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Small provinces lead growth as commodity slump hits others
Economically least-developed provinces led the countryâs gross domestic product (GDP) growth last year, as bigger provinces suffered the most from the fall in commodity prices
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Economically least-developed provinces led the country's gross domestic product (GDP) growth last year, as bigger provinces suffered the most from the fall in commodity prices.
West Sulawesi, one of the country's newest provinces, recorded the highest GDP growth at 8.73 percent, well above the national growth of 5.02 percent. Jambi was ranked in second place with GDP growth of 7.39 percent and South Sulawesi was third with 7.47 percent growth.
Meanwhile, Aceh, East Kalimantan and Riau recorded the lowest GDP growth despite their rich natural resources, according to the latest Central Statistics Agency (BPS) GDP report.
West Sulawesi province, which was established in 2004 as a result of South Sulawesi's expansion, fared well from sharp growth in the manufacturing sector, which grew 35.92 percent last year. Exports, which rose by 19.53 percent, were also a significant economic driver.
BPS head Suryamin said Friday that West Sulawesi, as a new province, contributed only Rp 29 trillion (US$2.3 billion) to the country's total GDP volume of Rp 10.54 quadrillion last year. 'However, the province saw quite high growth in several sectors and subsectors, such as mining, furniture and air transportation. It has a small economic volume, so it will skyrocket when there are increases in certain sectors,' he told The Jakarta Post.
Yos Rusdiansyah, head of the BPS office in Jambi, said the province's high economic growth was supported by growing activities in agriculture, forestry and fisheries, which contributed 28 percent to its GDP.
BPS Makassar head Nursam Salam said although South Sulawesi's growth reached 7.57 percent last year, it was still below the 7.63 percent recorded in 2013.
BPS data also shows that resource-rich Riau, East Kalimantan and Aceh had the lowest economic growth at 3.5 percent, 2.62 percent and 1.65 percent, respectively, last year.
Suryamin said the three provinces had among the largest economic volume in terms of rich natural resources.
'East Kalimantan contributes about 30 percent of Indonesia's oil and mineral production, while Arun in Aceh is one of the largest suppliers of natural gas,' he said.
However, the slump in global commodity prices had affected the provinces, Suryamin added, citing BPS data that 'East Kalimantan's mining decreased by 0.11 percent last year'.
Indonesian Institute of Sciences (LIPI) economist Latif Adam said natural resource-rich provinces should diversify their economies to sustain economic growth during slumps in global commodity markets.
'We cannot limit certain regions only to natural resources. It is important for the government to distribute development of manufacturing and special economic zones across the country,' Latif said.
BPS data reveals that Indonesia's economic structure last year was dominated spatially by Java and Sumatra, with 57.39 percent and 23.16 percent respectively, while other islands accounted for less than 10 percent.
Each province in Java and Bali also recorded economic growth above the nationwide percentage, with Bali at 6.72 percent last year, followed by Jakarta with 5.95 percent, East Java 5.86 percent, Central Java 5.4 percent, Yogyakarta 5.2 percent and West Java 5.07 percent.
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' Jon Afrizal from Jambi and Andi Hajramuni from Makassar contributed to the story.
