t The macro-economic environment
Developing the Business Case for Investing in Inclusive Business in Indonesia: A Market Scoping Study 35
The economic environment in Eastern Indonesia
The provinces of Eastern Indonesia are considered to be the least developed and the most challenging both in terms of business environment and development activities. In Eastern Indonesia, natural
population growth exceeds the national average and increases exponentially as you travel further east. Although the unemployment rate is below the national average except in three districts East
Kalimantan, Maluku and Papua Barat
2
there is a higher tendency towards informal labour and underemployment is higher. Immigration has been low since the Suharto regime, which contributes to
the egio s sta ilit . A e eptio is in the Malukas where there has been violence originating from ethnical andor religious differences as well Papua where that has also been ongoing tensions.
There is considerable disparity and diversity of social, natural and built environments between regions and economic development trends Key indicators clearly show the challenges in Eastern Indonesia..
National statistics indicate that 14.7 of people in Eastern Indonesia are below the poverty line compared to 12.0 nationally. Eastern Indonesia scores lowest on the Human Development Index HDI
with a score of 70.1 compared to the national score of 72.0. Its population is also spread out over a wide area, indicating that services may be more difficult to access, despite the general trend towards
urbanization.
The region however scores better than the Indonesian average for the Gini-coefficient the most commonly used measure of inequality, which may be due to not having so many of the super wealthy
as in Bali or Jakarta. Surprisingly, Eastern Indonesia has a higher average wage than the national figure. This may be skewed by who is captured in the data. For example, Maluku and Papua, generally
considered among the poorest areas with 23 of people living below but an average monthly wage of IDR 2,061,500 far greater than the national average
Indonesia socio-economic indicators
Land a re