STRUCTURAL CHANGE AND REGIONAL INEQUALITY IN INDONESIA: THE CASE OF CENTRAL JAVA PROVINCE (2000-2010)
Bachtiar Achmad, Professor Takahiro Akita
2012 | Tesis | S2 Magister Ek.Pembangunan-
Decentralization system which was recently introduced in Indonesia to regulate the relationship between central government and local governments tend to increase regional income recorded by GRDP. Indeed, mainly in Central Java Province, since the early 20th century, inter regional inequality measured using Squared Coefficient of Variation (Squared CV) also widened due to unequal fiscal transfer from central government and undistributed private investment. Interestingly, regional disparity was decreasing from 2005 until 2010. New decentralization laws in 2004 seem to have improve income gap among 35 districts when inequality was narrowing since 2005. Yet still districts in northern region of Central Java province contributed the highest share of inequality due to large gain from manufacturing sector mainly in Kudus and Semarang. While inequality within districts in the middle region of province remained stable, disparity among regencies in the south regions was likely growing due to the advantage of the oil refinery industry located in Cilacap. One interesting result from this study is that income gap among regencies in Central Java in the recent years has a convergent tendency. Poor regencies such as Tegal, Pemalang, Kebumen, Wonosobo and Grobogan grow faster than richest regions due to increasing benefit from manufacturing and trade sectors. This phenomenon likely depicts that manufacturing sector and trade sector will be two main sources of economic in Central Java.
Kata Kunci : Regional inequality, squared coefficient of variation, bidimensional decomposition, convergence.
