East Nusa Tenggara is a province in Indonesia covering the eastern part of the Nusa Tenggara Islands. This province has 22 regencies or cities with a capital named Kupang. In terms of the structure of the business field, the economy of East Nusa Tenggara Province is still dominated by the agriculture, forestry, livestock, and fisheries sectors.
In the agricultural sector, dry land is one of the potential sectors in East Nusa Tenggara Province which the East Nusa Tenggara Government and the Ministry of Agriculture of the Republic of Indonesia continue to encourage so it can be developed into a supportive economy and food security for the community.
Initially, the prospect of agriculture in East Nusa Tenggara was considered unpromising and was pushed aside because there was too much dry land. However, with the tenacity of its people, now East Nusa Tenggara has several agricultural commodities that can be developed in commodity barns to meet national needs.
In 2019, several commodities from East Nusa Tenggara were exported to Timor Leste through the National Border Post of PLBN Mota’ain, namely 17.5 tons of soybeans, 5 tons of peanuts, 0.75 tons of green beans, and pepper/pepper, 40 kilograms worth IDR 199.5 million. Even though the overall value was not large, it was a good indicator for the development of its business. Apart from that, several other commodities exported to Timor Leste include fresh vegetables, fruits, soybeans, and shallots.
For the forestry sector as referred to the 2018 data from the Ministry of Forestry, the area of forest and marine conservation in East Nusa Tenggara Province as based on the Decree of the Minister of Forestry No. 3911/Menhut-VII/KUH/2014 measured at 1,784,751 hectares (Ha) spread over 291 Forest Areas (KH) with 27% land cover and 73% non-forest. There are also several types of forestry products that grow in East Nusa Tenggara such as mixed jungle, teak, mahogany, red wood, Sengon wood (albizia chinensis), candlenut, gmelina, and kapok (ceiba pentandra).
Meanwhile, the non-wood products that can be produced there include tamarind, candlenut, sandalwood, papaya wood, and honey. For forestry products, teak furniture products have contributed as much as 191 cubic meters with an export value of IDR 2 billion until September 2020. These export commodities have been confirmed to be healthy and safe, as well as in accordance with the export requirements of the leading destination countries by issuing a guarantee certification free from plant diseases.
Sandalwood (Santalum album) trees from East Nusa Tenggara are also popular and highly demanded in the international market. The derivative products from these trees are sandalwood and sandalwood oil. Due to its fragrant nature, the wood can be used as spices, incense, aromatherapy, perfume mixes, and even for making traditional weapon of sangkur kris (warangka). A good sandalwood has a scent that last for centuries.
Based on data from the Center for Research and Development of Biotechnology and Forest Plant Breeding (B2P2BPTH), sandalwood shipments from East Nusa Tenggara reached IDR 2.5 billion per year in the period 1986-1992 or contributed 40% of the province’s revenue.
However, due to lack of management in the management of its resources, in the 1991 to 1998 period sandalwood exports from East Nusa Tenggara experienced a decline and its contribution to Regional Original Income (PAD) also shrank to only 12% to 37%.
The decline in exports continued until 1997 there were no more exports from this area. The Environment and Forestry Service (LHK) of East Nusa Tenggara is trying to regain the fragrance of sandalwood by improving cultivation management.
In the period of 2010–2018, it was recorded that there were 3,344,317 sandalwood trees planted in the East Nusa Tenggara. Normally, it takes about 25 years to get a good sandalwood tree. Due to this reason, at the present time sandalwood has not been able to contribute significantly to growth in the forestry sector in East Nusa Tenggara.
In addition, the economy and the life of the people of East Nusa Tenggara are also closely related to cattle farming. It is recorded in history that since 1938, breeders from East Nusa Tenggara have sent 3,000 cows to Hong Kong. This has continued in the following years, until the local government focuses on meeting the needs of domestic cattle. With special historical value for the local people, activities of raising cattle are considered a priority in East Nusa Tenggara. Consequently, it is no wonder that cattle farming is a leading commodity in East Nusa Tenggara, especially Kupang. It was recorded that in 2019 as many as 80,440 cows were sent out of the region to meet the demand for domestic beef in Indonesia, more than half of which was supplied from Kupang.
However, since the beginning of 2020, cattle farms in East Nusa Tenggara have continued to experience losses. Since East Nusa Tenggara was hit by the COVID-19 pandemic, the livestock business has slowed down.
The implementation of social restrictions since March 2020 has had an impact on the inter-island commodity trade traffic, including cattle. This makes the revenues from the livestock business remains stagnant. The impact of the COVID-19 pandemic has limited ship departures and even closed the operation. Consequently, cattle cannot be sold to the destination as usual, but it does not last long. With government support and loan assistance from banks, businessmen can survive until port operations in East Nusa Tenggara can be operated again (for several business sectors that are in dire need).
Based on data from the Livestock Service Office of East Nusa Tenggara, the increase in demand in 2020 is related to the delivery of cows for sacrificial animals ahead of the Eid al-Adha celebration at the end of July 2020. Looking at the developments in the previous year, the number of requests was increased a few months before Eid al-Adha.
It is noted that the number of demands for cattle for Qurbani delivery to Jakarta continues to increase. The request reached thousands of heads. In early July, the number of cows sent specifically to the Special Capital Region of Jakarta could reach 11 thousand head, excluding the number of deliveries to the Kalimantan region.
The target of sending special livestock for 2020 is around 54 thousand heads. However, until June 2020, only 28 thousand head of cattle were sent outside East Nusa Tenggara. This was constrained by several damaged marine toll ships and several ships that were supposed to be operating to transport livestock in East Nusa Tenggara were moved or seconded to other areas outside East Nusa Tenggara.
During the COVID-19 pandemic, the activity of sending cattle out of the province is still carried out by implementing the health protocol to prevent this disease. Due to the high demands, currently there are a lot of cattle available in the quarantine place before they are sent to the destination area, even exceeding the capacity of livestock ships. This shows that the high potential of East Nusa Tenggara cattle farming in supporting national demand.
As for the fishery products, the number of fishermen households in Sikka Regency in 2019 was 5,085 scattered on the north and south coasts. Based on its track record, Sikka Regency in East Nusa Tenggara Province is one of the main capture fisheries products producers in eastern Indonesia.
In 2019, marine fish production in Sikka Regency reached 19,287.3 tons with a value of IDR 351.8 billion. The fishery products were sold locally and to other areas in the island of Flores. The skipjack tuna production in 2019 was 3,150.75 tons with a production value of IDR 44.11 billion, while tuna was 1,930.5 tons with a value of IDR 86.87 billion. Especially for tuna and skipjack, these fishes are sold outside East Nusa Tenggara, such as to the islands of Bali and Java and are exported abroad. Export destination countries for fishery products are Japan, South Korea, China, Vietnam, Malaysia, and Singapore.
In 2020, the Ministry of Marine Affairs and Fisheries (KKP) is encouraging the acceleration of the export of marine products from East Nusa Tenggara to neighboring countries such as Timor Leste and Australia. The Ministry will encourage the aquaculture sector in East Nusa Tenggara, one of which is seaweed. The seaweed cultivation process at Oesina Beach is not optimal so it needs to be maximized so that the production capacity increases.
As reported officially by Statistics Indonesia for Kupang City (BPS Kota Kupang) regarding its general economic growth, the economy of East Nusa Tenggara for the second quarter of 2020 (YoY) was contracted by 1.96% compared to the second quarter of 2019 (YoY). It was because most business sectors had economic contraction during this quarter.
However, several business fields are still experiencing positive economic growth. The highest growth was achieved by the information and communication business sector at 15.36%. This was followed by the financial services at 12.32%, while the electricity and gas supply at 11.76%.
In the second quarter of 2020 (y-o-y), the economic structure of East Nusa Tenggara had not changed significantly. Agriculture, forestry, and fisheries businesses still provided the largest contribution to the economy of East Nusa Tenggara by 30.01%, followed by government administration, defense, and social security business with a contribution of 14.44%, and the last ones were wholesale-retail trading and car and motorbike repair business at 11.04%.
Looking at the economic growth in East Nusa Tenggara in the second quarter of 2020 (YoY), the information and communication business field contributed the largest economic growth at 1.34%, followed by the Government administration, defense, and compulsory social security business and the financial services at 0.87% and 0.45%, respectively.