The Regional Disparity in Indonesia

The regional disparity or inequality in Indonesia is a dire problem. It is linger until now, and is subsumed as the main problem of development in Indonesia. We realize that economic growth in Indonesia portends good achievement. But, as we know in economics theory, economic policy should not only regards growth, but also the distribution of welfare. Growth without distribution means that economic policy doesn’t succeed.

In Indonesia, Central Statistics Agency reports that the regional disparity tends to decrease over years. But, that decreasing is still lumbering. The disparity between Java and non-Java is still happen in terrible situation. Is it over insight? If we look the data below, we concede that the insight is right and not over.  

Source: Central Statistics Agency

In 2011, Java contributes 57,6 percent in Gross Domestic Product (GDP). It means that Java dominantly contribute to GDP. Comparing with Sulawesi and Kalimantan, both Islands are still far away to resemble Java. This trait of economy doesn’t change significantly at least 3 years before. If we look data in 2009 and 2010, the trait is almost same with 2011. The increasing of contribution from other islands is also lumbering. I think that this problem will hinder Indonesia to seize its dream in term of welfare distribution over region.

So, what must be done to strike the problem? In my opinion, there are some measures that can be done to solve the regional disparity. First, the gov’t should devolve transfer fund to districts which are subsumed as poor districts. It means that poor districts acquire more fund rather than rich districts. If poor districts have adequate money, they can hold development in their region. The advance of economy can be seized as soon as possible if district government can optimize that fund.

Another way is accentuation of investment in poor districts which have economic potency. Investment can be attracted if there is economic potency in the region or district. But, economic potency is not enough. Infrastructure availability is also crucial to attract investor. Therefore, the center government has to allocate its fund to develop infrastructure such as road, bridges, etc.

As a conclusion, there are many ways to make economy more equitable in term of regional equality. But, at least, there are two ways that can be implement to strike the inequality problem, which are transfer fund that is pro poor district and attract investment to poor districts that have economy potency. Hopefully, the regional disparity problem can be addressed as soon as possible by government. []

Note: In the article above, I admit that there are many grammatical errors in which I still don’t understand well. So, I apologize for those wrong. It is important to know that I am still studying in English, so this media just used to publish my work in my study process. Thank you for visiting my blog.