Right now, Indonesia is at a crucial point where it is growing at a fast pace in the hope to be a developed country. This year alone, the country sets its economic growth target at 5.1 percent. And there is no plan to slow down anytime soon.
“Indonesia’s economy should grow at least 5 percent yearly, and steadily for the years to come. We are aiming to get out of the middle income trap, a condition we have been in since the end of 1998 economic turmoil, as soon as possible,” says Bambang Brodjonegoro, the Indonesian Minister for National Development Planning (Bappenas). He was appointed by President Joko Widodo in July 2016, a change from his previous post as Minister of Finance. Prior to his ministerial posts, Brodjonergoro was a Commissioner at Pertamina (the national oil and gas company), Aneka Tambang (a state-owned mining company) and PLN (the national electricity company.
While talking about Indonesia’s future, Brodjonegoro brought up concerns about sustainable development. By 2025, Indonesia is planning to achieve a total energy usage of 25 percent oil, 22 percent gas, 30 percent coal, and 23 percent new and renewable sources. To achieve that, Indonesia has signed a Memorandum of Understanding with the Global Green Growth Institute (GGGI) as well as working with partnering countries to develop renewable energy programmes.
The big question is: how does an emerging country balance its vast economic growth with a green mindset? Adding to that is international pressure from developed countries about Indonesia’s abundant energy usage. Prestige discusses the growth vs green dilemma along with another big issue of making renewable energy available for all with the Minister. Highlights from an exclusive interview:
What is your vision for Indonesia’s national development?
I hope Indonesia can get out of the Middle Income Trap state as soon as possible. Since the economic crisis in 1998, we have managed to get back up to the lower-middle class, but we haven’t gone up since. There should be a more serious effort to get out of this “trap”.
At Bappenas, I want to speed up economic growth. I want us to focus on investment and manufacturing industry. We can’t only rely on natural resources. When that is settled, the national development would be one that is of good quality, one that could decrease poverty and narrow down the gap between the rich and the poor.
How would the Green Growth programme help Indonesia to stop exploiting its natural resources?
The idea is to make sure that Indonesia is developing sustainably. To achieve green growth means we should have these three things:
- a balance between growth and sustainability
- a greener alternative to coal
- less steam power plants (PLTU) in Java
Where are we in terms of the search for renewable energy sources?
At this point, we are still researching for the clean and renewable energy that is suitable for the country. At the moment, water still has the biggest potentials. The second most potential option is geothermal. Other than that, we should also explore wind, sun and bioenergy.
Bioenergy has big potentials in Indonesia, but it could only work for small-scale energy providers. On the other hand, solar cells are very dependent on the level of sun radiation. If the radiation is at 4.8 PSH or more, then only it can produce electricity.
In general, we have a lot to do to change those potentials into an economic and feasible energy sources for the mass. They shouldn’t remain as pilot projects, but ones that are accessible to everyone in this country.
A lot of Indonesian students and young scientists are experimenting with renewable energy. Is the ministry involving them in the search for renewable energy sources for the mass?
Of course we appreciate the milestones of Indonesians, especially the young. Bodies like BPPT (National Body for Technology Research and Application) and LIPI (Indonesian Science Institute) are also developing their own researches. But the challenge is to shift the pilot project and make it into something that’s more economical. We should never forget that energy comes with a price, and the price will determine whether or not that energy source could be mainstream.
How long would it take for the alternative energies to be available to the public?
At the moment, we are striving to fulfill the target of 23 percent use of renewable energy in 2025. We need to focus on that, because at the moment we’re only at 10 to 11 percent. What’s more, coal costs less than what it was, so there’s a bigger push to use coal. The way out for now is to use coal in the cleanest ways possible (reducing emission in the production process). On the other hand, we need to provide incentives to those who make effort to use renewable energies in the manufacturing process.
What are the threats in making these renewable energies available to the mass?
First, as long as fossil fuel is available at reasonable prices, the temptations to continue using it, even increasing its use, is really high. In Indonesia, we have been trying to push the use of biofuel (made of CPO – Crude Palm Oil). Other issues surrounding palm industry is another story, but the fact that we could find a primary energy for transportation is really something. We shouldn’t forget that besides electricity, transportation is also a big a need for everyone. Brazil now uses 30% of renewable energy for transportation, using ethanol fuel from sugar cane. For us, since we are one of the biggest palm oil producers in the world, why not use CPO to produce a renewable energy source?
Second, the technology. We want to push the use of solar cells in remote areas, but the battery and storage are still expensive.
Third, incentives for private sectors. We aim for the electricity needs to be mostly provided by private sectors, but we want them to start using renewable energy sources. For that, we need to provide them with incentives because renewable energy sources are still currently more expensive than coal. This is why the government needs to act as an intermediary between the electricity producer and the public as electricity consumers.
Indonesia is developing, and its energy needs is increasing. Does the government consult other developed countries of how to balance economic growth with conscious energy usage?
We collaborate with GGGI, as well as other countries that we have bilateral relations with. For example, one country is giving a grant for Indonesia to develop the use of wind. Another for solar power projects. I think there is enough help from our partnering countries to discover renewable energy sources. But as I said before, the tough part is to develop those potential sources to provide for the mass. There are concerns about the energy not being applicable to all parts of the country. There are also concerns about the level of technology we currently have.
How do we change the mindset of big corporations so that they can be friendlier to the environment in doing business?
Corporations naturally have short-term goal of making profit. But the government should act as their regulator. If the government has agreed to protect green growth, then it should be strict towards those corporations. There needs to be a solid law enforcement. Second, we need to appreciate the corporations who have complied to the green growth commitment. We need to recognise them as well as giving them incentives for doing more than required.
How do you balance green development with fast development?
It’s a dilemma that all emerging countries face. The European countries believe that Indonesia should stop using coal and deforestation. What we fail to remember is, in the past, before global warming was highlighted as an issue, those countries rely on coal to develop. During the Industrial Revolution, all the steam machines were fueled by coal. The coal they used and the deforestation they caused bring them to where they are today. At this point, we need a lot of resources to develop, that’s why we still use coal and to some extent, commit deforestation.
Most of Indonesia’s area is covered by water. Only 1/3 of the area is land, and from that number, only 1/3 is not forest. We currently have 250 million and counting people, and I think it’s a bit hard to develop if we only make use of 1/9 of the area we have. That justifies forest conversion. As long as we do it mindfully, I think it’s necessary. Having said that, I believe we should keep the green growth programme in mind to ensure the development we make today is sustainable.
(photography: Joe Sabarto)