Gilang Adi Nugroho

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IDENTIFICATION OF REGIONAL COMPETITIVENESS FROM EACH

PROVINCE IN INDONESIA : BEFORE AND DURING THE REGIONAL

AUTONOMY

Gilang Adi Nugroho11

Faculty of Geography, Universitas Gadjah Mada

Indonesian Government system changed after the 1998 reform , the current system of

government is regional autonomy. Regional autonomy gives more authority to local

governments to set their own territory. The authority is so great an opportunity to improve the

competitiveness of the region. An increasingly globalized world economy makes the area

should improve competitiveness in order to survive in globalization. Regional

competitiveness is important because it will sustain national competitiveness, if the

competitiveness of the region is still higher then the national competitiveness will be high as

well. The definition of regional competitiveness by Abdullah et al is the ability of the

regional economy in achieving high growth rate and sustainable prosperity to remain open to

domestic and international competition . The purpose of the study was 1) to identify theprovincial competitiveness before and during regional autonomy. 2) identify sectoral issues

every province. The unit of analysis in this research are the provinces in Indonesia totaling 33

region.Variabel of regional competitiveness are macroeconomic, infrastructure, education

and health, these variables is a basic requirement for improving local economy (WEF,2011).

This research method uses a technique Z -Score, the standard deviation of the classification

system and cross tabs by analysis technic, quantitative descriptive.

Competitiveness of the provinces in Indonesia before and during regional autonomy

has a pattern that is not much different . Average provincial competitiveness in the western

part of Indonesia is higher than the eastern part. Provinces in Java has a value high

competitiveness, such as Jakarta ,Yogyakarta,West Java and Central Java. DKI has the

highest competitiveness both before and during regional autonomy. Most of the provinces

that have a negative competitiveness is located in the eastern part of Indonesia such as Papua,

NTT and Maluku. This indicates that there is a disparity between the competitiveness of the

western part and eastern Indonesia. Most of the problems that hinder the improvement of the

competitiveness of each province is infrastructure, education, and health. The low rate water

supply, electricity and good roads are infrastructure problems in some provinces. The low

average length of the school and a high infant mortality rate faced by Human resources

problem provinces in Indonesia. Conclusions of this study are 1) there is a disparity in

competitiveness between the western and eastern Indonesia , both before and during regional

autonomy. 2) Education and Infrastructure is a sector that should be the concern of local

governments to enhance competitiveness.

Keyword : Competitiveness, Regional Autonomy, Z-score

INTRODUCTIONIndonesia experienced a change in

the system of government from a

centralized system in the New Order era

turned into a decentralized after the reform

era. Regional autonomy is one form of

implementation of a decentralized system.

Many experts claim that the decentralizedsystem suitable to be applied in Indonesia

whose characteristics vary . Indonesia is a

pluralistic nation because it has the

diversity of social, economic, cultural and

geographical thus can not be generalized

in terms of development.

Regional autonomy is the

definition of devolution of governmentpower by the government to autonomous


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regions to regulate and administer the

affairs of government in the system of the

Republic of Indonesia (Law No. 32 of

2004, Article 3, paragraph 1). The purpose

of regional autonomy under the legislation

is to accelerate the realization of publicwelfare and improve the competitiveness

of local autonomy for Indonesia Gains by

Syaukani is efficient and effectiveness in

governance, political equality, political

stability, and political education. Dada

Solihin argue that the benefits of regional

autonomy is to establish democracy,

maintaining "nation state", and fairness.

Regional autonomy is an opportunity to

build a local government area in

accordance with existing and potentialproblems. Regional autonomy may be

opportunities to improve the

competitiveness of local regions. The era

of globalization requires each county to

have a competitive edge in order to survive

in the economic system of globalization.

Michael Porter (1990) defines

competitiveness as the output issued by the

industry which can not be separated from

labor productivity (input). Other

definitions competitiveness issued by the

team LPEM FE UI is the region's ability to

prosper by remaining open to domestic

and international competition. No

definition of competitiveness that can be

accepted by all parties as competitiveness

can be seen from several viewpoints.

Regional autonomy is an

opportunity for local governments to

enhance competitiveness, competitiveness

even be the goal of regional autonomyunder local government law. Authority for

certain sectors can increase the region's

ability to establish its territory. Natural and

human resource potential of the provinces

in Indonesia is very large, if not supported

by it will lose competitiveness with other

regions or other countries. Areas that have

a competitive strength will be easy to

establish territory and will even attract

investors. The purpose of this study there

are two : 1) Calculate the competitivenessof the provinces in Indonesia before and

during regional autonomy, 2) describe

each regional competitiveness indicators.

MATERIAL AND METHODCompetitiveness indicators used in

this study refers to the first pillar ofcompetitiveness by the World Economic

Forum. World Economic Forum stated

there are 5 sectors which are the first

pillar, namely macroeconomic

competitiveness, infrastructure, education,

health, and institutions. The first pillar is

becoming a key factor of economic

development of a region. Indicators and

variables in research outlined in Table 1.

Table 1Indicator and variable of competitiveness

Indicator Variabel

Economi % of economic growth

GDP

Infrastructure % of electricity

% of clean water

% of road condition

HR andeducation

HD

Literacy Rate

Mean years of school

Health Infant Mortality RateLife expentacy

Source : WEF, LPEM FE UI Team

This study took place in 33

provinces in Indonesia. Sources of

research data from BPS and scientific

publications. The years of data are used,

namely 1999, 2004 and 2011 to describe

the state of competitiveness of the region

before and after decentralization. The

method used to calculate the level ofcompetitiveness of the regions of each

province is the Z-score. Z-score formula is

as follows:

xxZ

i

z = standardization data

xi = data

x = average

s = standart deviasi

Z-score is used to standardize the data that

give values to variables that have different


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units of analysis can be done. The results

of the calculation of competitiveness are

classified into high, medium and low with

a standard deviation method.

Formulas standard deviation

classification method is as follows:

High Hierarchy = Data > (X+Sd/2)

Moderate Hierarchy= (X+Sd/2) - (X-Sd/2)

Low Hierarchy = Data < (X-Sd/2)

Noted

X = Average

Sd = Standard Deviasi

RESULT AND DISCUSSION

The results of the calculation of

regional competitiveness of each province

in Indonesia in 1999 , 2004 , 2011 showed

that there is inequality. Inequality in

Indonesia is one of the problems still

facing this country. The imbalance occurs

between the western part of Indonesia to

the east.

The calculation result shows that

the competitiveness of the provinces on

the island of Java, before and during theregional autonomy has high

competitiveness . Table 2 shows the level

of competitiveness of the regions and the

classification of each province in 1999,

2004, and 2011. DKI Jakarta ,West Java

,Yogyakarta , Central Java ,North Sumatra

is at a high classification. This is different

from the eastern region there are only 2

provinces that have high classification East

Kalimantan and North Sulawesi .

Inequality can be seen that many provinces

have lower classification is in the eastern

part of the country such as NTT , NTB ,

West Kalimantan and Papua. Province in

the western part of Indonesia, which has a

lower classification only Bangka Belitung

Province , it is natural that the province of

Bangka Belitung is a new province so that

development is not maximized .

Provinces in Java and Sumatra has

several advantages that have highercompetitiveness compared to other

provinces. Higher competitiveness will

allow the province - the province to get

investors or capital. Substantial capital

accumulation can be a trigger for the

development of an area. This can increase

the distance between the western part ofIndonesia and the eastern part of

Indonesia. Competitiveness inequality

between provinces in Indonesia due to the

lack of infrastructure and quality human

resource inequality. Indonesia's

development is a challenge because of the

vast area of the country and shaped the

islands. Infrastructure development costs

are high due to geographical condition of

Indonesia uniform.

Western Indonesia isgeographically dominated by large islands

and little islands shaped like Bangka

Belitung province. This will make it easier

to build infrastructure such as electricity,

water and roads. The availability of

relatively good infrastructure makes

economic communities can thrive. Other

than mineral -based industries thrive in big

cities in the western part of Indonesia such

as Jakarta, Surabaya, Medan, Palembang,

and Tangerang. Access to health and

education in the western region is

relatively easy apart from the complete

facilities and advanced technology. This

has an impact on the high quality of

human resources, development indices in

classification of high , long life expectancy

and infant mortality to lack .

In contrast to the eastern region of

the infrastructure has not been too full to

make investors before the weakcompetitiveness. Infrastructure

development in the eastern region is

hampered by the geographical

configuration of islands shaped so that

infrastructure development is expensive.

Access to education and health in the

eastern region is very less because of

inadequate facilities and distribution of

health workers who have not been evenly

distributed. Distance of health facilities

and public education make it difficult toaccess education and health. This has an


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impact on life expectancy and infant

mortality rates are still high in several

provinces in eastern Indonesia. Human

resources competitiveness eastern region

lags far behind the west.

Table 2

Level and classification of competitiveness of the provinces in Indonesia Year1999,2004,2011

ProvinceCompetitiveness Classification

1999 2004 2011 1999 2004 2011

Aceh 1.03 1.13 2.44 III II II

Sumatera Utara 5.88 6.61 6.00 I I I

Sumatera Barat 2.95 4.33 4.72 II II I

Riau 2.34 4.89 3.60 II II II

Kepulauan Riau TAD TAD 5.74 I

Jambi 1.77 2.08 3.25 II II II

Sumatera Selatan 1.22 3.34 2.66 II II IIBangka Belitung TAD TAD 1.69 III

Bengkulu 0.38 1.30 1.87 II II II

Lampung 1.74 0.33 2.31 III II II

DKI Jakarta 21.18 20.61 13.88 I I I

Jawa Barat 3.97 5.22 5.40 II II I

Banten TAD 1.39 0.17 II II

Jawa Tengah 5.75 6.14 5.32 I I I

DI Yogyakarta 7.60 7.49 8.17 I I I

Jawa Timur 4.25 5.56 4.59 II I I

Bali 6.87 6.78 4.33 I I II

Nusa Tenggara Barat 9.72 9.07 9.68 III III IIINusa Tenggara Timur 4.71 6.54 5.36 III III III

Kalimantan Barat 3.62 3.21 1.26 III III III

Kalimantan Tengah 0.47 0.56 3.79 II II II

Kalimantan Selatan 0.38 0.72 0.86 II II III

Kalimantan Timur 9.83 9.42 5.29 I I I

Sulawesi Utara 7.25 9.59 7.82 I I I

Gorontalo TAD TAD 3.17 III

Sulawesi Tengah 0.61 0.87 0.77 II III II

Sulawesi Selatan 0.96 0.20 2.20 III II II

Sulawesi Barat TAD TAD 5.89 III

Sulawesi Tenggara 0.19 0.90 0.32 II II IIMaluku 0.52 1.07 1.41 II II II

Maluku Utara TAD 0.62 1.08 II II

Papua 3.50 10.89 10.33 III III III

Papua Barat TAD TAD 4.79 I

*red color : negative (the value under the average)

Black color : positif (value above the average)

The higher the positive value, the higher the value of the competitiveness of the region, and contrary


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Figure 1

Map Classification Of Competitiveness Province in Indonesia year of 1999Source : Analysis Result


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Regional competitiveness provinces in

Indonesia before and during regional

autonomy largely stagnant. There are only

a few provinces are able to increase their

competitiveness classification such as East

Java, West Java and West Sumatra. Theresult of the discussion was also found that

there is still a competitive imbalance

between the western and eastern

Indonesia.

Economic IndicatorsThe economic condition of the

provinces in Indonesia before and during

regional autonomy does not very much. It

actually looks attractive in variable

economic growth. In 2011, economicgrowth in the provinces of Java are even

lower than in the provinces other islands.

This is because most of the provinces

outside Java island has mining and

plantation commodities such as oil, gas,

coal, oil, rubber and other commodities.

Provinces such as East Kalimantan rely

petroleum, Papua with some minerals,

have higher economic growth than other

provinces. Example, PE East Kalimantan

Province in 1999 reached 4.73 % in 2004

down to 1.8 % and rose again to 3.98 % in

2011. Kalimantan Timur who rely on

mining as its revenue should prices

decline.

GDP provinces before and during

the growing regional autonomy. Regional

income inequality evident in the GDP of

each province, especially among the

provinces on the island of Java with

existing outside Java. The velocity ofmoney in this country mostly in Java so

GDP provinces on the island of Java is

much higher than the other islands, there

are only a few provinces outside Java that

GDP is almost equal as East Kalimantan ,

Riau, North Sumatra or Jakarta GDP

reached 200 trillion, while other regions

such as Papua, which is far below the GDP

is only 76 trillion, whereas Papua has high

natural wealth. Almost all the income in

the regions it flows in Jakarta and receivedonly a few areas, especially for oil and gas

and mineral commodities. This will affect

local revenues for development of the

region.

Infrastructure indicators

State of Indonesia which has theshape of the islands is a challenge to build

infrastructure. Variable road infrastructure,

electricity and clean water. The percentage

of roads in good condition shows that there

is inequality because the provinces in Java

Island has a higher percentage of roads

that is 8-90 %, while the other provinces is

only 50-60 %. Geographically , the island

of Java is more easy for the development,

in contrast to the eastern region which has

the form of islands, mountainous Papua ,Kalimantan, which has a type of peat soil

making it more difficult for road

construction.

Electricity is one of the issues that

remains challenging the Indonesian

government. Inequality percentage of

electricity occurs again, the provinces on

the island of Java has electric percentage

above 95 %, while other provinces are still

taken 90 %, even only 44 % of NTT

province. Geography and dispersed

settlement pattern making electrical

installations are expensive so the electrical

infrastructure in some provinces is not

maximized. This is feared to affect the cost

of production and economic activities.

Clean water is the infrastructure that

supports the environment and public health

. Provision of clean water in Indonesia is

not evenly distributed, even in Java is still

50 % RT is getting access to clean water.Many people in Indonesia are still using

water sources that have not guaranteed the

quality of contamination or the other. It is

feared impact on public health and the

environment because of lack of access to

clean water.

Health IndicatorsVariable life expectancy and infant

mortality show the performance of local

health sector. Life expectancy in theIndonesian provinces before and during


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the growing regional autonomy . Average

life expectancy in 1999 the community

was 64 years , later increased to 69 years

in 2011. Province such as Jakarta,

Yogyakarta, East Kalimantan and Riau in

2011 had a value of AHH over 70 years .AHH other provinces are still under 70

years old , even NTB has a low rate that is

62 years old . This should be a concern of

local governments in order to improve

public health in order to have longevity.

The infant mortality rate in each

province before and during regional

autonomy continues to decline , although

still an issue in some provinces . Average

infant mortality in 1999 is 51 deaths per

1,000 live births , then dropped in 2004 to31 cases and 29 cases in 2011 . Spatially

Only the infant mortality rate is still high

in some areas such as Gorontalo ( 52 cases

) , NTB ( 48 cases ) and NTT ( 38 cases ) .

The amount is far less infant mortality in

DIY or Jakarta that only 14 cases . Many

references say that the eastern part of

Indonesia still lacks health facilities and

human resources so that possible factor is

exactly what caused mortality is high.

Many mothers give birth in rural assisted

by Duku / physician rather than by

professionals so vulnerable in an

emergency and can lead to infant death .

Another factor is the lack of knowledge of

the family the importance of nutrition

during pregnancy.

Indicators of Education and

Human Resources

Education determines the quality ofhuman resources in an area. Good quality

of human resources , it can affect the

competitiveness of the region. The

variables used to determine the condition

of education and human resources is the

Human Development Index ( HDI ) ,

Literacy Rate and the average length of the

school.

The literacy rate of the provinces in

Indonesia reached 92 % in 2011 , up 3 %

from 1999. Broadly speaking , theprovinces in Indonesia in 2011 has a high

literacy rate , which is above 90 % , but

still there some provinces that blind people

still high as 30 % Papuan citizens are

illiterate. This should be a concern due to

catch up with the quality of human

resources of Papua province compared toother provinces .

The average length of the school to

increase, at the time in 1999 at 6 years ,

while in the year 2011 increased to 8

years. The government should provide

infrastructure and ease of access to

education in order to increase the average

length of school. Human Development

Index by province continue to rise before

and during regional autonomy. HDI

province in western Indonesia is higherthan the eastern region. Some provinces in

the eastern region still has a HDI below 70

as Papua 65, NTB and NTT 66 67. This

shows the gap in the quality of Indonesian

human resources. Communities in the

western part relatively easier to access

education than people in the eastern part.

Infrastructure, quality of teachers and

personnel in the western region is

relatively better than that of the eastern

region. This is the quality factor is still the

gap in human resources in Indonesia.


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CONCLUSION1). Competitiveness of provinces in

Indonesia still has a gap between the

western part of the eastern province both

before and during regional autonomy.

2) The problem of education and health issomething that must be considered,

especially in the the eastern province.

Human Resources also lose the eastern

part of the western section. Inequality

competitiveness must be addressed

immediately in order not to increase the

disparity of regional development

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Gilang Adi Nugroho