CHAPTER THREE A PROFILE OF JAMBI PROVINCE

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1 CHAPTER THREE A PROFILE OF JAMBI PROVINCE Jambi is a multicultural province that has recently enjoyed relatively high economic growth. However, some development problems still torment it such as the increased number of people living in poverty and mismanagement of natural resources. The regional autonomy has added more problems because of the lack of understanding about sustainable development among the decision makers in local government bodies. This chapter outlines the physical, demographic, and economic conditions of Jambi, and compares its weaknesses and strengths with other provinces in Indonesia. It also includes a brief discussion about the implementation of regional autonomy and sustainable development in this region The Physical Environment Jambi is located between 0 45 and 2 45 latitudes south and and longitudes east (Figure 3.1). The province borders Riau in the north, Berhala Gulf in the east, West Sumatra in the west, and South Sumatra in the south. The total area is km² (BAPPEDA Jambi, 2004). Topographically, Jambi consists of plain areas and hills in the east and mountains in the west, which is part of the Bukit Barisan Mountain Range (Kurniawan and Nursula, n.d.). The climate is tropical. Rainfall ranges from 2000 mm to 3000 mm per year, and peaks in January. The highest temperature is in the eastern part of Jambi at 33 C and there is no sharp difference in temperature between day and night. In the hilly and mountainous areas around Kerinci District, the CHAPTER THREE: A PROFILE OF JAMBI PROVINCE 25

2 temperature is much lower at 21 C. Humidity varies from 75% to 90% (Kurniawan and Nursula, n.d.). Figure 3.1 Map of Jambi Province 3.2. Demography The population of Jambi in 2002 was 2,494,000. Like most provinces in Indonesia, Jambi s population growth fell sharply from 3.39% during to 1.84% during the next ten-year period. This growth rate was the fourth highest of the nine provinces in Sumatra, while the population density of 47 persons per km² was the second lowest after the newly created province of Bangka Belitung. There was not much difference between the number of males and females as shown by the sex ratio in 2000 of (Statistical Year Book of Indonesia, 2002). Besides the local ethnic groups such as Malays, Javanese, Minangkabau and Bataks, Jambi s population also includes indigenous people named the CHAPTER THREE: A PROFILE OF JAMBI PROVINCE 26

3 Kubu or Suku Anak Dalam who are considered as the earliest inhabitants in Jambi (Kurniawan and Nursula, n.d.). Since 1967, implementation of the National Program of Transmigration has resettled 340,203 people, consisting of 253,873 who came from Java or Bali and refugees, and 86,330 local transmigrants. Most of local transmigrants were illegal loggers from the Kerinci Seblat National Park (Transmigration Office of Jambi Province, 2003). The transmigrants were later encouraged to grow oil palm. The number of people below the poverty line in Jambi declined sharply from 500,100 in 1999 to 188,500 in That number was the lowest in Sumatra after the new province of Bangka Belitung. The proportion of population below the poverty line was among the third lowest in Indonesia after Bali and South Kalimantan. The number of poor people in rural areas was slightly higher that that of urban areas (Statistical Year Book of Indonesia, 2002). However, in 2003 Jambi could not maintain this good record. The other provinces left Jambi behind; for instance West Sumatra, had 11.2 % of its population below the poverty line compared to 12.7% in Jambi. Other provinces such as Central and East Kalimantan that in 2002 had a higher proportion of the population below the poverty line than in Jambi also recorded outstanding results in lowering the number of poor people (BPS Statistics Indonesia, 2003). Even though the number of people living in poverty increased, the Gini coefficient in 2003 was 0.24, which means the distribution of income in the province was quite good (BAPPEDA Jambi, 2004) Natural Resources and Environment Even though agriculture s share of Gross Regional Domestic Product (GRDP) is relatively low, in the future this sector along with forestry and mining, is expected to be more developed and to give much higher revenue to CHAPTER THREE: A PROFILE OF JAMBI PROVINCE 27

4 the province. Based on data from the Investment Coordinating Board of Indonesia (Badan Koordinasi dan Penanaman Modal, BKPM) (2003), the area of unutilized land in 2000 was 204,155 ha. Most of the land area (1,091,141 ha) was under plantation crops such as rubber, oil palm, cassava, and coconut, and around 82,368 ha were used for other crops. Forest is the other main resource of this province. In 2002, the total area of forestland was 2,148,950 ha, consisting of production forest (1,278,700 ha), conservation forest (191,130 ha), tourism and wildlife reserve forest (679,120 ha) and conversion forest (726,900 ha). As a consequence of increasing forest loss and critical land, Jambi suffers flood disasters every year. During 2003 flooding occurred three times. The last one in December caused damage of around Rp254.6 billion or US$ 30 million (Bachori, 2004). At the end 2002, the area of critical land in Jambi was 581,539 ha (Thahar, 2003d). Jambi has three national parks - Taman National Kerinci Seblat, Taman National Bukit Dua Puluh and Taman National Bukit Duabelas. Their potential for tourism and education has not yet been fully explored (BKPM, 2003). There is increasing concern that these national parks are the target of illegal logging. Jambi has great potential in the mining sector but only petroleum has been exploited while the other mineral deposits such as coal, gold, bentonit and marble are still waiting to be exploited (BKPM, 2003) The Economy Currently Jambi enjoys quite good economic growth. In 2003, growth was 4.5%, which exceeded the national growth rate of only 3.8% (Thahar, 2004a). The inflation rate was -0.80% in 2003, which was lower than the national inflation rate, of 2.48% (Table 3.1). However, In 2002, Jambi recorded per capita Gross Regional Domestic Product of Rp5,263,900, the third lowest among the nine provinces in Sumatra (Indonesia Statistical Year Book, 2002). CHAPTER THREE: A PROFILE OF JAMBI PROVINCE 28

5 Table 3.1 Economic Indicators of Jambi Province in 2002 Indicators 2002 Per capita GRDP (000 Rupiah) 5,263.9 Share GRDP (%) Agriculture Manufacturing Growth GRDP (%) 3.45 Commodity exports (million US$) Labour force 1,161,423 The number employed in four main industries Agriculture and forestry 669,639 Public services 128,688 Manufacturing industries 56,637 Communication and transportation 43,320 Unemployment rate (%) 5.78 Inflation* (%) * inflation in October 2003 Source: BPS Statistics Indonesia (2003) and Statistical Year Book of Indonesia (2002) The total labour force in the province in 2002 was 1,161,423. Around 215,157 were unemployed, the third lowest in Sumatra (Statistical Year Book of Indonesia, 2002). The unemployment rate of 5.78% was the second lowest in Sumatra after Bangka Belitung (Table 3.1). The minimum regional wage level in Jambi varies between Rp245,000/month to Rp325,000/month, depending on the business sector (BKPM, 2003). People working in agriculture and forestry still constituted the largest number, i.e,. 669,639 of the 1,094,331 employed in all industries, or around 61%. This proportion was much higher than at the national level, which was 44% (Statistical Year Book of Indonesia, 2002). Even though agriculture absorbed the largest number of workers, the contribution of agriculture to GRDP was only 30% (Table 3.1). This means that the productivity was relatively low. The value of commodity exports in 2002 was only US$ 484,100,000 (Table 3.1). It recorded steady progress compared to the export value in 2000 of CHAPTER THREE: A PROFILE OF JAMBI PROVINCE 29

6 US$ 455,745,000 (BKPM, 2003). The main commodities exported from Jambi were rubber, raw coconut oil, and crude palm oil. Compared with the other provinces in Sumatra, the value of exports in 2002 was the third lowest (Statistical Year Book of Indonesia, 2002). After experiencing increased export volume in commodities other than gas in 2001, in 2002 the volume declined substantially mainly because around 70% of logging companies had stopped their operations due to the end of concession rights (Table 3.2). Previously, pulp and wood were the main sources of income in the non-oil and gas sector (Thahar, 2004b). Table 3.2 Export Volume and Value of Commodities Other than Gas in Jambi Province, Year Export Volume Export Value (tonnes) (US$) , ,000, , ,800, , ,000,000 Source : Thahar (2004b) 3.5. Implementation of Regional Autonomy and Sustainable Development Jambi Province has high potential to develop a more prosperous society in the era of regional autonomy since the region has abundant natural resources. Laws No. 22/1999 and 25/1999 give power to the local authorities to manage almost all of their natural resources. In the Annual Report of the Governor of Jambi for 2003, he mentioned four priorities for development, i.e., to reduce the number of people living in poverty and the income gap, to accelerate economic growth, to strengthen the supremacy of law and good governance, and to encourage the formation of welfare, religious and civil society (BAPPEDA, 2004c). CHAPTER THREE: A PROFILE OF JAMBI PROVINCE 30

7 The first two priorities clearly assume the anthropocentric point of view (i.e. they only count the interest of human beings) and are limited to the current generation, which is not consistent with the concept of sustainable development. According to Syaifullah and Ikawati (2001), the management of natural resources in the regional autonomy era is a cause for concern. The conflict of interest between the central and local government, and among the local governments within a province, has endangered the environment. It happens due to the lack of an environmental horizon of decision makers and lack of law enforcement in environmental cases. One example in Jambi Province is the permit to establish plantations in the forest area. The government collects local taxes and fees, but it is at the expense of forest loss. When some companies actually do not establish the plantations, or otherwise expand the area that exceeds the location permit, no penalty is given. Since the head of district has authority to issue a permit, the Governor of Jambi cannot interfere in this decision except by asking the head of district to issue such permits wisely. The problem in the implementation of regional autonomy is the lack of understanding about the development powers in the local government body itself, while central government does not supervise sufficiently. This then leads to exaggerated interpretation of these laws in the regions (Suara Merdeka, 2002). There is an intention to revise the laws by diluting some rights, but this is not popular. Even worse, it will increase the will of some rich provinces such as Riau, Aceh, and Papua to separate from Indonesia. The other case that shows the lack of the sustainable development concept among decision makers is the conversion of forest to another function. Thahar (2000) reports a controversy about the decision of the Provincial Office of Forestry and Estates to give an industrial forest plantation (IFP) permit to a private company. Many opposed it since 60% of the forest area still consisted of natural timber. By releasing this permit, the company would log all these valuable timbers and plant it with an oil palm monoculture. The IFP permit is CHAPTER THREE: A PROFILE OF JAMBI PROVINCE 31

8 intended to be approved in locations such as a damaged forest or a forest in which only 20% of the natural timber is left. Syaifullah and Ikawati (2001) conclude that the regional autonomy has fifty-fifty impact on environment. It could save environment if the decision makers and the local people are familiar with and concerned on the environmental issues, or vice versa. However, the people s aspiration is often ignored since the governor and the head of district are appointed by the local legislative assembly. They pay more attention to the demands of legislative members rather than local people (WALHI, 2002) Conclusion Jambi Province has great potential to be developed in future since it has abundant natural resources and a large labour force. Among the other provinces in Indonesia, Jambi is one that enjoys relatively high economic growth. There is no ethnic conflict as has happened in some parts of Indonesia. This condition is very conducive for foreign investment. Apart from those beneficial conditions, Jambi currently faces a serious environmental problem, namely forest loss. All media in Indonesia have followed this issue up. The loss is not only due to forest conversion to other uses, principally oil palm, but to illegal logging within areas of national parks. The central government during the New Order Regime and the local government during the era of regional autonomy seem to focus on exploiting the forest and dismiss the other potential services of forest such as ecotourism and education. The implementation of regional autonomy is an opportunity to save the environment in Jambi. However, the lack of adherence to sustainable development within the government body and among local people makes this very difficult. Even worse, the conflict of interest in the management of natural resources has exacerbated the environmental condition. CHAPTER THREE: A PROFILE OF JAMBI PROVINCE 32

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