2011年-世界发展银行全球_East_Java_Growth_Diagnostic___Identifying_the_Constraints_to_Inclusive_Growth_in_Indonesias_Second-Largest_Province_102页_3mb

East Java Growth Diagnostic Summary

Core Content

This report, East Java Growth Diagnostic: Identifying the Constraints to Inclusive Growth in Indonesia's Second-Largest Province, is a product of the World Bank, prepared in collaboration with the Regional Economic Development Institute (REDI) and the Provincial Government of East Java. It aims to identify the main constraints to inclusive growth in East Java, particularly in the context of economic development, investment, and poverty reduction.

Main Viewpoints

Economic Overview

• East Java is the second-largest contributor to Indonesia's economy, with a growth rate similar to the national average and other major Java provinces.
• Despite its potential, the province has not regained its pre-crisis growth levels and continues to have a higher poverty rate than the national average.
• The economic structure has remained largely unchanged over the past decade, with industry and agriculture still holding significant shares, but both sectors showing low growth.
• The absorption of the labor force into higher productivity sectors has been slow, with the majority still working in agriculture, which has the lowest labor productivity.

Investment and Growth

• Private investment in East Java is relatively low compared to Jakarta and West Java, limiting the province's ability to move towards higher growth sectors.
• The investment climate and infrastructure are identified as the main constraints to growth.
• The business environment is generally stable, with a low level of perceived corruption and manageable macroeconomic conditions.
• Access to credit is not a major constraint, but micro, small, and medium enterprises (MSMEs) still face challenges.

Human Capital and Education

• A large proportion of the labor force is unskilled, which limits the inclusiveness of growth.
• Access to secondary education is a major constraint, with significant disparities between urban and rural areas, and between rich and poor.
• Health services, on the other hand, are more equally accessible, which is a positive factor for human capital development.

Key Constraints and Policy Recommendations

Infrastructure Constraints

• Poor quality of district roads and inefficient port operations (e.g., Tanjung Perak) increase transportation costs and reduce the return on investment.
• Inadequate electricity supply to businesses, particularly due to unreliable service and high demand, affects operations.
• The high number of businesses relying on private generators and the long waiting lists for new electricity connections indicate a critical infrastructure issue.

Investment Climate Constraints

• The business registration process is cumbersome and costly.
• High perceived corruption, especially in Surabaya, raises the cost of doing business.
• Lack of formal land and company registration hampers access to credit and financial markets.

Human Resource Constraints

• Low access to secondary education limits the development of a skilled workforce.
• A significant portion of the labor force is older and less educated, working in low-productivity sectors.
• Strategies to improve skills through extension services and non-formal training, as well as increasing access to credit, are recommended.

Sectoral Constraints

Agriculture

• Low productivity and limited land availability are key issues.
• The high dependency on agricultural land and lack of diversification in products and export markets contribute to slow growth.
• Policies to promote horticulture, livestock breeding, and organic farming, as well as support for rural non-farm employment, are suggested.

Manufacturing

• The sector has not fully recovered from the 1997 financial crisis.
• Intense competition from countries like China, India, and Vietnam has reduced manufacturing output, especially in labor-intensive industries.
• The reliance on imported raw materials and intermediate goods further weakens the sector.

Trade, Hotel, and Restaurants

• These sectors have not been effective in driving overall economic growth.
• They require better support to stimulate other economic activities.

Policy Actions and Conclusion

• The report concludes with a Conclusion Matrix that outlines key constraints and corresponding policy actions.
• It emphasizes the need for improving infrastructure, enhancing the investment climate, and investing in human capital, particularly through education.
• It also highlights the importance of promoting rural non-farm employment and diversifying agricultural and manufacturing products to achieve more inclusive growth.

Acknowledgements

• The report was prepared by a team from the World Bank, with significant contributions from REDI and the Provincial Government of East Java.
• Public consultations and input from local government officials, business associations, and academic institutions were integral to the report's development.
• Financial support was provided by the Multi-Donor Diagnostic Facility on Shared Growth (DFSG) under the Poverty Reduction and Economic Management (PREM) unit program.

Key Stakeholders and Institutions

• REDI: Provided background research and local support.
• Provincial Government of East Java: Supported the entire process from preparation to implementation.
• World Bank: Led the analysis and report production.
• Local Partners: Included business representatives, government officials, and academic experts from various sectors and regions.

References and Appendices

• The report includes a detailed Table of Contents, List of Figures, List of Tables, and List of Boxes.
• It references data from various institutions, including the World Bank, Indonesia Central Bureau of Statistics (BPS), and The Asia Foundation.

Conclusion

• East Java has significant economic potential but faces multiple constraints that hinder inclusive growth.
• Addressing infrastructure deficiencies, improving the investment climate, and enhancing human capital through education and training are critical for sustainable and equitable development.
• The report serves as a reference for policymakers and stakeholders aiming to improve economic conditions in the province and set a benchmark for other regions.