Indonesia to Boost Economic Growth beyond Java

Indonesia is known for its rich archipelago, comprising of more than 17,000 islands with abundance of natural resources. However, for over the last decades, Indonesia’s economic growth has been heavily concentrated only in Java region. According to Minister of National Development Planning of the Republic Indonesia, Bambang Brodjonegoro, Java region contributes about 58 percent to Indonesia’s Gross Domestic Product (GDP), whereas Sumatra contributed 20% and the remaining regions only contributed 20% to the country’s GDP.

According to Bambang, the government has acknowledged that the uneven social and economic development between regions has been preventing other regions, particularly in eastern part of Indonesia to maximize their full potential.

Earlier this year Indonesia has set target of 5.8% for 2019 economic growth. To achieve this target, the government will have to distribute equally the social, economic and infrastructure development outside of Java. Amid the new target, Ministry of National Development Planning of the Republic of Indonesia is on the process of designing new strategic economic plan to boost economic growth beyond Java.

The government strategies include undertaking regional development outside Java with high national economic growth potential, by building economic growth centers in those regions. The economic growth centers will focus especially in manufacture industry to maximize the potential of natural resources. The government will focus on local activity centers in rural areas.

In addition, the government will undertake infrastructure development, and basic services in underdeveloped areas, border areas, archipelagic regions, and eastern Indonesia to improve and broaden the connectivity between regions.

In the long run, the new growth center will encourage the emergence of metropolitan cities outside of Java. The existence of a metropolitan city will be an early source of national economic growth. It is expected that the social welfare will be more evenly distributed with this new project. Bambang Brodjonegoro also stated that by boosting the economy of other regions outside Java, Indonesia could achieve economic growth at 6%.

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