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Massive Infrastructure Push Could Strip Nation of Resources: Expert
Ismira Lutfia & Faisal Maliki Baskoro | June 12, 2011

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Indonesia has made developing infrastructure its main priority. But the country’s master plan to accelerate the construction of projects and the creation of industrial centers to further lift the economy has been met with growing concerns about the sustainability of its natural resources.

Indonesia faces a high risk of deforestation in the years to come as the nation seeks to implement its stimulus program known as the Master Plan for the Acceleration and Expansion of Indonesian Economic Growth, or MP3EI, Ahmad Mubariq, senior consultant adviser on climate change policy at the World Bank, said on Sunday.

Ahmad, speaking in a session on Indonesia’s biodiversity at the World Economic Forum on East Asia in Jakarta, warned that large swaths of rainforest will be cleared to make way for the projects unless the process is carried out in a transparent manner.

According to the master plan, Sumatra will be developed as an agricultural and national energy center. In other provinces, Kalimantan will focus on mining and energy, Sulawesi-North Maluku on agriculture and fisheries, Bali-Nusa Tenggara on tourism and food, Papua-Maluku on natural and human resources and Java on industry and services.

“Accelerating the development of infrastructure, plantation clusters in Sumatra or establishing mining sites in Kalimantan may lead to an increase in deforestation,” said Mubariq, who is also a member of the Global Agenda Council on Ecosystems and Biodiversity.

The government’s Rp 4,000 trillion ($470 billion) plan is designed to boost the country’s gross domestic product to $4.5 trillion by 2025 and position Indonesia into the world’s top 12 economies by 2025.

Still, some state officials downplayed concerns of increasing deforestation, saying that the government had carefully planned the MP3EI so that it would not overlap with the preservation of forests.

“We have accounted for sustainability issues in the master plan,’’ Industry Minister M.S. Hidayat told the forum. “The projects are situated in lands that are not marked for conservation.”

Hidayat said that with improved infrastructure, the manufacturing sector could grow by 7 percent in the next two to three years. “If we can carry out our infrastructure projects offered this year and two years to come, I am optimistic that we can achieve the target,” he said.

Arsjad Rasjid, co-group chief executive officer of mining company Indika Energy, said that big mining companies had developed sustainability awareness, but the problem lay within the small companies that were below the radar.

“These small companies have mining concessions and carry out explorations but often don’t have any sustainable solution for their operation,” Arsjad said.

He said that these companies were very hard to identify because they were so small in size, but nevertheless he urged the government to keep a close eye on them. “Creating and maintaining sustainable operations is a must for every company because we want to live in the future that we create,” Arsjad said.