Huge capital investments tap minerals of Sumatra
Medan, Sumatra — Just past an orangutan rehabilitation center and near the former headhunting tribes known as Bataks, a visitor to the California-size island of Sumatra can find the iron ruins of the first oil strike in Indonesia.
The well was drilled in the late 1800s by a Dutch plantation owner, and the site now displays a plaque that reads: ''No reason exists to be overproud, as this ruin proves.''
What people are to Java, natural wealth is to Sumatra. This jungle and volcanic island, the largest in Indonesia's 13,000-island archipelago and the fifth largest in the world, carries the pride of providing over half of the nation's export earnings, including oil, natural gas, tin, rubber, and palm oil.
Once the center of an ancient Southeast Asia trading kingdom, Sumatra in recent times was cherished for its spices, then rubber, then petroleum. But it does not stop there.
With the richest resources in Indonesia, Sumatra has become the focus of an estimated $15 billion (US) of investment to keep the well of wealth pumping. ''Most development is so new in Sumatra that it will be three to four years before we see much. But within 10 to 15 years, Sumatra will change the face of Indonesia,'' says Dr. Mohammad Sadli, former minister of mines and a University of Indonesia economist.
The latest project on Sumatra opened this year: a $2 billion aluminum-hydroelectric plant, which is 78 percent financed by the Japanese. It expects to be producing 225,000 metric tons by 1984. The smelter runs off the power of the Asahan River, which flows out of Lake Toba, an old volcanic crater and the largest lake in Southeast Asia.
Also in the works is a $1.7 billion olefin plant in the northern province of Aceh, to be built by Exxon Chemical Company. The plant will rely on one of the largest natural-gas finds in the world. Then there is the $1 billion oil hydrocracking plant in central Sumatra plus a $900 million aromatics plant for supplying a planned synthetic textiles industry. Three cement plants, two urea fertilizer plants, and a multibillion-dollar project to tap the estimated 10 billion tons of low-quality coal are also under way.
All these capital-intensive projects are meant to provide the ''upstream'' raw materials for Indonesia's industrialization in the next decade. ''Sumatra is where the action is. It is the fastest-growing area of Indonesia,'' says a consultant to Royal Dutch Shell.
Most of the money made on these projects will go to the central government in Jakarta and to foreign investors. Sumatra, which is four times the size of Java, only has one-third of Java's population of 92 million people. Resentment against the Javanese creaming off Sumatra's profits helped spark a secessionist movement in the mid-1950s, and the fundamental Islamic community of Aceh flared up as a source of dissent in the 1970s. For political as well as economic reasons, the government places high value on Sumatra as a ''growth center.''
With World Bank backing Indonesia plans to balance the capital-intensive projects with the replanting and rehabilitation of some 42 percent of the island's 6 million acres of rubber plantations. About one-quarter of the Sumatrans survive on rubber, either as plantation workers or small holders.
One does not find the grinding poverty of Java on this lush land. In Medan, the largest city, with 1.5 million multiethnic people and once the home of Dutch plantation owners, a vast wealth based on the export trade is developing, as seen by the forest of television antennas on the tin and tile roofs. A drive into West Sumatra reveals a land of Japanese motorcyles and bullock carts, Christian churches and Muslim mosques side by side, and mile after mile of rubber, tea, cocoa, coffee, and palm plantation, all sitting below a dozen gurgling volcanoes on the island.
This is a land of roaming tigers, elephants, orangutans, rhinos, flying foxes , and proboscis monkeys. It is home to the largest flower in the world -- one yard across -- as well as nomadic aboriginals, missionized ex-cannibals, and the matriarchial societies of the Minangkabau.
In central Sumatra, Riau is known as the ''golden province'' because no other region has contributed more to the central government's coffers. Riau is home to the giant Minas onshore oil field, discovered in the 1940s and operated by Caltex Pacific Indonesia. Dozens of oil rigs dot the Sumatran landscape like tiny man-made volcanoes of wealth. The new wealth and open land have attacted hundreds of thousands of Javanese peasants to south Sumatra.