TEMPO.CO, Jakarta - The government’s plan to build sugar factories outside Java is both good and noble: Java no longer has enough land that can be used for sugar cane. Meanwhile, the demand for sugar cannot be met by domestic production. Of the 5.7 million tons required by industry and households, Indonesian farmers can only supply 2.2 million tons. The rest has to be imported.
Therefore, the 2016 decision by the cabinet to pursue the goal of self-sufficiency by 2020 – subsequently revised to 2024 – by inviting private investment was a good idea. Unfortunately, on the ground, the implementation of this was rife with conflicts of interest and breaches of regulations.
Of the 300 companies that put forward proposals, Agriculture Minister Amran Sulaiman chose 10. Minister Amran imposed a condition: investors must have access to funds. He did not want empty promises from investors who lacked funds.
One of the investors chosen by Minister Amran was his own cousin, Andi Syamsuddin Arsyad. The coal mining businessman from Kalimantan popularly known as Haji Isam was the deputy treasurer of the Joko Widodo-Ma’ruf Amin campaign team for the 2019 elections. Enthused with the idea of doing business with Isam, Minister Amran himself traveled to the region to oversee the processing of his business permit.
Using the excuse that he wanted to achieve a breakthrough, Amran circumvented many ‘obstacles’. The concession owned by Haji Isam’s business in Southeast Sulawesi was not suitable for sugar cane. In the regency and provincial spatial use plans, Bombana was classified as an area for cattle farming because the land is in the form of savannah and is a gold mining area that is poor in soil nutrients.
Moreover, since 2012, this pasture area had been part of a program by the agriculture ministry to breed 3,500 head of cattle for 400 farmers. However, the farmers and local people were moved off the land by Isam’s company using police officers. Amran also paid no attention to South Konawe, another location near Bombana, which is actually more suitable for sugar cane, and which would be in line with the spatial use plan.
It is easy to guess what happened. The land in Bombana produced stunted sugar cane. The calculations for the milling and production capacity of sugar were wrong even before the factories were in operation. The result was a return to the old solution of importing unrefined sugar.
Then, miraculously, as an incentive to build new sugar factories, these 10 companies were awarded the import quotas. Haji Isam also obtained another benefit, namely the gold remaining from the mining business that he had bought to turn into sugar cane fields. It is fair to suspect that the plan to establish sugar cane fields was simply a way to prospect for gold.
Phony business practices behind the plan for self-sufficiency in sugar must not be allowed to continue. Although permits were awarded for sugar imports, the lack of transparency in their management is clearly at odds with the principles of good governance. If President Joko Widodo wants to be serious about boosting the Indonesian economy, he should put a stop to policies that simply open the door to rent-seekers.
Read the Complete Story in this Week's Edition of Tempo English Magazine
