West papua Province has received special autonomy under the law for more than two decades.
In line with this, the government has also issued regulations to accelerate this province’s development and economy.
Economic Growth of West Papua
Overall, economic growth in the province from the expenditure sector was driven by RT Consumption.
Meanwhile, Government Consumption, Investment, and Foreign Exports hampered the pace of economic growth.
The Agriculture, Forestry and Fisheries Sectors drove economic growth in business fields.
In addition, the Mining and Quarrying and Wholesale and Retail Trade sectors also made positive contributions.
The government projects that the global economy will grow in line with the distribution and implementation of the COVID-19 vaccination.
The effectiveness of the vaccination program and various policies taken by the government and accommodative monetary policy is expect to support gradual economic recovery.
All parties agree that with conditions that are safe from the threat of a pandemic, the community will soon recover from reviving the economy.
This condition is also felt and carefully program by the Indonesian government.
Development Challenges
Despite the abundance of natural resources, economic development faces tremendous challenges.
The hurdles are physical: great distances, steep mountains, marshy plains, fragile soil, and high rainfall.
There are also the social challenges of low population density and extreme cultural fragmentation.
The less than 3 million indigenous Papuans speak 250 languages and have unique cultures. They sometimes clash with each other.
So far, gold, copper, silver, oil, natural gas and coal deposits have been discover in West papua.
However, human resource development indicators remain low. Despite being surround by mineral wealth and forests, most of its people remain desperately poor.
The demand for infrastructure reflects the desire to change this.
Local and international businesses also want better infrastructure to extract and export non-renewable minerals and forest wealth.
Inflation Outlook and Economic Sustainability
Although inflation in the province is rising, it remains under control.
The increase in inflation is in line with the increase in economic activity, resulting in increased public demand for goods or services.
Likewise, inflation is increasing in line with economic recovery. Based on the region, the inflation-forming cities in West papua are Sorong and Manokwari.
This increase in economic activity must also bring income that lasts for generations and not just for a few decades.
Investments are essential to creating livelihoods after the resources have been deplete.
The Freeport mine in Papua is an interesting case study, where private and public sector investors have been working to create sustainable development from a mining venture.
Forest products are also a focus of sustainable economics. Forest products are generally deplete more quickly.
A mine of a few hundred square kilometres can create income for years before it is depleted. Meanwhile, thousands of square kilometres of forest can be cleared within a generation.
Infrastructure Investment
Infrastructure development strategies in West papua must actively combat the threat of marginalization and exclusion of indigenous peoples.
At the same time, investments in infrastructure must be make realistically within budgetary and technical constraints.
Investments in infrastructure always carry the risk of inadequate and minimalist planning. Therefore, the results may not last to benefit future generations.
Under pressure to expand the road, water, power and other infrastructure systems, governments have focused on building new capacity.
As a result, existing capacity needs to be address and quickly deteriorates.
A strategy focusing only on construction will ultimately result in less helpful infrastructure than one focusing on operation and maintenance.
This condition is precisely what has been happening in West papua. It is both an opportunity and a challenge to improve the province’s economy.
Investors are also the foundation of hope for the province’s sustainable economic recovery.