Sumatra and the ubiquity of bread-and-butter issues


SUMATRA is an elongated landmass that is separated from Peninsular Malaysia only by the Straits of Malacca.

Malaysians are familiar with cities like Medan in North Sumatra as well as Padang and Bukittinggi in the West. There even exists an emotional connection, given that ethnic Malays make up around one-tenth of Sumatra’s stunningly diverse 58 million-strong population.

Sumatra is also a major economic engine for Indonesia as it contributes up to a fifth of the nation’s US$1.1 trillion (RM4.5 trillion) economy. However, its towns and cities are not exactly paradigms of prosperity. 

Pekanbaru, the capital of the island’s Riau province, looks like an overgrown plantation town. 

While it is neat and looks like any other city in Malaysia – for a province rich in oil underground and aboveground (palm oil) – the roads are full of potholes and when it rains, it floods.

In the south of the island, Palembang, locals are proud of a new LRT built for the last Asian Games but are now fretting about low ridership (4,000 riders per day out of a population of 1.6 million) and the huge subsidies needed to maintain it (200-300 billion rupiah annually). It’s money they feel could have gone to lowering electricity costs or providing or providing minimum support prices for commodity producers.

Sumatra is angry. Sumatra is looking for a scapegoat. The “man of the hour” – fairly or not – is President Joko Widodo (Jokowi).

Sumatrans have always been wary of the incumbent. In 2014, he lost four of eight provinces to his once and future challenger, Prabowo Subianto.

Fast-forward to 2019 and little seems to have changed, despite Jokowi’s numerous visits across the island.

It doesn’t seem as if Jokowi will be able to gain much ground. Indeed, North Sumatra, once a bastion for his PDI-P mainstay, voted for an opposition candidate during the last gubernatorial elections.

Also, Prabowo has a knack for picking Sumatrans for running mates: Hatta Rajasa (from Palembang) and Sandiaga Uno (from Rumbai). This means a lot to the 25 million voters in Sumatra who often see themselves in opposition to the numerically dominant Javanese.

But it’s not all about parochialism. 

According to the Central Statistics Agency’s (BPS) Riau branch, average year-on-year inflation for prepared food, beverages, cigarettes and tobacco in June 2018 increased by 5.33% compared with the national average of 4.12%. 

An ikan bilis seller in the Pasar Bawah markets complained that previously, his electricity bill only amounted to 150,000 rupiah compared with 300,000 rupiah he has to fork out currently for his household of four. On January 1, 2013, tariffs for 1,300 VA homes amounted to 629 rupiah per kilowatt hour, but has now risen to 1467.28 rupiah per kilowatt hour. 

This is a 133% increase, which not only burns a deeper hole in the pockets of Indonesians from all walks of life, but also puts pressure on prices of goods and services across the board. Meanwhile, fuel prices have creeped up steadily in the past five years, which adds to inflationary pressure.

In Palembang, little has been done to help rubber smallholders. Prices have dropped from US$6.26 per kg in February 2011 to US$1.65 per kg in February 2019. The government has tried to purchase rubber directly from farmers and promised more tyre-making factories to soak up supply but this comes across as mostly a stop-gap. Indeed, only a in slight increase in prices have resulted.  

It should be noted that Indonesia’s rubber industry is driven by smallholders, unlike palm oil, which is controlled and run by conglomerates. Therefore, anaemic prices have had a big affect on livelihoods.  

There’s a real possibility that this problem could have a political impact. Prayuth Chan-o-cha of Thailand has largely failed to peel away the kingdom’s North and Northeast from Thaksin Shinawatra due to the plight of the vast rubber estates in those regions.

Clearly, the problem of low rubber prices will need a regional, Asean-wide solution, involving other major players like Malaysia, Thailand and even Vietnam.

Back in Indonesia, the combination of higher costs of living, as well as a weaker rupiah and commodity prices, has led to a groundswell of discontent in parts of Sumatra already ranged against Jokowi.

Bread-and-butter issues simply reinforce the existing fault lines of identity politics in the very diverse island and indeed, Indonesia as a whole: Java v Sumatra, Nahdlatul Ulama v Muhammadiyah (the two largest Islamist organisations in the world), religious v secular. 

Also, environmental issues are increasingly looming large: soil desertification often leads to forest fires. The resulting smog is then blamed on the plantation industry. 

These factors mean that large swathes of Sumatra are going to remain in Prabowo’s column despite what may happen nationally. 

This could prove decisive should the vote in Java prove closer than expected.

To be fair, Prabowo is not exactly brimming with ideas on how to make Sumatra’s provinces (and the rest of Indonesia) prosperous and happy.

He speaks endlessly of unemployment but also dismisses – as he did during a presidential debate – tech unicorns, despite their job-creating capacity.

And, there seems to be few ideas of how the Indonesia’s economy can move away from its dependence on natural resources.

There is also very little focus on either side in regard to education or upskilling initiatives to prepare Indonesian workers for Industry 4.0. 

These are real problems that transcend politics.

Whoever wins tomorrow will need to address them to ensure that Indonesia’s delicate fabric remains intact. – April 16, 2019.

* Amir Fareed Rahim is director of strategy, KRA Group.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.


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