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Four years needed for Central Sulawesi recovery
The economy of Central Sulawesi is expected to fully recover in four years, after devastating earthquakes and a tsunami in Sigi and Donggala regencies as well as land liquefaction in Palu city caused widespread destruction last September, a government official has said
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span>The economy of Central Sulawesi is expected to fully recover in four years, after devastating earthquakes and a tsunami in Sigi and Donggala regencies as well as land liquefaction in Palu city caused widespread destruction last September, a government official has said.
Patta Tope, head of the Central Sulawesi Provincial Development Planning Agency, said recently that the natural disaster had damaged the province’s economy, with growth plummeting 4.49 percentage points to 1.75 percent from 6.24 percent.
In order to fully recover in four years, he said, incoming investment in the province should grow 25 percent annually until 2022.
He said declining economic growth had also triggered a rise in the number of people classed as poor in the province by 18,400. The number would bring the total number classed as poor to 438,610, or 14.42 percent of the provinces population, he added.
“But with the post earthquake economic recovery efforts, the poverty rate, especially in Palu, Sigi and Donggala, can return to its previous level in three years,” he said in Palu.
The National Disaster Mitigation Agency has estimated that the total value of losses caused by the earthquakes, tsunami and liquefaction could reach Rp 15 trillion (US$1.02 billion).
Inflation in the province was projected to increase to between 6.63 and 10.28 percent from 3.65 percent, Patta said.
As many facilities were damaged, job creation in the province was expected to decrease to 18,372 from 30,168, initial projections show.
“[The worst affected industries for employment will be] transportation, construction and manufacturing,” he said.
Despite the devastating situation, Andi Mulhanan Tombolotutu, president director of Bangun Palu Sulawesi Tengah, expressed optimism that the province would need less than four years for economic recovery as investment in the special economic zone (KEK) in Palu was increasing.
Bangun Palu Sulawesi Tengah is a company owned by the regional administration, appointed as the Palu KEK authority.
He said the natural disaster did not discourage investors from investing in Palu KEK, which is built on a 1,500 hectare plot of land encompassing North Palu and Tawaeli districts.
A number of companies, he said, had come to Palu and were to invest in the KEK soon. Among the companies are PT Indo Mangan Industri, PT Sarana Dwima Jaya and PT Hashimoto Gemilang Indonesia.
For instance, PT Indo Mangan Industri, a British-Indonesian joint venture, is building a Rp 1.2 trillion manganese smelter. “It is expected to be completed in a year and start operation by 2020,” said Mulhanan.
Meanwhile, PT Sarana Dwima Jaya is building a factory with a Rp 100 billion investment value, which is expected to start operation in April next year.
Mulhanan said companies operating in Palu KEK had resumed operation three days after the earthquakes. Among them was PT Hongthai International working in the pine sap industrial sector, with an investment value of Rp 13.7 billion and employing 110 workers.
Other companies include coconut processing company PT Sofie Agro, which is to invest $1.38 million and employ 625 workers, Agro Sulteng Group with a Rp 300 billion investment employing 450 workers and PT Asbuton Jaya Abadi with Rp100 billion in capital employing 100 people.
Agro Sulteng Group works in the rubber and essential oil industry, while Asbuton Jaya Abadi manufactures cold mix asphalt.
