Indonesia is a country that is rich in natural resources. It is not a wonder that the government makes attempts to increase exports in various regions. West Papua is definitely not excluded from the plan. Over the last decade, this region has seen great growth in its exporting segment,
The Growth of Export
The region shows great promise in export due to its abundance of natural resources. It was noted that in 2008, it became the region with the highest export value in the country (amounted to slightly over 20%). After that period, though, the export growth is fluctuating.
As an example, it is reported that in 2011, the export growth had reduced to 90% compared to the previous year. That number is devastating, but the province tried to regain its footing in the following years. In 2014, the export value reached 4,049.23 million USD. It shows how potential yet volatile the export industry there is.
In 2015, the number reduced to almost half, which was 2,741.80 million USD. It then decreased again in 2016 before increasing in 2017 and 2018. Just as the export value had become more stable, the number went down again in 2020 and 2021. It was due to the pandemic that hit the entire world.
Other than the pandemic, there are certainly some issues that plague the export growth in West Papua over the last ten years. One of them is the hyper-reliance on certain commodities. When the production of those commodities goes down, the export value is heavily affected. Global economics is also a dominant factor that influences export.
Export Commodities of West Papua
There are many natural resources, but not all of them are well-developed enough to be sent abroad as commodities. So, what are the common export commodities from this province? Let’s take a look at the following list:
Liquefied Natural Gas (LNG)
The province has a vast resource of natural gas. It exports the gas mostly in liquefied form. The largest area to produce this commodity is Teluk Bintuni. Throughout 2020, the export value of LNG reached 1,734.18 million USD. That number equals 96.57% of the total export value of West Papua in that fiscal year.
The LNG from this region is mainly exported to the Republic of China. The price of natural gas fluctuates very often. Falls in export value also happen due to the decrease in demand. Nonetheless, this export area serves great potential.
Cement is another commodity that this province exports abroad. There are various types of cement that the region produces. However, the most common type is material for Portland cement.
In 2020, the total value of cement export from the region exceeded 16 million USD. This is almost 1% of the total export value that year. Around 40% of the cement commodity was sent to Taiwan. The country has a high demand for this construction material.
In the last decade, copper production has improved significantly. The demand for copper from this region is relatively high too. The main area that produces a high volume of copper is Tembagapura, Mimika.
Based on the data of December 2020, the export value of copper from this region reached 400.23 million USD. That number is a significant increase from the previous year. However, the need for a huge sum of capital to initiate underground mining may become an obstacle.
Wood is an export commodity in West Papua. However, wood logs and other wood products are yet to be the primadonna of export in the province. In 2020, the export value of woods and derivative products was estimated to be 6.9 million USD.
It is rather strange as the region has a vast forest to support this industry. This situation proves that this industry has yet to be developed optimally. To realize the region’s potential in this sector, changes need to be made.
Future of Export in the Region
Based on data from the last decade, we can gather that there is a huge potential for export from this province. Nonetheless, the way the export value fluctuates every year shows that some things must be taken into consideration to ensure that steady growth can be achieved in the coming years.
The central and local governments work together to design regulations that would increase the production of certain industries. This will ensure that sufficient supplies are available for export. To do it, the government should map the industries that are in dire need of a boost.
Another issue that the government wants to tackle is related to human resources. Highly trained human resources are needed to manage the export in the region. They need to be able to oversee the production well and ensure that the distribution chain also runs smoothly. It can also limit the involvement of foreign resources.
In the last decade, West Papua has seen significant growth in its export. However, the growth can be dubbed as highly unstable. There should be various efforts done on many levels to ensure the future of export in the region.