IDENTIFICATION OF REGIONAL COMPETITIVENESS FROM EACH

PROVINCE IN INDONESIA : BEFORE AND DURING THE REGIONAL

AUTONOMY

Gilang Adi Nugroho
1

1
Faculty of Geography, Universitas Gadjah Mada

Indonesian Government system changed after the 1998 reform , the current system of
government is regional autonomy. Regional autonomy gives more authority to local
governments to set their own territory. The authority is so great an opportunity to improve the
competitiveness of the region. An increasingly globalized world economy makes the area
should improve competitiveness in order to survive in globalization. Regional
competitiveness is important because it will sustain national competitiveness, if the
competitiveness of the region is still higher then the national competitiveness will be high as
well. The definition of regional competitiveness by Abdullah et al is the ability of the
regional economy in achieving high growth rate and sustainable prosperity to remain open to
domestic and international competition . The purpose of the study was 1) to identify the
provincial competitiveness before and during regional autonomy. 2) identify sectoral issues
every province. The unit of analysis in this research are the provinces in Indonesia totaling 33
region.Variabel of regional competitiveness are macroeconomic, infrastructure, education
and health, these variables is a basic requirement for improving local economy (WEF,2011).
This research method uses a technique Z -Score, the standard deviation of the classification
system and cross tabs by analysis technic, quantitative descriptive.
Competitiveness of the provinces in Indonesia before and during regional autonomy
has a pattern that is not much different . Average provincial competitiveness in the western
part of Indonesia is higher than the eastern part. Provinces in Java has a value high
competitiveness, such as Jakarta ,Yogyakarta,West Java and Central Java. DKI has the
highest competitiveness both before and during regional autonomy. Most of the provinces
that have a negative competitiveness is located in the eastern part of Indonesia such as Papua,
NTT and Maluku. This indicates that there is a disparity between the competitiveness of the
western part and eastern Indonesia. Most of the problems that hinder the improvement of the
competitiveness of each province is infrastructure, education, and health. The low rate water
supply, electricity and good roads are infrastructure problems in some provinces. The low
average length of the school and a high infant mortality rate faced by Human resources
problem provinces in Indonesia. Conclusions of this study are 1) there is a disparity in
competitiveness between the western and eastern Indonesia , both before and during regional
autonomy. 2) Education and Infrastructure is a sector that should be the concern of local
governments to enhance competitiveness.

Keyword : Competitiveness, Regional Autonomy, Z-score

INTRODUCTION
Indonesia experienced a change in
the system of government from a
centralized system in the New Order era
turned into a decentralized after the reform
era. Regional autonomy is one form of
implementation of a decentralized system.
Many experts claim that the decentralized
system suitable to be applied in Indonesia
whose characteristics vary . Indonesia is a
pluralistic nation because it has the
diversity of social, economic, cultural and
geographical thus can not be generalized
in terms of development.
Regional autonomy is the
definition of devolution of government
power by the government to autonomous
regions to regulate and administer the
affairs of government in the system of the
Republic of Indonesia (Law No. 32 of
2004, Article 3, paragraph 1). The purpose
of regional autonomy under the legislation
is to accelerate the realization of public
welfare and improve the competitiveness
of local autonomy for Indonesia Gains by
Syaukani is efficient and effectiveness in
governance, political equality, political
stability, and political education. Dada
Solihin argue that the benefits of regional
autonomy is to establish democracy,
maintaining "nation state", and fairness.
Regional autonomy is an opportunity to
build a local government area in
accordance with existing and potential
problems. Regional autonomy may be
opportunities to improve the
competitiveness of local regions. The era
of globalization requires each county to
have a competitive edge in order to survive
in the economic system of globalization.
Michael Porter (1990) defines
competitiveness as the output issued by the
industry which can not be separated from
labor productivity (input). Other
definitions competitiveness issued by the
team LPEM FE UI is the region's ability to
prosper by remaining open to domestic
and international competition. No
definition of competitiveness that can be
accepted by all parties as competitiveness
can be seen from several viewpoints.
Regional autonomy is an
opportunity for local governments to
enhance competitiveness, competitiveness
even be the goal of regional autonomy
under local government law. Authority for
certain sectors can increase the region's
ability to establish its territory. Natural and
human resource potential of the provinces
in Indonesia is very large, if not supported
by it will lose competitiveness with other
regions or other countries. Areas that have
a competitive strength will be easy to
establish territory and will even attract
investors. The purpose of this study there
are two : 1) Calculate the competitiveness
of the provinces in Indonesia before and
during regional autonomy, 2) describe
each regional competitiveness indicators.

MATERIAL AND METHOD
Competitiveness indicators used in
this study refers to the first pillar of
competitiveness by the World Economic
Forum. World Economic Forum stated
there are 5 sectors which are the first
pillar, namely macroeconomic
competitiveness, infrastructure, education,
health, and institutions. The first pillar is
becoming a key factor of economic
development of a region. Indicators and
variables in research outlined in Table 1.

Table 1
Indicator and variable of competitiveness
Indicator Variabel
Economi % of economic growth
GDP
Infrastructure % of electricity
% of clean water
% of road condition
HR and
education
HD
Literacy Rate
Mean years of school
Health Infant Mortality Rate
Life expentacy
Source : WEF, LPEM FE UI Team

This study took place in 33
provinces in Indonesia. Sources of
research data from BPS and scientific
publications. The years of data are used,
namely 1999, 2004 and 2011 to describe
the state of competitiveness of the region
before and after decentralization. The
method used to calculate the level of
competitiveness of the regions of each
province is the Z-score. Z-score formula is
as follows:

x x
Z
i


z = standardization data
xi = data
x = average
s = standart deviasi
Z-score is used to standardize the data that
give values to variables that have different
units of analysis can be done. The results
of the calculation of competitiveness are
classified into high, medium and low with
a standard deviation method.
Formulas standard deviation
classification method is as follows:

High Hierarchy = Data > (X+Sd/2)
Moderate Hierarchy= (X+Sd/2) - (X-Sd/2)
Low Hierarchy = Data < (X-Sd/2)

Noted
X = Average
Sd = Standard Deviasi

RESULT AND DISCUSSION

The results of the calculation of
regional competitiveness of each province
in Indonesia in 1999 , 2004 , 2011 showed
that there is inequality. Inequality in
Indonesia is one of the problems still
facing this country. The imbalance occurs
between the western part of Indonesia to
the east.
The calculation result shows that
the competitiveness of the provinces on
the island of Java, before and during the
regional autonomy has high
competitiveness . Table 2 shows the level
of competitiveness of the regions and the
classification of each province in 1999,
2004, and 2011. DKI Jakarta ,West Java
,Yogyakarta , Central Java ,North Sumatra
is at a high classification. This is different
from the eastern region there are only 2
provinces that have high classification East
Kalimantan and North Sulawesi .
Inequality can be seen that many provinces
have lower classification is in the eastern
part of the country such as NTT , NTB ,
West Kalimantan and Papua. Province in
the western part of Indonesia, which has a
lower classification only Bangka Belitung
Province , it is natural that the province of
Bangka Belitung is a new province so that
development is not maximized .
Provinces in Java and Sumatra has
several advantages that have higher
competitiveness compared to other
provinces. Higher competitiveness will
allow the province - the province to get
investors or capital. Substantial capital
accumulation can be a trigger for the
development of an area. This can increase
the distance between the western part of
Indonesia and the eastern part of
Indonesia. Competitiveness inequality
between provinces in Indonesia due to the
lack of infrastructure and quality human
resource inequality. Indonesia's
development is a challenge because of the
vast area of the country and shaped the
islands. Infrastructure development costs
are high due to geographical condition of
Indonesia uniform.
Western Indonesia is
geographically dominated by large islands
and little islands shaped like Bangka
Belitung province. This will make it easier
to build infrastructure such as electricity,
water and roads. The availability of
relatively good infrastructure makes
economic communities can thrive. Other
than mineral -based industries thrive in big
cities in the western part of Indonesia such
as Jakarta, Surabaya, Medan, Palembang,
and Tangerang. Access to health and
education in the western region is
relatively easy apart from the complete
facilities and advanced technology. This
has an impact on the high quality of
human resources, development indices in
classification of high , long life expectancy
and infant mortality to lack .
In contrast to the eastern region of
the infrastructure has not been too full to
make investors before the weak
competitiveness. Infrastructure
development in the eastern region is
hampered by the geographical
configuration of islands shaped so that
infrastructure development is expensive.
Access to education and health in the
eastern region is very less because of
inadequate facilities and distribution of
health workers who have not been evenly
distributed. Distance of health facilities
and public education make it difficult to
access education and health. This has an
impact on life expectancy and infant
mortality rates are still high in several
provinces in eastern Indonesia. Human
resources competitiveness eastern region
lags far behind the west.


Table 2
Level and classification of competitiveness of the provinces in Indonesia Year
1999,2004,2011

Province
Competitiveness Classification
1999 2004 2011 1999 2004 2011
Aceh 1.03 1.13 2.44 III II II
Sumatera Utara 5.88 6.61 6.00 I I I
Sumatera Barat 2.95 4.33 4.72 II II I
Riau 2.34 4.89 3.60 II II II
Kepulauan Riau TAD TAD 5.74

I
Jambi 1.77 2.08 3.25 II II II
Sumatera Selatan 1.22 3.34 2.66 II II II
Bangka Belitung TAD TAD 1.69

III
Bengkulu 0.38 1.30 1.87 II II II
Lampung 1.74 0.33 2.31 III II II
DKI Jakarta 21.18 20.61 13.88 I I I
Jawa Barat 3.97 5.22 5.40 II II I
Banten TAD 1.39 0.17

II II
Jawa Tengah 5.75 6.14 5.32 I I I
DI Yogyakarta 7.60 7.49 8.17 I I I
Jawa Timur 4.25 5.56 4.59 II I I
Bali 6.87 6.78 4.33 I I II
Nusa Tenggara Barat 9.72 9.07 9.68 III III III
Nusa Tenggara Timur 4.71 6.54 5.36 III III III
Kalimantan Barat 3.62 3.21 1.26 III III III
Kalimantan Tengah 0.47 0.56 3.79 II II II
Kalimantan Selatan 0.38 0.72 0.86 II II III
Kalimantan Timur 9.83 9.42 5.29 I I I
Sulawesi Utara 7.25 9.59 7.82 I I I
Gorontalo TAD TAD 3.17

III
Sulawesi Tengah 0.61 0.87 0.77 II III II
Sulawesi Selatan 0.96 0.20 2.20 III II II
Sulawesi Barat TAD TAD 5.89

III
Sulawesi Tenggara 0.19 0.90 0.32 II II II
Maluku 0.52 1.07 1.41 II II II
Maluku Utara TAD 0.62 1.08

II II
Papua 3.50 10.89 10.33 III III III
Papua Barat TAD TAD 4.79

I
*red color : negative (the value under the average)
Black color : positif (value above the average)
The higher the positive value, the higher the value of the competitiveness of the region, and contrary



Figure 1
Map Classification Of Competitiveness Province in Indonesia year of 1999
Source : Analysis Result
Regional competitiveness provinces in
Indonesia before and during regional
autonomy largely stagnant. There are only
a few provinces are able to increase their
competitiveness classification such as East
Java, West Java and West Sumatra. The
result of the discussion was also found that
there is still a competitive imbalance
between the western and eastern
Indonesia.

Economic Indicators
The economic condition of the
provinces in Indonesia before and during
regional autonomy does not very much. It
actually looks attractive in variable
economic growth. In 2011, economic
growth in the provinces of Java are even
lower than in the provinces other islands.
This is because most of the provinces
outside Java island has mining and
plantation commodities such as oil, gas,
coal, oil, rubber and other commodities.
Provinces such as East Kalimantan rely
petroleum, Papua with some minerals,
have higher economic growth than other
provinces. Example, PE East Kalimantan
Province in 1999 reached 4.73 % in 2004
down to 1.8 % and rose again to 3.98 % in
2011. Kalimantan Timur who rely on
mining as its revenue should prices
decline.
GDP provinces before and during
the growing regional autonomy. Regional
income inequality evident in the GDP of
each province, especially among the
provinces on the island of Java with
existing outside Java. The velocity of
money in this country mostly in Java so
GDP provinces on the island of Java is
much higher than the other islands, there
are only a few provinces outside Java that
GDP is almost equal as East Kalimantan ,
Riau, North Sumatra or Jakarta GDP
reached 200 trillion, while other regions
such as Papua, which is far below the GDP
is only 76 trillion, whereas Papua has high
natural wealth. Almost all the income in
the regions it flows in Jakarta and received
only a few areas, especially for oil and gas
and mineral commodities. This will affect
local revenues for development of the
region.

Infrastructure indicators
State of Indonesia which has the
shape of the islands is a challenge to build
infrastructure. Variable road infrastructure,
electricity and clean water. The percentage
of roads in good condition shows that there
is inequality because the provinces in Java
Island has a higher percentage of roads
that is 8-90 %, while the other provinces is
only 50-60 %. Geographically , the island
of Java is more easy for the development,
in contrast to the eastern region which has
the form of islands, mountainous Papua ,
Kalimantan, which has a type of peat soil
making it more difficult for road
construction.
Electricity is one of the issues that
remains challenging the Indonesian
government. Inequality percentage of
electricity occurs again, the provinces on
the island of Java has electric percentage
above 95 %, while other provinces are still
taken 90 %, even only 44 % of NTT
province. Geography and dispersed
settlement pattern making electrical
installations are expensive so the electrical
infrastructure in some provinces is not
maximized. This is feared to affect the cost
of production and economic activities.
Clean water is the infrastructure that
supports the environment and public health
. Provision of clean water in Indonesia is
not evenly distributed, even in Java is still
50 % RT is getting access to clean water.
Many people in Indonesia are still using
water sources that have not guaranteed the
quality of contamination or the other. It is
feared impact on public health and the
environment because of lack of access to
clean water.

Health Indicators
Variable life expectancy and infant
mortality show the performance of local
health sector. Life expectancy in the
Indonesian provinces before and during
the growing regional autonomy . Average
life expectancy in 1999 the community
was 64 years , later increased to 69 years
in 2011. Province such as Jakarta,
Yogyakarta, East Kalimantan and Riau in
2011 had a value of AHH over 70 years .
AHH other provinces are still under 70
years old , even NTB has a low rate that is
62 years old . This should be a concern of
local governments in order to improve
public health in order to have longevity.
The infant mortality rate in each
province before and during regional
autonomy continues to decline , although
still an issue in some provinces . Average
infant mortality in 1999 is 51 deaths per
1,000 live births , then dropped in 2004 to
31 cases and 29 cases in 2011 . Spatially
Only the infant mortality rate is still high
in some areas such as Gorontalo ( 52 cases
) , NTB ( 48 cases ) and NTT ( 38 cases ) .
The amount is far less infant mortality in
DIY or Jakarta that only 14 cases . Many
references say that the eastern part of
Indonesia still lacks health facilities and
human resources so that possible factor is
exactly what caused mortality is high.
Many mothers give birth in rural assisted
by Duku / physician rather than by
professionals so vulnerable in an
emergency and can lead to infant death .
Another factor is the lack of knowledge of
the family the importance of nutrition
during pregnancy.

Indicators of Education and
Human Resources
Education determines the quality of
human resources in an area. Good quality
of human resources , it can affect the
competitiveness of the region. The
variables used to determine the condition
of education and human resources is the
Human Development Index ( HDI ) ,
Literacy Rate and the average length of the
school.
The literacy rate of the provinces in
Indonesia reached 92 % in 2011 , up 3 %
from 1999. Broadly speaking , the
provinces in Indonesia in 2011 has a high
literacy rate , which is above 90 % , but
still there some provinces that blind people
still high as 30 % Papuan citizens are
illiterate. This should be a concern due to
catch up with the quality of human
resources of Papua province compared to
other provinces .
The average length of the school to
increase, at the time in 1999 at 6 years ,
while in the year 2011 increased to 8
years. The government should provide
infrastructure and ease of access to
education in order to increase the average
length of school. Human Development
Index by province continue to rise before
and during regional autonomy. HDI
province in western Indonesia is higher
than the eastern region. Some provinces in
the eastern region still has a HDI below 70
as Papua 65, NTB and NTT 66 67. This
shows the gap in the quality of Indonesian
human resources. Communities in the
western part relatively easier to access
education than people in the eastern part.
Infrastructure, quality of teachers and
personnel in the western region is
relatively better than that of the eastern
region. This is the quality factor is still the
gap in human resources in Indonesia.





















CONCLUSION
1). Competitiveness of provinces in
Indonesia still has a gap between the
western part of the eastern province both
before and during regional autonomy.
2) The problem of education and health is
something that must be considered,
especially in the the eastern province.
Human Resources also lose the eastern
part of the western section. Inequality
competitiveness must be addressed
immediately in order not to increase the
disparity of regional development

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