ECONOMIC JOURNAL OF EMERGING MARKETS , 7(2) October 2015, 93 -106 EJEM ECONOMIC JOURNAL OF Econ. J. Emerg. Mark. EMERGING MARKETS Available at http://jurnal.uii.ac.id/index.php/jep  Dominant Economic Sectors in Kulonprogo, Gunungkidul, and Bantul Regencies in Special Province

Nur Feriyanto 1

1Department of Economics, Universitas Islam , Indonesia e-mail: [email protected]

Article Info Abstract The Special District of Yogyakarta (DIY) subdivided into four regencies and Article history: one city has targeted economic growth in Regio nal Medium Term Develo p- Received : 10 May 2015 ment Plan DIY 2012 -2017 . This research aims to analyze some dominant ec o- Accepted : 20 July 2015 nomic sectors from Regencies of Kulonprogo, Gunungkidul and Bantul in Published : 1 October 2015 achieving the target of economic growth in the year of 2015 -201 7. The result of the r esearch showed the economic sectors in Kulo nprogo have been dom inated by sectors in A griculture, Services, T rade, hotel and restaurant and Keywords: GRDP, economic growth, Manufacturing in dustries. In Gu nungkidul, it was dominated by A griculture , dominant economic sectors Trade, hotel and restaurant , Service , Manufacturing industries and C onstru c- tion. Meanwhile, in Bant ul Regency it was dominated by Agriculture, Trade, hotel and restaurant, M anufacturin g industries, Services and C onstruction . JEL Classification: O1, R0, R1 Abstrak Daerah Istimewa Yogyakarta (DIY) dibagi menjadi empat kabupaten dan satu DOI: kota telah menargetkan pertumbuhan ekonominya di dalam Rencana Pembang u- http://dx.doi.org/10.20885/ejem nan Jangka Menengah Daerah DIY 2012 -2017 . Penelitian ini bertujuan untuk .vol7.iss2.art3 menganalisis sektor ekonomi yang dominan dari Kabupaten Kulonprogo , Gu- nungkidul dan Bantul dalam mencapai target pertumbuhan ekonomi pada tahun 2015 -2017 . Hasil penelitian menunjukkan sektor ekonomi di Kabupaten Kulo n- progo didominasi oleh sektor P ertanian , Jasa , Perdagangan , hotel dan restoran dan I ndustri manufaktur . Di Gunungkidul , didominasi oleh sektor P ertanian , Per- dagangan , hotel dan restoran, Jasa , Industri manufaktur da n K onstruksi . Sement a- ra itu, di Kabupaten Bantul didominasi oleh sektor Pertanian , Perdagangan , hotel dan restoran , Industri manufaktur , Jasa dan K onstruksi .

Introduction sec tors for the investment of the city/regencies so as to provide a multiplier The achievement of economic growth in effect s on other business sectors. regencies and Yogyakarta City in Special Each of regency/city in Special Di s- District of Yogyakarta (locally abbreviated trict of Yogyakarta Province has its different as DIY) Province by 2017 has been ta r- contribution in GRDP of DIY Province. geted in RPJMD (Regional Medium Term Some regencies might provide a great co n- Development Plan of DIY 2012-2017. The tribution in GRDP of DIY province but ot h- target of economic growth can be achieved er might provide little. The regencies with with one condition when every economic less -developed econ omy , in this case, must sector is able to meet the target of Gross be continually supported to make them be t- Regional Domestic Product ( GRDP ) as ter and later on can provide a great contrib u- proposed. For this reason, it is deemed i m- tion to the economy in DIY Province. R e- portant for government for both rege n- cognizing the dominant economic sectors in cies/city to concern with the dominant ec o- regencies or city that are not dominant in nomic sectors to later become the leading 94 ECONOMIC JOURNAL OF EMERGING MARKETS , 7(2) October 2015, 93 -10 6 

role towards the econ omic matters and people. Correlation between the economic GRDP in DIY Province is deemed critical growth and investment is very essential in a then. It is to make any policies issued and region; thus, i t is important to be a concern strategy in developing them come to be for the stakeholders. It is in view of how a meani ngful for the economic achievement well planned investment is able to accelerate both at regional level and at provincial one. the economics of a region through the ec o- Tab le 1 shows the description of values and nomic sector as stated in GRDP of the r e- shares in regencies/city in GRDP of DIY gion. It has been well proven that an acc u- Province in the period of 2011 to 2014. rate invest ment in economic sector can co n- The Value and Share of GRDP in tribute a significant impact on the economic Kulonprogo Regency could be categorized growth (Adofu, 2010). low, followed by Gunungkidul and Bantul Sultan and Haque (2011) examined positioned in the middle. Yo gyakarta City the contribution of domestic investment, and , conversely, were at the foreign investment and ex port on economic higher value and share. It, as a consequence, growth for India over the period 1970 to is deemed essential for the local government 2007. They found that domestic investment in Kulonprogro, Gunungkidul and Bantul to has a significant contribution to economic seriously concern towards the economic growth , while exports and foreign inves t- growth in each of its rege ncy through the ment do not contribute to economic growth . maximization in the development of their Shaw and Shen (2013) conducted a re- dominant economic sectors. For this reason, a search for Tanzania about the relationship research purposely to observe the dominant between foreign investment and GDP . This economic sector in Kulonprogo, Gunungk i- research shows that there is a causal rel a- dul and Bantul is necessary to be done as a tionship between these variables. Ther e- base of issuing policy for the development of fore , the Tanzanian government should dominant economic sector to make them able give more serious attention to the foreign to contribute better in future towards the investment since this variable has signif i- GRDP of DIY Province. cant effect on GDP . Some researchers have given their Mohamed , Singh and Liew (2013) ex- concern with the importance of measuring amined the impact domestic and foreign the economic growth as stated by Samuel direct inves tment to economic growth in and Nurina (2 015) noted that the economic Malaysia during the period 1970-2008 u s- growth can be used to measure to what e x- ing the VECM . Their study found that there tent the ability of a state (regional) in pr o- was a long-term bilateral causality between vi ding the economic needs for its entire economic growth and domestic investment.

Tab le 1: Value* and Share **of GRDP Based on Current Prices in the Regencies and City in DIY Province towards GRDP in the Period of 2011–2014 Year Regencies /City 2011 2012 2013 2014 Value Share Value Share Value Share Value Share

Kulonprogo 1.869.338 8,45 1.963.028 8,42 2.062.181 8,41 2.158.701 8,36 Gunungkidul 3.474.288 15,7 3.642.562 15,62 3.830.399 15,63 4.017.825 15,56 Bantul 4.177.201 18,9 4.400.313 18,87 4.645.475 18,95 4.898.074 18,97 Yogyakarta City 5.816.568 26,3 6.151.679 26,39 6.498.899 26,52 6.838.339 26,48 Sleman 6.704.100 30,3 7.069.229 30,32 7.471.897 30,49 7.908.465 30,63 DIY Prov 22.131.774 100,0 23.309.218 100,0 24.508.855 100,0 25.821.406 100,0 *) in Million Rupiah ; **) Percentag e of GRDP of Regencies / City towards Province Source : Data of Central Bureau of Statistics of DIY (Processed) Dominant economic se ctors … (Feriyanto ) 95

Based on the background, this r e- Today, each of regions is being search aims to make an adjustment on the faced with some various problems in d e- target of the economic growth in Regencies veloping their local economy. In South S u- and City in DIY Province as programmed lawesi, the high rate of unemployment is in RPJMD (Regional Medium Term D e- becoming an issue being faced by the local velopment Plan), and to determine some government (Mahyudin and Zain , 2010). sectors of dominant economic sectors based The issue on the employment is also found on their own contribution towards GRDP at the national scale in which a state with of Economic sector in DIY Province. the very huge number of population is not As a sector of government budget, able to accommodate the employment due development has a positive correlation with to the limited job opportunities. The issue the economic growth of a region (Ncube, on the high rate of unemployment seems to et.al, 2013). To reach the economic growth in be unavoidable (Suparyoto, et.al , 2013). its region, the government policy should at Other problems were also encoun- best prioritize the development in acc ordance tered was the significant decline in agricu l- with the potential owned by each region. tural land (Singh 2014). His paper deals Sometimes, the natural resource potential with the analysis of trends in investment in might become “blessing” or “curse” if the Indian agriculture . He shows that over the government fails to manage the resources period of economic reform, agricultural properly. It happened in some rich develo p- growth rates slowed down significantly. ing countries that unable to convert it re- Additionally , Narasimhan & Bhai- sources potency into productive asset (Ploeg, ravamurty (2014) also revealed that em- 2011). On the most important key success is ployment in agriculture is mostly seasonal the quality of institutions. If the institution is and intermittent in character, so that during more producers friendly then the higher the the period of peak agricultural activit y, the resources induce the higher income (Me h- demand for labor is higher than during the lum, et.al, 2006). off season they have to face acute unem- The potency of a region can be seen ployment problem. from the dominant economic sectors as  stated in GRDP that is the added values r e- Research Method sulted by all economic units in a region, e i- This research used descriptive statistic based ther goods or service . This potency can be on secondary data in the form of the target developed through an accurate investment in of the economic growth in Kulonprogo R e- the dominant economi c sector. The local gency, Gunungkidul Regency, and Bantul governments to attract the investment in its Regency in the period of 2015 to 2017 and region or area are able to do by increasing the the GRDP growth in Kulonprogo R e- the government budget and by maintaining gency, Gunungkidul Regency and Bantul the inflation stability. The flow of Foreign Regency from 2015 to 2017 in accordance Direct Investment (FDI) is mostly conce n- with the economic sectors . Here, t he data trated in advance economies. In order to a t- has been published by BPS (Central Bureau tract more FDI inflow, the emerging ma r- of Statistics ). Meanwhile, the data on the kets should improve their economies (Groh target of economic growth was taken from and Wich, 2012). Some factors may be able the RPJMD (Regional Medium Term D e- to bring an effect on the capital flow to velopment Plan) of DIY 2012 -2017. The come to an area include the development of estimation of the upcoming GRD P in the communication technology, market infr a- year of 2015, 2016, and 2017 for Kulon structure, market liberalization, and the va- Progo Regency , Gunungkidul Regency and nishing of bureaucratic obstacles. Bantul Regency are from the current GRDP 96 ECONOMIC JOURNAL OF EMERGING MARKETS , 7(2) October 2015, 93 -10 6 

multiplied by ( 100 percent plus a target pe r- centage of economic growth in RPJMD ). The estimation of the upcoming GRDP per year from each regency then allocated to the economic sector based on the estimation using the average allocation per sector of the economy during the period 2009 to 2014 .

Result and Discussion Kulonprogo regency The target of economic growth in Kulo n- progo Regency in 2015 was at 5.30 per cen t; and it is projected to increase by 5.39% and 4.47% by2016 and 2017, r e- spectively as in line with the target in RPJMD DIY (2012-2017).

Tab le2: Target of Economic Growth (%) Kulonprogo Regency in The Period of 2015-2017 Indic ator Year 2015 2016 2017 Economic Growth (%) 5.30 5.39 5.47 Source: RPJMD DIY 2012-2017

The target of economic growth in Kulonprogo Regency can be achieved if each economic sector is able to meet the ta r- get of GRDP of Kulonprogo Regency as the projection calculation below (table 3) . The dominant economic sectors bringing an i m- pact on economy in Kulonprogo Regency based on the percentage of contribution of each sector to GRDP include: (1) Agricu l- ture; (2) Service; (3) Trade, Hotel and Re s- taurant; and (4) Manufacturing Industries (Table 3). All of four economic sectors in the period of 2013 -2017 give the large co n- tribution to GRD P of Kulonprogo at (2.958.797 + 2.204.830 + 2.019.732 + Agriculture becomes the dominant 1.582.505 )/ 11.416.310 = 9.850.093 / sector which affect GDP has also been 11.416.310) = 76,78 per cent. Hence, it is re a- found in Tunisia (Chebbi, 2010). In his r e- sonable if all of four economic sectors need search  he concluded that in the short run, to have a special concern from local go v- agriculture in Tunisia seems to have partial ernment in Kulonprogro to be contin ually role as a driving force in the growth. Agri- developed, here obviosuly without ignoring cultural sector in Tunisia depends on water the roles of other economic sectors. and energy subsidies, any shortage in water Dominant economic se ctors … (Feriyanto ) 97

and energy supply may adversely affect the rian; guava, bananas, rambutan, zalacca; growth. jackfruit, mangosteen, and breadfruit; and d) As seen from the graphic 1, the Plantation products: coconu t; cloves; coffee; leading sectors in Kulonprogo Regency i n- brown; pepper; vanilla; tea; and sugar cane; clude agriculture, service, trade and man u- e) Poultry: chicken; chicken and duck; and facturing industry. The development of the f) Eggs from: chicken and duck. activities in agriculture, tourism and trading For its geographical condition, the in Kulonprogo will stimulate the develo p- agriculture in Kulonprogo is quite fertile ment of four economic sectors as Kulo n- supported by the sources of groundwate r, progo has a quite wide agricultural far m- rivers and good irrigation. Similarly, the hu s- land (about 45.326 ha) potential to support bandry in this regency is developed conside r- its agricultural activities. ing the availability of many areas that can be Kulonprogo Regency is an important used for the development of husbandry bus i- contributor in agriculture and animal hu s- nesses. In addition to the agricultural pro d- bandry in Yogyakarta through: a) the pro d- ucts, the poultry breeding is becoming one of uct of food crops such as corn, soybean, or the household incomes for people in Kulo n- cassava; (b) vegetables : onion, mustard, red progo in consideration to that people here are pepper, chili; (c) fruits: avocado, lanse; d u- highly competent in this business.

Tab le 4: GRDP of Dominant Economic Sectors Kulonprogo Regency Manufacturing Agriculture Service Trade Growth Growth Growth Industry Growth Year (Million (Million (Million (%) (%) (%) (Million (%) Rupiah) Rupiah) Rupiah) Rupiah) 2013 526.782 - 410.362 - 367.294 - 279.227 - 2014 547.005 3,84 438.360 6,82 387.522 5,51 284.199 1,78 2015 595.495 8,86 428.409 -2,27 399.601 3,12 321.938 13,28 2016 627.593 5,39 451.501 5,39 421.139 5,39 339.291 5,39 2017 661.922 5,47 476.198 5,47 444.176 5,47 357.850 5,47 Means (2013 - 591.759,40 5,89 440.966,00 3,85 403.946,40 4,87 316.501,00 6,48 2017) Source: Central Bureau of Statistics (BPS) - processed

700.000 Agriculture 600.000 Service 500.000 Trade 400.000

300.000 Manufacturing Industry 200.000 (million rupiah) (million

100.000

Grdp of dominant dominant of Grdp economic sectors 0 2013 2014 2015 2016 2017

Graphic 1: Dominan t Economic Sectors in Kulonprogo Regency

98 ECONOMIC JOURNAL OF EMERGING MARKETS , 7(2) October 2015, 93 -10 6  

Agricultural business plays an e s- Rp.440.966.00 million, with the value of sential role in generating the economic GRDP higher than the other dominant ec o- growth in Kulonprogo Regency with the nomic sectors such as trade and industry average of annual GRDP at Rp.591.759.40 and it is in the second rank of other four million, and with the highest value of dominant economic sectors in Kulonprogo GRDP compared to other dominant ec o- Regency . The aver age of annual growth in nomic sectors such as services, trade, and this economic sector is at 3.85 percent, and transportation sector. It is in the first rank the growth of this economic sector is at the of four dominant economic sectors in K u- lowest rank compared to other dominant lonprogo Regency. The average of annual economic sectors . growth from this economic sector is at 5.89 The economic sector development in per cent and with the growth in the position trade in is quite pro m- of the second rank of other dominant ec o- ising for the following considerations: a) The nomic sectors. plan of the government to build a new airport In service sector, this economic se c- of DIY in this r egency; b) railway station in tor is highly correlated with the touri sm and which it is planned to be integrate d to the ai r- trade activities. Therefore, the multiplier e f- port ; and c) sea ports in the form of fis h port fect will be significant towards the economic that will also be built in this regency . growth in Kulonprogo Regency. Various Looking at the investment and their tourism objects i n Kulonprogo R egency be- supporting infrastructures above, it is hig h- coming t he tourist attraction include: a) Nat u- ly possible if Kulonprogo Regency can be ral Tourism ( Glagah Beach, Congot Beach , the trade centre for having a strategic place Trisik Beach, Sermo Reservoir, Suroloyo in the province and be adjacent to th e wes t- Peak , and Kiskendo Cave ); b) Tourism Vi l- ern part of Central P rovince. To op- lages (Nglinggo, Kalibiru, Sermo, Siderejo, timize the trading activities in Kulonprogo and Jatimulyo); c) Religious Tourism (Se n- Regency, there is a need to support it with dangsono, Nyi Ageng Serang Cemetery , G i- good infrastructure, such as the availability rigondo Cemetery ); d) Educational Tourism of banks and other financial institutions; (wild rescue center , an d Dolan D eso Boro); electricity, telephone, transportation devic- and e) Special Interest Tourism such as raf t- es , roads; security; good transportation; ing and sport fishing . enabling it later to boost the economic Some cultural events on tribe ar e a l- growth in Kulonprogo Regency. so often performed in Kulonprogo Regency Trade play s an important role in such as L abuhan Pura Pakualama n, Sap a- boosting the economic growth in Kulo n- ran Jayakusuma and so on. Such tourism progo Regency as it has an average of a n- and cultural objects should be conti nually nual GRDP by Rp .403.946.40 million with developed in that tourism is indirectly co r- higher value of GRDP in comparison to related to the GRDP growth for some ec o- industry. It is in the third rank of four d o- nomic sectors as in trade , hotels and resta u- minant economic sectors in Kulonprogo rants ; transport ation; and s ervices. In addi- Regency. The average of annual growth in tion, infrastructure also needs to be well trade is at the highest percentage ( 4.87%) concerned as , given the attractions located with the business growth at the third rank in Kulonprogo Regency, it is not imposs i- following other dominant economic sectors ble to attract many tourists. in industry and agriculture. Economic sector in term of s ervices In industry, the average of annual also play s an important role in accelerating GRDP amounted to Rp.316.501.00 million the economic growth in Kulonprogo R e- with the lowest rank in the average of an- gency with an average of annual GRDP by nual GRDP compared to the other domi- Dominant economic se ctors … (Feriyanto ) 99

nant business sector. Nevertheless , it has an Agricultural products here include: rice; average annual growth by 6.48 percent po- cor n; soybean; peanuts and cassava and sitioned at the first rank of other dominant plantation crops include coconut; cashew; economic sectors . chocolate; sugarcane; yams; and peanuts. In farming, it could include cattle; goats and Gunungkidul regency chickens, as well as fisheries either inland fish or marine fish. The economic growth in Gunungkidul Re- Agriculture plays an important role gency in 2015 amounted to 4.89 percent; in promoting economic growth in Gunung- and projected to increase by 5.01% and kidul with an average of annual GRDP by 5.12% by 2016 and 2017, respectively as Rp.1.513.647, a nd with the highest value of targeted in RPJMD DIY (2012 to 2017). GRDP in comparison to other dominant The target will only be achieved if each economic sectors such as Trade; Services; business is able to meet the target of GRDP Manufacturing industry and Construction. of Gunungkidul Regency as stated in Pr o- It is in the first rank of five dominant ec o- jection Calculation in Table 6. nomic sectors in Gunungkidul Regency.

The average of annual gro wth in this ec o- Tab le 5: Target of Economic Growth In nomic sector amounted to 6.04 percent in Gunungkidul Regency in the period of the position of the highest rank for the 2015-2017 growth of economic sector in Gunungkidul Year Indic ator 2015 2016 2017 Regency. Tourism and trade activities are Economic Growth (%) 4,89 5,01 5,12 closely related with the economic sectors in Source : RPJMD DIY 2012-2017 trade, hotels and restaurant. I n Gunungk i- dul, there are various tourism objects that The dominant economic sectors that can attract the tourists both from domestic can determine the economic growth in Gu- and from foreign. nungkidul Regency inclu de: (1) Agricu l- A number of interesting tourism o b- ture; (2) Trade , Hotels and Restauran ts; (3) jects in Gunungkidul include beaches (B a- Services; (4) Manufacturing Industry ; and ron, Kukup, Krakal, Drini, Sadeng, (5) Construction. During the five -year p e- Throughout, Wediombo, Sundak, cloves and riod from 2013-2017, all of five economic so on); cultural tourism (Sokoliman Mag e- sectors contribute to very significant GRDP li tic site, Gembirowati rest house, Kembang of Gunungkidul Regency (7.568.233+ Lampir Hermitage, Custom Clean); nature 2,366,961 + 1,873,037 + 3,195,971 + (Nglanggeran mountain, Siung Lake 2,987,700) / 21,139,970 = 17,991,902 / /Ancient Bengawan Solo, Karst Valley M u- 21.13997 million = 85.10 percent. Ther e- lo, Sri Getuk Waterfall, Wonosari Forest, fore , it is acceptable if the local gover n- Wanaga ma Forest, Kemuning Lake, and ment of Gunungkidul could give a special Luweng Sampang). In addition, a tourist concern with five economic sectors for a attraction in the form of a tourist village sustainable development without ignoring (Bobung, Garotan, and Mojo); and caving the role of other economic activities. tourism (Pindul, Ngobaran, Seropan, Jo m- As seen in the table above, the agr i- blang, and Sriti) can also be the attracting culture sector is the dominant sector in G u- tourism objects. T he local government in nungkidul regency followed by the trade , Gunungkidul Regency, therefore, needs to service , manufacturing s ector and the co n- continue to develop these attractions, either struction. Agriculture, plantation, animal in the form infrastructure or in the form of husbandry and fisheries, meanwhile, are the effective promotion considering many tou r- main contributors to GRDP in this regency. ism objects have not been explored yet. 100 ECONOMIC JOURNAL OF EMERGING MARKETS , 7(2) October 2015, 93 -10 6  

Dominant economic se ctors … (Feriyanto ) 101

1.800.000 1.600.000 1.400.000 Agriculture 1.200.000 1.000.000 Trade

800.000 Service 600.000 400.000 Manufacturing Industry sectors (million sectors(million rupiah) 200.000 Grdp ofGrdp dominant economic 0 2013 2014 2015 2016 2017

Graphic 2: Dominat Economic Sectors in Gunungkidul Regency

Further development of tourism in value of GRDP higher than other dominant Gunungkidul needs to be improved in order economic sectors (services; industry and to increase economic growth . As it was construction). Trade is positioned in the found by He and Zheng (2011) in Sichuan second rank of other five dominant ec o- Province of China, tourism effectivelly nomic sectors in Gunungkidul Regency . drived economic growth . Furthermore , it The average of annual growth in this ec o- can be seen that the main driving force of nomic sector is also quite hig h at 4.82 per- economic growth is the secondary sectors , cent with the growth in the second position such as tourism. of five dominant economic sectors . The development of trading activ i- The economic sector in terms of ties in Gu nungkidul runs well in the form of services also plays an important role in handicraft s, carvings, B atik, to the traditio n- promoting economic growth in Gunungk i- al food of this regency (Thiwul, Gathot, P a- dul for having an average of annual GRDP tilo, Utri, L emet, and fried grasshoppers) as by Rp.597.540 million with the value of the favourite food not only for the indigeous GRDP higher than the other dominant ec o- people but also for those outside Gunungk i- nomic sectors in industry and construction. dul . Looking at this q uite rapid development It is in the third rank of five dominant ec o- in trade and its strategic trade and economy , nomic sectors in Gunungkidul Regency . it is necessary to support the trade in the The average of annual growth in this ec o- form of sufficient infrastructure s and facil i- nomic sector is at 3.87 per cent with the ties such as the availability of banks and growth in the lowest rank of other domi- other financial instituti ons; electricity, tel e- nant economic sectors . phone, terminal; transporta tion, road; and The i ndustry in Gunungkidul Re- security. This support later will make poss i- gency is more focused on various handi- ble to involve any other areas in Gunungk i- craft s such as Batik m ask , wooden dolls, dul in trading activities - particularly in agr i- fibre glass, decorative c arving , natural culture and husbandry that in turn can im- stone ornaments, written B atik, silver, fr a- prove the welfar e of people of Gunungkidul grant roots , copper, carved bamboo, and Regency. woven bamboo. In this case, the p otentials The economic sectors in trade, hotel more based on local raw materials should and restaurant play an important role in ge- be continually developed for tightly corr e- nerating the economic growth in Gunung- lated to the GRDP growth in term of ec o- kidul with an average of annual GRDP nomic sectors in trading, industry and se r- amounting to USD 639 194 million with the vices . I ndustry play s an important role in 102 ECONOMIC JOURNAL OF EMERGING MARKETS , 7(2) October 2015, 93 -10 6 

generating the economic growth in G u- 5,360,719 + 3,711,033) /26.121.606 = nungkidul Regency as it has an average of 21,854. 208 / 26,121,606 = 83.66 percent annual GRDP at USD473 3 92 million with (Table 5). Hence, it is deemed important if the average of annual GRDP in the fourth it can have a concern from the local go v- rank of dominant economic sectors . The ernment of Bantul Regency to continually average of annual growth in this economic develop them; surely, without ignoring the sector is at 4.77 per cent with the growth role of other economic activities. positioned in the fourth rank following oth- Based on the table 9, it can be seen er dominant economic sectors : agriculture; that the leading sectors in Bantul include trade and construction. agriculture, trade, Industry, services and Economic sector in c onstruction also construction. Agriculture, plantation and determines in promot ing the economic livestock and fisheries, in this case, become growth in Gunungkidul Regency for having the important contributors towards GRDP of an average of annual GRDP at USD 374 607 Bantul with leading products in the form of million with the average of annual GRDP at paddy, onion and red pepper; Plantations: the lowest rank of other dominant economic coconut; cashew and sugarcane, Livestock: sectors . The average of annual growth in cow; goats; lamb and chicken, and fish ery this economic sector is at 4.79 per cent with (land fish and marine fish). the growth in the position of the third rank Agriculture plays an important role of other dominant economic sectors . in promoting the economic growth in Ba n- tul Regency with an average of annual Bantul regency GRDP at Rp.1.114.975 million and the val- In 2015, the economic growth in Bantul ue of GRDP higher than the other dominant Regency was at 6.14 percent; and it is pro- economic sectors such as tr ade, manufa c- jected to increase by 6.15% by 2016 and by turing industry; services and construction. 6.20% by 2017 as targeted in RPJMD DIY These results are the same as found (2012 to 2017). The target of economic by Shah (2015) who concluded in his paper growth in this regency can be realized if that agricultural sector have a positive rel a- only each economic sector is able to meet tionship with GDP for all nations included the target of GRDP in Bantul as shown in in the estimation from the period 1960 to the calculations provided in Table 8. 2014. This effect is caused by the increase The dominant economic sectors in income per capita in the agricultural se c- determining the economic growth in Bantul tor. Regency include: (1) Agriculture; (2) Agriculture is in the first rank of Trade, Hotels and Restaurants; (3) Man u- five dominant economic sectors. The aver- facturing industry (4) Services; and (5) age of annual growth in this economic se c- Construction. Those five fields in the p e- tor is at 7.52 percent with the growth in the riod of 2013-2017 can contribute to a very position of the highest rank of five domi- significan t GRDP for Bantul Regency by nant economic sectors. (5,574,877 + 4,136,461 + 3,071,118 +

Tab le 8: Target of Economic Growth in Bantul Regency in period of 2015-2017 Year Indic ator 2015 2016 2017 Economic Growth (%) 6,14 6,15 6,20 Source: RPJMD DIY 2012-2017 Dominant economic se ctors … (Feriyanto ) 103

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1.400.000

1.200.000 Agriculture 1.000.000 Trade 800.000 Manufacturing 600.000 Industry Service 400.000

(MILLIONRUPIAH) Construction GRDP OFDOMINANT ECONOMICSECTORS 200.000

0 2013 2014 2015 2016 2017

Graphic 3: Dominan t Economic Sectors in Bantul Regency

Tourism and trade are two business growth of GRDP from the economic sector activities tightly related with the economic of Trade, Hotels and R estaurants; Manufa c- sector of Trade, Hotel and Restaurant. turing industry; A gricult ure; C onst ruction; Hence, an integrated economic develo p- and Services. Given the good and repr e- ment strategy in Bantul Regency should sentative trading facilities, it can stimulate always be implemented by utilizing the the economic growth as it will help the multiplier effect on each economic of the economic activities in this region. The trade existing activity. Bantul Regency possesses facilities in Bantul include traditional ma r- a number of tourism villages such as Te m- kets; Animal M arket; Art Market (Gab u- bi; Kasongan; or Kreb et, generally also as a san); shops and stalls. producer of various favorite handicrafts Trade also determines the economic such as pottery ; leather goods (bags, jac k- growth in Bantul Regency with an average ets, etc.); and wood craft. Many tourism of annual GRDP at Rp.1,072,144 million sites in Bantul also become a major dest i- with the average value of GRDP in the nation of many tourists (domestic or f o- second rank of five dominant economic reigners). There are m an y to urism attra c- sectors in Bantul Regency .The average of tions offered in this regency such as Bantul annual growth from this business sector is beach es (Parangtritis; Samas; Kuaru, and quite high at 5.57 percent with the growth Depok); natural tourist objects such as S e- in the fourth rank of five dominant ec o- larong cave and Cermai cave) and the rel i- nomic sectors . gious tourism sites ( Cemetery) that There is a va riety of industries in needs to be preserved for its e xistence to Bantul Regency such as industry in metal; attract the tourists and to generate the local chemical ; agr iculture and f orestry . Though economy. most of industries in Bantul can be categ o- The trading activity in Bantul Re- rized as the small -scale industry, its market gency is also developing together with the share has been moved to international market development in tourism sector. The trade in which they have some countries for the sector in this regency is in regard to handi- exporting the ir products such as European craft in the form of wooden furniture, c e- Continent s (Spain, Germ any, Netherlands ) ramics, carving decoration and food such as and to African continent ( South Africa ). Geplak Bantul, and Melinjo chips. The Industry also has a significant role trade also is also highly correlated to the regarding the economic growth in Bantul Dominant economic se ctors … (Feriyanto ) 105

Regency. With an average of annual GRDP facturing Industry (4) Services and (5) at Rp.827 292 million, the value of GRDP Construction. in this regency is higher than the other d o- An accurate investment and pro- minant economic sectors such as agricu l- mo ting in the dominant economic sectors in ture and construction. I t is in the third rank Kulonprogo Regency, Gunungkidul R e- of five dominant economic sectors . The gency and Bantul Regency can accelerate average of annual growth in this business is the economic growth in those regencies. If at 6.46 per cent with the growth in the each of the regencies can stimulate the ec o- second rank of other five dominant ec o- nomic in their own region maximally by nomic sectors in Bantul. using the potential of the region and domi- Service sector also play s an impor- nant economic sectors , then the economy in tant role in promoting economic growth in Special District of Yogyakarta Province Bantul Regency with an average of annual can also develop rapidly based on the ec o- GRDP at Rp.742 207 million and with the nomic excellences in those regencies of value of GRDP higher than dominant ec o- Yogyakarta Province. nomic sector of construction. It is in the fourth rank of five dominant economic se c- Acknowledge ment tors in Bantul Regency. The average of an- The author would like to express gratitu de nual growth in this economic sector is at to Bappeda DIY for supporting the raw d a- 5.20 per cent with the business growth in ta and the funding of this research. the lowest rank of other dominant econom- ic sectors . References Construction play s an i mportant role in promoting economic growth in Ba n- Adofu, I. (2010) , “Accelerating Economic tul regency as it has an average of annual Growth in Nigeria, The Role of GRDP at USD 614 224 million with the Foreign Direct Investment”, Cu r- lowest value of GRDP compared to other rent Research Journal of Economic dominant economic sectors such as agricu l- Theory , 2(1), 11-15. ture ; trade; industry; and services. I t is in Chebbi, H . E. (2010) “Agriculture and the fifth rank of five dominant economic Economic Growth in Tunisia ”, Ch i- sectors . The average of annual growth in na Agricultural Economic Review, this economic sector is at 5.71 percent with 2(1), 63-78 the growth of this business in the position Groh, A.P. and Wich , M. (2012), “Emer g- of the third rank of five dominant economic ing economies' attraction of foreign sectors . direct investment,” Emerging Ma r- ket Review, 13(2), 210-229 Conclusion He , L.H. and Zheng, X. G. (2011) “ Empir- The dominant economic sectors in Kulo n- ical Analysis on the Relationship progo Regency include: (1) Agriculture ; (2) between Tourism Development and Services ; (3) Trade, Hotel and Restaurant; Economic Growth in Sinchuan ”, and (4) Manufacturing Industry . The domi- Journal of Agricu ltural Science, nant economic sectors in Gunungkidul R e- (3)1, 212-2017 gency include: (1) Agriculture; (2) Trade , Mahyudin, M. and Zain , M.M. (2010), Hotel and Restaurant; (3) Services; (4) “Elasticity of Labor Demand and Manufacturing Industry ; and (5) Constru c- Real Wage Rigidity by Sector in tion. Meanwhile, t he dominant economic South Sulawesi Province ”, Jurnal sector in Bantul includes: (1) Agriculture; Agroindustri , 28(2), 113-132. (2) Trade , Hotel and R estaurant; (3) Man u- 106 ECONOMIC JOURNAL OF EMERGING MARKETS , 7(2) October 2015, 93 -10 6 

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