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Analysis of the Influence of Infrastructure on Economic Growth in North Sumatra Province

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Analysis of the Influence of Infrastructure on Economic Growth in North Sumatra Province International Journal of Research and Review DOI: https://doi.org/10.52403/ijrr.20210427 Vol.8; Issue: 4; April 2021 Website: www.ijrrjournal.com Research Paper E-ISSN: 2349-9788; P-ISSN: 2454-2237 Analysis of the Influence of Infrastructure on Economic Growth in North Sumatra Province Syamsidar Sinaga1, Irsad2, Rahmanta3 1Postgraduate Students, Faculty of Economics and Business, Department of Economics, Universitas Sumatera Utara, Indonesia 2,3Postgraduate Lecturer, Faculty of Economics and Business, Department of Economics, Universitas Sumatera Utara, Indonesia Corresponding Author: Syamsidar Sinaga ABSTRACT real output per person. While the country- poor country with a dense population and a The objective of the research was to analyze the lot of life at the level of the limit of life influence of road infrastructure, health experiences the difficulty of raising it. infrastructure, and government spending in Causes of low income in developing infrastructure on economic growth in North countries is the entry into force of the law of Sumatra Province. In the model equation, economic growth is dependent variable while the addition result of the diminishing due to road infrastructure, health infrastructure and increasing population very quickly, while government spending in infrastructure are there is no power to encourage the growth independent variable. The scope of this research of the economy in the form of increasing the is the district and city in North Sumatra quantity and quality of natural resources, Province, exactly 32 districts/cities from 2015- capital, and technological progress (Naf'an 2019. The analyzing model is the Fixed Effect in Ms Yanti et al, 2019:73). Model, by using E-views 10 software. The result Indonesia is one of the developing of the research showed that road infrastructure, countries where the country of Indonesia health infrastructure, and government spending doing a lot of development to improve the in infrastructure simultaneously had significant welfare of society. The construction is the influence on economic growth. Partially road infrastructure had negative and not significant basis for improving the welfare of the influence on economic growth, health community. One of the indicators to see the infrastructure had positive and significant development is economic growth. The influence on economic growth and government positive economic growth indicates the spending in infrastructure had positive and not presence of increased economic activity, on significant influence on economic growth in the contrary, negative economic growth North Sumatra Province. showed a decline in economic activity (Maqin, 2011:10). Keywords: Road Infrastructure, Health In the science of economic growth Infrastructure, Government Spending in (economic growth) is the process of changes Infrastructure, Economic Growth. in economic conditions of a country continuously toward a better state for a INTRODUCTION certain period. Economic growth can be The economy is said to grow or defined also as the process of increasing the evolve if there is growth of real output. production capacity of an economy which is Growth occurs when there is a rise in output manifested in the form of increase in per capita. Economic growth illustrates the national income (Hidayah et al, 2018:586). rise in the standard of living measured by International Journal of Research and Review (ijrrjournal.com) 196 Vol.8; Issue: 4; April 2021 Syamsidar Sinaga et.al. Analysis of the influence of infrastructure on economic growth in North Sumatra Province. Source : BPS Sumut – Economic Growth Data for the Years 2015-2019 Chart 1.1 Economic Growth In North Sumatra Province On The Basis Of HargaKonstan Years 2015-2019 (Percent) Chart 1.1 shows the growth of the the lowest is Coal District of 4,11%. In economy of North Sumatra in years 2015- 2016, the highest economic growth is the 2018 fluctuated and increased from the year City of Medan by 6,27% and the lowest is 2018-2019. The highest economic growth is North Tapanuli Regency amounted were the year 2019 of 5.22% and the lowest of 4.12%. In 2017 the highest economic the year 2015 amounted to 5,10%. In the growth is a District Mandaling Christmas by year 2016 economic growth in North 6,09% and the lowest is the Coal District of Sumatra Province increased to 5,18%, but in 4,11%. In 2018, the highest economic 2017 decreased to at 5.12%. In 2018, growth is a Regency Gunungsitoli of 6.03% economic growth in North Sumatra and the lowest is North Tapanuli Regency to Province increased to 5,18% and in 2019 4.35%. In the year 2019 the highest back increased to 5,22%. economic growth is a Regency Gunungsitoli Based on the district/city, in the year by 6,05% and the lowest is Coal District to of 2015 the highest economic growth is a 4.35%. The disparity in economic growth District Mandaling Christmas by 6,22% and between the districts of the city are still International Journal of Research and Review (ijrrjournal.com) 197 Vol.8; Issue: 4; April 2021 Syamsidar Sinaga et.al. Analysis of the influence of infrastructure on economic growth in North Sumatra Province. visible. Overall, economic growth in North Sumatra Province is influenced by several Sumatra is still supported 3 districts/cities, factors of infrastructure such as road namely the City of Medan, Mandailing infrastructure, and infrastrukturkesehatan. Natal Regency and Regency Gunungsitoli. The policy of infrastructure development Donations quantity of GDP that should be pursued in order to not only focus fluctuate essentially determined by the on increasing the value of output, but also magnitude of the contribution to the on the evenness of its distribution. In the economy each district/city. The economic report on the year 2019, the World conditions of each district in the scope of Economic Forum (WEF) revealed that the time that can be identified based on the rate level of competitiveness of Indonesia still of growth by comparing the GDP in lags behind that of some countries. This can different years (years 2015-2019). The be seen on the Chart 1.2. development of economic growth in North Source: World Economic Forum 2019 Chart 1.2 Infrastructure Competitiveness of ASEAN Countries in 2019 Chart 1.2 shows that the ranking of drivers of the economic growth. The rate of the competitiveness of Indonesia's economic growth of a country or region can infrastructure is still lagging behind in the not be separated from the availability of area of Southeast Asia (ASEAN). Score infrastructure such as transportation, energy Indonesia's competitiveness at the level to and sanitation. This is what causes the 67.7 points from a scale of 0-100. These development of infrastructure to be the achievements make Indonesia is ranked 72 foundation of sustainable economic out of 141 countries surveyed and the fifth development. Increasing infrastructure and order in the ASEAN region. While its improvement by the government is Singapore remained in the rank of major as expected to spur economic growth (Suratno a country with infrastructure in Sumadiasa et al, 2016:927). competitiveness of the highest in ASEAN Road infrastructure is required by with the score 95,1. each area. The road is the physical The construction of the infrastructure, serves to connect the region infrastructure is one of the important and with other regions and a variety of center vital part to speed up the process of national activities, social and economic. The and regional development. Infrastructure availability of road infrastructure in the also plays an important role as one of the Province of North Sumatra has an influence International Journal of Research and Review (ijrrjournal.com) 198 Vol.8; Issue: 4; April 2021 Syamsidar Sinaga et.al. Analysis of the influence of infrastructure on economic growth in North Sumatra Province. on economic growth, such as increasing the of road infrastructure in each district/city amount of output produced, the availability that is the path length of provincial and of employment opportunities, as well as the district roads shows the numbers that is development of the sectors of the economy different. More clear about the development which will ultimately affect economic of road infrastructure in North Sumatra can growth in a region. be seen in Chart 1.3. Based on data obtained from BPS Sumatera Utara 2019 seen from the quantity Source: BPS Sumut – Data Infrastructure of the Road 2019 Chart 1.3 Road Infrastructure According to the Status of Province and District(Km) in the Province of Sumatera Utara 2019 Chart 1.3 shows the total length of North Sumatra. Contribution of the business the roads of North Sumatra in 2019 is sector in the field of transport of 2019 have 36.561,2 km. Based on the district/city, the increased. Should be with the increasing infrastructure of the longest path is Deli contribution of the business sector in the Serdang Regency ie3.817,58 km and the field of infrastructure to economic growth, lowest is Regency, Sibolga, namely to 60.1 increase the amount and maintenance of km. The condition of the path length of low road infrastructure. Whereas road is very alarming because it will bring a construction and repair of roads in north negative impact to the whole society such as Sumatra potentially improve the economy increasing the number of people who are of 0.45% per annum above the baseline and isolated and reduce the investment into the extend the absorption of labor by 0.15%. Province of North Sumatra that will Increasing the efficiency of the economy as eventually affect the economic growth of a result of good road infrastructure also International Journal of Research and Review (ijrrjournal.com) 199 Vol.8; Issue: 4; April 2021 Syamsidar Sinaga et.al. Analysis of the influence of infrastructure on economic growth in North Sumatra Province.
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