Moch. Rum Alim. Analysis Of Intra And Interregional Economic Linkages

ABSTRACT

MOCH. RUM ALIM. Analysis of Intra and Interregional Economic Linkages and Inequality between Java and Sumatra (BONAR M. SINAGA as Chairman, MANGARA TAMBUNAN and D. S. PRIYARSONO as Members of the Advisory Committee). Interregional economic linkages in Indonesia in term of economic growth and income distribution have been thoroughly investigated. The objective of this study is to analyze the causes of the economic relationship between Java and Sumatra, where recently there is a strong widening inequality not in favor of Sumatra economy. The model of Interregional Social Accounting Matrix between Java and Sumatra (SAMIJASUM) is constructed based on secondary data in the form of 59 x 59 matrix and using cross entrophy technique for balancing. The Stage of Java economy initially was started form services, agriculture, manufacture, and mining. As economic development took place, changing of economy of Java to become strong in service and manufacture sectors. While Sumatra sectors star from primary commodities, mining and agriculture. The result analyses based on SAMIJASUM shows that: (1) the trade balance of Java and Sumatra are imbalance in favor of Java, (2) the linkages of economic sectors of Sumatra to Java economy was quite stronger, while the Java to Sumatra is weak, and (3) the spillover effect of Sumatra to Java is higher than Java to Sumatra in term of economic growth. If national and local concentrates for Sumatra economy development, it would equally benefit to Java and Sumatra economy. Keyword: economic structure, linkages, trade balance, spillover effect, economic inequality.