The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia

Ukar Wijaya Soelistijo; La Ode Aswandi; Marwan Zam Mili

doi:doi:10.11648/j.eco.20140302.12

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The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia

Ukar Wijaya Soelistijo, La Ode Aswandi, Marwan Zam Mili

Published in Economics (Volume 3, Issue 2)

Received: 26 June 2014 Accepted: 8 July 2014 Published: 20 July 2014

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Abstract

Within the last 35 years of 1975-2010 it was shown that within 1975-2000 the trend of convergence of economy between the provincial index of gross regional domestic product (GRDP) per capita with the national index of gross domestic product (GDP) per capita figured out by the ratio of the GRDP per capita of the richest province to the poorest province equaled 21 to 25 in 1975 toward around 12 in 2000, even though on the post 2000 the provinces which were before 2000 under the national GDP per capita index (<100) declining and lesser. The provinces which have reached the points of convergence by the year of 2000 are Aceh, North Sumatera, West Sumatera, South Sumatera, East Java, Central Kalimantan, South Kalimantan and Bali. It is indicated that within the next 30 years the several other provinces which could reach the points of convergence are West Java, Central Java, DI Yogyakarta, West Kalimantan, Riau, Papua and East Kalimantan. However, the other several provinces which are not fully convergent in the meaning of almost consistently existing above the national GDP per capita (what so called the ‘surplus’ provinces), are Aceh, DKI Jakarta, and Bali. Moreover, on the other side, several provinces with GRDP per capita which consistently exist below the national GDP per capita (what so called the ‘minus’ provinces) with the downward sloping regression or with the gently upward sloping regression. Toward achieving points of economic convergence, those ‘minus’ provinces have to trigger their potential prime sectors, which have high economic multipliers.In generating their regional income, it is shown that almost all the provinces of Indonesia still rely on the primary sectors such as mineral and agriculture, with the consequences of low added value. It is expected that mineral and coal and its downstream industries could be able to support the ‘minus’ regions to converge to the national index. Augmenting the regional economic growth, the regions should develop the secondary and services industry which have high value-added multiplier to extend the across-regional trade as well as between the regions in the country with the neighbors’ regions through subregional economic cooperation. Methodology applied in this study is based on regional economic modeling and observation.

Published in	Economics (Volume 3, Issue 2)
DOI	10.11648/j.eco.20140302.12
Page(s)	27-42
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Indonesia, GDP/GRDP Per Capita, Economic Multipliers/Linkages/Convergence

References

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[2]	Anonymous (a), “Produk Domestik Regional Bruto Provinsi-Provinsi di Indonesia Menurut Lapangan Usaha, 1975-1999,” Badan Pusat Statistik, 2000, Jakarta.
[3]	Anonymous (b), “Tabel Input-Output Indonesia 2005 Update 2008,” Badan Pusat Statistik, 2005, Jakarta.
[4]	Anonymous (c), ”Statistik Indonesia, 1984-1995,” Badan Pusat Statistik, 1996, Jakarta.
[5]	Anonymous (d), 1997, ”Peta Tematik Kegiatan, Sarana dan Prasarana Pertambangan dan Energi di Kapet Luar Jawa Bali,” Departemen Pertambangan dan Energi.
[6]	Anonymous (e), ” Master Plan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia.” (MP3EI), Kementerian Perekonomian RI, Istana Bogor 2011.
[7]	Anonymous (f), ”Statistik Indonesia 2012.” Badan Pusat Statistik, Jakarta, 2012.
[8]	G.S. Madala, 1977, “Econometrics,” Mc. Graw-HilI, Book Company, New York, 1977.
[9]	J. Naisbitt & P. Aburdene, 1990, “The Ten Directions For the 1990’s Megatrends 2000,” Avon Books, New York, 1990.
[10]	Mujib, R. Saleh, D. Sugandi, B. Yunianto, ”Studi manfaat regional dalam pertambangan batubara terhadap pengembangan wilayah di Tanjung Enim Kabupaten Muara Enim Propinsi Sumatera Selatan,” Laporan Pengembangan Mineral Regional No. 67, PPTM, Bandung, 1992.
[11]	U.W. Soelistijo, “Mining and Energy Sector Development Program in Eastern Indonesia,” ISSN 0854-9931, Indonesian Mining Journal, volume 5 number 3, October, 1999.
[12]	U.W. Soelistijo, ”Pengaruh Ekonomi Makro Regional Tambang Emas Pongkor – PT Antam Jawa Barat dan Potensi Transformasi Pasca Tambang.” Seminar Pembangunan Provinsi Jawa Barat, 12-13 Juni 2012, Jatinangor, Bandung, 2012.
[13]	U.W. Soelistijo, “Beberapa Aspek Terkait Investasi Dalam Usaha Pertambangan,” Pendidikan dan Pelatihan Analisis Potensi Untuk Penilaian Kelayakan Investasi, Pusdiklat Mineral dan Batubara, Bandung 13-15 Maret 2012.
[14]	U.W. Soelistijo, “Pengembangan Regional Berkelanjutan.” Fakultas Teknik Pertambangan dan Perminyakan ITB, 2012.
[15]	U. W. Soelistijo, L.O. Aswandi, 2014. “Future Trend of Mineral Industries Development in Indonesia.” Earth Science. Vol. 3, No. 2, 2014, pp. 58-67. doi: 10.11648/j.earth.20140302.14, 2014
[16]	V.B. Thomas, “Input-Output Analysis in Developing Countries: Sources, Methods and Applications,” John Wiley & Sons Ltd, New York, 1982.
[17]	W. lsard, “Introduction to Regional Science,” Prentice-Hall, Inc. Englewood Cliffs, New Jersey,1975.
[18]	W. Leontief, “ Input-Output Economics,” Oxford University Press, New York,1979.
[19]	W.H. Miernyk, “The Elements of Input-Output Analysis,” Random House, New York, 1965.
[20]	W.H. Miernyk, “Regional Analysis and Regional Policy,” Oelgeschlager, GunnHain, Publishers, Inc. Cambridge, Massachusetts,1985.

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APA Style

Ukar Wijaya Soelistijo, La Ode Aswandi, Marwan Zam Mili. (2014). The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia. Economics, 3(2), 27-42. https://doi.org/10.11648/j.eco.20140302.12

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ACS Style

Ukar Wijaya Soelistijo; La Ode Aswandi; Marwan Zam Mili. The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia. Economics. 2014, 3(2), 27-42. doi: 10.11648/j.eco.20140302.12

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AMA Style

Ukar Wijaya Soelistijo, La Ode Aswandi, Marwan Zam Mili. The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia. Economics. 2014;3(2):27-42. doi: 10.11648/j.eco.20140302.12

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@article{10.11648/j.eco.20140302.12,
  author = {Ukar Wijaya Soelistijo and La Ode Aswandi and Marwan Zam Mili},
  title = {The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia},
  journal = {Economics},
  volume = {3},
  number = {2},
  pages = {27-42},
  doi = {10.11648/j.eco.20140302.12},
  url = {https://doi.org/10.11648/j.eco.20140302.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20140302.12},
  abstract = {Within the last 35 years of 1975-2010 it was shown that within 1975-2000 the trend of convergence of economy between the provincial index of gross regional domestic product (GRDP) per capita with the national index of gross domestic product (GDP) per capita figured out by the ratio of the GRDP per capita of the richest province to the poorest province equaled 21 to 25 in 1975 toward around 12 in 2000, even though on the post 2000 the provinces which were before 2000 under the national GDP per capita index (<100) declining and lesser. The provinces which have reached the points of convergence by the year of 2000 are Aceh, North Sumatera, West Sumatera, South Sumatera, East Java, Central Kalimantan, South Kalimantan and Bali. It is indicated that within the next 30 years the several other provinces which could reach the points of convergence are West Java, Central Java, DI Yogyakarta, West Kalimantan, Riau, Papua and East Kalimantan. However, the other several provinces which are not fully convergent in the meaning of almost consistently existing above the national GDP per capita (what so called the ‘surplus’ provinces), are Aceh, DKI Jakarta, and Bali. Moreover, on the other side, several provinces with GRDP per capita which consistently exist below the national GDP per capita (what so called the ‘minus’ provinces) with the downward sloping regression or with the gently upward sloping regression. Toward achieving points of economic convergence, those ‘minus’ provinces have to trigger their potential prime sectors, which have high economic multipliers.In generating their regional income, it is shown that almost all the provinces of Indonesia still rely on the primary sectors such as mineral and agriculture, with the consequences of low added value. It is expected that mineral and coal and its downstream industries could be able to support the ‘minus’ regions to converge to the national index. Augmenting the regional economic growth, the regions should develop the secondary and services industry which have high value-added multiplier to extend the across-regional trade as well as between the regions in the country with the neighbors’ regions through subregional economic cooperation. Methodology applied in this study is based on regional economic modeling and observation.},
 year = {2014}
}

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TY  - JOUR
T1  - The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia
AU  - Ukar Wijaya Soelistijo
AU  - La Ode Aswandi
AU  - Marwan Zam Mili
Y1  - 2014/07/20
PY  - 2014
N1  - https://doi.org/10.11648/j.eco.20140302.12
DO  - 10.11648/j.eco.20140302.12
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 27
EP  - 42
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20140302.12
AB  - Within the last 35 years of 1975-2010 it was shown that within 1975-2000 the trend of convergence of economy between the provincial index of gross regional domestic product (GRDP) per capita with the national index of gross domestic product (GDP) per capita figured out by the ratio of the GRDP per capita of the richest province to the poorest province equaled 21 to 25 in 1975 toward around 12 in 2000, even though on the post 2000 the provinces which were before 2000 under the national GDP per capita index (<100) declining and lesser. The provinces which have reached the points of convergence by the year of 2000 are Aceh, North Sumatera, West Sumatera, South Sumatera, East Java, Central Kalimantan, South Kalimantan and Bali. It is indicated that within the next 30 years the several other provinces which could reach the points of convergence are West Java, Central Java, DI Yogyakarta, West Kalimantan, Riau, Papua and East Kalimantan. However, the other several provinces which are not fully convergent in the meaning of almost consistently existing above the national GDP per capita (what so called the ‘surplus’ provinces), are Aceh, DKI Jakarta, and Bali. Moreover, on the other side, several provinces with GRDP per capita which consistently exist below the national GDP per capita (what so called the ‘minus’ provinces) with the downward sloping regression or with the gently upward sloping regression. Toward achieving points of economic convergence, those ‘minus’ provinces have to trigger their potential prime sectors, which have high economic multipliers.In generating their regional income, it is shown that almost all the provinces of Indonesia still rely on the primary sectors such as mineral and agriculture, with the consequences of low added value. It is expected that mineral and coal and its downstream industries could be able to support the ‘minus’ regions to converge to the national index. Augmenting the regional economic growth, the regions should develop the secondary and services industry which have high value-added multiplier to extend the across-regional trade as well as between the regions in the country with the neighbors’ regions through subregional economic cooperation. Methodology applied in this study is based on regional economic modeling and observation.
VL  - 3
IS  - 2
ER  -

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Author Information

Ukar Wijaya Soelistijo

University of Islam Bandung (UNISBA), Institute of Technology Bandung (ITB), Mineral and Coal Technology R&D Center (MCTRDC), Center for Education and Training of Mineral and Coal (CETMC), Bandung, Indonesia
La Ode Aswandi

Institute of Technology Bandung (ITB), PT Tambang Sejahtera Indonesia, Bandung, Indonesia
Marwan Zam Mili

Institute of Technology Bandung (ITB), University of Halu Oleo (UHO), Kendari, Indonesia

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Plain Text BibTeX RIS

APA Style

Ukar Wijaya Soelistijo, La Ode Aswandi, Marwan Zam Mili. (2014). The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia. Economics, 3(2), 27-42. https://doi.org/10.11648/j.eco.20140302.12

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ACS Style

Ukar Wijaya Soelistijo; La Ode Aswandi; Marwan Zam Mili. The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia. Economics. 2014, 3(2), 27-42. doi: 10.11648/j.eco.20140302.12

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AMA Style

Ukar Wijaya Soelistijo, La Ode Aswandi, Marwan Zam Mili. The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia. Economics. 2014;3(2):27-42. doi: 10.11648/j.eco.20140302.12

Copy | Download

@article{10.11648/j.eco.20140302.12,
  author = {Ukar Wijaya Soelistijo and La Ode Aswandi and Marwan Zam Mili},
  title = {The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia},
  journal = {Economics},
  volume = {3},
  number = {2},
  pages = {27-42},
  doi = {10.11648/j.eco.20140302.12},
  url = {https://doi.org/10.11648/j.eco.20140302.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20140302.12},
  abstract = {Within the last 35 years of 1975-2010 it was shown that within 1975-2000 the trend of convergence of economy between the provincial index of gross regional domestic product (GRDP) per capita with the national index of gross domestic product (GDP) per capita figured out by the ratio of the GRDP per capita of the richest province to the poorest province equaled 21 to 25 in 1975 toward around 12 in 2000, even though on the post 2000 the provinces which were before 2000 under the national GDP per capita index (<100) declining and lesser. The provinces which have reached the points of convergence by the year of 2000 are Aceh, North Sumatera, West Sumatera, South Sumatera, East Java, Central Kalimantan, South Kalimantan and Bali. It is indicated that within the next 30 years the several other provinces which could reach the points of convergence are West Java, Central Java, DI Yogyakarta, West Kalimantan, Riau, Papua and East Kalimantan. However, the other several provinces which are not fully convergent in the meaning of almost consistently existing above the national GDP per capita (what so called the ‘surplus’ provinces), are Aceh, DKI Jakarta, and Bali. Moreover, on the other side, several provinces with GRDP per capita which consistently exist below the national GDP per capita (what so called the ‘minus’ provinces) with the downward sloping regression or with the gently upward sloping regression. Toward achieving points of economic convergence, those ‘minus’ provinces have to trigger their potential prime sectors, which have high economic multipliers.In generating their regional income, it is shown that almost all the provinces of Indonesia still rely on the primary sectors such as mineral and agriculture, with the consequences of low added value. It is expected that mineral and coal and its downstream industries could be able to support the ‘minus’ regions to converge to the national index. Augmenting the regional economic growth, the regions should develop the secondary and services industry which have high value-added multiplier to extend the across-regional trade as well as between the regions in the country with the neighbors’ regions through subregional economic cooperation. Methodology applied in this study is based on regional economic modeling and observation.},
 year = {2014}
}

Copy | Download

TY  - JOUR
T1  - The Role of Mineral and Coal Mining on Interregional Convergence-Divergence Economic Trend in Indonesia
AU  - Ukar Wijaya Soelistijo
AU  - La Ode Aswandi
AU  - Marwan Zam Mili
Y1  - 2014/07/20
PY  - 2014
N1  - https://doi.org/10.11648/j.eco.20140302.12
DO  - 10.11648/j.eco.20140302.12
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 27
EP  - 42
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20140302.12
AB  - Within the last 35 years of 1975-2010 it was shown that within 1975-2000 the trend of convergence of economy between the provincial index of gross regional domestic product (GRDP) per capita with the national index of gross domestic product (GDP) per capita figured out by the ratio of the GRDP per capita of the richest province to the poorest province equaled 21 to 25 in 1975 toward around 12 in 2000, even though on the post 2000 the provinces which were before 2000 under the national GDP per capita index (<100) declining and lesser. The provinces which have reached the points of convergence by the year of 2000 are Aceh, North Sumatera, West Sumatera, South Sumatera, East Java, Central Kalimantan, South Kalimantan and Bali. It is indicated that within the next 30 years the several other provinces which could reach the points of convergence are West Java, Central Java, DI Yogyakarta, West Kalimantan, Riau, Papua and East Kalimantan. However, the other several provinces which are not fully convergent in the meaning of almost consistently existing above the national GDP per capita (what so called the ‘surplus’ provinces), are Aceh, DKI Jakarta, and Bali. Moreover, on the other side, several provinces with GRDP per capita which consistently exist below the national GDP per capita (what so called the ‘minus’ provinces) with the downward sloping regression or with the gently upward sloping regression. Toward achieving points of economic convergence, those ‘minus’ provinces have to trigger their potential prime sectors, which have high economic multipliers.In generating their regional income, it is shown that almost all the provinces of Indonesia still rely on the primary sectors such as mineral and agriculture, with the consequences of low added value. It is expected that mineral and coal and its downstream industries could be able to support the ‘minus’ regions to converge to the national index. Augmenting the regional economic growth, the regions should develop the secondary and services industry which have high value-added multiplier to extend the across-regional trade as well as between the regions in the country with the neighbors’ regions through subregional economic cooperation. Methodology applied in this study is based on regional economic modeling and observation.
VL  - 3
IS  - 2
ER  -

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