Ending the pervasive curse of ‘Papua currency’

Development in Papua, Indonesia’s most eastern and underdeveloped province, has been hampered by extremely expensive logistics costs caused by the lack of transportation infrastructure. The Jakarta Post’s Rendi A. Witular recently traveled to several remote areas of the province to find out more. This is the first of three reports about the development in Papua.

Pegunungan Bintang, like other regencies tucked into the alpine terrain of Papua’s isolated central area, has long endured the exorbitant prices of goods and materials.

The regency, inhabited by 113,000 people, drains most of its development fund just to cover costs of airline services, which link the regency with the outside world. Around 40 percent of the regency’s budget, roughly Rp 600 billion (US$61.63 million), has been spent on subsidizing transportation costs.

As all goods have to be airlifted, the price of subsidized fuel can reach an average of Rp 70,000 per liter, and during Christmas and New Year it could top Rp 200,000. In contrast, it costs a mere Rp 4,500 in Java regardless of the holiday season.

Cement is priced between Rp 1.2 million and Rp 1.5 million per 50-kilogram bag, compared to Java where it can be bought only for as little as Rp 67,000.

“Jakarta thinks that our budget is sufficient for development. But they seem to be ignorant to the fact that most of the funds cover transportation costs,” said Pegunungan Bintang Deputy Regent Yakobus Wayam, recently.

“You can imagine how expensive infrastructure development is here when you take in to consideration that we have to airlift the machinery and materials,” he said.

In addition, the regency also has to deal with the uncertainty of flight cancellations, which delay the delivery of supplies, as airplanes are often grounded due to bad weather.

Luckily, the supply of staple food items are sufficient thanks to provisions from local farmers.

Located about a 1.5-hour flight from Papua’s capital, Jayapura, Pegunungan Bintang is flagged as one the province’s security flash points due to its proximity to Papua New Guinea (PNG), with whom it shares a border. The border areas are regularly used by Free Papua Movement (OPM) fighters to evade Indonesian security forces.

Border trespassing has often occurred at the regency’s district of Batom, located around 2 kilometers from a gold mine operated by a PNG company.

Batom’s 1000 residents, mostly children and teenagers, are among the poorest in Papua. They depend on supplies dropped regularly by the local administration from the regency’s capital, Oksibil.

Although the capital is only 30 minutes away by small plane there are no roads that connect Batom with Oksibil for motor vehicles, and so it can take up to eight-day journey through mountainous regions to reach Oksibil.

“The district has been left without doctors or teachers since Christmas last year, as they could not afford the high cost to return to the district,” said Army Sgt. Widodo, an Indonesian Military (TNI) soldier stationed to secure the district’s border area.

The timing of their absence could not been worse as Batom residents and the 20 border officers stationed there have been gripped with an outbreak of malaria.

A soldier from Bengkulu province in Sumatra died from malaria in Batom in late January. Not only could he not receive the proper medical treatment due to the absence of qualified medical practitioners, but bad weather hampered air evacuation attempts, Widodo recalled.

Despite an annual budget of more than Rp 40 trillion — the seventh-largest budget in the country — Papua’s infrastructure development remains at the bottom of the list due to colossal logistics costs despite its rich natural resources of gold, copper, coal and timber.

The province’s pervasive transportation costs drains the budget of each regency. For example, the exorbitant cost of logistics forced Tolikara regency to spend 65 percent of its budget, equivalent to Rp 700 billion, on air travel and deliveries this year.

The remaining 35 percent of the budget is far from sufficient to cover the enormous cost of constructing the much needed roads, health centers and schools, according to Tolikara Regent Usman Wanimbo.

“How can we spend the budget wisely on infrastructure if the price of goods are 100 times more expensive than any where outside Papua?” said Usman recently.

“The real value of our Rp 700 billion budget is equal to Rp 70 billion in Java,” he said.

Aside from Tolikara and Pegunungan Bintang, other regencies located within the province’s central territory, known locally as pegunungan tengah, share a similar high-cost economy that has never been resolved by the central government.

The territory also includes regencies such as Jayawijaya, Lanny Jaya, Nduga, Membrano Tengah, and Yahukimo.

According to the Central Statistics Agency (BPS) census in 2010, the pegunungan tengah territory, with 1.6 million of Papua’s 2.8 million people, is host to the largest concentration of the province’s population.

Due to its sluggish development, the area has become a hotbed for regular civil and separatist conflicts.

“There’s no other way to resolve the development problem in Papua than to eliminate what we call ‘Papua currency’,” said Doddy Imam Hidayat, the chief expert of the Presidential Unit to Accelerate the Development of Papua and West Papua (UP4B).

“The term means that the real value of the whopping budget for Papua is incomparable to those in other provinces because of the expensive prices there. The budget could well be spent if we could first bring down the prices of all goods,” he said, recently.

Informed by that fact, the UP4B embarked on an ambitious project to end the province’s isolation by accelerating the construction of 1,520 kilometers of roads to be completed by 2015. It is estimated that the project would cost around Rp 1.5 trillion.

As the condition in Papua is deemed “abnormal”, the agency is planning to team up with the Army’s Engineering Directorate (Zeni) to help the Public Works Ministry and local public works agencies achieve the road network expansion swiftly.

A dozen Zeni personnel were deployed to remote areas in Papua in late January to undertake terrain surveys for the planned projects.

“We’re settling the bottleneck in an ‘abnormal way’. If we take the normal way — by depending on the ministry and the local agencies to build the roads — it will take around 60 years to complete. But with the deployment of the military, we are upbeat it could be completed by 2015,” said Doddy. “We think the best way to resolve any problem in Papua is to think outside the box.”

Among the immediate projects on the horizon, according to the UP4B, is the addressing of the connection issue experienced by the pegunungan tengah. Intended new roads will link the area with a river port in Mumugu district in Asmat regency. The river could accommodate large ships that sail to and from the Arafuru Sea.

The port’s construction, spearheaded by the Transportation Ministry, has been underway since last year, and it is slated to be in operation in 2014.

The port will be equipped with a fuel depot supplied by ships and distributed by fuel trucks to the central-area regencies. Currently, barrels of fuel are transported by aircraft and helicopters from Jayapura.

“The road network expansion will not only bring down prices and end the curse of the so-called ‘Papua currency’, but will also help us expand healthcare and education services. The trickle effect will be enormous,” said Usman Wanimbo.[JakartaPost]
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