THE INFLUENCE OF THE MINING SECTOR ON THE POTENTIAL OF RESOURCE CURSE IN SOUTH SUMATRA USING PANEL DATA AND INPUT-OUTPUT ANALYSIS

• Main Author: Wibowo, Suryadi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/70147
• Institution: Institut Teknologi Bandung

The mining sector is one of the mainstay sectors in the Indonesian economy. South Sumatra, with abundant oil, gas and coal reserves, has experienced unstable economic growth and has a negative growth trend from 2001 to 2021. This condition shows a symptom/potential for resource curse in South Sumatra Province through the mining and quarrying sector. Where resource curse is a phenomenon that shows the condition of a country or region with an abundance of natural resources actually experiences negative or slow economic growth. Based on the estimated panel data regression, it can be seen that the mining sector GRDP variable has a negative and significant relationship to the GRDP growth variable. Apart from the mining sector, the agricultural and construction sectors also have a negative and significant influence. However, the manufacturing sector has a positive and significant influence. This shows that the Province of South Sumatra has the opportunity to experience resource curse through the mining, agriculture and construction sectors but can still avoid these symptoms through the processing industry sector. When viewed from the change in the output multiplier between 2006 and 2016, the mining sector has increased by 31%. This value shows that the government of South Sumatra is still making the mining sector a mainstay sector in the economic structure. Analysis of the relationship between backward and forward linkage shows that the manufacturing sector is a key sector in the economy, while the mining, agriculture and construction sectors are potential sectors that can still be developed. Therefore, in order for South Sumatra Province to be free from resource curse symptoms, the government of South Sumatra must develop a processing industry sector based on the agricultural and mining sectors.