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Social Inequality Becomes Issue In South Sulawesi For Economic Growth

Hendri T. Asworo, Renat Sofie Andriani   -   Wednesday, March 5 2014, 5:26 am

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MAKASSAR – South Sulawesi economy should be able to grow by 8.4%-8.7% within the next four years in order to reduce the income inequality as well as pursue the revenue per capita of IDR30 million in 2018.

Yet, the province is encountering a number of challenges, starting from the growth concentration made only in several areas, household consumption declining indication, and infrastructure.  

Bank Indonesia Head of Representative for Sulawesi, Maluku, and Papua (Sulampua) Suhaedi conveyed the social inequality still becomes main issue for the province’s economy, although based on World Bank definition the province is classified into middle income regions.

“With the revenue of IDR22.15 million or US$2,108.79 per capita, South Sulawesi is classified into middle income areas,” he said in the 2014 South Sulawesi Regional Economic Study Seminar, Tuesday (3/4).

However, he said, the major economic growth was still made by Makassar (33.1%), Bone (6.8%), and East Luwu (6.7%). Therefore, he said, in order to reap revenue of IDR30 million per capita in 2018 the province should grow in the range of 8.4%-8.7%. 

“In order to avoid saturation in the cities, there should be made growth centers in other cities,” he said.

South Sulawesi economic growth in 2013 reached 7.65%, higher than the national economic growth of 5.78%.

Another challenge to encounter by the province is household consumption which indicates declining. This is because the household consumption is only centralized in three cities that might lead to saturation.

In truth, the household consumption in South Sulawesi has contributed 48% of the province’s economy.

In his opinion, the household consumption role should be replaced with a more sustainable component from investment. “Particularly on infrastructure investment which will bring a greater multiplier effect,” he said.

Meanwhile, Hasanuddin University Economist Hamid Paddu said the growth of consumption segment in South Sulawesi should be restricted in order to push a stable growth.

According to him, the production and investment should be spurred so that the economic growth will not be fragile for it only relies on goods from abroad or import. “The middle class nowadays tends to make high consumerism that makes the import grows high in South Sulawesi,” he asserted.

Mining Export

Bank Indonesia (BI) predicts that Sulampua’s economy will be corrected into 5.4%-5.9% in 2014 due to the declining of mining activities as a result of raw mineral export regulation.

The economic growth declining is quite significant compared to the achievement in 2013 of 8.7%. The region’s economic growth in 2013 was higher than in 2012 of 8.1%. It was made inversely with the national economic growth of only 5.78%.

BI Deputy Head of Representative for Sulampua Causa Iman Karana said the restriction on mining export regulation will hamper the sector’s activities that will also press the region’s economic growth.

“The economic growth would only be around 5.4%-5.9%. The inflation might be also corrected upon the adjustment of fuel price into the range of 4.7%-5.2%,” he said in Makassar, Tuesday (3/4).

Further he said the mining and excavation sectors in 2013 gave contribution to Sulampua’s economic growth of 18.3% so that the economy will be depressed whenever the mining export is restricted.

The second largest economic growth was finance, rental, and companies services that reached 13.7%, followed by trade, hotel, and restaurant at the third postion of 9.9%.

In particular with South Sulawesi province, the economy in 2014 may grow by 7%-8%, or approximately the same with the achievement made in 2013 of 7.65%. Yet, Iman said, the province’s economic growth highly depends on the infrastructure project completion, both by the government and foreign trade.  

Meanwhile, the province’s inflation in 2014 is predicted to reach 4.3%-5.3%. “Yet, it will have pressure at the initial of this year especially on core inflation,” he said.

 

 

 

 

Editor : Taufik Wisastra

 
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