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

June 12, 2025

Energy and Mineral Resources (ESDM) Deputy Minister Yuliot Tanjung revealed the latest developments for 2 million hectares (ha) of sugarcane land in Merauke Regency, South Papua Province to supply bioethanol raw materials. 

Yuliot stated that he could not yet affirm when the 5 percent bioethanol gasoline fuel mandate, or E5, would be implemented; but the deputy minister ensured that the government is currently accelerating the process of providing domestic ethanol raw materials.

"One of them is the acceleration of the development for integrated sugarcane plantation and bioethanol [production] in Merauke, South Papua," said Yuliot when met at his office on May 16, 2025.

He elaborated that the development of Merauke's sugarcane land has been completed in the first half (H1) of 2025. Currently, machinery and equipment orders for sugarcane and bioethanol projects in the region have also been underway.

"The plantation and [ethanol factory] could now be prepared, so [the relevant] raw materials and policy [measures] can now be implemented," he said.

The government has previously formed the Sugar and Bioethanol Self-Sufficiency in Merauke Regency Acceleration Task Force. The Investment and Downstream Ministry/Investment Coordinating Board (BKPM) had also confirmed that PT Global Papua Abadi and other investors in consortiums for the project had begun making various preparations for sugar and bioethanol production.

In the middle of last year, when he was still Investment Deputy Minister/BKPM Deputy Head, Yuliot said that the investors had begun carrying out field activities in the form of preparing seed gardens and laboratories to conduct soil, pest, and seed research.

"PT Global Papua Abadi's investment activities in sugarcane plantations are integrated with the sugar and bioethanol industries," he added.

Yuliot also said that five sugar factories would be built in Merauke Regency to process sugarcane from a plantation area of ​​around 400,000 ha in a single supply chain ecosystem. Development of cluster 3 land in Merauke with a total area of ​​2 million ha for the sugar and bioethanol project has been carried out since the first quarter (Q1) of 2024.

The government has also identified the land to be used as part of the Sugar and Bioethanol Self-Sufficiency Acceleration in Merauke Regency Task Force's mission with Presidential Decree (Keppres) No. 15/2024. The total investment value needed to develop 2 million ha of sugar cane land in Merauke is claimed to be almost US$8 billion(around Rp130 trillion at Rp16,252.15 per US$1).

Moreover, there is set to be five consortiums involved in the development of five sugar factories, sugar factory land, as well as bioethanol production, plantations, and power plants with a capacity of 120 megawatts (120 MW). Yuliot divulged that PT Sinergi Gula Nusantara (PT SGN), or Sugar Co, and Wilmar Group will join the consortium.

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