Province

South Papua

Overview Economy

Papua – South Papua

Situated on Papua Island, South Papua is a newly established province in Indonesia. Its establishment was administered under Law No. 14/2022, signed by President Joko “Jokowi” Widodo on July 25, 2022. Through this law, the province of Papua underwent an administrative division, resulting in the formation of South Papua province.

Encompassing the southernmost portion of Papua, the province shares its land borders with Papua province to the north and the independent nation of Papua New Guinea to the east. To the south, it is bounded by the Arafura Sea, and to the west, by the Aru Sea.

Up to 120,279 square kilometers of landmass covers South Papua, which is also home to 553,910 individuals. Additionally, the province is divided into four districts, namely the Mappi district, Asmat district, Boven Digoel district, and Mappi district, which also serves as the province’s capital city.

In South Papua, Christianity is the dominant religion, according to 2023 data from the Directorate General of Population and Civil Registration Office. It represents 72.57 percent of the population, with Catholicism being the most prevalent Christian denomination at 49.62 percent, followed by Protestantism at 22.95 percent. Other religions, including Islam, were recorded at 27.28 percent, Hinduism at 0.11 percent, and Buddhism at 0.04 percent, making up a smaller portion of the province’s religious landscape.

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Economic Description

Despite being a recent addition to Indonesia's provinces, South Papua's economy is maintaining a steady pace. In 2022, the province’s Gross Regional Domestic Product (GRDP) reached Rp 28.6 trillion, with the construction sector serving as the province’s leading sector with a significant contribution of Rp 6.9 trillion. It is closely followed by the agriculture, forestry, and fisheries sector at Rp 6.1 trillion, and the wholesale and retail trade sector, including cars and motorcycles reparation, at Rp 3.5 trillion.

The construction sector’s leading role in South Papua extends from thriving construction activity across Papua Island. Subsequently, given the province’s recent establishment, the construction of essential infrastructure fuels activity across various sub-sectors, positioning construction as the backbone of South Papua’s ongoing economic development.

Furthermore, the agriculture, forestry, and fisheries sector is the second leading sector in South Papua. Within this sector, the largest sub-sector is farming and livestock, contributing nearly Rp 2.8 trillion. Fisheries closely follow with Rp 2.7 trillion, along with forestry at Rp 605 billion.

Lastly, the wholesale and retail trade sector has emerged as the third leading contributor to South Papua’s economic well-being. This sector experienced a significant growth rate of 8.76 percent in 2023, showcasing its potential to become an even more vital driver of economic activity in the province in the future.

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Latest News

October 7, 2025

Energy and Mineral Resources (ESDM) Deputy Minister Yuliot Tanjung confirmed that the construction of a bioethanol processing plant in Merauke Regency, South Papua Province, is still targeted for completion in 2027 since a domestic company has already invested in the project. The plant would process sugarcane from 2 million hectares (ha) of land included in the Sugarcane Plantations National Strategic Project (PSN) in Jagebob District, Merauke Regency.

"The planting process was initiated out by [former] President Jokowi (Joko Widodo), and the factory construction is expected to be completed in 2027. This is already underway," Yuliot told the media in South Jakarta Administrative City, Jakarta Special Capital Region (DKI) on Sep. 23, 2025.

When questioned regarding the House of Representatives' demand for the Sugarcane Plantations PSN to be halted, Yuliot explained instead that the project has significantly contributed to the local community.

"There are new jobs being created for them. The total workers employed has reached more than 3,000 people," he added.

Yuliot previously informed in mid-August 2025 that the sugarcane processing plant was under construction, which is expected to support the program to increase bioethanol in gasoline blends.

House Commission XIII member Marinus Gea of the Indonesian Democratic Party of Struggle (PDIP) faction has demanded that the government temporarily halt the Sugarcane Plantations PSN in Merauke Regency until the rights of the Yei indigenous people are guaranteed. Furthermore,  the PDIP faction of the DPR has also urged the government to take firm action against illegal activities in Yei, such as conducting an audit of the concession permits already granted for the PSN.

"Customary land is a part of the community's identity and culture, as well as a source of livelihood for indigenous groups. Attempts to seize customary land under the pretext of developing national projects constitute a betrayal of the constitution," said Marinus in a recent press release.

PT Murni Nusantara Mandiri (MNM), the company holding a 52,700-hectare concession permit for sugarcane plantations in Jagebob District, Merauke Regency, is suspected of seizing the Yei community's customary land. The Pusaka Foundation recorded that 4,912 ha of forest had been cleared as of August 2025. The indigenous community has resisted the land clearance in response, accusing the company of intimidation and land grabbing.

The non-governmental organization (NGO) Greenpeace Indonesia reported that residents of Jagebob District, Merauke Regency, directly confronted bulldozers and excavators from a sugarcane company encroaching on their customary land. The heavy equipment from PT MNM encroached despite the Kwipalo clan's firm refusal to relinquish their land.

"This customary land grabbing is occurring, once again, in the name of the Sugarcane Plantations PSN, a program initiated by the 7th President Joko Widodo and now continued by President Prabowo Subianto," Greenpeace Indonesia stated on its official Facebook account.

The sugarcane plantation was opened by PT Global Papua Abadi to serve the sugar and bioethanol industries. The total investment required to develop 2 million hectares of sugarcane plantations in Merauke Regency is estimated to be nearly US$8 billion. The project is set to involve five consortiums developing five sugar mills, the requisite land for the mills, bioethanol production, sugarcane plantations, and a 120-megawatt (120 MW) power plant.

Deputy ESDM Minister Yuliot revealed back when he was Deputy Investment Minister/Investment Coordinating Board (BKPM) Deputy Chair that PT Sinergi Gula Nusantara (PT SGN), also known as Sugar Co, and the Wilmar Group would be joining the project.

ESDM Ministry New, Renewable Energy and Energy Conservation Director General Eniya Listiani Dewi divulged that half of the 2 million ha of sugarcane plantations would be used to supply feedstock for bioethanol. She targeted the bioethanol supply to replace the current market share of Pertalite. Eniya also said that land preparation for the project is carrying out Presidential Regulation No. 40/2023, which regulates the acceleration of self-sufficiency in sugar and bioethanol.

 

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