By Ben Otto
JAKARTA, Indonesia--President Joko Widodo is trying to shake off
early political setbacks and press ahead with his pledge to bring
infrastructure and development to the farthest corners of his
sprawling archipelago nation.
In particular, remote and impoverished Papua has caught Mr.
Widodo's attention.
For the second time since taking charge of Southeast Asia's
largest economy last year, Mr. Widodo this month visited the far
eastern region, more than 3,000 kilometers (1,900 miles) from the
capital, Jakarta, to suggest the restive area is turning a page on
history, poverty and a tenuous connection to the rest of the
country.
Papua, a sparsely populated territory of port towns, highland
villages, natural forest and the highest mountains in Oceania, lies
closer to Australia than it does to the power centers of western
Indonesia. The region has long been home to multibillion-dollar
mining and petroleum projects by Arizona-based Freeport-McMoRan
Inc. and BP PLC, but remains one of the poorest areas in
Indonesia.
But an undersea fiber optic cable is slowly working its way to a
frontier region now served by satellites, and Mr. Widodo said he
would speed up construction of a 4,000-kilometer highway running
across what amounts to a fifth of all land area in Indonesia, a
vast nation of 18,000 islands strategically straddling the Indian
and Pacific Oceans and some of the world's busiest shipping lanes.
He visited the construction site of a stadium that will allow Papua
to host Indonesia's national games for the first time.
Though those projects were in train well before Mr. Widodo
arrived in office seven months ago, he has enthusiastically adopted
them as he tries to breathe new life into infrastructure projects
and widen economic development beyond a few industrialized hubs in
the country's west.
Mr. Widodo also freed five political prisoners from among dozens
jailed for their roles in a secessionist movement that has long
dogged Papua and underpinned a large role for the military in
governing it. In most other regions in Indonesia, the military's
role shrank following the ouster of authoritarian ruler Suharto in
1998.
Overall, investment in Papua is minimal, in large part because
poor infrastructure blocks companies from feasibly tapping into the
region's enormous natural resources potential. Last year,
non-oil-and-gas investment in Papua totaled about $1.4 billion,
less than 4% of the country's total investment. Almost all of that
was foreign investment, with Freeport alone pouring nearly $1
billion into its mining operations.
"The industry has been held back more by high costs than by
security concerns," one foreign oil-and-gas consultant said.
"Projects there need frontier-type fiscal terms to work."
The territory was ruled by the Dutch until the 1960s, then
joined Indonesia after a controversial, U.N.-backed referendum in
1969. An enduring secessionist movement known as the Free Papua
Movement (OPM) has led to decades of virtual military rule. While
the rebellion has long faded, tensions with security forces
remain.
Analysts said that freeing the prisoners was an early gesture to
suggest Mr. Widodo's administration would go further than past
governments in bringing the 3.6 million Papua residents, about half
of whom are of Melanesian ethnicity, a distinct minority in
Indonesian, further into the fold of a nation of 250 million
people.
"Papua needs, more than anything, political attention from
Jakarta and an opening to the world, if Papuans are ever to feel at
home in this country," said Paul Rowland, a Jakarta-based political
analyst.
Part of that opening entails building up the infrastructure that
will spur on new investment not just in Papua, but across eastern
Indonesia. On his way to Papua last week, Mr. Widodo stopped off in
the Maluku island chain to remind people of his plans to renovate a
large seaport there, and once in Papua, drew attention to a new
port he'd build in the territory's far west.
Both are emblematic of Mr. Widodo's belief that maritime
development in the expansive archipelago country will be key to
boosting exports and lowering crippling logistics costs to spread
the wealth of Indonesia--a nearly $900 billion economy--more
evenly. The president is fond of comparing the price differences of
cement in Java and Papua--$6 a bag versus $150, he says--to make
the point.
Papua is home to Indonesia's largest forests, and by some
estimates half of all its copper. Freeport's Grasberg mine in the
Papuan highlands is the largest in Indonesia, and the government's
single largest source of tax revenue. BP is considering a $12
billion plan to expand its natural gas operations.
Mr. Widodo still faces questions about project execution that
have plagued the early-going of his administration. Investment
spending, and efforts to unstick several major projects, are behind
schedule. Already there's talk of a cabinet reshuffle.
In Papua, there's "no coherent strategy on this, as everything
else," said Sidney Jones, head of the Jakarta-based Institute for
Policy Analysis of Conflict. Mr. Widodo's moves were "nice
gestures, but who's in charge?"
Write to Ben Otto at ben.otto@wsj.com
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