North Kalimantan

Indonesia's newest province emerged in 2012 from a centuries-old borderland. A 16th-century Kayan princess married a Brunei nobleman, creating a princely state at Tanjung Selor whose territory once stretched into what is now Malaysian Sabah. The Dutch discovered oil at Tarakan in 1901, and production peaked at 18,000 barrels daily in the 1920s, making the island a strategic prize that Japan seized during World War II.

North Kalimantan was carved from East Kalimantan specifically to reduce Malaysian influence over this border territory. The bet paid off: exports through provincial ports reached US$361 million in January 2024 alone, with coal dominating shipments. Yet coal dependency proved a constraint when South African prices undercut North Kalimantan's India-bound exports, limiting growth to 4.66% in Q4 2024. Tarakan's oil revival—2,700 barrels/day in 2023, the highest since 2008—offers hope, as does newly discovered gas in the Tarakan Basin.

The province maintains ferry links to Malaysian Tawau and participates in trilateral maritime patrols against terrorism spillover from Sabah. By 2026, North Kalimantan will test whether its border position becomes an economic advantage—a gateway to Malaysian and Brunei markets—or remains a security burden requiring constant surveillance.