East Kalimantan Economic Transformation Strategy

Balikpapan, 27/8/14. The importance of economic transformation strategies/economic shifts based on unrenewable resources to renewable resources only can be realized if there is a balance between the economic, environmental and social pillars in development planning and the economy that forms a green economy. It is hoped that changes from the current economy towards a green economy or low carbon economy will create better societal conditions and social justice, reducing environmental risks and ecological damage. This was stated by Assistant II for Economics and Development H.M. Sa'bani at the Workshop on Integration of Regional Action Plans for Reducing Greenhouse Gases (RAD-GRK) for East Kalimantan Province into Regency/City Planning and Monitoring, Evaluation and Reporting Mechanisms for RAD-GRK Implementation (PEP) in the Sky Bar room on the 8th floor of the Gran Senyiur Hotel, Jl. ARS. Mohammad Number 7 Balikpapan, attended by approximately 120 participants from SKPD within the East Kalimantan Provincial Government and Regencies/Cities throughout East Kalimantan.

In his speech, the Kalimantan Provincial Assistant for East Kalimantan said that the East Kalimantan Provincial Government has determined the Development Strategy options, not only for the next five years but is designed until 2030 in realizing an Advanced East Kalimantan in 2030.
Kaltim has gone through several phases of economic development that are not healthy and of good quality. The decline in the growth rate from 7.42% in the wood period to 5.41% in the oil and gas era resulted in unemployment increasing to above 10%. Furthermore, the decline in the rate of economic growth due to the shift in the economic base from oil and gas to coal resulted in the highest unemployment percentage in East Kalimantan's economic history, namely 12.83% in 2007. However, since economic transformation efforts were carried out in 2009, the percentage of unemployment has continued to decline and in 2013 it became 8.87%, the poverty level reached 6.06% and the HDI increased to 77.10.

This fact shows that the phenomenon of changes in regional economic growth rates as a result of reduced stocks of non-renewable resources has occurred in the East Kalimantan region. The worst condition occurred in 2013 when economic growth reached 1.59% which was caused by a decrease in the contribution of the oil and gas and coal sectors due to a decrease in production and a decrease in coal prices.

In the last decade, the role of the non-oil and gas sector in East Kalimantan has increased, especially driven by coal mining. While the contribution of renewable economic sectors such as agriculture and services is still small, we want to change this economic structure through an economic transformation strategy towards an economic structure based on renewable natural resources.

Realizing the problems faced by the Provincial Government. East Kalimantan implemented an economic transformation policy based on renewable natural resources, where 2009 - 2013 was the foundation for socio-economic transformation, while the 2014 - 2018 period was when we implemented a development pattern by strengthening competitiveness, adding value based on sustainable local resources. Implementing a green economic growth scenario or a low carbon development scenario is the right choice for East Kalimantan. Increasing human capital capabilities that master science and technology is very necessary to enter the stage of innovation-driven economies. This requires social and economic transformation.

Economic transformation/an economic shift based on unrenewable resources to renewable resources can only be realized if there is a balance between the economic, environmental and social pillars in development and economic planning that form a green economy. It is hoped that changes from the current economy towards a green economy or low carbon economy will create better societal conditions and social justice, reducing environmental risks and ecological damage.

The implementation of economic transformation is carried out by using a strategy to develop derivative industries from the plantation, food crop and mining sectors as a direction for a more balanced economic transformation. Through this strategy, it is hoped that by 2030 the industrial sector will become the main economic base with a proportion of 42%, the trade and services sector will reach 17% and the agricultural sector will reach a proportion of 10%. It is hoped that an economic structure like this can produce high and stable economic growth and can absorb higher employment opportunities.

The above goals and objectives of economic transformation must be carried out gradually and consistently and require multi-stakeholder support and support from all levels of stakeholders.

There are five stages in the economic transformation that have been and will be carried out, namely, the Initiation Period (2009-2013); Capacity Development Period (2013-2015); The Period of Increasing Added Value (2015-2018), the Industrial Development Period (2018-2020 and the Economic Development–Innovation Period (2020-2030). Thus the 2013-2018 East Kalimantan RPJMD period is in the two stages of economic transformation mentioned above.

In addition to the many successes that have been achieved in economic development, on the other hand, East Kalimantan produces the fourth largest greenhouse gas emissions of 34 provinces in Indonesia, or 150,566,160 tonnes of CO2/year. These greenhouse gas emissions mainly come from the land-based sector. And in it there are emissions from deforestation amounting to 69,988,875 tons of CO2/year. Of course, this is a big challenge for East Kalimantan to harmonize development and reduce greenhouse gas emissions.

In an effort to reduce carbon emissions and implement environmentally sound development (green development), the East Kalimantan Provincial Government together with all elements of society have declared the Green Kaltim program at the 2010 Kaltim Summit on January 7 2010.
Green Kaltim is a condition in East Kalimantan which has policy tools, governance and development programs that provide social and ecological protection for the people of East Kalimantan, as well as providing long-term guarantees for the safety and welfare of the community as well as environmental sustainability. Green Kaltim is the start of a process of implementing regional development that is environmentally sound (Green Development) based on environmentally sound governance (Green Governance).

The low carbon growth strategy in East Kalimantan is basically to combine economic growth with climate change mitigation, which relies on:
a. Reducing the carbon footprint of related economic sectors: Agriculture, Forestry, Plantation, Coal, Oil & Gas;
b. Carrying out higher added value economic activities but producing lower emissions;
c. Building an economy and infrastructure that is resilient to climate change.
As a form of responsibility in reducing national and global greenhouse gas emissions, the East Kalimantan Government has targeted a 19.07% reduction in emissions from the 2020 baseline of 1.41 Giga tons. The largest contribution to reducing emissions comes from the land-based sector, namely 70% (from 1.029 Giga tons to 0.799 Giga tons of C02e in 2020)

East Kalimantan is committed to switching to a climate change-based development path. For East Kalimantan Province, which is developing its economy, it will not choose the option of reducing emissions if this will restrain economic growth, and therefore the strategy chosen is that economic development and CO2 mitigation can be strengthened together. In this regard, activities have been identified that can reduce emissions and provide high added value.
To ensure consistency in development implementation, the issue of climate change and environmental management has received strategic attention and place in the 2013-2018 RPJMD.

Through the vision that has been set, the vision "Creating an Equitable and Just Prosperous East Kalimantan Based on Agro-Industry and Environmentally Friendly Energy" aims to realize economic competitiveness with an emphasis on the use of renewable natural resources and simultaneously carried out in an environmentally friendly and low carbon manner. This is a translation of the application of the Green Economy concept which will be implemented in East Kalimantan. Quantitatively, the East Kalimantan provincial government is targeting a reduction in emission levels as measured by emission intensity to reach 1,250 tonnes of CO2/Million US$ GRDP in 2018.

To achieve the expected synergistic economic growth and emission reduction, support is needed from various stakeholders, especially from the Regency/City government.

Therefore, we really hope that the pattern and mechanism for integrating climate change issues carried out by the East Kaliamantan Provincial Government can be followed by all Regency/City Governments, this is to ensure consistency of commitment and sustainability of the implementation of activity programs and their funding support. The mainstreaming pattern in the RPJMD aims to ensure that emission reduction programs/activities are also integrated in the activity program in the SKPD because they must be accommodated in the SKPD Rentra.

The Provincial Government, through the Programs and Activities contained in the 2013 - 2018 RPJMD, is committed to assisting and facilitating District and City governments to go through the process of mainstreaming climate change in Regency/City development planning documents.
To accelerate and ensure sustainability of emission reduction targets, support from development partners is also highly expected. The East Kalimantan Provincial Government hopes for concrete and measurable cooperation and synergy between development partners and NGOs who have worked in East Kalimantan in implementing emission reduction.

The scope of cooperation that we can carry out includes:
1. Funding for implementation of the Green Economy scenario .
2. Support in policy making and regulatory development. (regulations, incentive and disincentive mechanisms)
3. Developing and strengthening the quality of data and information (baseline, data and information gap analysis and data sharing mechanisms).
4. Understanding between stakeholders (socialization, increased coordination)
5. Institute capacity developmentusi and development of human resources in the implementation of development strategies low carbon.
6. Implementation of strategic activities, such as:
- Forest management and land use management (Land use licensing information system)
- Development of new and renewable energy to provide electricity
- Utilization of degraded land for small and medium businesses to improve the economy
- Increasing the role of MRV for reducing emissions

To determine the success of reducing emissions, a Monitoring, Reporting and Verification mechanism and system that is reliable and easy to implement is needed, considering that the issue of PEP or MRV is an implementation that is as important as the implementation of emission reduction itself.

The government through Bappenas has provided direction regarding the implementation of the Monitoring, Evaluation and Reporting (PEP) system for action plans carried out by each region. This PEP system is carried out to ensure the implementation of action plans that have an impact on reducing emissions, what obstacles are faced and funding sources that support the implementation of these action plans. For this reason, support from each SKPD is really needed regarding supporting data such as LAKIP and realization of budget use so that this system can run well and be informative.

At the end of his speech H.M. Sa'bani conveyed the importance of monetoring for each activity to determine the level of success. By using this PEP system, we will be able to provide information on the achievement of emission reduction targets targeted by the Indonesian Government at 26% and will increase to 41%, including East Kalimantan's emission reduction target of 19.07% and what is more important is that we can provide reports to the public about the success of green economic development which is reflected in emissions intensity. (Public Relations of Bappeda East Kalimantan Province, Sukandar, S.Sos.