THE EFFECT OF FISCAL AND ECONOMIC CAPACITY ON INEQUALITY IN MALUKU, NORTH MALUKU, NORTH SULAWESI AND WEST PAPUA PROVINCES

• Main Author: El Izzudin Kiat, Umar
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/56571
• Institution: Institut Teknologi Bandung

Each region has differences in the planning process, causing different conditions, especially in terms of economy and inequality. The provinces of Maluku, North Maluku, North Sulawesi, and West Papua are part of the easternmost territory of the Republic of Indonesia. These four provinces were also included in the former sultanates of Tidore and Ternate in the past and were among the richest areas because they were visited by 4 (four) colonial countries to colonize spices. Unfortunately, it is currently one of the poorest provinces in Indonesia. Only West Papua Province has the best per capita GRDP (number 6 in Indonesia). Even though it is the best, it is suspected that West Papua Province has an unequal economy in its territory. Therefore, this study aims to analyze the economic conditions and the level of inequality of the four Provinces and to see the effect of the Fiscal Capacity Index (IKF) and the regional economy on the level of inequality. used is to describe the level of the economy and inequality with GDRP and Williamson index analysis also uses time-series panel data regression analysis to see the extent of the effect of fiscal and economic capacity indices on the level of inequality. The data used is time-series data from 2006 to 2018. The results showed that West Papua Province was the most unequal province compared to the other three provinces. The level of inequality in West Papua Province is in the heavy category. The province with the least amount of inequality was North Maluku Province. although the amount of revenue in North Maluku Province is the smallest from its surroundings. The test of the effect of the fiscal capacity index on the regional economy between regencies/cities results that the variables of total regional income and total expenditure have a significant and positive effect on the economy of 49 districts/cities and the test of the effect of the Fiscal and Economic Capacity Index on Regional Inequality at the provincial level, results in fiscal variables it does not have a significant effect, only the economic variable (GDRP per capita) has significantly affected the inequality index in 2006 - 2018. The recommendation from this research is that The recommendation from this research is that the government can pay attention to total income and total expenditure because it indirectly affects the index and pay more attention to the relationship between these variables.