POTENTIAL RESOURCE CURSE ANALYSIS OF COAL MINING SECTOR AT REGIONAL LEVEL USING VECTOR AUTOREGRESSIVE METHOD (VAR)

• Main Author: AMALIA (NIM : 22115301), RIZKI
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/30578
• Institution: Institut Teknologi Bandung

The provinces of East Kalimantan, South Kalimantan, and South Sumatra are the largest coal producers in Indonesia. Different from South Sumatra, regional economic in the province of South Kalimantan and East Kalimantan rely heavily on coal mining sector. This can be seen from the contribution of the coal mining sector to total GRDP of each province which shows a fairly high percentage. <br /> <br /> <br /> Regional economies that depend on non-renewable resources, for example coal, on the other hand have a negative impact. Dependence on the coal mining sector causes the development of other economic sectors such as agriculture, manufacturing and services to be hampered. there are concerns, these sectors will not be able to replace the role of the coal mining sector if at any time coal reserves run out. In addition, revenue from the coal mining industry is strongly influenced by fluctuations in world commodity prices. <br /> <br /> <br /> The potential occurance of resource curse in the province of East Kalimantan, South Kalimantan, and South Sumatera is regionally analysed based on the relationship and influence between the mining, agriculture, manufacture, and service sector, as well as inflation, household consumption, government expenditure and fixed capital formation. The identification of potential resource curse is also carried out by analyzing the relationship between the mining sector and the components of the Human Development Index (HDI).. Data from 1986 to 2016 were analysed using restricted vector autoregression that consist of impulse response function (IRF) and variance decomposition (VD) analysis. <br /> <br /> <br /> The results showed that there is a potential resource curse in the provinces of East Kalimantan, South Kalimantan, and South Sumatra. The increase in the mining sector affects the decline in household consumption and an increase in the inflation rate in the long run. The increase in the inflation rate in the long run has affected the decline in the processing and service sectors. In addition, the provinces of East Kalimantan and South Kalimantan had little impact on the development of the processing and service sectors, even causing a decline in the agricultural sector. Resource curse potential also occurs in the provinces of East Kalimantan, South <br /> <br /> Kalimantan, and South Sumatra in terms of social aspects. The increase in the coal mining sector caused a decrease in the average length of schooling and literacy rates. In addition, growth in the mining sector has an insignificant impact on life expectancy and per capita income.