Tackling poverty in South Sulawesi: Why connectivity matters

As we move into the next three years of the Partnership for Australia-Indonesia Research (PAIR), the research team behind the program asked: Why are we here, and what are we trying to achieve?

On 5 February 2020 at the PAIR Policy Dialogue, the team met with national stakeholders and representatives of the provincial government of South Sulawesi to hear about specific issues facing the region, and to determine how to best target the research across the areas of transport logistics and supply chain, commodities, young people and development, and young people’s health and wellbeing.

Makassar, the capital of South Sulawesi, is building a new port, and a trans-Sulawesi railway network is under construction. In the context of these developments through infrastructure and connectivity, our research aims to explore how local communities can improve their livelihoods, develop new skills and create new enterprises.

Some AIC Senior Fellows discuss February’s site visits and the PAIR Policy Dialogue:

Our discussion with the national and local policymakers of South Sulawesi was invaluable, and the following points stood out:

Tackling regional inequality

Many policy makers and academics in attendance drew our attention to the income inequality and poverty experienced in Indonesia. As a whole, Indonesia experiences income inequality both at the individual level, with few wealthy individuals far outpacing the rest, and at the regional level, as eastern islands are relatively underdeveloped with lower income levels and infrastructure investment, in comparison to the archipelago’s wealthier western regions. In particular, the National Team for the Acceleration of Poverty Reduction (TNP2K) cited extremely high unemployment among the 18-24 age bracket in South Sulawesi, with many among them working in the informal sector without workplace protections. Several speakers, including Consul-General Richard Mathews and advisor to the Ministry of Transport Professor Wihana Kirana Jaya, stressed the essential role of evidence-based policy decisions in furthering development in the region.

Infrastructure as a bridge to youth

Construction of the new trans-Sulawesi rail line, initially connecting the regions of Barru, Maros, and Pangkep, is broadly seen as a golden opportunity to improve connectivity among different urban and rural communities in South Sulawesi. A representative of the Independent Youth Alliance (Aliansi Remaja Independen Sulsel) emphasised the need for new transport infrastructure to expand their reach and to engage with youth in the wider community outside of Makassar. There are, however, challenges on the road ahead: the new line is Sulawesi’s first train line, and this could present transition difficulties for locals previously reliant on road transport.

Seaweed as a tool to benefit communities

South Sulawesi produces a large portion of the world’s seaweed, a versatile export product used for food, food additives, and biofuels, among other materials. Unfortunately, while farmers in the region produce large amounts of raw seaweed, most is exported directly for processing elsewhere in Indonesia, or overseas.  As a result, most of the value addition to seaweed products occurs outside Sulawesi, resulting in limited wealth distribution to local farmers.  Discussion by policymakers centered on the challenges involved in maintaining consistent quality of Sulawesi’s exports, and bringing more seaweed processing capability onto the island in order to export higher-value products.

The goal behind PAIR is ambitious – improving connectivity between people and communities in South Sulawesi is a complex, multidimensional issue. But we’re optimistic that the program is well placed to identify new opportunities, both social and economic, given its focus on locally-significant commodities such as seaweed, and on leveraging local knowledge.

The day provided much food for thought leading into our last two days in Makassar, which we spent developing research questions to guide PAIR’s work over the next few years. Over this year, we’ll be focused on collecting data to build a clearer picture of communities and businesses in South Sulawesi. For the transport logistics and supply chain team in particular, this will centre on land use, disaster risk, and movement of people and freight in the region, with a view to estimating potential demand for rail services.  These preliminary projects will support our future research to develop recommendations for policy and operational planning for the new railway.