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Social Economic Problems in Agricultural Development in East Nusa Tenggara and East Timor

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Social Economic Problems in Agricultural Development in East Nusa Tenggara and East Timor Ekonomi d<in Keuangan Indonesia Volume XLIV Nomor 1, 1996 Social Economic Problems in Agricultural Development in East Nusa Tenggara and East Timor Daniel D. Kameo Abstrak Pokok kajian dalam artikel ini menyangkiit dua hal. Pertama, kajian tentang berbagai hambatan sosial ekonomi yang menjadi tantangan dalam upaya pembangunan pertanian di Nusa Tenggara Timur dan Timor Timur dan kedua, identifikasi potensi sektor pertanian dan pemikiran altematif strategi pembangunan pertanian di daerab ini. Hambatan sosial ekonomi yang menonjol adalah kemiskinan, teknologi dan ketrampilan, kelemahan-kelemahan institutional, hambatan lokasional keterbatasan infrastruttur, kondisi alam, dan tekanan penduduk. Pada bagian akbir dari artikel ini dikemukakan altematif strategi kebijakan pembangunan pertanian di daerah semi-arit Nusa Tenggara Timur dan Timor Timur dan usulan topik-topik studi pendutung yang hasilrya dapat dipakai sebagai dasar yang kuat dalam penentuan berbagai kebijakan pembangunan pada umumnya dan pembangunan pertanian pada kbususnya di daerah ini. 33 Kameo I. INTRODUCTION A. Background Judging from some of the major social economic indicators and comparisons with other Indonesian provinces, one might easily conclude that East Nusa Tenggara and East Timor are regions that face major development problems in the future. One could also point to poor natural resources and harsh physical conditions as the underlying causes of this regional poverty. After twenty-five years of development efforts under the New Order government. East Nusa Tenggara is still one of the poorest provinces in Indonesia. It has the lowest per capita GRDP and purchasing power which is a reflection of limited output and low productivity. Subsistence agriculture-based activities still dominate the economy. In 1993, 22.7% of the rural population and 16.4% of the urban population lived under the poverty line (BPS 1994a). East Nusa Tenggara has the highest poverty index after East Timor, Maluku, Irian Jaya and West Kalimantan. East Timor's situation was even worse to begin with. As development efforts began twenty years ago after the integration of the region as an Indonesian province in 1976, East Timor was facing innumerable multidimensional problems. As is so well stated by Soesastro (1991, p.207), prior to 1974 East Timor had languished for centuries as a neglected colonial backwater. Ruled by an ailing power on the opposite side of the world for nearly 400 years, neglected for centuries, it remained as one of the most isolated and backward regions in the world. Although the Portuguese administration did make some belated attempts to develop the province during the last few years of its rule, it still showed all the symptoms of colonial neglect and indifference. The Timorese participation in the economy was negligible and confined mainly to subsistence and smallholder agriculture. Business was controlled by the 14,000 Chinese living there, as well as a few Portuguese and Goanese. Health standards were very poor. Most of the infrastructures, concentrated only in Dili, had not been built imtil the early 1960's. That was, in part, a picture of East Timor when the development process began 20 years ago, which is not an easy and 34 Social Economic Problems in Agricultural Development favourable start to the path of development. In 1993, 26.24% of the East Timor population was living below the poverty line and 70.6% of the 442 villages in East Timor were classified as impoverished (desa tertinggal) (BPS 1994d). In most of these villages, poverty is readily apparent in the poor housing of the people, unsanitary conditions, shortage of clean drinking water, inadequate diets, signs of malnutrition in children and skin diseases (Kameo 1994a). In 1994, BKKBN conducted an assessment survey to describe the level of family prosperity using composite measures from 13 variables. Families were categorised into five categories from the Pre-Prosperous family (PraKeluarga Sejabtera/Pra-KS) i:e. diose families unable to meet such basic needs such as adequate food, clothing, housing and health; to the Prosperous family III plus (KS UEP), i,e. families able to meet basic needs, physiological and development needs and to contribute to social and religious activities. As shown in the following table. East Nusa Tenggara and East Timor have the highest percentage of families living in the Pre-prosperous category. Table 1 The Socio-Economic Status of Families According to the 1994 BKKBN Keluarga Sejahtera Census Province/Region Category of Tamlly Pirtsperity" (%) Pra-KS KSI KSII KSlll KSill+ Total East Nusa Tenggara 70.8 21.5 6.5 1.1 0.1 100.0 East Timor 78.5 13.4 5.3 2.4 0.4 100.0 Average of Easternmost Indonesia 54.1 30.3 10.9 3.6 1,1 100.0 Indonesia (National average) 29.1 33.7 22.8 11.4 3.0 100.0 Source: BKKBN, 1994, Sensus Keluarga Sejahtera (unpublished results) quoted in Handayani and Hull, "The Famih and its well-being', in Jones and Rahardjo,1994. As is the case in many other provinces in Indonesia, agriculture is the main contributor to the regional economy and to the economic welfare of the people. The agriculture sector in East Nusa Tenggara and East Timor makes the greatest contribution to the regional economy. In fact. East Nusa Tenggara is the only province in Indonesia with an agriculture sector contributing more than 50% to its GRDP. On the contrary, the contribution of industry to the economy of East Nusa Tenggara and East Timor are the two lowest ones in the country. 35 Kameo Within the agricultural sector itself, the farm food crops sub-sector is donunant. This sub-sector contributes 55.9% and 54.8% to the total agriculture product in East Nusa Tenggara and East Timor respectively. The second important sub-sector is livestock in East Nusa Tenggara, contributing 23.3%, and farm non-food crops in East Timor, contributing 23.5 percent to the total agriculture output. It is also important to note that both in East Nusa Tenggara and in East Timor the public administration and defence sector is the second main contributor to the GRDP. In fact, this sector contributes more in these two regions than it does in any other region of the country. In 1992, it contributed almost 207o to the economy of East Nusa Tenggara and East Timor, while it only contributed 7.1% to the national economy. This statistic indicates that government expenditure plays a significant role in the economy of these two provinces. Total domestic and foreign investment in East Nusa Tenggara is the lowest in Indonesia. In the 1968-1992 period only 0.1% of the foreign investment and 0.37o of the domestic investment in Indonesia were invested in East Nusa Tenggara. Table 2 shows that the per capita GRDP in East Nusa Tenggara is only 347o of the national average and in East Timor it is 407o. This low income is also reflected in low purchasing power as shown by the figures in the following table on monthly per capita household expenditures and the higher percentage of household expenditure used for food. Table 2 Main Economic Indicator of East Nusa Tenggara and East Timor West Nusa Tenggara Fast Timor taAamialNalionai ImHcalors t ,. ' Avarajee) 1987 1992 1987 1992 1987 1992 Sectoral contribution to CROP (%)•: -Agriculture S2.0 46.7 39.7 38.6 25.7 18.5 -Industry 2.07 2.14 1.09 1.66 17.2 20.6 Average CROP growth rate 1987- 1992 (%) CROP per Capita (Rp)" 275,226 489,757 247,066 570,283 743,194 1,408,687 * At 1983 constant prices ** At current market prices Source: BPS, 1994, GRDP of Provinces in Indonesia by Industrial Origin 1987 1992, Jakarta. 36 Social Economic Problems in Agricultural Development Table 3 Percentage Distribution of Population by Expenditure Classes and Percentage of Average per Capita Monthly Expenditure for Food in 1993 Household Expenditure Ea^ Nusi) East Timor Indonesia Tengeara _ Expenditure classes: Up to Rp 40,000 86.8 80.0 62.4 Rp 40,000 - Rp 60,000 8.5 10.6 19.9 Higher than Rp 60,000 4.7 9.4 17.7 Household Expenditure for food (%) 67.2 62.6 56.8 Source: BPS, 1994, Statistical Yearbook of Indonesia 1993, Jakarta (Table 10.2.11. p.590-91) BPS, 1994, Expenditure for Consumption of Indonesia per Province 1993, Jakarta (Table 1. p.27) B. Problem Statement From the macro economic outlook of these two provinces given above, one could draw the conclusion that the people and the economy of these regions are depending on an economic sector that is not able to support either the economy or the economic welfare of the people. Development efforts are challenged by the dilemma of a heavy dependence upon agricultural activities on the one hand and poor semi-arid land on the other. This condition is more or less indicative of the great challenges faced by the people and the government in these regions if the agricultural sector is to remain the major source of income. Identifying both the socio economic obstacles to agricultural development and the potential that can be developed would help the people and the government in these regions to decide on the best possible policy alternatives for their future. i II. CHALLENGES IN AGRICULTURAL DEVELOPMENT The following section discusses social-economic and institutional aspects that have been obstacles in the past and will continue to challenge development efforts, particularly agricultural development in the future. Ignoring these variables in designing any development programmes for these regions, especially in agriculture development, would most likely lead to failure. 37 Kameo A. Poverty As shown in the figures above, poverty is still the main problem in these provinces. Indeed, poverty arises from the poor natural resources and harsh physical environment but poverty also reinforces itself in a vicious circle.
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