Riau province case study (revised on may 14 th )

Riau province case study

(revised on may 14th)

Presented by:Chairul DenylMully EndahRima Eryani

Stevanus Anggoro

OVERVIEW

ProfileInequality’s ProblemLeading Sector AnalysisFinancial AnalysisPolicy Implication

geography

geographyTo the North:

North Sumatera Province, Straits of Malacca, Straits of Singapore.

To the South:Jambi Province.

To the West:West Sumatera Province and North

Sumatera ProvinceTo the East:

South China Sea, Eastern Malaysia, Singapore, Riau Island Province.

profileCapital

PekanbaruGovernor

Rusli ZainalArea

82,232 km2 (31,750 sq mi)Population

4.070.911 (2003)Density

60.2 /km2 (156 /sq mi)

profileEthnic groups

Malay (38%), Javanese (25%), Minangkabau (11%), Batak (7%),

Banjarese (4%), Chinese (4%), Buginese (2%)

ReligionMuslim (88%), Protestant (1%), Catholic

(5%), Buddhist (6%), Hindu (0.2%)Languages

Malay, Indonesian, MinangkabauTime zone

WIB (UTC+7)

1. Kuantan Singingi

2. Indragiri Hulu

3. Indragiri Hilir

4. Pelalawan

5. Siak 6. Kampar

7. Rokan Hulu

8. Bengkalis

9. Rokan Hilir

71. Pekanbaru

73. D u m a i

.000%

2.000%

4.000%

6.000%

8.000%

10.000%

12.000%

14.000%

16.000%

18.000%

Population by the Districtsin Riau province

2001 - 2007

2001200320052007

Districts

perc

enta

ge

1. Kuantan Singingi

2. Indragiri Hulu

3. Indragiri Hilir

4. Pelalawan

5. Siak 6. Kampar

7. Rokan Hulu

8. Bengkalis

9. Rokan Hilir

71. Pekanbaru

73. D u m a i

.000%

5.000%

10.000%

15.000%

20.000%

25.000%

30.000%

Percentage of Poor Peoplein Riau Province

2005 - 2007

200520062007

Districts/City

Perc

enta

ge o

f Poo

r peo

ple

0 - 4 5 - 9' 10 - 14' 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65+000

050

100

150

200

250

300

350

MaleFemale

Age Group

Popu

latio

n(0

00)

0 - 4 5 - 9' 10 - 14' 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65+000

050

100

150

200

250

300

350

MaleFemale

Age Group

Popu

latio

n(0

00)

POPULATION BY AGE AND SEX GROUPIN RIAU PROVINCE 2007

agric

ultult

ure

Mining

and Q

uarry

ing

Manufa

cturin

g Ind

ustry

Electric

ity, W

ater S

upply

and G

as

Buildin

g and

Con

struc

tion

Trade,

Restau

rants

and H

otels

Transp

ortati

on an

d com

munica

tion

Funac

e and

Insu

rance

Service

s.000%

10.000%

20.000%

30.000%

40.000%

50.000%

60.000%

Percentage of the People 15 Years and Overby Industrial Origin

2006 -2007

20062007

Indutsrial Origin

Perc

enta

ge

Inequality’s problem

From Willamson Index, we can see positive correlation between

growth and equality.The following chart show that

GRDP with oil is greater in inequality rather than chart

without oil.

2000 2001 2002 2003000

001

001001

001 001 001

000

000000 000

Inequality Index(Williamson Index, 2000-2003,real price)

with oil

without oil

Will

iam

son

Inde

x

Year

.000 2000.000 4000.000 6000.000 8000.000 10000.000.000

1.000

2.000

3.000

4.000

5.000

6.000

7.000

Dumai

Pekanbaru

Rohil

Bengkalis

Rohul

Kampar

SiakPelalawan

Inhil

Inhul

Kuansing

Kuansing

Inhul

Inhil

Pelalawan

Siak

Kampar

Rohul

Bengkalis

Rohil

Pekanbaru

Dumai

REGIONAL TYPOLOGY ANALYSISRIAU PROV, 2000 - 2003(REAL PRICE, WITH OIL & GAS)

GRDP PER CAPITA (thousand RP)

Growth (%)

Low income & low growth

High income but low growth

Low income but high growth

High income & high growth

.000 2000.000 4000.000 6000.000 8000.000 10000.000.000

1.000

2.000

3.000

4.000

5.000

6.000

7.000

Dumai

Pekanbaru

Rohil

Bengkalis

Rohul

Kampar

Siak

Pelalawan

Inhil

Inhul

Kuansing

Kuansing

Inhul

Inhil

Pelalawan

Siak

Kampar

Rohul

Bengkalis

Rohil

Pekanbaru

Dumai

REGIONAL TYPOLOGY ANALYSISRIAU PROV, 2000 - 2003

(REAL PRICE, WITHOUT OIL & GAS)

GRDP PER CAPITA (thousand RP)

Growth (%) Low income but high growth

High income & high growth

High income but low growth

Low income & low growth

Growth poles analysis

Based on typology analysis, we can find that some districts

become a growth poles in Riau Province, such as: Bengkalis,

Dumai, Rokan Hilir.

Leading Sector

Leading sector is a sector that has comparative advantage compare

with the same sector at other regions.

We could use Location Quotient to

analyze a leading sector.

Location quotientLocation quotient — ratio that provide a

convenient way to examine the specialization of economic activity in a

region — is basically a way of quantifying how concentrated a particular industry,

cluster, occupation, or demographic group is in a region as compared to the

nation. It can reveal what makes a particular region 'unique' in comparison to the national average (EMSI, resource

library).

18

LOCATION QUOTIENT Static Base on GRDP Constant Price (with oil & gas) in 1993-2003

DISTRICT LQ1 LQ2 LQ3

1. KUANTAN SINGINGI AGRICULTURE SERVICES CONSTRUCTION

2. INDRAGIRI HULU CONSTRUCTION MANUFACTURE SERVICES

3. INDRAGIRI HILIR AGRICULTURE FINANCE, RENT OF BUILDING, BUSINESS SERVICE

MANUFACTURE

4. PELALAWAN AGRICULTURE MINING & QUARRYING FINANCE, RENT OF BUILDING, BUSINESS SERVICE

5. SIAK MINING& QUARRYING MANUFACTURE ----

6. KAMPAR AGRICULTURE MINING & QUARRYING SERVICES

7. ROKAN HULU AGRICULTURE SERVICE FINANCE, RENT OF BUILDING, BUSINESS SERVICE

8. ROKAN HILIR AGRICULTURE MINING & QUARRYING TRADE, HOTEL & RESTAURANT

9. BENGKALIS MINING & QUARRYING TRADE, HOTEL & RESTAURANT

ELECTRICITY, GAS & WATER SUPPLY

10. PEKANBARU ELECTRICITY, GAS & WATER SUPPLY

CONSTRUCTION FINANCE, RENT OF BUILDING, BUSINESS SERVICE

11. DUMAI TRANSPORTATION & COMMUNICATION

CONSTRUCTION ELECTRICITY, GAS & WATER SUPPLY


1. KUANTAN SINGINGI AGRICULTURE SERVICES CONSTRUCTION

2. INDRAGIRI HULU MANUFACTURE CONSTRUCTION ----

3. INDRAGIRI HILIR AGRICULTURE MANUFACTURE FINANCE, RENT OF BUILDING, BUSINESS SERVICE

4. PELALAWAN MANUFACTURE AGRICULTURE ----

5. SIAK ---- ---- ----

6. KAMPAR AGRICULTURE SERVICES CONSTRUCTION

7. ROKAN HULU AGRICULTURE SERVICES ----

8. ROKAN HILIR AGRICULTURE TRADE, HOTEL & RESTAURANT

----

9. BENGKALIS TRADE, HOTEL & RESTAURANT


AGRICULTURE

10. PEKANBARU ELECTRICITY, GAS & WATER SUPPLY

CONSTRUCTION FINANCE, RENT OF BUILDING, BUSINESS SERVICE

11. DUMAI TRANSPORTATION & COMMUNICATION

CONSTRUCTION ELECTRICITY, GAS & WATER SUPPLY

LOCATION QUOTIENT STATIC BASE ON GRDP CONSTANT PRICE (NON OIL & GAS) IN 1993-2003

LOCATION QUOTIENT DYNAMIC BASE ON GRDP CONSTANT PRICE (WITH OIL & GAS) IN 1993-2003


1. KUANTAN SINGINGI MANUFACTURE ELECTRICITY, GAS & WATER SUPPLY

MINING & QUARRYING

2. INDRAGIRI HULU FINANCE, RENT OF BUILDING, BUSINESS SERVICE

AGRICULTURE MINNING & QUARRYING

3. INDRAGIRI HILIR AGRICULTURE MANUFACTURE ELECTRICITY, GAS & WATER SUPPLY

4. PELALAWAN SERVICES TRADE, HOTEL & RESTAURANT

AGRICULTURE

5. SIAK AGRICULTURE SERVICE MANUFACTURE

6. KAMPAR MINNING & QUARRYING MANUFACTURE ELECTRICITY, GAS & WATER SUPPLY

7. ROKAN HULU MANUFACTURE MINING & QUARRYING AGRICULTURE

8. ROKAN HILIR MANUFACTURE MINING & QUARRYING CONSTRUCTION

9. BENGKALIS MINING & QUARRYING ELECTRICITY, GAS & WATER SUPPLY

MANUFACTURE

10. PEKANBARU FINANCE, RENT OF BUILDING, BUSINESS SERVICE

TRANSPORTATION & COMMUNICATION

AGRICULTURE

11. DUMAI FINANCE, RENT OF BUILDING, BUSINESS SERVICE

MINING & QUARRYING SERVICES

LOCATION QUOTIENT DYNAMIC BASE ON GRDP CONSTANT PRICE (NON OIL & GAS) IN 1993-2003


1. KUANTAN SINGINGI MANUFACTURE ELECTRICITY, GAS & WATER SUPPLY

AGRICULTURE

2. INDRAGIRI HULU FINANCE, RENT OF BUILDING, BUSINESS SERVICE

AGRICULTURE SERVICE

3. INDRAGIRI HILIR AGRICULTURE ELECTRICITY, GAS & WATER SUPPLY

CONSTRUCTION

4. PELALAWAN SERVICES TRADE, HOTEL & RESTAURANT

AGRICULTURE

5. SIAK SERVICES FINANCE, RENT OF BUILDING, BUSINESS SERVICE

MANUFACTURE

6. KAMPAR TRANSPORTATION & COMMUNICATION

TRADE, HOTEL & RESTAURANT


7. ROKAN HULU MANUFACTURE SERVICES ELECTRICITY, GAS & WATER SUPPLY

8. ROKAN HILIR MANUFACTURE FINANCE, RENT OF BUILDING, BUSINESS SERVICE

SERVICES

9. BENGKALIS SERVICES FINANCE, RENT OF BUILDING, BUSINESS SERVICE


10. PEKANBARU TRADE, HOTEL & RESTAURANT

FINANCE, RENT OF BUILDING, BUSINESS SERVICE

TRANSPORTATION & COMMUNICATION

11. DUMAI ---- ---- ----

Based on LQ analysis at tables above, the result is surprising that majority district in Riau

Province have more than one leading sectors. It is a good potential for every district to support development in its

region.

LOCATION QUOTIENT ANALYSES (1)


Base on calculation result of LQ static, both with oil and gas and non oil and gas, the highest LQ of leading sector majority

on agriculture sector.In LQ static with oil and gas, the highest

leading sector non agriculture in Siak (mining & quarrying), Pekanbaru

(electricity) and Dumai (transportation).In LQ static non oil and gas, the highest

leading sector non agriculture in Pelalawan (manufacture) and Bengkalis

(trade).


Different with Location Quotient static, in Location Quotient dynamic, the highest

leading sector tend disseminate at many sectors both at data with oil and gas and

non oil and gas.The only one district who didn’t have

leading sector is in Dumai District at data Location Quotient Dinamic non oil and

gas.


There are interesting matters to be analized that as long as observation

period (1993-2003), several districts in Riau Province are indicated have

experience in structural transformation.


Example:In Siak District, structural transformation

happened in year 1998 when manufacturing industry sector as the highest leading sector was replaced by

mining and quarrying. In Bengkalis, Kampar District which each

previously the highest leading sector in agriculture, since 1998, the highest

leading sector was replaced by mining and quarrying industry.

Shift and Share

Majority district in Riau Province share to GRDP of province from Agriculture,

Livestock, Forestry, and Fishery Sector. Let’s observe the data!

In the observation period, there is only few district experience in shifting

their contribution to GRDP of province. Again, let’s observe one

more!

2007 2008 2009000%

020%

040%

060%

080%

100%

027% 031% 035%

072% 069% 065%

001% 000%

Revenue CompositionRiau Province

Other Legal Owned RevenueBalancing FundLocal Owned Revenue

2007 2008 2009000%

020%

040%

060%

080%

100%

004% 005% 000%

095% 091%

000%

001% 004%

000%

Revenue CompositionBengkalis District


2007 2008 2009000%

020%

040%

060%

080%

100%

003% 005% 005%

095% 093% 093%

002% 002% 002%

Revenue CompositionIndragiri Hilir District


2007 2008 2009000%

020%

040%

060%

080%

100%

001% 002% 003%

094% 094% 094%

005% 004% 003%

Revenue CompositionIndragiri Hulu District


2007 2008 2009000%

020%

040%

060%

080%

100%

004% 005% 009%

092% 091% 085%

004% 004% 006%

Revenue CompositionKampar District


2007 2008 2009000%

020%

040%

060%

080%

100%

002% 003% 003%

096% 095% 095%

002% 002% 002%

Revenue CompositionKuantan Singingi District


2007 2008 2009000%

020%

040%

060%

080%

100%

002% 004% 003%

095% 092% 093%

003% 005% 004%

Revenue CompositionPelalawan District


2007 2008 2009000%

020%

040%

060%

080%

100%

027%005% 007%

068%092% 090%

005% 003% 003%

Revenue CompositionRokan Hilir District


2007 2008 2009000%

020%

040%

060%

080%

100%

003% 004% 003%

093% 089% 092%

004% 006% 005%

Revenue CompositionRokan Hulu District


2007 2008 2009000%

020%

040%

060%

080%

100%

015%031% 024%

083%066% 073%

002% 003% 003%

Revenue CompositionSiak District


2007 2008 2009000%

020%

040%

060%

080%

100%

006% 007% 005%

088% 087% 091%

006% 006% 004%

Revenue CompositionDumai District


2007 2008 2009000%

020%

040%

060%

080%

100%

014% 014% 016%

079% 077% 072%

006% 009% 012%

Revenue CompositionPekanbaru District


35%

16%

2%1%

15%0%

23%

6% 3%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON FUNCTION)

RIAU PROVINCE

Public ServiceEducationSocial ProtectionSecurityEconomyEnvironment Housing & Public FacilityHealthTourism & Culture

Source : MoF

21%

17%

1%1%

13%7%

33%

5% 2%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON FUNCTION)BENGKALIS DISTRICT


Source : MoF

25%

26%

2%2%

22%

2%

14%6% 1%


INDRAGIRI HILIR DISTRICT


Source : MoF

32%

17%

1%1%

11%1%

33%

4%0%


INDRAGIRI HULU DISTRICT


Source : MoF

26%

29%

1%1%

11%1%

23%7%


KAMPAR DISTRICT


Source : MoF

42%

23%

1%

0%

10%

1%

15% 7%1%


KUANSI DISTRICT


Source : MoF

17%

19%

1%

1%

11%7%

37%

6%1%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON FUNCTION)PELALAWAN DISTRICT

Public ServiceEducationSocial ProtectionSecurityEconomyEnvironment Housing & Public FacilityHealthTourism & CultureSource : MoF

30%

15%

1%1%

13%5%

31%

4% 1%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON FUNCTION)ROKAN HILIR DISTRICT


23%

28%

1%0%

13%1%

25%

7%1%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON FUNCTION)ROKAN HULU DISTRICT


19%

13%

0%1%12%

2%

48%

3% 1%


SIAK DISTRICT


29%

21%

2%1%6%3%

31%

7% 1%


DUMAI DISTRICT


33%

37%

1%

1%

6%

3% 14%4% 1%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON FUNCTION)PEKANBARU DISTRICT


24%

17%43%

7% 8%

1%0%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON TYPE)RIAU PROVINCE

EMPLOYMENT EXPENDITURE

GOODS AND SERVICES EXPENDITURE

CAPITAL EXPENDITURE

INTEREST EXPENDITURE

SUBSIDY EXPENDITURE

DONATION EXPENDITURE

SOCIAL AID EXPENDITURE

REVENUE SHARING EXPENDITURE TO PROVINCE, DISTRICT, SUB DISTRICT, AND VILLAGE

FINANCIAL AID EXPENDITURE TO PROVINCE, DISTRICT, SUB DISTRICT, AND VILLAGE

UNPLANNED EXPENDITURESource : MoF

20%

15%

55%

8%

2% 0%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON TYPE)

BENGKALIS DISTRICTEMPLOYMENT EXPENDITURE

GOODS AND SERVICES EXPEN-DITURE

CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE




FINANCIAL AID EXPENDITURE TO PROVINCE, DISTRICT, SUB DIS-TRICT, AND VILLAGE


24%

17%43%

7%8%

1% 0%


INDRAGIRI HILIR DISTRICTEMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






29%

22%

38%

0%6%

4% 0%


INDRAGIRI HULU DISTRICTEMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






39%

14%

37%

0%1% 5% 0% 3%0%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON TYPE)KAMPAR DISTRICT EMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






51%

12%

30%

0%3% 3% 0%


KUANTAN SINGINGI DISTRICTEMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






20%

25%

54%


PELALAWAN DISTRICTEMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






34%

18%

48%


ROKAN HILIR DISTRICTEMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






43%

16%

38%

2% 0% 0% 0%


ROKAN HULU DISTRICTEMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






14%

12%

67%

1%3% 4% 0%


SIAK DISTRICTEMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






32%

21%

47%

PERCENTAGE OF LOCAL BUDGET 2007(BASED ON TYPE)DUMAI DISTRICT

EMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






50%

17%

28%

0% 5% 0% 0%


PEKANBARU DISTRICTEMPLOYMENT EXPENDITURE


CAPITAL EXPENDITURE


SUBSIDY EXPENDITURE






Riau Visions 2020

To establish Riau Province as the centre of economy and Malayan culture within religious, mentally and physically wellbeing social

environment in Southeast Asia in 2020.

Riau Mission 2020To establish Law Enforcement and Human

right empowerment.To maintain the spread of development

equilibrium between region.To establish the regional resource potency-

based economy and empowerment of economic society

To establish infrastructure that can enliven religious social life.

To establish the easy accessibility on infrastructure and public service

Strategy Planning Riau Province

To establish economics development that alleviation poverty by Education development and enliven religious

social life and sustainability of Malayan culture in community within

its empowering framework.

Policy implication

PERDA Support economic growth

Local government abolish e few Local regulation (Perda) because it contradictive with higher law and it counteract investment in Riau ProvinceFor example: Local regulation about labor charge, advertisement and local regulation that regulate industry venture. All of the local regulation has been abolish because it contradictive with law Number 18, 1997 about local tax and local charge.

Policy implication (1)

Mid Term Development Planning (RPJM) 2009 - 2013

From more than 100 priority investment, there are 18 investment opportunity became priority by Riau local government in Mid Term Development Planning (Rencana Pembangunan Jangka Menengah RPJM) 2009 - 2013. (www.riauterkini.com)


Industry cluster and seaport Dumai (Pelintung, Lubuk Gaung), Buton, and Kuala Enok Inhil, develop Roro Dumai-Tanjung Medang Bengkalis and Dumai-Malaka (IMT-GT).

Agribusiness center in DumaiClean Water in Pekanbaru Selatan

dan Dumai

REGULATION ASPECT (3)

Tourism at Pulau Rupat, industry cluster Tenayan, training center Dumai, highway Pekanbaru-Kandis-Dumai, fishery at Kampar (patin jambal).

Rail way Prapat-Dumai, Pekanbaru-Taluk Kuantan-Muara

Electricity industry in Peranap InhulNatural resources base industry


Lisencing CERIA Program

Fast Efficient Responsive Innovative and Accountable

This program run by Integrated Licensing Agency (Badan Pelayanan Perizinan Terpadu) Riau Province

CONCLUSIONRiau is one of rich province but

experience enclave economy, some regions become a growth poles and the other still lagged behind (backward).

This conditions cause inequality between districts.

Riau province faces dilemma of development between extent agriculture sector or maintain sustainable environment

REFFERENCES :Alihsjabana, Armida S. dan Brojonegoro, Bambang PS (2004).

Regional Development in The Era of Decentralization: Growth, Poverty, and The Environment. Universitas Padjadjaran, Bandung.

Kuncoro, M. (2004) Otonomi dan Pembangunan Daerah: Reformasi, Perencanaan, Strategi, dan Peluang. Penerbit Erlangga, Jakarta.

Kuncoro, M. (2002) Analisis Spasial dan Regional: Studi Aglomerasi dan Kluster Industri Indonesia. Yogyakarta: UPP-AMP YKPN.

www.bps.provinsiriau.go.idwww.djpk.depkeu.go.idwww.humasriau.orgwww.riau.go.idwww.riauterkini.com

http://www.bps.provinsiriau.go.id/

http://www.djpk.depkeu.go.id/

http://www.humasriau.org/

http://www.riau.go.id/

http://www.riauterkini.com/

Riau province case study (revised on may 14 th )

Documents

Transcript of Riau province case study (revised on may 14 th )