2) Indonesia: Grasberg Copper Production Set to Plunge in 2019
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1) Not so clueless about Papua: an academic's call for more research on Papua
Date 1/9/2019 8:19:07 AM
(MENAFN - The Conversation) Most people, including me, often perceive that Papua, Indonesia's eastern most region, is one of the most underdeveloped and dangerous islands in the archipelago.
This is the result of a development policy during the New Order regime that neglected the eastern part of Indonesia for decades and only focused on building the island of Java , where more than half of Indonesia's 260 million population live . Such a policy has created economic inequality between the eastern and the western parts of Indonesia, and have caused a number of problems . These include poverty, lack of infrastructures development, poor bureaucratic performance, corruption, and separation movements.
But when I visited Papua for my PhD research on socioeconomic impacts of energy subsidies on fishermen communities in 2016, things have been changing. During my visit, I discovered interesting facts that are not found on latest research and publications on Papua.
This article aims to share some insights on Papua from my personal experience doing research there. I hope this article can encourage more research on Papua and can contribute to solve part of the problems in Papua.
Not as underdeveloped as we thought
Before flying there, scary perceptions of Papuan people holding machetes and arrows, surrounded by poverty, haunted me. But once I touched down in Sorong, West Papua, I saw a city that's very well-developed. And people there just lived their life as normal as people in other provinces. In the morning, children go to school, while sellers and buyers crowd local market. At night, many people hang out and sing in Tembok Berlin beach.
In fact, several capitals in West Papua and Papua, the two provinces in the island, resemble those in Sulawesi, considered as the most advanced Island in the eastern part of Indonesia.
Cities like Jayapura, Papua are more developed than Ternate, the former capital of North Maluku.
Gross Regional Domestic Product in Billion Rupiah 2017 (Data is processed from BPS-Ternate, BPS-Manokwari, and Dispenda Jayapura)
Statistics also show annual economic growths of two provinces in Papua are higher than the average national economic growth at 5.27% in the third quarter of 2018. In that period, Papua grew by 6.76% , while West Papua grew by 6.89%
After Soeharto's administration collapsed in 1998, violence and issues of disintegration emerged. The Indonesian government then offered special autonomy to several provinces, including Papua in 2001 . The special autonomy funds for Papua and West Papua have been increasing by 505% from Rp1.38 trillion (US$95.5 million) to Rp8.3 trillion since 2002.
Human development index to measure achievement in key dimensions of development including life expectancy, education and standard of living, also increased by 7.8% from 2012 to 2017. The figure is above the national average at 4.6% .
Despite such progress, poverty still lurks. In Papua, 27.62% of total population or around 917,681 people is poor. Meanwhile, 25% of the population in West Papua or around 214,000 still live in poverty.
Despite discouraging figures, the government has reduced poverty rate by 3.4% for Papua, and 1.94% for West Papua from 2012-2017. Meanwhile, during the same period, the national poverty rate went up by 1.84% .
The poverty issues are mostly due to an inefficiency of budget management and allocation.
However, based on my interview with an expert on philology Willem Burung from Cendrawasih University said that it is important to note that Papuans do not like to indicate themselves as poor as they believe that they have abundant natural resources.
Not as harm as we thought
During my fieldwork, I found Papuans very friendly, kind, and love to make jokes. I did not find any conflicts among the societies neither experienced rejection from them. I found it easy to mingle with them as I came from South Sulawesi and shared similar accent. This very welcoming gesture makes me hard to believe that they love to initiate conflicts.
However, the sample of my research only covers people who are living in the seashore. People living in coastal areas have better access to economy and information than Papuans living in remote mountains where most of the island's separatist movements are based.
These groups are partly motivated by socioeconomic disparity.
Different from the separatists, almost all my respondents said they embraced themselves as Indonesians and they do not demand an independence from Indonesia.
Some of them question the future of Papua should they separate from Indonesia as no one can guarantee that their lives will be better under the power of new regime.
'So what? it will just create more problems'.
Corruption problems
The media often reported that the central government have failed to stop the Papuan separatist movement despite government's financial support due to historical and political reasons.
However, apart from those reasons, I believe that the Papuan separatist movement still persists due to the central government's failures to address socioeconomic issues in Papua.
These issues derive from abuse of power by Papuan bureaucrats. Local administrations have gained their autonomy to govern their own business and economy since 2001. But corruption is rampant among local bureaucrats. I believe these people are the cause why inequality continues to persists in Papua and continue to provoke separation movements.
My interviewees claimed that officials in West Papua and Papua had misused special autonomy funds and distributed them to their own relatives or political sympathisers instead of being distributed to the people. The majority of special autonomy fund did not touch the needs of the grass roots.
I often hear my respondents say: 'Papuans are manipulated by Papuans' or 'Papuans are colonised by Papuans'.
President Joko 'Jokowi' Widodo's efforts to woo Papuan people by building infrastructures might have never fully worked as he ignores to address corruption problems and poor bureaucracy in local governments.
The government's lack of monitoring mechanism has also worsened the situation. However, the central government does not have many choices. Investigating corruption cases within the higher elites of Papua can potentially trigger new conflicts as these elites may provoke their supporters to go against the government.
What can be done?
There is no simple way to understand and solve conflicts in Papua. There is a missing link between what's real and what's perceived about Papua, caused by the lack of updated researches on Papua.
I believe that only by providing objective information by involving scholars and researcher to conduct more research on Papua can solve part of issues in Papua.
Most recent research publications on Papua show recycled data from 20 or 30 years ago. These research also lack data originality, meaning that they only quote old resources without conducting any fieldwork.
The lack of research on Papua is mostly due to the government's tight control over the province. Even though Jokowi has revoked the ban for foreign press to cover issue in Papua, the reality is far different, rising safety concerns.
From my personal experience, the lack of information on the procedures to conduct research in Papua has also been a problem.
But it is clear that lack of objective research potentially leads to the government solving problems of Papua with old solutions.
Therefore, the government should support and encourage more scholars to research Papua so better solutions for Papua can be found.
Research Indonesia Inequality Jokowi Papua
MENAFN0901201901990000ID1097948665
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2) Indonesia: Grasberg Copper Production Set to Plunge in 2019
Scott Tibballs - January 9th, 2019
Indonesia has flagged significantly reduced copper concentrate exports as well output from its recently nationalized Grasberg mine in Papua province.
Yunus Saefulhak, director of minerals at the Indonesian Energy and Mineral Resources Ministry, said Wednesday (January 9) that the government expects exports of copper concentrate from Indonesia to fall by 300,000 to 800,000 tonnes in 2019, as Grasberg’s output declines from 2.1 million tonnes of concentrate in 2018 to 1.2 million tonnes in 2019.
Grasberg is the fourth-largest copper mine in the world (at 2017 production levels), and recently became majority owned by the Indonesian government after a deal was struck between former owner-operator Freeport-McMoRan (NYSE:FCX) and its joint venture partners Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) and the Indonesian government.
A fall in production over the next few years had been flagged by Freeport in the lead up to the agreement, which saw Freeport relinquish majority ownership to Indonesian state-run companies but remain the operator.
In its July 2018 quarterly report, Freeport had said that guidances for copper would fall as the massive operation transitioned from open pit to underground over 2019 and 2020.
Though it envisaged a full ramp up of underground operations in 2021 and a return to form, the transition is expected to be completed by 2022.
Karen Norton, base metals analyst at GFMS Thomson Reuters, told the Investing News Network that Grasberg’s precipitous fall in production is already factored into copper outlooks.
“[It will] be one of the factors contributing to forecast minimal growth in global copper mine output this year,” she said. “There is not much room for manoeuver though and that growth could easily turn negative if major mines fall short of expectations.”
Norton added that for the time being, “consumption prospects are probably a greater preoccupation” for markets.
Demand for copper has remained firmly in the sights of analysts as market sentiment remains depressed with the trade war grinding on.
Freeport, which retains a 48.77-percent share of Grasberg, was trading up 2.68 percent on the New York Stock Exchange on Wednesday, at US$11.48.
2018 did not treat the Phoenix-based company kindly — it has lost 40 percent of its value since January 2018, when it was trading at almost US$20.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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