Interview: Oesman Sapta

In addition to natural resources, what other investment opportunities does Kalimantan have to offer?

OESMAN SAPTA: Under the Master Plan for the Acceleration and Expansion of Economic Development (MP3EI), the government has defined 22 categories of economic activity in six designated development zones in which investors can open or extend business ventures. Kalimantan currently looms large as one of these zones. To improve the investment climate, the central and regional governments are working closely in a number of areas, including: simplifying regulations that affect the economy of the province, strengthening connectivity, revitalising the “real sector”, and developing centres of excellence by upgrading the quality of human resources and increasing the use of technology. In addition to the traditional reliance on energy businesses, investors will see more opportunities in various transportation sectors, such as maritime transport, facilitated by the growing interconnectivity between the islands, or in the development and upgrade of airports across the region. Additionally, in the agriculture sector, Kalimantan offers significant investment opportunities as it develops itself as a national production and stockpiling centre of primary and secondary crops, given the availability of arable land and sufficient rainfall.

What basic infrastructure services are required to too meet the needs of the province?

OESMAN: Kalimantan, a huge, fertile, and resource-rich island, needs all kinds of infrastructure to cope with the rapid pace of its economic progress and future development needs. This includes basic infrastructure for public utilities, transportation works to break the isolation of many of its towns and villages, as well as development to bolster various sub-sectors of the economy. Local governments are opening their gates for foreign and domestic investors to develop harbours, airports, industrial zones, tourist resorts, low-cost housing and power generation plants. Indeed, electricity supply is still insufficient on the island, despite Kalimantan being Indonesia’s largest supplier of energy resources. These investments will not only boost the different sub-sectors of the local economies, but will also positively affect the nation as a whole. Given its strategic location bordering neighbouring countries, Kalimantan can be a good choice for industrial relocation for multinational companies that aim to reach East and South-east Asian countries as well as the South Pacific.

How do you assess the government’s efforts to harmonise regulations related to mining, farming, forestry, and environmental and spatial planning?

OESMAN: I speak of this from the perspective of an Indonesian businessman who follows closely the evolution of Indonesian democracy and decentralisation of power. I believe the harmonisation of regulations in these sectors is already under way with the MP3EI, and it comes at a time when better coordination among economic ministries and central and local government agencies is needed more urgently than ever.

Under the regional autonomy policy launched by President Abdurrahman Wahid, executive power was decentralised and distributed partly to the provincial governments and fully to the regency and municipal governments. As such, some of the decrees issued by the local governments to meet the immediate needs of their respective regions directly collided with those that had previously been issued by governors and ministers. Investors – especially foreign ones – need legal certainty, supremacy of law, policy clarity and predictability, a conductive business environment and a level playing field. I believe that the government can do more in this regard, facilitating investment activities in the more than 500 regencies and municipalities across the Indonesian archipelago. A thorough review of the policies relating to business and investment activities, both at local and central government levels, will offer a better understanding of investment opportunities emerging throughout Indonesia, helping to boost both domestic and foreign investment in the country.