Developing Poor Little Rich Natuna’s Economy

Abstract

In March 2016, elite groups of Natuna and the neighbouring oil-and-gas district Anambas aspired to separate from Kepri to create their own province. Their aim was to secure more fiscal transfers from Jakarta. Among these people was Natuna’s former district-head Daeng Rusnadi, who was once imprisoned for corruption concerning oil-and-gas revenues. The plan was supported by Natuna’s current district-head Hamid Rizal, whose deputy is Rusnadi’s wife. In January 2017, the discourse was adopted by local parliamentarians, who subsequently tried to exploit Jakarta’s security interest to push for a “special defence province”. Unsurprisingly, Kepri’s governor Nurdin Basirun did not support the separation as Kepri would then lose its only oil-and-gas districts. Eventually this spark of separation was doused by the recent gerbangdutas’ pledge of funds and the moratorium on the creation of new provinces. On the surface, Jakarta’s development funds for Natuna seem to be what the region needs. However, further dependency on the central government’s resources may not be helpful in boosting the local economy in the long run. By focusing on the dependence of regions to central government transfers, this article aims to highlight the causes of Natuna’s lack of income despite its natural wealth.