Jumat, 28 Juli 2017

Human Development and Economic Inequality of Western Indonesia and Eastern Indonesia Region


Education in Indonesia, source: https://www.google.com/amp/s/www.edunews.id/edunews/pendidikan/pendidikan-indonesia-menyisakan-banyak-pr-untuk-pemerintah/amp/

I. Background
Until  now,  economic  inequality  is  still  a  problem of  Indonesia.  Along  with  the  rolling  of infrastructure  and  human  development,  apparently  from  the  aspect  of  equity  is  still  lame.  The economic  imbalance  between the surplus  and the  deficit  is also high. The  proof,  the  economic  cake  is  only  enjoyed  by  a  handful  of  residents  who  in  fact control  the  national  wealth  and  banking  deposits.  Swiss  credit  institutions  data,  Credit  Suise, also  put  Indonesia  in  the  4th  position  as  a  country  with  the  world's  highest  wealth  disparity.

The  indication  is  seen  from  the  large  percentage  of  national  wealth  owned  by  1  percent  of  the sample  of  Indonesia's  population  that  has  a  wealth  of  49.3  percent  of  national  wealth. Meanwhile, in plain view, poverty  in  Indonesia is  still  visible. If  observed  by  rural  and  urban  areas,  poverty  in  Indonesia  is  declining.  The  percentage of  people  living  below  the  2006  rural  poverty  line  of  21.8  percent  fell  to  14.1  percent  in  2016. Similarly  in  urban  areas,  the  percentage  of  people  living  below  the  2006  urban  poverty  line was 13.5 percent, down to 7.8 percent by  2016  (BPS, 2017). Nevertheless,  the  magnitude  of  poverty  levels  contain  a  large  imbalance.  Especially when  compared  to  between  the  Western  Region  of  Indonesia  (KBI)  and  Eastern  Indonesia (KTI).

The  percentage  of  poor  people  in  KTI  is  double  digit,  while  the  percentage  of  poor people  of  KBI  is  only  one  digit.  Based  on  data  from  the  Statistics  Indonesia  (BPS)  2016,  the percentage  of  poor  people  in  Papua  is  28.5  percent,  West  Papua  25.4  percent,  East  Nusa Tenggara  22.2 percent and Maluku also 19.2 percent. Inequality  levels  are  also  evident  in  high  Gini  ratio.  In  March  2014,  the  Gini  Indonesia ratio  was  0.406  points,  rising  in  September  to  0.414  points.  The  condition  of  inequality  did decline  in  March  2016,  which  amounted  to  0.397  points,  but  apparently  there  is  a  slowdown in  the  Gini  Indonesia  ratio.  From  the  aspect  of  economic  development  too.

According  to  BPS (2016),  80  percent  of  Gross  Domestic  Product  is  dominated  by  KBI,  while  20  percent  is distributed by  KTI  regions. Economic  growth  also  shows  low  quality.  By  2016  economic  growth  is  indeed  reaching 5.02 percent, but  the source  of  economic  growth is  still  dominated by  household consumption. This  raises  the  question  of  which  households  share  the  economic  growth.  The  economy continues  to  grow  positively,  but  at  the  same  time  the  decline  in  poverty  is  slowing  as  the population continues to increase.

Another  aspect  that  is  not  less  important  to  note  is  the  development  of  Indonesian people.  This  aspect  is  evident  from  the  size  of  the  Indonesian  Human  Development  Index (HDI). In  recent  years,  HDI  Indonesia  has  continued  to  improve.  BPS  noted  that  by  province, there  are  three  provinces  with  the  fastest  HDI  growth,  namely  Papua  at  1.40  percent,  South Sumatra  up  1.15  percent  and  East  Java  at  1.15  percent.

In  contrast,  there  are  also  three provinces  that  experienced  a  slowdown  in  HDI  growth,  namely  Riau  (0.51  percent),  West Kalimantan  (0.44  percent)  and  Riau  Islands  (0.51  percent)  (BPS,  2017).  When  sorted  between KBI  and  KTI,  on  average  the  growth  of  HDI  2016  from  the  previous  year  is  almost  the  same. The  HDI  growth  of  KBI  region  was  on  average  0.84  percent,  while  KTI  was  slightly  higher  at 0.88 percent.

Based  on  existing  information,  the  reality  shows  that  there  is  an  inconsistency  between the  Gini  ratio  and  the  size  of  the  Indonesian  HDI.  With  positive  economic  growth  and  HDI overall  ascending  in  2016,  poverty  continues  to  slow  as  Indonesians  grow. Therefore,  a  study of  the  magnitude  of  the  correlation  between  HDI  and  the  Gini  ratios  of  KBI  and  KTI  regions of  Indonesia  is  desirable  to  obtain  findings  about  economic  disparities  that  are  inconsistent with the  increase  in HDI  as an indicator of  development output. Starting  from the  background, some of  the issues that will be discussed in this research  are:

1. How  is the  overview of KBI  and KTI  regions based on Gini and HDI  ratios?
2. How  is the  relationship between  Gini and  HDI  ratios of KBI  and KTI  regions?

II. Research  Purposes

Objectives to be  achieved in this research, namely:

1. Knowing  the overview  of KBI  and KTI  areas based on Gini and HDI  ratios.
2. Knowing  the  relationship between Gini and HDI  ratios of KBI  and KTI regions.

III.  Theoretical basic

3.1.  Theoretical Review

3.1.1.  Inequality Inequality  is  an  inequality  due  to  differences  in  the  distribution  of  welfare,  whether economic,  social,  political,  legal  or  security  aspects.  Inequality  in  the  specific  sense  is  an economic  inequality  between  a  place  and  another.  Inequality  occurs  naturally  or  as  a  result  of government  policy.  According  to  KBBI,  inequality  is  a  condition  that  is  not  as  it  should  be, such  as unfair or unfinished. Inequality  other  than  in  the  general  sense,  there  is  a  special  social  and  economic inequality.  Social  inequality  is  a  condition  in  which  social  imbalances  occur  in  society.  Unfair social  conditions  can  result  from  unequal  status  and  status  in  society,  including  differences  in access  to  education  and  equitable  economic  development  to  reduce  poverty.  While  economic inequality  is  more  on  how  the  mechanism  of  economic  growth  imbalances  that  in  downstream can reduce  the poverty  level of a  region.

3.1.2. Human Development Human  development  is  a  goal  of  complete  national  development.  Human  development basically  explains  two  aspects,  as  well  as  the  individual  development  process  from  the  side  of the  livelihood,  the  wider  human  development  has  important  aspects  especially  how  to  form human beings  who have  the  expertise and creativity  in various  areas of life. The  United  Nations  Development  Program  (UNDP)  puts  the  human  development dimension  in  two  aspects:  first,  human  capacity  improvement  consisting  of  longer  life expectancy  is  supported  by  health,  knowledge  and  improved  living  standards.  Second,  human development  is  seen  as  a  condition  that  enables  the  creation  of  human  development,  including elements  of  human  participation  in  politics  and  community,  long-term  environmental conditions,  rights  and  security  for  every  individual  and  the  creation  of  gender  equality  and social justice.

3.2. Related  Research

Inequality  is  a  problem  experienced  by  Indonesia  today.  The  social  and  economic disparities  have  an  impact  on  human  development  outcomes.  This  condition  at  least  shows  an interaction  between  indicators  of  economic  inequality  from  the  Gini  ratio  and  human development  indicators  of  the  Human  Development  Index  (HDI).  Ravi  Kanbur  and  Lyn Squire  (1999)  mentioned  that  HDI  has  an  important  relationship  to  the  productive  income capacity  of  a  society.  The  poor  use  their  energy  to  participate  in  the  economy,  but  poverty  due to  social  and  economic  inequality  itself  affects  their  reduced  capacity  to  participate  in  the economy.  As  a  result  of  low  HDI,  the  poor  are  unable  to  take  advantage  of  the  opportunity  to earn a  productive  income.

Efrilia  Rita  Utami  (2017)  in  her  research  entitled  Application  of  Generalized  Spatial Three  Stage  Least  Square  (GS3SLS)  On  Spatial  Simultaneous  Equation  for  East  Java Economic  Growth  Modeling.  The  research  used  spatial  Autoregressive  (SAR)  GS3SLS method  using  HDI  variable,  Gini  ratio  and  Economic  Growth  Rate  (LPE).  From  the  results  of this study  found  that Gini ratio has a elasticity  of 0.118 percent  against  HDI.

Astika  Sa'diyah  (2014)  in  his  research  entitled  Analysis  of  Factors  Affecting  Human Development  Index  in  West  Nusa  Tenggara  Provincial  and  Random  Effect  Model  (REM) method  using  PDRB  variable,  poverty  rate,  Gini  and  HDI  ratio  shows  that  Gini  ratio  has negative  effect Against  HDI. Similarly,  Prawoto's  (2011)  study  entitled  Analysis  of  Influential  Factors  Against Human  Development  Index  with  variables  used  per  capita  expenditure,  Gini  ratio,  proportion of  non-food  and  food  expenditure  per  capita  and  dependency  ratio,  one  of  the  results  shows that the ratio of Gini  Have  a  negative  and significant impact on HDI.

IV.  Methodology and  Data

4.1. Data  Source

The  data  used  in  this  study  comes  from  the  Central  Bureau  of  Statistics  (BPS).  The period  of  data  used  in  this  research  is  annual  to  see  the  picture  of  gini  ratio  and  HDI  in  West Indonesia and East  Indonesia region.

4.2. Analysis  Method

This  study  uses  Pearson  correlation  to  see  the  direction  of  relationship  between  gini ratio  and  HDI.  Pearson  correlation  is  one  of  the  correlation  measures  used  to  measure  the strength  and  direction  of  the  linear  relationship  of  the  two  veriabels.

 Two  variables  are  said  to be  correlated  if  the  change  of  one  variable  is  accompanied  by  another  variable  change,  either in  the  same  direction  or  the  opposite  direction.  The  value  of  small  correlation  coefficient  does not  mean  the  two  variables  are  not  related.  It  may  be  that  two  variables  have  a  strong relationship  correlation  but  the  correlation  coefficient  value  is  near  zero,  for  example  in  the case  of  non-linear relationship.

Thus,  the  correlation  coefficient  measures  only  the  strength  of the  linear  relationship  and  not  on  the  nonlinear  relationship.  The  existence  of  a  strong  linear relationship  between  variables  does  not  necessarily  mean  there  is  a  causality,  cause  and  effect relationship.

V.  Result

Indonesia's  HDI  growth  of  0.91  percent  in  2016  compared  to  the  previous  year,  2015.  If observed  from  each  region,  HDI  growth  in  2016  increases.  Graph  1  shows  that  HDI  growth  in West  Indonesia  and  East  Indonesia  is  in  line  and  there  is  no  significant  imbalance.  Thus  it  can be  said  that  the  progress  of  human  development  in  the  area  of  West  Indonesia  and  East Indonesia equivalent. In  contrast  to  the  development  of  HDI  that  is  not  visible  inequality,  the  development  of Gini  ratio  of  West  Indonesia  and  East  Indonesia  region  looks  lame  in  2016  compared  to  the previous  year.  There  are  some areas that experience  gini  ratio changes quite extreme.

By  2016,  most  of  West  Indonesia  has  decreased  gini  ratio.  This  indicates  that  the  social and  economic  divide  in  the  West  Indonesia  region  is  increasingly  depleted.  However,  it  does not happen in eastern  Indonesia that is the social and economic  gap is widening. By  2016,  gini  ratios  in  Central  Kalimantan  are  up  8.3  percent  compared  to  the  previous year,  2015.  While  gini  ratios  in  North  Sulawesi  and  North  Maluku  each  increased  by  4.4 percent  and  5.3  percent.  This  shows  that  economic  development  in  the  region  is  only  enjoyed by  a  few  people.

The  gulf  between  the  rich  and  the  poor  gets  wider.  In  2016,  the  highest economic  growth  (y  on  y)  was  achieved  by  Transportation  and  Warehousing  of  17.49  percent, electricity  and  gas  procurement  growing  by  15.23  percent,  and  financial  services  by  11.87 percent. From  the  result  of  pearson  correlation  analysis  between  HDI  and  Gini  Ratio  region  of West  Indonesia  and  East  Indonesia  obtained  correlation  value  of  8.8  percent.  There  is  a relationship  between  HDI  and  Gini  Ratio  that  is  not  linear.  That  is,  improving  the  quality  of human resources does not result  in widening  economic  and social  gaps.

VI.  Conclusions and  Recommendations

Based  on  the  results  of  the  analysis  in  this  study  it  can  be  concluded  that  there  is  still inequality  of  development  between  the  region  of  West  Indonesia  and  East  Indonesia. Inequality  that occurred in the Eastern  Indonesia region is  greater. From  these  conclusions,  the  suggestion  proposed  in  this  research  is  the  need  for  equal distribution  of  development  in  eastern  Indonesia  that  can  be  enjoyed  by  all  levels  of  society not just a handful of  rich  people.

Reference :

Gujarati, Domadar N. 2004.  Basic Econometrics.  The  McGraw: Hill Companies

Sugiyono. 2007. Metode  Penelitian Bisnis. Bandung:  Alfabeta.

Www.bps.go.id.

Www.kalteng.bps.go.id

Www.smartstat.wordpress.com

Artikel ini ditulis oleh Joko Ade Nursiyono dan Henida Widyatama