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Collaboration and Bank Indonesia’s Important Role in the Economy in Papua

by Senaman
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Jayapura – Acting Governor of Papua, Muhammad Ridwan Rumasukun said that collaboration with the local Bank Indonesia Representative Office can strengthen the economy on Cendrawasih Island for the better. This was conveyed at the inauguration ceremony of the Head of Bank Indonesia, Faturachman at the Bank Indonesia Representative Office hall. The cooperation that has been carried out so far is not only limited to suggestions and opinions but also in economic forums and the Regional Inflation Control Team (TPID) but has developed through direct support for the economic development of the people in the field. This is reflected in Bank Indonesia’s role in the development of the real sector, among others, by supporting the empowerment of MSMEs, as well as initiating clusters based on food security and superior commodities. Of course, these good efforts have resulted in excellent achievements, as evidenced by the economic growth in Papua Island in the first quarter of 2024, the highest in Indonesia, which amounted to 17.49 percent.

Bank Indonesia (BI) has a significant role in supporting and developing the economy in Papua. Through various initiatives and programs, BI seeks to improve economic stability, encourage digitalization, and strengthen the micro, small, and medium enterprises (MSME) sector.

One of Bank Indonesia’s main focuses in Papua is inflation control. In 2023, inflation in Papua was successfully controlled within the national target range of 3±1 percent. This achievement is the result of synergy between BI, the local government, and various stakeholders in controlling price volatility. In 2024, BI targets lower inflation of 2.5±1 percent to maintain economic stability in the region.

BI actively encourages the use of Quick Response Code Indonesian Standard (QRIS) as a payment transaction tool in Papua. Through activities such as QRIS Fun Walk, QRIS Cinema Watching Program, and Papua Competition (QRIS PACE), BI is trying to expand the acceptance of QRIS in various lines of society. This program not only facilitates transactions but also increases financial inclusion in Papua.

Bank Indonesia also provides strong support for the development of MSMEs in Papua. BI conducts various training and mentoring programs to increase the capacity and scale of MSME businesses. Activities such as the Cenderawasih Festival and MSME exhibitions aim to promote local products and improve MSME competitiveness in the wider market. In addition, BI also facilitates the development of the Islamic economy and finance by providing halal certification training and supporting the pesantren economy.

BI is working with the local government and various organizations to improve Papua’s economic capacity. By 2024, Papua’s projected economic growth is expected to reach 5.25 to 6.25 percent, driven by various economic and political activities, including election campaigns that increase activity in the trade, transportation, and food and beverage sectors.

Bank Indonesia in Papua continues to strive to create a stable and thriving economic environment. Through controlling inflation, promoting the digital economy, and supporting MSMEs, BI has contributed greatly to improving the economic welfare of the Papuan people. Going forward, a strong synergy between BI, the local government, and the community is expected to lead Papua towards more inclusive and sustainable economic growth.

With these initiatives, Bank Indonesia in Papua serves not only as a financial regulator but also as a strategic partner in regional economic development.

  1. Collaboration with Local Government: Bank Indonesia works closely with the Papua Regional Government to improve efficiency and effectiveness in regional financial management. This collaboration helps in safeguarding the regional economy and improving economic growth.
  2. Encouraging More Heterogeneous Sources of Economic Growth: Bank Indonesia focuses on encouraging more heterogeneous economic growth so that it does not rely solely on one sector. This helps to increase the resilience of the economy and reduce the risk of dependence on one industry.
  3. Encouraging More Diverse Economic Actors: BI also seeks to increase the diversity of economic actors, including corporations and MSMEs, and provide support from the government and private sector. This helps promote more stable and inclusive economic growth.
  4. Encouraging Multiple Financial Economic Systems: Bank Indonesia also focuses on encouraging various financial economic systems, including conventional and sharia finance. This helps to increase access to finance and promote more inclusive economic growth.
  5. Digitalization and Environmental Development: BI is also working to increase digitalization and environmental insight development to improve efficiency and effectiveness in regional financial management. This helps promote more sustainable and inclusive economic growth.
  6. Guarding Inflation: Bank Indonesia is also focusing on controlling inflation in Papua, which means keeping an eye on price levels to prevent them from rising excessively and destabilizing the economy.
  7. State Budget Management: Bank Indonesia is also working to improve the management of the State Budget (APBN) in Papua, which helps boost economic growth and mitigate the economic contraction caused by the COVID-19 pandemic.

Thus, Bank Indonesia plays an integral part in increasing economic growth in Papua through collaboration, encouraging more heterogeneous sources of economic growth, encouraging more diverse economic actors, encouraging various financial economic systems, digitalization, environmental insight development, guarding inflation, and managing the state budget.

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