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Adding Value Right at the Source

As major islands in Indonesia received better budget allocations from the central government, many rural areas outside Java and Sumatra are still overlooked. A recent shift in this trend means that the region is now more attractive to investors.

Most of coconut harvest in rural areas in Indonesia is still processed minimally into low value products such as black copra. As depicted in the photo above, husks are to be burnt below coconut meat separated by a bamboo platform. This process produces a thick smoke which is hazardous to the health of workers/farmers. Investment into these areas will help improve processing methods, thus improving the quality of life and increasing product value.

“The government is directly influential in the investment attractiveness of an area”

In the last couple of years, the Indonesian government has been shifting its focus on developing the infrastructure outside of Java. This means better roads, bridges and most importantly, more interconnected logistic routes from smaller islands to major International ports in Java. As local products are now more easily transported to global markets, more investors will come in and create value adding processes right at the source.

Major investments in Halmahera

Halmahera Island, located in North Maluku has been very a attractive region for foreign investments recently. As the global demand for electric vehicles grows, so is the need for nickel as the raw material for batteries. Fuelled by the nickel rush, huge mining operations are now running in the Weda Bay area with major foreign investments. Furthermore, the presence of smelter facilities also means that the mineral is value added locally first before being shipped away. The gold mining industry is also experiencing a boom in East Halmahera.

At the same time, agriculture produce from the region such as clove, nutmeg and coconuts have been mostly sold in crude form. However, the recent infrastructure development has attracted companies like Dewacoco to invest in a facility to process these materials. Agriculture processing is undoubtedly crucial for Halmahera economy. Not only does it open employment opportunities, it also brings in tax revenue for the local government.

Rapid development however can bring upon negative environmental effect on the pristine waters and forests of Eastern Indonesia. It is crucial for local communities and corporations to maintain sustainable practices. As with president Jokowi's pledge towards a zero carbon emission Indonesia, green sustainable projects will receive better loans and investments from international capitals. In summary, the development of processing facilities in areas with rich natural resources is beneficial to the local community. This is only possible with allocation for better infrastructure from the central government. Simultaneously, the government should also enact regulations that promote sustainable practices and make change to environmentally harmful practices.


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