Geography Reference
In-Depth Information
following the NIC model, has only happened since 1985, but it has been
spectacularly rapid. Up to the 1980s, the only industries were those making
small consumer items, and resource-processing industries like the manufacture
of plywood. Now the industrial spread of products has become very wide, and
there are exports of garments, textiles, electronic goods, petrochemicals,
synthetic fibres, motorcycles, as well as the older established plywood, oil and
gas, and cement. In the 1970s there was some tendency to expand the state sector
with a new steel industry and fertilizer and cement works, as oil revenues gave
the opportunity for state intervention. Indonesia remains heavily dominated by
state-led industries, but the private sector is expanding and privatization is now
in progress. Most of the industry is concentrated in Java, and the large industrial
complexes are located around Jakarta in the west and Surabaya in the east.
Rapid expansion of the population, a major problem under Sukarno, was
checked by family planning which was gradually extended over the whole nation
through the 1970s. Economic growth, and in particular exports, was further
stimulated by the opening up of major raw material sources: oil and gas in
Sumatra and Kalimantan, and forestry in many of the islands.
Regionally, Indonesia could be said to have been suffering from the kind of
problems experienced in Latin American countries, where huge underdeveloped
interior regions tempt populist governments to invest heavily in resource
development and thus squander away vital funds for human resource
development. Major investments were certainly made in the oil and gas industry,
and this industry has consistently accounted for over 70 per cent of exports for
the country. This oil and gas, mostly in northern and central Sumatra and on the
island of Borneo (Kalimantan), was located in a resource frontier, creating the
imbalance seen in Latin America between such frontiers, with poor people but
rich in natural resources, and a rich centre with few resources on the island of
Java. There were and still are strong regional disparities in incomes. In 1971
(Hill 1991), using an index of Indonesia as 100, the poorest province, East Nusa
Tenggara, had a GDP per capita of 48, against Jakarta's 248. In 1983 the figures
for these two provinces were 54 versus 276. These figures excluded oil revenues
from the calculation. Including them would mean that provinces such as
Kalimantan have levels of over 600, increasing the regional differences.
Indonesia thus presents an example of rapid development despite its tendency
to resource-led development. But it does not really present a model different from
the NICS. Much of the development is in Java and around the great metropolis
of Jakarta. This city's population of some 9 million in 1993 looks modest
compared with a national population of 190 million, but considering the spatial
pattern of scattered islands, it is large. Most industries are highly concentrated
here, apart from the resource-based ones. Foreign investments have mostly been
made in Java, 21.5 per cent in Jakarta and 21.6 per cent in the rest of Java in the
period 1967-85. The benefits from industrial development are also concentrated,
as shown by the interregional differences in income levels. Oil extraction did
indeed present a distraction in the 1970s, which very nearly put development off
