UPGRADING IN PROGRESS

Indonesia 2018 | ECONOMY | INTERVIEW

TBY talks to Irwan Prayitno, Governor of West Sumatra, on the strength of Sumatra's agricultural sector, projects to boost infrastructure, and diversification into other industries.

Irwan Prayitno
BIOGRAPHY
Irwan Prayitno was elected for the first time in the 2010 elections for a five-year term. In 2016, he was elected for his second term. Before his election as governor, he served as a member of Indonesia’s Parliament (DPR-RI) from the election region of West Sumatra for three consecutive periods spanning 1999-2014. He holds a bachelor's degree in psychology from the University of Indonesia and a master's and a PhD from Putra University in Malaysia.

What has contributed to the stable economic growth in the last year?

In West Sumatra, the economy is primarily based on agriculture. More than 60% of the workers are in the agriculture sector and agriculture right now is the dominant gross regional domestic product (GRDP) economic growth indicator at 23.8%. The economy in West Sumatra is based around palm oil, rubber, and many other forms of agriculture, and therefore, the growth of the economy is relatively stable YoY. In West Sumatra, economic growth is slightly higher, at 5%, than the national 4.9%, according to the latest figures. There is some impact from the global and regional situation here on our economy in West Sumatra; however, it is not that big since we rely on agriculture. Besides agriculture, the budget from the central and local government is relatively stable, and this is one of the impacts on the growth of the economy. Exports and imports are stable because of the commodities we export.

What are your plans for the upgrade of infrastructure?

The west side of Sumatra island has limited traffic for international trade compared to the eastern side of the island, which has traffic to Malaysia and Singapore. If we open the district from the west of Sumatra island to the east with a road corridor, then commodities from the west can be moved throughout the region. We have the best seaport on the coast of Sumatra; therefore, if the commodities from the other province can move to ours, then they go directly to Europe, the Middle East, and India. The Straits of Malacca are already crowded, so this is a great opportunity. In addition, the commodities from West Sumatra can go to the seaport in the east to go to Singapore and Malaysia. If there is a toll, then we have an opportunity for further revenue generation and economic growth. The president prioritized building the toll road from the west to east, and the central government is spending money to invest in the road, which is currently being planned and undergoing a feasibility study. We are now studying how to prepare the land for the toll road with the money from the central government. In 2018, work on the toll road will start, though we are also open to investment by industry leaders in West Sumatra. In the other provinces, like Bali, there are toll roads that are joint ventures between the private sector and the government, and we invite investment. This is an opportunity for us to also work this way together through government budget and private sector investment. If the budget is the private and public sectors together, then the private sector will get a feasible benefit.

What are your ambitions for your current five-year term as governor?

West Sumatra has many characteristics, including geography, demography, and the character of the ethnic culture. If we have the ambition to make West Sumatra a developed province, then we have to consider these characteristics. For example, we cannot build or develop industry in West Sumatra because it is not suitable or feasible for some commodities since industries require many workers, which is a problem in the province. The majority ethnic group in West Sumatra is the Minangkabau people who do not want to work in industry as laborers as they are traditionally entrepreneurs and traders. For the infrastructure projects, you will find that the workers are from Java, not West Sumatra. Rather, high-tech industries and manufacturing can be developed as the work is specialized and will be attractive to the Minang ethnic people, who are able to work in expert roles that command a higher salary. The infrastructure of the toll road is our ambition as this will open the economy to manufacturing, not only in agriculture but also in high-value and high-tech industries.