Rupiah’s plunge makes farmers rich
THE FINANCIAL CRISIS & THE ASIAN HEARTLAND: INDONESIA
This is the second of a two-part series of articles by our reporter DERWIN PEREIRA on how North Sumatra is coping with the economic crisis. Today he looks at the differing fortunes of the construction and agriculture sectors.
Agriculture is reaping rich returns for North Sumatra.
Palm oil, rubber, tobacco and cocoa are found in plantations throughout this province of 12 million people.
Increased export of these produce triggered by the sharp rupiah devaluation has fattened the wallets of farmers in the last six months.
According to central bank statistics, export profits from the sector in May was up 88 per cent over comparable figures for May last year.
The strength of the North Sumatran economy is in its agricultural sector.
The local authorities have indicated that they will develop this industry even more, given the relative decline in other sectors such as manufacturing, construction and transport.
There are plans to export products such as nutmeg, clove and even aromatic herb oil in the next five years.
Analysts said that with rising incomes, outlying areas in the province are developing at a much faster rate now and attracting more and more people from the cities to its villages.
Economists said the prospects for agro business are promising in North Sumatra.