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Enormous untapped potential for SMEs

Interview - August 23, 2016

Indonesia’s West Nusa Tenggara province, whose two largest islands are Lombok and Sumbawa, is encouraging its youth and SMEs with a plan to create 100,000 new entrepreneurs. It is also looking to maximize the maritime potential of the Lombok Strait, and in tourism it sees no problem in hitting its target of boosting visitor numbers by 50%. Governor Muhammad Zainul Majdi has the details.



As Governor of West Nusa Tenggara (NTB), how has the region changed during your time in office? 

We have had a lot of changes, for example our economy now is relatively stable, and in the last two years it has performed above the national average. We are ambitious about how the growth in West Nusa Tenggara (NTB) can contribute positively to the national growth of Indonesia. Furthermore, we are hoping to have more sustainable growth. One of our main priorities is ensuring that the environment in NTB can support our growth in the long term.


In terms of stable economy and sustainable growth, how are your programs with entrepreneurs and young people contributing to the economy of West Nusa Tenggara?

Since 2008 we introduced our program called “100,000 Wirausaha Baru” (100,000 New Entrepreneurs). The backbone of this program is our youth and we aim to empower the young generations of NTB through its implementation. I believe that NTB’s economic structure can be strengthened not only in the agriculture sector, but also in the entrepreneurial sector. Through this strengthening we can create sustainable growth through micro and small-medium enterprises.


This is very much in tune with the World Islamic Economic Forum, which is focused on decentralizing growth and improving future business by creating opportunities for SMEs. One of the factors that will contribute to the success of SMEs is connectivity. How is connectivity being improved in NTB?

Our President has declared creating the global maritime axis as one of his administration’s priorities, and of course we will contribute to do that. In fact, to achieve this global maritime axis, a key factor would be the utilization of Lombok Strait (Selat Lombok). Lombok Strait has several characteristics that Malaka Strait does not have. Firstly, Lombok Strait’s sea is very deep, so it could accommodate very large vessels. Secondly, Lombok Strait is already well known internationally. There are already a lot of vessels from Europe, Japan and China going through this strait. If we focus on making it a global hub, I believe we would attract even more from the shipping and logistics industry.

We have a very good location for a potential port in Lombok called “Kayangan”. We have already started talking with the people there, so I believe the needs of land acquisition could be fulfilled. We will be preparing the regulations that will accommodate this plan now, and we are communicating with the central government to make the territory a Special Economic Zone (SEZ). This aims to give incentives for investors who plan to build and develop Kayangan area.


What would you like to communicate to the international investors who are considering investing in the Special Economic Zone or tourism businesses of West Nusa Tenggara?

We would like to communicate the potential that NTB has; we have already become a major destination, but we still have much to develop. We are just next to Bali and we can use this to our advantage to leverage our tourism potential. We also have very diverse tourism attractions here, from mountains such as Rinjani and Tambora, to the deep ocean. Lombok is really a one-stop destination.

Beyond this, our Mandalika Special Economic Zone is one of the 10 main destinations for tourism development beyond Bali. Our geostrategic position in terms of sailing makes it possible to be developed as a global hub, especially in the northern area of Lombok.

NTB also has amazing potential in agriculture, particularly in products such as paddy, corn, seaweed, and fisheries. We would like to say that Lombok and Sumbawa, as a part of NTB, are very conducive to investment. We want to give the best incentives for investors to invest long term in our area.


Your work in attracting “Muslim or family-friendly tourism” has been lauded by the Minister of Finance, Minister of Tourism and Coordinating Minister of Maritime Affairs. What role do you think halal tourism or family-friendly tourism will play in Lombok’s future?

Objectively family-friendly tourism is a huge market and it keeps on growing year after year, yet Indonesia has never really taken this market seriously. Starting from last year, Indonesia has decided to take this market more seriously and NTB has declared to the central government that we are willing to be the first province to develop this family-friendly tourism, or Muslim-friendly tourism.

We believe that this will be very good for NTB’s tourism development, because we are still going to facilitate conventional tourism. We have already prepared the local regulations and we invite our partners and stakeholders to prepare themselves to move ahead with these developments. We believe the new market of Muslim-friendly tourism in NTB will contribute immensely to national development and recognition.

In 2008, NTB received 480,000 tourists, and then by 2013, we reached 1 million tourist arrivals. In the year of 2016, we have already achieved 2 million tourists. As we can see, the growth accelerates very quickly under the right conditions. Our target from the Minister for this year is very ambitious, 3 million tourists. Other regions had targets of a 20% increase, the Ministry gave us the target of a 50% increase and we are very optimistic about reaching that target.


What could people learn from what Lombok has been doing in the tourism industry?

Tourism in NTB has one very important lesson for us; the values of Islam are compatible with tourism. So it is wrong if people say that tourism cannot grow in an area with a Muslim majority. It shows that Islam actually teaches people to be open, live in harmony and contribute to the society for their shared interest. NTB sets an example as the majority of the people here are Muslim, but other religions live in peace and harmony in NTB. With this we would like to say that harmony is our most precious asset. In Indonesia you see that Islam contributes positively, unlike in other countries that make Islam’s teaching the base of their conflicts and destruction. In Indonesia, our diversity makes us stronger.

Second, I would also like to say that the potential for the small and medium enterprises to develop in NTB is enormous. We just need the financial access. We believe with enough capital we could really see decentralized growth, but this is only possible if there is inclusive financial access. It is very important that everyone can access financial services. Here, we are trying to create a bridge between SMEs and existing financial and banking services. We hope that countries attending the WIEF can work to create a model that ensures financial access to everybody. Huge capital cannot give any benefit to society if the people cannot access it. It is very important to create a model that gives people the opportunity of financial access.


What makes Lombok so unique?

I think it is about harmony in Lombok. It is our culture and we are doing our best to maintain it. It is our most important asset, yet it is intangible.