while the national figure has seen a consistent increase, rising by a total of 24.4 percent from 2014 to 2022, Western Papua’s plummeted by 10.7 percent over the same period, while that of the rest of Papua shrank by 0.3 percent.
Institute for Development of Economics and Finance (INDEF) executive director Tauhid Ahmad noted that Papua’s relatively high GDP per capita was owed to the mining sector, particularly the massive operations of PT Freeport Indonesia, which runs the Grasberg mine in Mimika Regency of what is today the province of Central Papua.
“The surrounding communities do not benefit from Papua’s growing economy,” Tauhid told The Jakarta Post on Friday.
That conclusion is in line with Papua’s per-capita expenditure, which has always been far below the national average.
Papua (excluding Western Papua) has ranked rock bottom in this indicator at least since 2011, while Western Papua’s best score was the fourth-worst, just ahead of North Maluku and East Nusa Tenggara.
Given the mismatch between the high per-capita GDP and low per-capita expenditure, Tauhid concluded that the economic output from the mining sector failed to translate into the betterment of the region’s population.
Mining is a high-capital, low-labor industry, limiting its local multiplier effect through employment.
The expenditure figures do not take into account the higher price levels of many consumer goods in the relatively hard-to-access Papua region, meaning the welfare gap is even wider than the data suggest.
Vidhyandika Djati Perkasa, a senior researcher at the Centre for Strategic and International Studies (CSIS), recalls price differences he noticed during a recent visit to Wamena, the capital of Papua Highlands province.
Vidhyandika claimed he paid Rp 25,000 (US$1.58) for a 1.5-liter bottle of water that is commonly sold for Rp 8,000 on Java.
BPS data show that Papua tops the list for poverty, consistently sitting at a level more than double the national average, albeit both decreasing over the years.
Referring to the World Bank’s Handbook on Poverty and Inequality, BPS uses the basic needs concept to define poverty.
Since assuming leadership in 2014, Jokowi has looked to economic advancement to address Papua’s problems, launching infrastructure projects and placing a particular focus on targeted sectors like agriculture, mining and tourism.
Jokowi said in March that Rp 1.03 quadrillion from central and regional budgets had been spent on infrastructure projects including roads, bridges and airports in Papua.
He claimed that 3,462 kilometers of roads had been laid down for the trans-Papua highway, along with 1,098 kilometers of roads in border regions and two airports.
In addition, the region has been designated for some of the central government’s national strategic projects (PSNs).
A report published by the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) details 15 ongoing PSNs in Papua and Maluku in the second half of 2022, with a total PSN value placing the region third, behind only Java and Sumatra.
“The thinking was that, through infrastructure, through building the trans-Papua road [for instance], Jokowi was hoping to decrease poverty,” Vidhyandika told Post on Friday.
The logic behind that was that infrastructure would bring down prices and increase people’s purchasing power, given that the region’s sky-high prices were mainly caused by Papua’s notoriously difficult access due to a lack of roads.
On top of that, new public infrastructure typically generates additional economic activity, lifting public welfare in general.
“That policy is appropriate, […] but the locals feel they’re being marginalized in their own home,” said Vidhyandika, explaining that one consequence of infrastructure projects was that “outsiders” flocked to the land.
He went on to say that this had caused growing resentment among the local population and had been fueling social unrest in Papua.