Tag: business

A new province is born

Waterways: A long boat glides along the Sekatak River in Bulungan regency. River passage is the main transportation choice in North Kalimantan, as the new province still lacks good roads. JP/Prodita Sabarini
Waterways: A long boat glides along the Sekatak River in Bulungan regency. River passage is the main transportation choice in North Kalimantan, as the new province still lacks good roads. JP/Prodita Sabarini

Indonesia’s newest province is North Kalimantan, carved out of one of the nation’s richest provinces, East Kalimantan. The Jakarta Post’s Prodita Sabarini and Nurni Sulaiman report from Bulungan regency, the home of its future capital. 

To the north of East Kalimantan, bordering the Malaysian states of Sabah and Sarawak, a new province — Indonesia’s 34th — is in the making.

North Kalimantan was born after the gavel was pounded at a plenary meeting of the House of Representatives in Jakarta in October.

A little over two months later, across the sea around 1,500 kilometers from the capital, there are few signs of the province’s existence. In Tanjung Selor, the capital of Bulungan and the proposed provincial capital, a sign in front of the old regent’s office reads: “Preparations for the North Kalimantan Gubernatorial Office”. The office is a simple low-rise yellow building.

The House bill that authorized the creation of North Kalimantan mandated the home minister to prepare governmental infrastructure and to appoint an acting governor within nine months.

Bulungan Regent Budiman Arifin said that the acting governor would have their office in the yellow building, which sits on about 1.6 hectares in the city. “It will be up to the new governor if they want like to renovate it,” he said.

North Kalimantan’s establishment came as a surprise: A government issued moratorium on the formation of new autonomous regions in 2009 was effectively flouted by the House. The last province to be established before North Kalimantan was West Sulawesi in 2004, but new regencies continued to be created. The government wanted to halt the creation of new provinces and regencies as the process had been prone to conflict. In 2009, for example, angry protesters barged into the North Sumatra Legislative Council’s chambers, demanding that the body approve the formation of the province of Tapanuli. The council speaker’s Abdul Aziz Angkat, died of a heart attack out of shock.

North Kalimantan comprises four regencies — Bulungan, Nunukan, Malinau and Tana Tidung — and Tarakan city.

In early January, the regents and the mayor visited Samarinda for events marking the 56th anniversary of East Kalimantan. Budiman, who was at the event, said he was wistful and relieved at the same time. “This will be our last time going to Samarinda for the anniversary. Next year, we will be celebrating our own.”

Tarakan mayor Udin Hianggio says the history of North Kalimantan began 12 years ago, when a group of university students hailing from the northern part of East Kalimantan, who were studying in Malang, East Java, launched an initiative to separate from East Kalimantan.

Back then, oil-rich Berau regency, which also includes the popular tourist destination of Derawan, was to have been the cornerstone of the new province. Berau was eventually kept within East Kalimantan.

Regional leaders and civil society groups met regularly to prepare their request to establish a new autonomous region. They established an association of regional leaders and a lobbying group headed by former Tarakan mayor Jusuf SK.

“This has been a long struggle,” mayor Udin said, “Praise God, [the new province] is now passed as law.”

The House mandated that a budget for North Kalimantan’s operations and elections be allocated by the East Kalimantan provincial administration and the four affected regency administrations. East Kalimantan has been pegged to provide Rp 300 billion for the new province; Bulungan regency, Rp 50 billion.

The rationale behind the creation of a new province, Budiman said, was administrative ease. East Kalimantan was previously the nation’s second-largest province in terms of area after Papua. Officials in the northern part of East Kalimantan had to take boats, planes and a bumpy day’s car ride to Samarinda, East Kalimnatan’s provincial seat.

Budiman said that having the provincial capital in the north would speed administration, speed progress and speed the elimination of poverty. The regions in the north were the poorest in resource-rich East Kalimantan, lacking infrastructure while featuring double-digit poverty rates. Malinau was the worst off, recording a poverty rate of 15.31 percent in 2010, according to the East Kalimantan Statistics Agency.

Another reason to form a new province was to better secure Indonesian territory that borders Malaysia. In 2002, Indonesia lost a legal battle with its neighbor to keep Sipadan and Ligitan Islands in the Makassar Strait. Lawmaker Agun Gunandjar Sudarsa of House Commission II on regional autonomy said that the establishment of North Kalimantan would secure the loyalties of Indonesians living on the Malaysian border.

“We saw the history of how our country lost Sipadan-Ligitan [islands,” Udin said. “That’s an example [of the effect] of an area which is too vast.”

However, critics say that establishment of new autonomous regions has been costly, claiming that a lack of capacity has meant that new regions have failed to improve the people’s welfare.

According to the Home Ministry, 57 of 205 autonomous regions established between 1999 and 2004 have failed to increase welfare or public service. The Home Ministry now regularly evaluates these new provinces, regencies and municipalities, which it can order to be reintegrated with their original regions if found wanting.

Budiman, however, is certain that North Kalimantan will be able to serve its people. “Many of the new regions that resulted from decentralization in East Kalimantan have succeeded, starting from Tarakan, Malinau regency, Nunukan, West Kutai, East Kutai, Bontang, Penajam, and Tana Tidung regency,” he said.

All the regions in North Kalimantan were once a vastly larger Bulungan regency. Tarakan, Malinau. Nunukan, Tana Tidung were part of Bulungan until they became autonomous.

He said that the human resources to staff the new province were available in Bulungan and the other regencies.

The staff and acting governor of North Kalimantan are currently staffed by appointments from the ministry. “The acting governor will not open all the [provincial] agencies yet, only the vital ones, such as those for public works, health agency, etc….,” Budiman said.

To anticipate the flow of migrants coming to Bulungan as Tanjung Selor becomes the provincial capital, access to clean water and other services would be increased, Budiman said. He added that he would work with the state electricity company PLN to increase the power supply in the region.

“More people will come here as we become a new province. We have to be ready for that,” he said.

The Jakarta Post | Reportage | Mon, January 28 2013

Indigenous Dayaks struggle to hold on to their lands

Village meeting: Yua (far left) and village leader Yohanes (second from left) participate in a local community gathering in Sekatak district, Bulungan regency. Yua witnessed the forceful eviction of indigenous people in Bulungan during the Soeharto era to make way for a wood manufacturing company. (JP/Prodita Sabarini)

Village meeting: Yua (far left) and village leader Yohanes (second from left) participate in a local community gathering in Sekatak district, Bulungan regency. Yua witnessed the forceful eviction of indigenous people in Bulungan during the Soeharto era to make way for a wood manufacturing company. (JP/Prodita Sabarini)

Yua is a small man with fine lines on his face. He does not know how old he is but he remembers vividly the time when he was newly married and saw men with green uniforms holding rifles entering his village in the forest near the Sekatak River in Bulungan regency.

He is from the Bulungan tribe, one of the 400 Dayak ethnic groups in Kalimantan. He said that the men in uniform came into his village in the early 1970s and forced the people to move closer to the river. Four decades have enabled him to recall the forceful relocation with humor.

“They soaked them,” Yua said, chuckling. He was sitting on the floor in the house of Yohanes, 35, a village leader in Sekatak district. Yohanes explained that those who resisted the relocation were made to go into the river by the soldiers and stay neck-deep in the water for hours.

“They stripped them,” Yua added. “They pointed their guns.”

Under former president Soeharto’s rule, many indigenous groups in East Kalimantan that are connected to the land and forest around them have been forced to relocate, their ancestral lands given away as concessions for mining and timber production.

Yohanes said that seven indigenous settlements from the tribes of the Punan, Kenyah, Tidung, Belusu and Bulungan were relocated to what is now the Sekatak district. The central government gave the ancestral lands to Intraca Wood Manufacturing, a timber producer, owned by Hartarti Murdaya, he said.

The Reformasi era after the fall of Soeharto, which included decentralization, did not do much to change the plight of indigenous people. Their lost lands remained in the hands of private companies.

Internationally however, the rights of indigenous people are starting to gain ground through the non-binding UN Declaration of the Rights of Indigenous People, which includes the rights of indigenous people to “free, prior and informed consent” of projects in their customary lands. In Indonesia, legislative members are deliberating a bill on the recognition and protection of indigenous people.

In Samarinda, the National Alliance for Indigenous People (AMAN) East Kalimantan coordinator Margaretha Seting Beraan said that the tension between the Unitary State of the Republic of Indonesia (NKRI) concept and indigenous people’s rights could be seen in the difference between the latter’s suggested draft of the bill and the legislature’s. In the bill, recognition for indigenous people’s rights was conditional on the principle of NKRI.

“Actually, I don’t agree with the concept of NKRI if they homogenize groups. I only agree with the NKRI concept if pluralism is respected,” Margaretha said. “Basically we come from different cultures with different customs and laws that come together in one country,” she said.

Back in Sekatak, village leaders say their people rely on the forest and land. Having been pushed out from their ancestral forest, many of their people have been criminalized for illegal logging. “We have at least 50 people jailed for illegal logging,” said Zainal Abidin, 37, leader of Ujang village in Sekatak.

He said that people used the wood to build their houses, climbed the trees searching for honey from giant beehives and planted fruit trees and rice.

Margaretha, who comes from the Dayak tribe called Kayan, said that Kalimantan’s indigenous people came from Yunnan, the southwest part of China that borders Southeast Asian countries such as Laos,
Vietnam and Burma.

“Some come from Sumatra and some come from the Philippines,” she said. “The Punan was believed to be the oldest group that came here and the rest mixed with people who came later and created subgroups,” she said.

Each group would settle on a plot of land and develop its language and customs, she said. The borders of each group’s land are usually determined by the hills and rivers. “If the water from the mountain flows down toward a tribe’s village then it’s considered part of that tribe’s land. If the water flows the other way, then that belongs to another tribe,” she said.

Each ethnic group understands the respective borders, she added, and customary leaders usually settled disputes using customary law. The authority of administrative governments and their power over land however, undermines customary ways. This not only worked to the government’s advantage in giving concessions to private companies, but also caused conflict between villages like in the case of Muara Tae, West Kutai, according to Margaretha.

Kutai Barat regency has made concessions on Muara Tae’s land to a palm oil company. Masrani, a village leader, said the palm oil company started to bulldoze the ancestral forest there, which belonged to the Dayak Benoaq in Muara Tae, after a neighboring village claimed that Muara Tae’s land was theirs. He said that people from Muara Ponak village gave away land that was within Muara Tae’s customary village border to a palm oil company in 2010.

While bulldozers have started to cut off the forest, the regent, Ismael Thomas, released a decree saying that the 638 hectares of land that were cleared were Muara Ponak’s. “But this is our land that has been passed on for generations. Our village border with the neighboring village is nature’s border. We have different rivers with Muara Ponak, there’s a hill and that becomes our border,” he said.

Margaretha said that disputes of customary land could be solved using customary law, but that the government’s commercial interests in those lands undermined these laws.

In West Kutai, customary leaders even had to be officiated by the administrative government, which made it easier for the regional government to control local communities there. “The customary leaders become government pawns because their position depends on the government,” Masrani said.

As the national law does not explicitly recognize the protection of customary land, Margaretha said that the Muara Tae had community fought for their rights through various avenues, including by filing a complaint to the Kuala Lumpur based-Roundtable on Sustainable Palm Oil. Despite these efforts, the palm oil company continues to operate on their lands.

East Kalimantan province has a slogan for its 2009-2013 development plan: “Building Kaltim for all”. The government is preparing big projects to speed up development. One of them is the Maloy Industrial Zone and International Port. Margaretha is worried how it will affect indigenous people in the area.

When Governor Awang Farouk Ishak was asked whether the development would consider the rights of indigenous people, he answered: “We do not differentiate between religious groups or ethnic groups. Every one should enjoy progress.”

Margaretha says indigenous groups are concerned because experience shows that the government’s approach has exploited nature, while the groups themselves have learnt to live and care for their natural surroundings.

JP/Prodita Sabarini and Nurni Sulaiman, Bulungan/Samarinda

The Jakarta Post | Special Report | Fri, January 18 2013

‘Stop thinking we are rich’: Kutai Kartanegara regent

Rita Widyasari: (JP/Prodita Sabarini)
Rita Widyasari: (JP/Prodita Sabarini)

The media likes to dub East Kalimantan regency Kutai Kartanegara as the richest in the country.

At a glance it appears as if it is; the region lies on the former Kutai Kartanegara sultanate and is assigned the biggest regional budget. In 2013, Kutai Kartanegara will have Rp 7.5 trillion (US$776.79 million) to spend, around 33 percent higher than 2012’s budget of Rp 5 trillion.

Moreover, the area is rich in coal, with more than 1.2 million hectares of its land allocated to more than 680 mining concessions.

Yet, its regent, the feisty 39-year-old Rita Widyasari, the former local council speaker, refused to call her regency “rich”. It was actually her father, former graft convict and regent Syaukani Hasan Rais, who made Indonesians aware of Kutai Kartanegara’s wealth when he announced free health and education services. Syaukani’s legacy was tarnished when he was implicated in a corruption case that involved Rp 103.5 billion in funds and sentenced to six years by the Supreme Court. He received a controversial presidential pardon and served only three years.

In her residence in Tenggarong, Kutai Kartanegara’s center of governance, Rita, once a fellow at Harvard University’s Executive Education Training program, was seated on a brown leather sofa. Her young daughter runs around the room.

Rita, who took office in 2010, said that she was well aware of the wealth of natural resources that her regency holds. The regency produces around 70 million tons of coal per year, nearly half of East Kalimantan’s coal production.

Kutai Kartanegara’s budget, she said, was “incomparable with the sheer size of the region”.

“Before I became regent Samarinda had a budget of Rp 1.8 trillion for 700 square kilometers. We have Rp 5 trillion [in 2012’s regional budget] and we’re 27,000 square meters, 39 times bigger than Samarinda!” she said.

“We should have their budget of 1.8 [trillion rupiahs] times 39 and then we can build infrastructure that’s connected like Samarinda,” said Rita. She was educated in Bandung’s Padjadjaran University in West Java, graduating in social sciences and continued a masters program at the Jend. Sudirman University in Purwokerto, Central Java.

Rita also compared Kutai Kartanegara to Surakarta, a mere 44 square kilometers.

“We are 600 times bigger than Surakarta whose infrastructure has been built already!” she said. Rita’s aide Abriyanto also pointed out that Kutai Kartanegara is 40 times the size of Jakarta.

Rita said that the argument that Kutai Kartanegara has a small population — little more than 600,000 people based on the 2010 census — was not strong enough.

“Our population is dispersed, so we have to build infrastructure to reach 1,000 people here, 1,000 people there. We have to connect districts and make resources closer to the people,” she said.
Source: East Kalimantan Statistics AgencySource: East Kalimantan Statistics Agency
With its huge size, Kutai Kartanegara still needs roads to link the different areas. Rita said that only
40 percent of their roads were in good condition.

The other 30 percent are in bad condition and the rest are in dire condition, she said.

“I’ve calculated the cost to build roads and connect the entire regency. It’s Rp 65 trillion,” she said.

Rita said that the regency was still overly dependent on non-renewable resources.

Abriyanto, said that in the long term, Kutai Kartanegara was to be the center of agricultural products — an alternative to non-renewable resources.

The regency is allocating 10,000 hectares of land to develop cassava farms with farmers. Cassava can be made into ethanol and tapioca flour. Abriyanto said that Kutai wanted to fill the gap in Indonesia’s cassava shortage. He said that the farmers involved in this program would have a say in the industry as well as 10 percent of the shares in the industry.

Meanwhile, regarding investing in human capital, Rita created the program “One teacher, One laptop” to assist teachers. Some 13,000 teachers were given laptop notebooks. The total cost for the program was Rp 83 billion.

“If they are able to work faster and prepare classes better with the laptop, then the quality of teaching will be better and children will learn more,” she said.

She said that because many of Kutai Kartanegara’s residents are isolated and still lack access to roads it was not yet appropriate to call the regency rich.

“There’s still a lot of work to be done,” she said.

— JP/Prodita Sabarini and Nurni Sulaiman, Tenggarong

The Jakarta Post | Reportage | Thu, January 17 2013

The woe of Samarinda

In a Makroman farming district, half an hour from the center of Samarinda, the chirps and quacks of fowl in rice paddies compete with trucks’ roaring engines.

Samarinda’s administration gave a mining company permission to dig up the earth in the capital’s farming area in 2007. A year after the mine operated, chemicals from the mine seeped into farmers’ water source and entered fish ponds and rice paddies, causing farmers’ yield to fall to half of its original production output, according to Baharudin, a leader of the local farming group.

East Kalimantan has experienced a mining boom in the past decade. The boom has brought foreign and local investors to the area. The pervasiveness of the mining industry is most pronounced in the capital, Samarinda, where mining concessions are granted without the consideration of the local community.

In 2009, the House of Representatives passed the law on mineral and coal that limited regional administrative power in the issuance of mining permits. Before regional powers were limited in the concession licensing, Samarinda issued 38 new licenses between 2005 and 2009, according to data from the Mining Advocacy Network (JATAM), giving the city a total of 76 mining concessions.

The mining concessions area more than doubled from around 20,000 hectares to more than 50,000 hectares. The mine that polluted Makroman farmers’ rice paddies and fishponds was one of these concessions.

More than 70 percent of Samarinda’s area has been allocated to mining concessions. They have reached the residential areas too. In Makroman, the mines are next to rice paddies. In Loa Kulu, a mine pit is behind an elementary school. In 2009, resident’s houses in Loa Kulu were destroyed due to a landslide caused by mining activities.

When The Jakarta Post visited the area, the pit had been covered with soil. However, in 2012 more than 100 pits around the city were yet to be reclaimed according to data from Samarinda’s Environmental Agency.

East Kalimantan JATAM coordinator Kahar Al Bahri said that the Samarinda administration maneuvered the 2009 law on mineral and coal through the property business, an area where land is also in the hands of private companies.

He said that even after the 2009 law on mineral and coal was passed, new mines still opened up. The
Samarinda administration gave rights of resources to property developers that found coal on their land, Kahar said.

“If the property developers find coal on their land they can exploit the source first and then build property,” he said. In fact, some property developers were not interested in building houses at all but used this loophole to get to the coal, Kahar added.

Recently, the Constitutional Court ruled that regional administrations have the right to issue permits, after Kutai Timur regency, which is also part of East Kalimantan and home to mining concessions of Kaltim Prima Coal of Bumi Resources, requested a judicial review.

Samarinda’s leaders say they are striving for damage control. Since taking office on Nov. 23, 2010, the “political commitment” was to cease the issuance of new mining business permits, said Deputy Mayor Nusyirwan Ismail.

With so many concessions already — and with the city’s rapid development and its population of over 926,000 — environmental conflicts are becoming “highly sensitive”, Nusyirwan said. The district of North Samarinda is of particular concern, with further growth expected with the new airport.

As for mine hunters in the guise of property developers, the official said procedures were being tightened in the issuance of land permits.

Integrated teams check the area prior to property work and any suspected activity other than property development is reported to the police. The result of regular inspections are announced and published through the media on the 25th of every month, Nusyirwan added.

The procedures carried out since last February have resulted in the revocation of permits of four companies, he said. The announcements also include the companies that are operating well and not damaging the environment; those that gained written warnings, those whose operations are suspended for a month during which the surrounding environment must be repaired; and those whose permits would be revoked if progress was considered below 70 percent after one month.

JATAM representative Kahar argues that the environmental and safety control over the mines remains lax. Many of the pits excavated close to residential areas have been abandoned without reclamation, often with fatal consequences. Five children fell in abandoned mine pits filled with water in 2011 in Sambutan district. Two of the children died.

Back in Makroman, Komari, 70, a farmer who has worked the land for nearly 30 years, said that the water had changed in his area, affecting his produce.

“In the old days, it was so clear,” he said while walking barefoot among the rice paddy.

“I used to produce 8 tons [of rice]. Now, if we can produce 4 tons, we consider ourselves lucky,” he said.

Komari said that there had been little support for farmers. At the JATAM office, Kahar said that many politicians in the Samarinda and East Kalimantan council had a vested interest in mining, as they or their families were in the business.

Komari’s house is within Samarinda city limits, but the family is still not connected to the power grid. A generator is used to light the house at night and to power the water pump.

JATAM has been advocating for the rights of farmers in Makroman since 2008. Kahar muses about the lack of electricity there.

“Isn’t it ironic that we’re sending our coal overseas to power other countries’ power plants and next
to the coal mines here, houses are powerless?”

— JP/Prodita Sabarini and Nurni Sulaiman

 

The Jakarta Post | Reportage | Thu, January 17 2013

Escaping the ‘resource curse’: E. Kalimantan at the tipping point

Back to back: A coal mine adjacent to a rice field in Makroman, Sambutan district in Samarinda, the capital of Indonesia’s third-richest province. Its deputy mayor has said the municipality is determined to tighten supervision of the industry in the face of environmental degradation and “highly sensitive” issues regarding mines around the rapidly growing city. (JP/Prodita Sabarini)

Can East Kalimantan become the “center of growth for East Asia?” This is the claim made by the East Kalimantan governor in what is indeed a promising province, judging by its economic figures alone. But, how can East Kalimantan’s leaders and people overcome this province’s ills; most notoriously, its environmental degradation? Prodita Sabarini and Nurni Sulaiman report from the cities of Samarinda, Tarakan and Tenggarong for this first of a two-part series.

Tugboats pulling pontoons filled with towering piles of coal glide along the Mahakam River at 8 a.m. Each of the pontoons can carry between 6,000 and 8,000 tons of coal.

Within 10 minutes, nearly 48,000 tons of coal pass underneath the Mahakam Bridge and are transported out to the Makassar Strait where it will be shipped to fuel power plants in other countries, such as China, Japan and South Korea. Indonesia was the largest exporter of coal in 2010, mostly due to activities like this in East Kalimantan. Government figures show that in 2011, the province produced 204.99 million tons of coal, 45 percent more than 2010’s 140.75 million tons.

The date Jan. 9 marks East Kalimantan’s anniversary since the creation of the province in 1957, when Kalimantan was split into three regions 12 years after Indonesia’s independence. Today, East Kalimantan is at a tipping point between either escaping or falling into the “resource curse”, a condition of dependency on the extractive industry hampering development of other sectors, and where a region’s growth will stagnate or contract as non-renewable resource reserves deplete.

The province’s leaders are optimistic. “The province is no longer a ‘sleeping giant’,” Governor Awang Faroek Ishak told The Jakarta Post, recalling President Susilo Bambang Yudhoyono’s assessment of the province.

The assessment is true in two ways. Its size is less gigantic: in October 2012, the House of Representatives passed a bill to create a new North Kalimantan province, splitting the area of East Kalimantan into East and North Kalimantan. Previously, East Kalimantan was the second-largest province in Indonesia after Papua. The second truism in the assessment, which was what Yudhoyono was referring to, is development and the region’s potential.

“East Kalimantan is running fast,” Awang said. He added that in the long term, East Kalimantan would be the “center of growth for East Asia”, pointing to the region’s strategic location and natural resources.

The realization of Awang and Yudhoyono’s dream is yet to be seen as East Kalimantan plans a number of projects, such as a special industrial zone and international port in Maloy, East Kutai regency; 6 million hectares of oil palm plantations, also in Maloy; and a Balikpapan-
Samarinda toll road that will be the local equivalent of the Pantura (Java’s North Coast Road). “All these are long-term programs. The third governor after my tenure will enjoy the fruits of this,” Awang said.

A day before the province’s 56th anniversary, Awang stood before the provincial legislative council in Samarinda and listed the achievements of the province — the highest contribution to the country’s export output; third in competitiveness after Jakarta and East Java; third in the value of foreign and local incoming investment; and so on. Awang, 67, is a big man, whose public-speaking mannerisms resemble that of the President. His hands waved and bounced in the air as he spoke.

Awang’s speech highlighted that resource-rich East Kalimantan was a rising region in Indonesia. Millions of dollars of investment are pouring in and commodities, mostly oil, gas and coal, are pouring out. Awang mentioned that the province contributed the most in 2011 to the country’s export output with a value of US$37.97 billion. This was more than 50 percent higher than the previous year’s export output of $25.12 billion. As of October 2012, its export output stood at $27.71 billion. In 2011, it had the highest gross regional domestic product (GRDP) per capita in the country, standing at Rp 105.85 million (US$10,986) per year.

But East Kalimantan’s achievements are not without consequences. A ride around the capital shows the environmental destruction of Samarinda. Being the capital, it is a telling example of the shape of things to come in the rest of province’s regions. The city is surrounded and squeezed in by mines. In all directions from the city center, hills are sliced and chopped. Red and dusty barren land has replaced the once green jungle. The mines are very close to residential areas, causing in 2009 houses in a Samarinda district called Loa Kulu to subside due to a landslide, according to Said, a local resident.

Concerns are also mounting, given that the province’s coal reserves will eventually be exhausted, that East Kalimantan’s non-renewable-resource economy faces the inevitable risk of coming to a halt. The province is highly dependent on these resources with more than 70 percent of its GRDP coming from them.

The East Kalimantan Mining Advocacy Network (JATAM) likens the current mining boom to that of the logging boom two decades ago, when the timber industry thrived between the late-1970s to late-1990s. Coordinator for JATAM’s East Kalimantan chapter, Kahar Al Bahri, said that the timber industry, which had evicted indigenous people from their ancestral forestland, folded when the forest could no longer produce timber. “The same thing will happen with coal mining. We predict a 20-year cycle of a resource boom. It was 20 years for the timber industry, and we estimate the coal boom will not last longer than 20 years. By 2030, the coal resources will be depleted,” he said. Government figures estimated that East Kalimantan coal reserves in 2011 stood at more than 8 billion tons, lasting 50 years based on the assumption of 150 million tons being produced each year.

Kahar said that extractive industries showed the illusion of economic growth as they required millions of dollars worth of investment and yielded millions of dollars in profits for companies. “But they don’t create that many jobs,” he said. While the province’s GRDP is highly dependent on extractive industries, only 5.6 percent of the working population is employed in these industries. More than 50 percent of the population depends on agriculture.

“At the village level, there seems to be an effort to destroy village communities. People used to be able to live off the forest and have farms, but their yields have now halved and farming areas are shrinking to make way for mines,” he said.

On paper, the government appreciates the yawning gap between extractive industries and other sectors and the environmental degradation the industries are causing. The government is working to change the economic structure of the province by prioritizing agriculture and oleo-chemical industries.

However, skepticism is strong. The government’s plan for agriculture focuses on large-scale agriculture rather than on small landholdings, such as the 50,000-hectare Food Estate Delta Kayan Bulungan in Bulungan regency, now part of North Kalimantan. Margaretha Seting Beraan from the Alliance of Indigenous Peoples (AMAN) also doubts whether indigenous people’s rights will be respected during the establishment of industrial zones in Maloy.

Meanwhile, another sector that needs attention to escape the resource curse is human capital. East Kalimantan has allocated Rp 70 billion for scholarships since 2009, with more than 73,000 recipients through 2012. In collaboration with the Education and Culture Ministry, the province plans to also establish a Kalimantan Institute of Technology in Balikpapan. A hundred people were being sent to study at the Surabaya Institute of Technology (ITS), Awang said, and some 300 hectares of land would be allocated for the new school.

“We want to have our own ITB [Bandung Institute of Technology] and, hopefully, one that is better than that,” Awang said.

The Jakarta Post | Reportage | Thu, January 17 2013

Shop and do good at the malls

To remind mall-rats that their money can serve other purposes than simply shopping, Islamic charity organizations have gone to the malls and opened for business.

Alms foundations, such as Dompet Dhuafa and the Community Caring Justice Post (PKPU), have set up counters in various malls and shopping centers. That way, whenever Muslims go to shop they are reminded that they also have a duty to give away some of their money to the less fortunate, particularly ahead of the highly consumptive Idul Fitri celebrations.

“We can’t just wait passively [to collect alms]. We have to, as the saying goes, ‘get on the ball’, and we see that potential zakat [alms] payers go to malls,” Dompet Dhuafa executive director Ahmad Juwaini said.

Zakat, mandatory alms, is one of the five pillars of Islam. Paying zakat through malls breaks from the tradition of channeling it through mosques or giving it directly to the needy.

Dompet Dhuafa, the private alms foundation that pioneered professional zakat management in Indonesia in 1993, first opened their counters in office buildings, such as the Jakarta Stock Exchange, according to Ahmad. Eventually, they spotted the potential of malls.

In Jakarta, its counters can be found at Senayan City and Plaza Senayan, as well as Blok M Plaza and Pejaten Village.

Handaka Santosa, head of the Indonesian Association of Shopping Centers (APPBI) said that shopping centers were commonly used as meeting points. “We can use them to create awareness of zakat and provide the facilities for that,” he said.

The emergence of Dompet Dhuafa has led to the establishment of 19 national private alms foundations in addition to the government-run National Alms Agency (BAZNAS) and its regional chapters. Zakat collection by these faith-based charitable organizations continues to rise with an average increase of 24 percent annually. Last year, the organizations collected Rp 1.7 trillion (US$178.5 million).

Ahmad said that while the majority of zakat donations come through online bank transfers, donations from zakat counters in malls can account for more than Rp 1 billion.

PKPU deputy CEO Sri Adi Bramasetia said that counters at malls were quite effective in collecting mandatory and voluntary donations. Last year, the counters collected Rp 1.8 billion in mandatory and
voluntary alms, he said.

In addition, Ahmad said, “because the owners and managers of other counters in the malls see us every day, we reach them as well.”

Prodita Sabarini, The Jakarta Post, Jakarta | Headlines | Tue, August 21 2012