West Papua is now seeing a positive economy. Thanks to infrastructure development, education funding, and encouragement to boost the regional economy. These beneficial moves are also backed by the availability of pre-employment cards distributed to the Papuan people.
Those are said to skyrocket the regional economy in eastern Indonesia. This article will provide a concise overview of the situation.
The Positive Trend
President Jokowi is well-known for being the first president to step foot in Papua and prioritize this region. That’s why there are distinct benefits that are seen to be highly significant in the growth of West Papua.
The existence of a special autonomy policy imposed by the central government is one factor that encourages this rise. For example, the Sorong SEZ was declared the first Special Economic Zone in Papua by Government Regulation 31/2016.
This Special Economic Zone was developed on 523.7 hectares of land in a favorable location near the Sele Strait. Its fishing and maritime transportation potential is expected to lift the Papuan economy significantly.
With an incoming investment project of Rp 32.2 trillion and the capacity to employ 15,024 people till 2025, It is not strange that the economic growth of West Papua outperforms national economic growth.
In addition to the Sorong area, the government is carrying out ambitious activities in this Raja Ampat territory. For example, the development of the trans-Papua sea toll road improves the smooth flow of trade commodities. It is thought that it will be possible to distribute the cost of goods and encourage more labor to be absorbed by doing so.
The Economic Growth
Its economy achieved positive monthly and annual growth in the fourth quarter of 2021, which was 5.16 percent greater than the third quarter of the same year, which only expanded by 2.84 percent.
According to data from the Central Statistics Agency (BPS), the Papuan economy hit IDR 235.34 trillion in 2021, based on the quantity of gross regional domestic product (GRDP) at current prices (ADHB).
Overall, the economy grew by 15.11 percent in 2020 compared to the previous year. This statistic is far more exciting than the previous year’s growth rate of 2.39 percent.
Plus, it indicates the fastest growth rate in a decade. The expansion is undoubtedly backed by an increase in economic activity across the board, except for health care and social services and financial and insurance services, which are not faring and other sectors.
The Industry Sector
Some details of this expansion are supported by emerging sectors in Papua, with the mining and quarrying sector leading the way.
The mining and quarrying industries grew the most (36.84 percent). The construction sector came in second with 13.8 percent, and the agricultural sector came in third with 10.8 percent. Other industries that should be commended for their progress are real estate (7.04 percent) and electricity and gas procurement (5.77 percent).
Simply put, 11 business sectors are supporting the healthy growth of West Papua. They are power and gas supply, water supply, lodging and food and beverage, mining and quarrying, agriculture, real estate, health and education services, other services, wholesale and retail trade, and processing industries.
In addition to what has been stated, the positive trend of the economy in this region is supported by the growth of consumer credit in October 2021, which was recorded at 5.16 percent. It indicates that people’s purchasing power is beginning to improve after being hit by the COVID-19 pandemic, which devastated the economy and the world.
Nevertheless, in terms of expenditure, the economic growth of this region in the fourth quarter of 2021 was driven by increases in household consumption and investment. Also, the performance of government consumption and exports continues to shrink, posing a barrier to the rate of economic growth in this region.
But anyway, it is reasonable to say that the economy of West Papua has grown greatly over time. It is significantly higher than the national average growth rate of 3.69 percent, with this region increasing by 10.09 percent.
