Several Observers Discussed President Joko Widodo - Jusuf Kalla's Nawacita Program in Jakarta (12/22) - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – The Joko Widodo – Jusuf Kalla (JK) government has almost completed it’s four year term. It’s achievements so far can be evaluated, and if they fall short, the rights and obligations that the government promised, can be demanded, as stated in the Nawacita program vision and mission.

Nawacita is the incumbent’ nine priority program which was outlined in the 2014 Presidential Election. The program consists of various fields, including infrastructure development, which has been a priority, and the development of human resources.

One program in the economic sector is to realize economic independency, by moving the strategic sector of the domestic economy. It means, the government tends to realize energy sovereignty and mining of natural resources for the greatest prosperity of the people.

Based on available data, the achievements is only around 40-50 percent of the target. There is a tendency for governments to manage energy and natural resource management not in long-term planning but only in the short-term.

Fabby Tumiwa, Executive Director of Institute Essential Services Reform rated, so far the government tends to target it high, but the realization is always below the target. Throughout 2018, the energy, oil and gas and mining sectors were marked by surprising events.

These events included the issues of corporate actions and strategies, governance and regulation, downstream industry, fiscal and economy, environmental problems and the tangled threads of law enforcement. This sector is considered important because it has a big influence on the temperature of the nation’s politics.

In fact, Maryati Abdullah from Coordinator of Publish What You Pay (PWYP) Indonesia see a tendency to mate business and politics, so the policies remain blunt and far from prosperity.

In the corporate action and strategy aspects, she said, a major event like the state-owned oil and gas holding company, PT Pertamina, when it acquired 56.96 percent shares of gas producer, PT Perusahaan Gas Negara Tbk (IDX: PGAS) in April. Integration is intended to achieve financial consolidation and optimal tax planning.

In addition, the divestment process of PT Freeport Indonesia (PTFI) to state-owned miner PT Indonesia Asahan Aluminum with share of 51.2 percent signed by President Widodo on Dec. 21.

However, there are still environmental issue constraints, also, a change in the status of the Contract of Work to a Special Mining Business License and the gradual divestment payment which allegedly will slow the total acquisition process.

The complexity of Freeport’s problem is the ability of Inalum to pay acquisition shares which reached US$3.85 billion. The miner has issued $  billion global bonds in Singapore.

This value is the highest in the history of Indonesia’s financial business, and became the sixth largest acquisition in Southeast Asia in the last 10 years.

On the other hand, the government was also pressured from labor problems, where around 300,000 workers in Freeport were local residents of Timika, Papua. When acquired, the government will be pressured by the corporation under the pretext of ensuring the welfare of the local workforce.

In Papua this is a problem cause the corporations must pressure the government regarding the issue of local labor and need long process, said Haris Azhar, Executive Director of Lokataru.

Regarding the environmental aspect, throughout 2018 around 32 people died around mining sites in East Kalimantan, criminalizing workers and residents around the mine. The threat was especially from mine shafts which continue to threaten and damage the ecosystem. At PTFI, the Indonesia Audit Board has found a state loss of Rp 186 billion (US$12.82 million) due to damage to the ecosystem.

And the biggest of the records in this sector is corruption cases involving state officials and the Parliament number in the Riau-1 power plant project. There is even an attempt to criminalize academics or mass organizations that are valuate state-losses due to environmental damage to strengthen demands for corruption in mining permit cases in Southeast Sulawesi.

In addition, there is a government policy that incorrectly raises oil and gas, energy and coal exports. When compared with other countries, Indonesia’s total per share is 2.2 percent. Meanwhile the production amount is 7 percent. Strangely, the number of exports became 16.1 percent.

Logically, this policy is wrong. As assumption, Indonesia’s reserves are only 2.2 percent, then the amount of production should be high or lower. However, with a high export, the government seeks to solve this issue by increasing production volumes.

So, a trade deficit has occurred. It is estimated that in the future, Indonesia will lose mining resources, and if the mine is continued, the next generation will lose its foreign exchange resources.

It can be said that the oil, energy and mining policies of the Widodo – JK government these past four years are still far from the promises they made regarding the people’s welfare.

US$1: Rp14,500

Written by Daniel Deha, Email: theinsiderstories@gmail.com