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Good governance integral to green financing West Papua development
Creating an endowment fund for West Papua to develop with a sustainability focus must begin with foundational good governance at its inception.
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Forest guards: Local people trek the forest near their village of Sira in South Sorong, West Papua, on June 9, 2021. The people are entrusted to protect the community forest, which is also their source of living.
(Kompas/Ferganata Indra Riatmoko)
T
o say that Indonesia has shifted gears toward a greener future is an understatement. Pragmatically, the country’s direction to sustainability represents more than just values or principles, and also ensures economic survivability and progress amid global disruption.
According to a study by the National Development Planning Agency (Bappenas), shifting to a green economy can help realize the aim of creating 1.8 million jobs. Going green translates into growth. On the other hand, who reaps the fruits of development has always been the underlying issue. With rising inequality, this ambition needs to be met with the understanding that no one is left behind, especially West Papua province.
Indonesia’s commitment to West Papua will be a test for the nation on how it manages economic and environmental sustainability. Home to one of the largest forest areas in the country, vast pockets of biocultural diversity define the environment of the Papuan region.
As of 2012, the provinces of Papua and West Papua was home to more than 38 percent of Indonesia’s remaining primary forest. This equates to approximately 33.8 million hectares of remaining forest. At the same time, its diverse flora and fauna remain vulnerable to environmental degradation in the region, where Papua province has lost 663,443 ha of natural forest cover over the span of two decades. This exceeds the entire area of Brunei Darussalam.
Indeed, West Papua represents a convergence of economic growth as well environmental sustainability. This is an urgent issue that demands a solution, and can be addressed through innovative financing.
Enter the potential provided by a provincial endowment fund, an alternative financing scheme that would open a wide range of opportunities that, with the proper contingencies in place, can support sustainability initiatives.
Fortunately, the Indonesian government has recognized this opportunity and has paved the way through the development of relevant legal frameworks composed of Law No. 1/2022 on Central-Regional Fiscal Relations, which provides the avenue for regional administrations to develop a provincial endowment fund, provided that a social or economic benefit is present.
