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Regional inequality still a major problem

Development of the nation is biased toward the west, which holds about an 80 percent share of the national economic activities.

Harry Aginta (The Jakarta Post)

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Jakarta

Tue, May 9, 2017 Published on May. 9, 2017 Published on 2017-05-09T09:07:01+07:00

Prime zone: A worker checks infrastructure facilities in Janda Berhias Island in Batam, Riau Islands, on March 4. (Antara/MN Kanwa)

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fter the 1997 to 1998 Asian financial crisis, the growth of Indonesia’s economy has been amazing. In the past 17 years, the nation’s gross domestic product (GDP) rose on average by almost 5.4 percent annually. Indeed, Indonesia is known as having the largest GDP in Southeast Asia.

However, entering the end of the first quarter of 2017, President Joko “Jokowi” Widodo’s administration has been challenged with a classic problem in Indonesia, namely regional growth inequality.

According to the Central Statistics Agency (BPS), Indonesia’s economy grew 5.02 percent in 2016. Regardless of this reasonably high growth rate in the midst of a lackluster global economy, the achievement poses a problem for regional inequality. For example, out of 34 provinces, East Kalimantan experienced negative economic growth of 0.3 percent, the second annual negative growth in a row.

A solution to growth inequality between regions is urgently needed because economic activities in Indonesia stills tend to be concentrated geographically in the western region after more than five decades.