Provinces in the eastern part of Indonesia are seeing robust economic growth in the third quarter thanks to higher commodity prices, but without diversification away from commodities the regions may not sustain such rapid growth, economists say.
While the nation’s overall economic growth was 5.02 percent in the July to September period yearon-year (yoy), provinces in eastern Indonesia saw higher growth, namely Maluku and Papua with 13.72 percent, Sulawesi with 6.67 percent and Bali and Nusa Tenggara, both with 5.04 percent, according to data from the Central Statistics Agency (BPS).
President Joko “Jokowi” Widodo said he wants to spread economic contributions from the eastern part of Indonesia to the whole archipelago and pledged to boost infrastructure development in the regions.
However, economists said the government’s efforts to build infrastructure on the outskirts of the country had yet to bear fruit as they required more time before affecting the local economies. Instead, the rising prices of mining commodities have become the main reason for the spike in growth in eastern parts.
“Improvements in commodity prices, such as gold in Papua, caused the jumping growth,” University of Indonesia (UI) economist Lana Soelistianingsih said on Monday following the data release.
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