Disparity between provinces narrows<\/p>\n
BOGOR, West Java (JP): Income disparity between the provinces
\nmay be persisting after 25 years of New Order rule, but it has
\ndeclined significantly with extensive improvements in educational
\nand health services, a World Bank official said yesterday.<\/p>\n
Jorge Garcia Garcia, a World Bank representative to Indonesia,
\nsaid that although the government had improved education and
\nhealth services, they must improve faster in less-developed
\nprovinces.<\/p>\n
He considered health and education to be the main determinants
\nof a regions welfare.<\/p>\n
\"Indonesia's income distribution right now is relatively
\nequal... I cannot judge whether this is good or bad, because some
\npeople may consider that it could be better,\" Garcia said at a
\nseminar held by Bogor Agricultural University.<\/p>\n
Garcia said that socioeconomic indicators for the provinces
\nshowed that efforts to reduce inequality must continue.<\/p>\n
\"The government can select interventions which improve equity
\nwithout sacrificing growth, such as by improving education and
\nhealth facilities,\" he said.<\/p>\n
He said the poorer provinces could continue to catch up with
\nthe richer provinces if the government maintained the progressive
\npolicies it has had since the late 1960s.<\/p>\n
Back then the government avoided large fiscal deficits and an
\novervalued rupiah. It also devalued the rupiah and reduced fiscal
\nand current account deficits quickly, Garcia said.<\/p>\n
But the government has also imposed some regressive rulings
\nwhich have made some provinces grow faster than others, he said.<\/p>\n
These include import and export restrictions which favor Java
\nover other provinces.<\/p>\n
\"Import restrictions protected the commodities that Java
\nproduced, like rice, sugar and manufactured goods, but provinces
\noutside-Java lost because they had to pay higher prices for the
\ncommodities that Java produced,\" he said.<\/p>\n
Export restrictions were imposed mainly on agricultural and
\nforestry products which Sumatra and the eastern islands produce.<\/p>\n
According to Garcia's studies, based on data from the Central
\nBureau of Statistics from 1983 to 1993, the real GDP per capita
\nof the 27 provinces, except Riau, grew 4.75 percent on average,
\nwhile the non-oil real GDP per capita grew 5.5 percent a year.
\nRiau's real GDP fell 1 percent a year on average.<\/p>\n
Bali's real GDP grew the fastest at 7.5 percent on average;
\nfollowed by Lampung, 7.3 percent; Central Java, 6.1 percent;
\nJakarta, 6.1 percent; South Sulawesi, 6 percent and North
\nSumatra, 5.9 percent.<\/p>\n
East Kalimantan's, South Sumatra's and Irian Jaya's real GDP
\ngrew the slowest at 0.4 percent, 1.7 percent and 1.9 percent on
\naverage, respectively.<\/p>\n
Excluding oil and gas, real GDP in all the regions grew
\nbetween 1983 and 1993, Garcia said.<\/p>\n
He said that although the welfare of people in eastern
\nIndonesia was frequently a concern because of their low incomes
\nand the high incidence of poverty there, some of their incomes
\nhad grown faster than the national average since 1975.<\/p>\n
\"In fact, both low and high growth rates of total per capita
\nincome can be found in provinces of western Indonesia (Sumatra,
\nJava and Bali) and in eastern Indonesia (Kalimantan, Nusa
\nTenggara, Sulawesi, Maluku and Irian Jaya),\" Garcia said.<\/p>\n
His studies concluded that provinces which started with the
\nhighest per capita GDP in 1975 finished with the highest per
\ncapita GDP in 1993, thus the richest and poorest provinces in
\n1975 continued to be the richest and poorest in 1993.<\/p>\n
Riau, East Kalimantan, Aceh, Jakarta, South Sumatra and Irian
\nJaya had the highest per capita GDP in 1975 and 1993. East Timor,
\nEast Nusa Tenggara, West Nusa Tenggara and Lampung recorded the
\nlowest per capita GDP in 1975 and 1993.<\/p>\n
Garcia said the original conditions of the provinces mostly
\ndetermined their final status, but faster accumulations of human
\nand physical capital increased provinces' per capita GDP.<\/p>\n
Garcia's studies found that high population densities did not
\nhamper growth rates and that low population densities did not
\nensure high growth rates.<\/p>\n
During the 1960s, for example, the national population density
\nwas about 60 people a square kilometer, but during the 1980s and
\n1990s, per capita income grew at about 4.5 percent a year, while
\nthe population density reached about 90 people a square
\nkilometer.<\/p>\n
\"Low population densities prevented specialization because
\nthey reduced the size of the market and increased the costs of
\nproviding good transport and communications infrastructure,\" he
\nsaid. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/disparity-between-provinces-narrows-1447893297",
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