The ‘Indonesian lobby’ is once again mentioned as a talking point regarding West Papuan issue. This time, a statement was made by Gary Juffa, Governor of Oro, Papua New Guinea. Following a statement by Tara Kabutaulaka, an academic from Vanuatu, Juffa echoed his statement by saying that there seemed to be something wrong with what is happening in West Papua.
Kabutaulaka directly pointed finger on Indonesian government, saying that Solomon Islands’ change of stance was a result of “Indonesia’s growing political influence in the region”. DR. Kabutaulaka spoke for 6 minutes at the Australian radio network abc.net.au. DR. Kabutaulaka also regretted the decision to include Indonesia in the Melanesian Spearhead Group, a major international forum consisting of nations with Melanesian ethnic population.
Indonesian trade deals: Gateway to ASEAN and Beyond
The Indonesia-Solomon Islands trade relations has shown nothing of abnormality. The steady yearly growth of 17% shows that imported goods from Indonesia is gaining acceptance in Solomon Islands.
Indonesia, however, is seen as a gateway for Pacific island countries like Solomon Islands to start bigger businesses with the ASEAN countries. As the biggest market in ASEAN (also strong in military power), newly emerging economies in the Pacific will see Indonesia not only as a market, but as a partner who gives the invitation to ASEAN meetings. With so many regional communities like ASEAN+3, ASEAN-China Free Trade Area, a good relationship with Indonesia is seen as lucrative.
Solomon Islands has opened their embassy in Jakarta since August 2014, while Indonesian embassy in Port Moresby is also accredited to Solomon Islands. Indonesia is a gateway for Pacific countries to enter the ASEAN and Asian region, while Indonesia wish to increase its influence in Pacific region. Both countries are the members of Melanesian Spearhead Group (MSG).
Solomon Islands, as one of the least developed countries in the world is seen by experts as soon to be graduating into developing country. Least Developed Countries (LDC) is a category issued by the United Nations in 1971, to increase the awareness of the rest of the world. There have been only five countries graduated from LDC status since 1971. With Indonesia supplying around 3% of Solomon Islands’ imported goods value, the trade between two countries has a lot of room for improvement. West Papua is, apparently, the eastern part of the gate that connects Pacific island countries with the rest of Asia.
The Stance on West Papua
In the case of West Papua, Solomon Islands is no stranger. In 2016, the bilateral relations worsen as during United Nations General Assembly, Solomon Islands Prime Minister Manasseh Sogavare alleged the human rights violations in the Indonesian provinces of Papua and West Papua, and also push for the independence of the said provinces. Solomon Island pushed this issue together with Vanuatu, Nauru, the Marshall Islands, Tuvalu and Tonga. Indonesia strongly rejected this accusation and accused these countries of interfering with its domestic affairs and Indonesia’s national sovereignty. Indonesia saw this statements as politically motivated to support separatist groups notorious for its terrorist attacks. Indonesia in turn slammed Solomon Islands and Vanuatu on their own domestic human rights problems. Later on as we know, Solomon Islands changed its stance on the issue.
The Indonesian Soft Power
In conclusion, Indonesia’s presence in the Pacific region is a form of soft power: a non-coercive force which simply attracts other nations to cooperate. In the form of economic and possibly cultural attraction, Solomon Islands, the Papuan peoples, and other entities might have realised that Papua, and the world in general, would be better off with West Papua being an integral part of Indonesia and as the gate for Pacific island countries to the rest of Asia.
“Indonesia has a high added value in the palm oil industry. I want to encourage Indonesian companies to develop oil palm in Solomon Islands,” the president noted. Besides oil palm, Indonesia hopes to work together with the Solomon Islands in the fishing industry. The president hopes that this industry can become an important sector in the economic cooperation of Solomon Islands.
Meanwhile, in the field of tourism, Indonesia is ready to help the Solomon Islands to develop tourism, especially “eco-tourism.” Several regions in Indonesia have developed environment-based tourism. “Indonesia is also ready for cooperation in the field of maritime affairs, especially coastal development and disaster management,” he continued.
At the meeting, the president also expressed his appreciation for the firm position of Solomon Islands to respect Indonesia`s sovereignty.
“I appreciate the position of Solomon Islands to support Indonesia`s territorial integrity. I appreciate Your Majesty`s view of developments in Papua,” Jokowi remarked. To the PM of Solomon Islands, Jokowi also explained the development that had been carried out in Papua and West Papua in the past four years.
“The evelopments include construction of 4,174 kilometers of roads, 7 airports, and 15 ports; improvement of public health and education services; community economic empowerment; and one-price BBM policy. With this development, I am sure that the welfare of the Papuan people will be better, “he asserted.
The president was accompanied by the Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan, Minister of Foreign Affairs Retno Marsudi, and Minister of State Secretary Pratikno. In addition, the Head of the Investment Coordinating Board (BKPM) Thomas Lembong, Indonesian Ambassador to Papua New Guinea Ronald J.P. Manik, Director General of Asia Pacific and Africa, Ministry of Foreign Affairs Desra Percaya, and Special Staff of President Adita Irawati were also present during the meeting.
The Solomon Islands’ economy grew by three and a half times between 2003 and 2016. In the first of a two-part series, Business Advantage PNG talks to Jay Bartlett, Chair of the Chamber of Commerce and Industry (SICCI) about the challenges and opportunities facing this key Pacific economy. The Heritage Park Hotel in the capital of the Solomon Islands, Honiara. The hotel is majority-owned by PNG’s Nasfund. Source: Heritage Park Hotel
Bartlett says agribusiness, mining and tourism are three sectors with potential. ‘With agribusiness, there is a lot of scope and a lot of opportunity. Much of the population is rural and a lot of the population is already engaged in the informal sector in agriculture.
The Chamber of Commerce and Industry’s Jay Bartlett
‘So, we could possibly look at ways where we can value-add; look at the supply chains and make markets more accessible—domestic markets and maybe also regional and international markets.
‘There is a lot of scope to directly impact people working in the rural and informal sectors.’
At the moment, Bartlett says, the Solomon Islands’ biggest agricultural export is palm oil. The main player is Guadalcanal Plains Palm Oil (GPPOL), which is majority-owned by New Britain Palm Oil (itself owned by Malaysia’s Sime Darby).
‘They are looking at a significant program to expand over the next five to ten years in the Guadalcanal plains, which will likely triple the production.
‘We should be exploring and driving innovation in some of the niche products.’
That has a lot of scope to improve our export sector and create a lot of jobs for the community and the economy.’
There is also opportunity with other crops such as coconut oil, taro, cassava and kava.
‘Those are obviously not going to be huge volumes,’ notes Bartlett. ‘They are done on a more small-holder scale.
‘But I think that has a lot of opportunity. We should be exploring and driving innovation in some of the niche products.’
Bartlett says shipping to smaller Pacific Islands is always expensive because of the lack of scale.
‘But I think the bigger challenge is access into markets, getting the right certification in place to enable some of our crops to go into some of the bigger markets, like Australia and New Zealand.
‘That is probably a bigger challenge than the actual physical logistics of it.’
Bartlett says the Solomons Chamber has been talking to government about broadening the tax base and diversifying the economy.
‘In Melanesia, land can be a quite complex and sensitive issue.’
‘For this to happen, the government needs to review the levels of taxes, both corporate taxes and PAYE (pay-as-you-earn).
‘At the moment, the tax system is quite complicated. If it could be simplified, made easier, it would catch a lot more and contribute more into the government’s revenue.
‘The other big fundamental issue that is ongoing is the land issue, which needs to be addressed. There needs to be more effort put into mechanisms that allow ownership structures to be put in place for customary land in order to open it up for development and investment.’
Bartlett says ‘some processes where local landowners can address land issues,’ are required. He points to the need for mechanisms ‘where we can formally register customary land through landowner groups or associations.’ He believes it is a long-term challenge.
‘We need to allocate resources today to enable that to be dealt with. In Melanesia, land can be a quite complex and sensitive issue and there is not one solution, due to the different island and cultural differences.’
There are also physical challenges. According to the World Bank, population density, at 20 people per square kilometre, is among the lowest in the world. The World Bank says significant funds are spent on small and medium-sized capital expenditures, but there are limited systems of financing for recurrent costs and ongoing maintenance.