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S. Sumatra to Receive Boost From Economic Corridor
Shirley Christie & Antara | March 20, 2011

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The government plans to make Tanjung Api-Api in South Sumatra a special economic zone in an effort to lift that area and surrounding regions, Coordinating Minister for Economic Affairs Hatta Rajasa said on Saturday.

“Tanjung Api-api has been discussed and put on the list of the National Planning Development Board,’’ Hatta said during the inauguration of National Mandate Party (PAN) regional executive board in Palembang. Hatta also serves as the chairman of the party.

He said Tanjung Api-api, which is in Banyuasin district, about 80 kilometers north of provincial capital Palembang, would house several industries and a seaport built within the region.

“A railway to transport coal from coal-producing districts such as Lahat and Tanjung Enim will also be built,” Hatta said. “Those huge projects must be supported by all the people so that the people’s economy, especially in South Sumatra, will grow bigger.”

In January, state coal miner Perusahaan Tambang Batubara Bukit Asam said it planned to build power plants to support its operations and create a railway to transport fuel from its center of production in Tanjung Enim to seaports in South Sumatra’s Tarahan Bay, according to president director Sukrisno. The 307-kilometer railway, a joint venture dubbed the Bukit Asam Transpacific Railway, would cost $1.65 billion and be financed by the miner, which holds a 70 percent stake in the project, and Rajawali Group, which controls the remainder.

Hatta said the central government planned to develop economic centers in every district and city in South Sumatra. He said in February that state-owned enterprises had committed to disbursing about Rp 400 trillion ($45.6 billion) for the first phase of the country’s economic corridor project.

The six economic corridors make up the crux of the government’s master plan for development, which is hoped to turn Indonesia into one of the world’s top 10 economies by 2030.

According to the master plan, six regions will be designated as main economic corridors. Sumatra will be developed as an agricultural and national energy center, while Kalimantan will focus on mining and energy, Sulawesi-North Maluku on agriculture and fisheries, Bali-Nusa Tenggara on tourism and supporting national food self-sufficiency, Papua-Maluku on natural and human resources, and Java on industry and services.

The master plan also prioritizes eight sectors: manufacturing, agriculture, fisheries, mining, tourism, telecommunications, energy and industrial zones.

The government will also open investment opportunities to other countries such as Japan, South Korea and Russia.

Purbaya Yudhi Sadewa, an economist at the Danareksa Research Institute, told the Jakarta Globe on Sunday that the six corridor plan was moving in the right direction and would become part of an integrated economic development plan.

“[The plan] is strengthening the economic centers in the country,” Purbaya said. “Since the government has a limited budget, it would be good to evaluate the implementation of the projects afterwards before deciding whether we should extend the similar pattern or improve it,” he said.

Purbaya said South Sumatra should succeed as an economic center as it houses commodities such as coal, gas, rubber and crude palm oil.