Friday, 11 September 2026
MEDAN | INDATANEWS.COM - North Sumatra Governor Muhammad Bobby Afif Nasution has proposed four models for regional cooperation aimed at integrating the economic potential of the 10 provinces on Sumatra Island.
The proposal was presented during the Coordination Meeting of Sumatra Governors, held as part of the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) series of events at the JW Marriott Hotel Medan on Wednesday, September 9, 2026.Bobby said Sumatra has enormous economic potential, both in terms of production and markets as well as its available workforce. However, this vast potential has yet to fully translate into greater regional economic strength because individual regions continue to develop their respective production sectors largely independently.
According to Bobby, Sumatra now needs a cooperation model that connects the potential of each province rather than simply seeking new sources of economic growth. Such integration is crucial to ensure that key commodities and products from different regions generate greater added value while strengthening Sumatra's competitiveness in both national and international markets."The challenge is no longer whether potential exists on the island of Sumatra. The challenge is how we connect and consolidate this potential so that it becomes a major force for the region and for Indonesia," Bobby said.
As the first model, Bobby proposed integrating the value chains of major regional commodities. In his view, regions across Sumatra should no longer serve merely as raw-material production centers but should increasingly develop interconnected processing industries, from raw-material extraction to final processing.
Bobby cited palm oil in North Sumatra as an example. According to him, the province now produces around 120 downstream palm-oil products. He said the figure demonstrates that palm oil still has significant development potential, particularly if provinces across Sumatra integrate their downstream industries.Regional governments, he said, could connect production centers with industrial estates so that raw materials do not immediately leave the region in unprocessed form. Under this model, processing could take place closer to production sites, thereby generating greater added value for regional economies.
Bobby also believes that an integrated value-chain model could be applied to numerous other commodities that represent Sumatra's economic strengths. At the same time, the approach could create an industrial ecosystem involving farmers, businesses, processing industries, traders and logistics service providers.The second model involves developing integrated areas across provincial boundaries, particularly by strengthening the logistics sector. Bobby emphasized that logistics costs have a significant impact on the prices of goods and commodities across Sumatra.
According to him, logistics accounts for around 30 percent of the price formation of goods on Sumatra. Therefore, better regional connectivity is a key factor in reducing distribution costs while increasing product competitiveness.Bobby proposed the construction of railway connections linking several production centers with similar commodity and raw-material profiles. He cited improved connectivity between Aceh, North Sumatra and West Sumatra as an example.
Such connectivity would allow the government to consolidate agricultural products from several regions before they reach export markets. Stronger logistics infrastructure could also facilitate access to international trade routes through the Malacca Strait and the Indian Ocean, providing access to major markets such as China and India.
The third model proposed by Bobby focuses on project-based and timely cooperation. He criticized the fact that cooperation between regions has often remained at the stage of discussions and memorandums of understanding, preventing it from reaching its full economic potential.
To address the issue, Bobby proposed establishing a joint regional enterprise in the form of a BUMD operating across provincial boundaries on Sumatra. Such an institution could provide an alternative financing mechanism for regional projects requiring substantial investment and involving the interests of more than one province.He also proposed establishing a banking consortium comprising regional development banks. The model would involve eight regional development banks (BPDs) owned by the 10 provinces on Sumatra.
Bobby said cooperation between regional enterprises and development banks could create a stronger financing framework for implementing joint strategic projects. Regional governments would not have to carry out all projects separately but could pool their financial resources according to their respective needs and potential.Bobby linked the proposal to the Danantara concept at the national level. In the context of Sumatra, a similar form of cooperation could be directed toward supporting projects with cross-regional impacts and increasing productivity across the island.
The fourth model focuses on stabilizing food prices and strengthening the agricultural sector. Bobby called on all provinces across Sumatra to provide greater support for national food self-sufficiency while establishing a food reserve system capable of responding to potential disruptions in supply.As an example, he pointed to the North Sumatra provincial government's establishment of a food reserve warehouse, or buffer stock, on Nias Island. The facility is connected to port access, allowing the government to secure supplies of essential food commodities and help stabilize food prices in the island region.
"In some remote areas, there should be food supplies, a minimum stock equivalent to a three-month food reserve for the region," Bobby said.In his view, food reserves are particularly important in remote areas because these regions face distribution challenges that differ from those on Indonesia's mainland. Regional governments could use buffer stocks as an instrument to maintain supplies during disruptions in deliveries or periods of rising prices.
In the first half of 2026, its contribution increased to more than IDR 2,812 trillion. In terms of population, Sumatra accounted for 21.9 percent of Indonesia's total population. The island's large population also highlights the potential of its domestic market, which could support the growth of industry and trade across the region.
Sumatra's economic strength is also reflected in the contribution of various commodities to national production. Rubber accounts for around 75 percent of national production, coffee for 74 percent, while palm oil contributes more than 55 percent.In addition to these three commodities, coconuts and sugarcane each account for more than 30 percent of national production. Cocoa as well as marine and fisheries products each contribute more than 20 percent.
These figures show, Bobby said, that Sumatra already has sufficient production scale to become one of the main engines of Indonesia's economic growth. The central challenge is to connect production with processing industries, markets, infrastructure and financing.Bobby believes Sumatra's 22.08 percent share of national economic output can still be increased. At present, the island's economy remains heavily dependent on commodity production. Therefore, regional governments need to accelerate the transition toward a more industrial and processing-oriented economy.
He hopes the four models can become concrete steps toward stronger economic integration across Sumatra. Regional cooperation, he said, should not merely result in agreements reached at forums but should also produce concrete projects that directly benefit the people.Jambi Governor Al Haris welcomed the proposal and expressed hope that interregional cooperation would continue. In his view, stronger coordination is necessary for Sumatra to develop as an integrated economic region while achieving more balanced regional development.
Al Haris also expressed his support for the proposals put forward by Bobby Nasution. He viewed a stronger role for Sumatra's provinces not only as important for regional economic growth but also as an opportunity to make a greater contribution to the national economy."What is important is our shared commitment through this coordination meeting to strengthen the important role of the provinces on Sumatra, so that this will not only influence national economic growth but also strengthen the regional economy on Sumatra," Al Haris said.
The coordination meeting was also attended by Home Affairs Minister Tito Karnavian, West Sumatra Governor Mahyeldi Ansharullah, Jambi Governor Al Haris, Aceh Deputy Governor Fadhlullah, Bengkulu Deputy Governor Mian, and Acting Secretary of the North Sumatra Provincial Government Timur Tumanggor.The meeting provided Sumatra's provincial governments with an opportunity to strengthen coordination in response to the region's economic challenges. With its substantial potential in commodities, population, markets and geographic location, regional integration could provide an important foundation for Sumatra to evolve from not only a production center but increasingly into a competitive industrial and trading region. (IDNC)
REPORTER: Ahmad Zulfikar | EDITOR: Fik Sagala
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