scholarly journals Premature Structural Transformation and Income Inequality in Pre and Post Commodity Boom Period in Indonesia

Author(s):  
Eri Kuntoro

Since 2000, Indonesia had been confronted with the problem of increasing income inequality between the poor and rich. At the same time, there was a shift change in the economic structure. That was the decrease in the contribution of manufacturing sector which was replaced by services sector and the increase in raw material export due to the jump in commodity prices. This study aims to measure the determinants of inequality from the employment side in the form of structural transformation and the economic openness side in the form of trade and investment. By using a dynamic panel model, it is known that the increase on trade openness has a significant effect on the reducing of income inequality, but its effect has diminished in the commodity boom period. Meanwhile, the structural transformation from the agricultural sector to the services sector has contributed a significant role in reducing inequality.

It has often been stated that the agricultural sector has the potential to provide the needed raw material for the manufacturing sector. It is pertinent to clearly identify this potential, interrogate why it still remains potential, and more importantly, suggest workable ways to sustainably and profitably exploit the potential as a going concern. This chapter is therefore designed to focus on enterprise expansion and opportunities for expansion in agriculture. The chapter is divided into the following sections: “Characteristics of Agriculture in Nigeria,” “Determinants of Youth Participation in Agriculture,” “Agricultural Enterprise Expansion and Agricultural Transformation,” “Enhancing Enterprise Expansion,” and “Opportunities in Agriculture.” The chapter concludes that for the potential of agriculture in an economy to be realized, the relevant stakeholders should know that business as usual is not an acceptable option; yield-increasing and enterprise-expansion-inducing strategies should be implemented in both the short and the long term. Recommendations are made to enable those engaged in agriculture to profit by it and increase in both output and in scale.


2019 ◽  
Vol 8 (1) ◽  
pp. 103
Author(s):  
Jude Ohi Ikhatua ◽  
Peter Okoeguale Ibadin

Today, countries, especially the developing ones rebase their Gross Domestic Product (GDP) to determine their economic strength. Nigeria as an acclaimed giant in Africa cannot but continuously examine variables which may impact the economy. It is in this light that this study was intended to investigate the Determinants of Tax Revenue Effort in Nigeria. To achieve this, secondary data, as time series data, covering a period of 1980 to 2015, were used and sourced from the Central Bank of Nigeria Statistical Bulletin, Annual Abstract from the Office of the National Bureau of Statistics and the Federal Inland Revenue Service, both in Nigeria. The dependent variable of Tax Revenue Effort (TTAXeff) was regressed on macro independent variables of Agricultural Sector Productivity(AGRICSP), Manufacturing Sector Productivity (MANSP), Tourism Sector Productivity(TOURSP), Telecommunication Sector Productivity(TELCOMSP), Capital Flight(CAPFR), Trade Openness (TOPEN) and Human Capital Development(HCD). The study adopted a longitudinal research design and used the Autoregressive Distributed Lag (ARDL) technique to evaluate the models. The findings revealed that Agricultural Sector Productivity, Tourism Sector Productivity, Trade Openness and Human Capital Development had significant and positive effects on Tax Revenue Effort in Nigeria. The Manufacturing Sector Productivity, Telecommunication Sector Productivity and Capital Flight had significant but negative effects on Tax Revenue Effort in Nigeria. There is however the need to consistently ensure better performance of tax efforts in the country through strict and meticulous enforcement of tax rules and tax administrations procedures in the country.


Author(s):  
Emma Dwi Ratnasari

This study aims to analyze the forming of GRDP sectors in Kebumen, and determine which sectors are priorities to be developed in order to encourage economic growth Kebumen. The research uses descriptive analytical method, the data used are secondary data in the form of time series of GDP Kebumen and Central Java Province with the observation year 2005 to 2009. The analysis used is the analysis of LQ (Location Quotient), shift share, Typology Klassen, Model Growth Ratio (MRP), and Overlay. Results Analysis of Location Quotient (LQ) shows the basic sector in Kebumen is Mining and Quarrying sector, Agricultural sector, services sector and financial sector, Rental and Service, no visible shift of economic structure, where the primary sector is still a focus for regional income, Overlay analysis produced 5 seed sector, the Mining and Quarrying Sector, Agricultural Sector, Industry Sector, Finance, Ownership, and Corporate Services and Services, Klassen Typology analysis showed that the Mining and Quarrying sector and the services sector is a sector advanced and rapidly growing sector, Agriculture and Financial sectors, Renting and Business Services is an advanced but depressed sector, Manufacturing sector is a potential sectors / could still be developed, the analysis of the leading sectors that need to be developed namely Services sector. Based on the analysis in this study, several suggestions can be presented as follows: Kebumen district must give priority to the services sector with a competitive advantage as well as specialization without having to neglect other sectors. Need to develop co-operation of Agriculture, Industry and Services are intensive and sustainable.


2019 ◽  
Vol 8 (2) ◽  
pp. 1
Author(s):  
Ahmad Habibi Harahap ◽  
Eko Wahyu Nugrahadi

Economic growth of North Sumatera Province is not quite on the top of optimum. If the compared by some of others province in Indonesia and by  all of his potention, the North Sumatera Province only on the 10th rank of economic growth in Indonesia in 2009-2013 period. The purpose of this study is toanalyze the economic sectors which are the basis in each district/city in North Sumatera province and to determine the structure of economic growth in the district /city both sectoral and aggregate the province of North Sumatera. Structural transformation to some extent will have an impact on overall economic growth. Analysis tools used in this study is Location Quetiont (LQ), Growth Ratio Model (MRP), overlay analysis, and shift share analysis. Results of this study showed that the agriculture sector is a sector which is the basis in nearly 13 districts/cities in North Sumatera Province. But the growth in agriculture, processing industries, mining and quarrying, and the electricity, gas & water supply sector likely slowed, otherwise all tertiary sectors which include: trade, hotels, and restaurants; transportation and communication, finance, leasing, and services company, and the services sector is likely to experience growth positive. Transportation and communication is a sector with the highest growth occurring in North Sumatera Province. Shift Share Analysis results showed that in the Province of North Sumatera is going structural transformation characterized by decreasing the role of the agricultural sector, and the increasing role of the service sector. This condition as well as contrary to the Kuznets theory which states that the process of structural transformation contribution marked by shifting agriculture to manufacturing and then to services sector.


2019 ◽  
Vol 46 (4) ◽  
pp. 549-561
Author(s):  
Moheddine Younsi ◽  
Hasna Khemili ◽  
Marwa Bechtini

Purpose The purpose of this paper is to examine the relationship between foreign aid and income inequality (IIQ) reduction for 16 African countries using unbalanced panel data covering the period 1990–2011. This paper attempts to answer the critical question: does foreign aid lead to IIQ reduction? Design/methodology/approach To examine the effect of foreign aid on IIQ, this paper uses an RE model with robust OLS regression and system-GMM estimator, which are useful in dealing with the endogeneity problems. Findings Results of RE model indicate that foreign aid, foreign direct investment, trade openness as well as corruption have a positive and statistically significant effect on IIQ. Government spending and inflation have a negative and statistically significant effect on IIQ, while GDP per capita growth has a negative but statistically insignificant relationship with IIQ. The results are robust by using system-GMM dynamic panel model which confirms that the coefficients of all considered variables remain same sign and significance. Research limitations/implications This study implies that an increase in foreign aid is associated with an increase in IIQ. As an effective strategy to foreign aid, this paper suggests that improving of financial sector development, and institutional quality and policies can reduce income inequalities and stimulate economic growth. Originality/value This paper is the first of its kind to empirically explore the relationship between IIQ and foreign aid measured here by net aid transfers as a share of GDP in African countries, using modern econometric techniques, time period and a variety of control variables.


2008 ◽  
Vol 40 (3) ◽  
pp. 967-982
Author(s):  
Dragan Miljkovic ◽  
Rodney Paul

This study examines the causes of the countercyclicality of the trade balance in the three major sectors of the U.S. economy: services, manufacturing, and agriculture. These results are compared with the results pertinent to the U.S. economy as a whole. At the macroscopic level, Sachs' hypothesis seems to explain the countercyclicality of the trade balance, while results are mixed across individual sectors. The services sector may be explained by Sachs’ hypothesis, while results for the manufacturing sector are more consistent with the real business cycle hypothesis. The results for the agricultural sector, however, cannot be explained by either hypothesis.


2020 ◽  
Vol 8 (2) ◽  
Author(s):  
Ahmad Habibi Harahap

Economic growth of North Sumatera Province is not quite on the top of optimum. If the compared by some of others province in Indonesia and by  all of his potention, the North Sumatera Province only on the 10th rank of economic growth in Indonesia in 2009-2013 period. The purpose of this study is toanalyze the economic sectors which are the basis in each district/city in North Sumatera province and to determine the structure of economic growth in the district /city both sectoral and aggregate the province of North Sumatera. Structural transformation to some extent will have an impact on overall economic growth. Analysis tools used in this study is Location Quetiont (LQ), Growth Ratio Model (MRP), overlay analysis, and shift share analysis. Results of this study showed that the agriculture sector is a sector which is the basis in nearly 13 districts/cities in North Sumatera Province. But the growth in agriculture, processing industries, mining and quarrying, and the electricity, gas & water supply sector likely slowed, otherwise all tertiary sectors which include: trade, hotels, and restaurants; transportation and communication, finance, leasing, and services company, and the services sector is likely to experience growth positive. Transportation and communication is a sector with the highest growth occurring in North Sumatera Province. Shift Share Analysis results showed that in the Province of North Sumatera is going structural transformation characterized by decreasing the role of the agricultural sector, and the increasing role of the service sector. This condition as well as contrary to the Kuznets theory which states that the process of structural transformation contribution marked by shifting agriculture to manufacturing and then to services sector.


Author(s):  
Ngadi Ngadi ◽  
Devi Asiati ◽  
Ade Latifa ◽  
Nawawi Nawawi

Indonesia has committed to embody gender equality in the labor market through gender mainstreaming programs in all sectors. Nevertheless, the reality indicates that gender inequality in the labor market still exists. This chapter aims to discuss various issues of gender inequality in the Indonesian labor market in the agriculture, manufacturing, and services sectors. The data used for the analysis is the 2016 national labor force survey. The survey covered 82,613 workers with 31,256 of them from the agricultural sector, 14,835 from the manufacturing sector and 36,522 from the services sector. The analysis shows the dominance of male labor in all the sectors with the lowest proportion of female workers occurs in the manufacturing sector (27.1%) followed by the agricultural sector (37.5%) and the services (46.5%). Based on the type of position, men are more dominant in strategic positions in all the three sectors. The highest wage disparity between women and men takes place in the agricultural sector followed by the manufacturing and the services.


2021 ◽  
Vol 18 (1) ◽  
pp. 48
Author(s):  
Axellina Muara Setyanti

<p><em>Indonesia is a country that has relied on the agricultural sector as an economic base for decades. On the other hand, the more developed an economy is, the higher the reserves in the service sector. Despite this declining GDP, agriculture is still very important to the Indonesian economy, even though it is 14 percent of GDP. This study analyzes structural transformation through shift-share analysis. It looks at the tendency of labor to enter the agricultural, manufacturing and service sectors using probit regression on Sakernas microdata. This study found that the service sector continues to grow and outperforms the agricultural sector both in terms of added value and employment. The results of the shift-share show shrinkage in the productivity of agricultural sector while the manufacturing and service sectors are growing. This fact proves a change in economic structure. The characteristics of the agricultural sector labor force have a higher tendency for male workers, live in rural areas, are relatively older and have fewer family members, are less educated, do not have training certification, and have no previous work experience.</em></p><p class="MsoNormal"><em><span style="font-family: 'Times New Roman';">service sector, agricultural sector, manufacturing sector, probit, structural transformation</span></em></p>


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