Tuesday, 11 September 2012


The Government admitted economic potential in borderland had not been developed to the maximum. The result was that economic condition of the people on border towns were still most disheartening. Deputy Minister of Industry Alex S.W. Retraubun in Jakarta on Monday (23/7/2012) stated that potentials of economy and industry in borderline towns were not being fully exploited. The Government even seemed to neglect the places and let them be the bases of smugglers of industrial commodities. Borderlands, it was said to be happy playgrounds for criminals and law breakers such as smugglers of goods, arms, or even human trafficking due to desolate condition of the places.

Alex stated that border towns in Indonesia treasured potential raw materials resources for industrial or manufacturing like CPO, wood, metal and non-metal mining products, oil and gas, and seaweed. Alex believed that development of industry in towns bordering on neighboring country must be started from now on. Developments should not be concentrated in big cities in Java. This he said, had its underlying law, i.e. Perpres No. 208/2008 on national industry policy (KIN).

According to the Deputy Minister, there had to be a specially allocated fund in the Government’s budget to step up development of basic infra structure like highways and internal roads whereby to start economic heartbeat. The way it had been may workers in the borderzone worked less than 35 hours a week and in less productive sectors their income were low. What happened according to Alex was that wages and selling price of products were 4 to 5 times higher in Malaysia than in Indonesia so naturally people were more interested to work or sell their yields in Malaysia. “Indonesian citizens in Kalimantan love to work as migrant workers in Malaysia because the pay was higher” Alex remarked.

Meanwhile Vice Chairman of the Indonesian Chamber of Commerce (KADIN) and Head of Coordinator of Borderland Endang E. Kusumayadi said there were five crucial problems to be cracked down by the Central Government today, i.e. economic disparity, investment hindrances, regional regulations which were noy pro-investment, change of citizenship, and complicated permit application procedures. Endang stated that the borderline towns had high economic potentials, but low employment opportunities.

Infra-structure in borderland were also still at minimum, so it was hard for them to develop their natural potentials. The result was that economic growth in the regions were low. Endang said there was another problem in developing borderland into industrial, commercial and residential zones. And yet she added, the borderline towns were potential areas for processing of palm, crumb rubber, CPO supporting industries, rubber, mining products, hotels and restaurants, marine tourism, cold storage and warehousing.

Other problem was trade regulations which were not on the side of the people. She explained that each borderland had their different problem, so she rated that the present regulation put in effect by the Government was too generalized. Therefore special treatment would be necessary for border towns. Endang stated that other national issues in borderland was change of citizenship. Social economic disparity triggered social economic conflict among the people which made them change citizenship or separate from unified Indonesia (NKRI). As areas rich in natural resources, borderlands were still entangled in permit issuance problems and local regulations. “We expect eased procedures in permit application and investments  to be enhanced soonest” Endang requested.

Business News - July 27, 2012

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