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(C-50) AN OVERVIEW OF GRDP SECTORS WITH LOCATION QUOTIENT ANALYSIS (CASE STUDY IN WEST DISTRICT AND ITS EXPANSION AREA: THE EXPANSION PERIOD TO COVID-19 PANDEMIC) Yayuk Eko Wahyuniningsih1 T. Zulham2 Leli Putri Ansari1 Ivon Jalil1 Economic Development, Faculty of Economic, University of Teuku Umar, Meulaboh, 23615, Indonesia1 Economic Development, Faculty of Economic, University of Syiah Kuala, , 23116, Indonesia2 *Corresponding author, Email address: [email protected]

ABSTRACT

In the 90s it was announced that the North-East region of Aceh Province as an industrial zone and the Middle-Southeast and West-South areas as an agricultural zone. Likewise with the districts of West Aceh and its expansion areas (Districts of Aceh Jaya, District Nagan Raya, District and Aceh Barat themselves). This study aims to analyze the basic sector in GRDP from 17 sectors available from the time of division untill pandemic Covid-19. The data used are secondary data obtained from BPS and Bappeda. The results of the LQ analysis from 2010-2019 show that in the first division area, namely Simeulue Regency, the highest LQ value is 1,51 in 2010 and 1,27 in 2016. Then Aceh Jaya District with the highest LQ 1.81 for construction sectors and agriculture sectors 1,18. Next, the Nagan Raya District with agriculture LQ 1,52 in 2016 and 1,36 in 2019. Furthermore, West Aceh had the lowest LQ 1.09 and continues to decline untill 2019 when covid-19 pandemic. The importance of the role of the government and local NGOs in increasing the value of this agricultural sector so that GDP increases.

Keywords Base Sector, Location Quotient and GRDP

INTRODUCTION Background Nowadays, economic growth is still one measure of nations’s properity in the world. Because, its reflects the output of economic development, that process of the raise of income level both total and per capita income along with the total population raising as well as the distribution income for community. One of aim of economic development of a country is to improve the community welfare. The community welfare that occurs through the increasing of the economic growth of the country because of income distribution for the population of the country concerned which obtained from a region’s Gross Regional Domestic Product (GRDP) of a region with many sectors.

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Subsequently, the Indonesian Bank corrected that the whole ’s economic growth in 2019 was previously estimated at 5.02 percent, although the achievement was lower than 2018 of 5.17 percent. This condition is supported by constant domestic demand, although exports decline. (www.bi.go.id, February 2020). Based on the condition means that economic growth is not always increasing, but fluctuating which is influenced by other factors, such as export, import and so on. Beside that, Covid-19 pandemic conditions that cause exports to decline. Furthermore, economic development in Aceh with oil and gas which is part of Indonesia in the second quarter of 2020 experienced a drop of 1.82 percent.. Then, Aceh's economy in the second quarter of 2020 as measured by Gross Regional Domestic Product (GRDP) at current prices reached IDR 40.06 trillion or US $ 2.81 billion. While non-oil and gas GRDP amounted to IDR. 38.71 trillion or US $ 2.72 billion (https://acehprov.go.id, 5th August 2020). Based on these conditions, economic growth of Aceh Province also drop by 1.82 percent. The same condotions with oil and gas or non-oil and gas. According to the Central Statistics Agency, economic growth in agriculture and farming in West Aceh steady decreased at 4.26 percent in 2018. But, its dramatically increased one year later in 2019. It happens with its expansion area, namely Aceh Jaya district, Nagan Raya district, Simeulue district and West Aceh. Beside that, one of the superior economic sectors today in West Aceh and its expansion area is financial services, agricultural, construction, whole sale and retail trade sectors. Next, the highest number of location quotient called leading sector or basic sector, and the lowest of location quotient is non-leading sector or non-basic sectors. Problem Formulation The formulation of the problem in this study is how overview of GRDP sectors with location quotient analysis in West Aceh district and its expansion area? Research Objectives The purpose of this study is to analyze the overview of GRDP sectors with location quotient analysis in West Aceh district and its expansion area.

LITERATURE REVIEW Base Sectors Tarigan (2009: 28) explain that economic activities are grouped based on basic and non- basic activities. Only basic activities can drive regional economic growth. Furthermore Tarigan (2009: 29) points out that all other activities that are not basic activities are included in the service/ aasic_8 AASIC 8 +66 631 831 201 @aasicofficial th 8 ASIAN ACADEMIC SOCIETY INTERNATIONAL CONFERENCE website: http://www.aasic.org ; email: [email protected] service sector/ sector, but these activities do not create a false meaning of service which is called a non-basic sector. Non-base Sectors According to Tarigan (2009: 28) the non-base sector (service) aims to meet local consumption. Based on the explnation above, the base sector is the most excellent sector in an area and the non-basic sector is a sector that is not superior in the area. Gross Regional Domestic Product (GRDP) GRDP is the measure of economic growth in a region. Next, a sector classified as a superior or less superior sector can be measured according to the GRDP of an area by comparing it to the Gross National Product (GNP) nationally. Generally, the GRDP itself consists of 17 sectors. The researcher uses time series data with 17 sectors consisting of: (1) agriculture, forestry and fishery, (2) mining and excavation, (3) processing industry, (4) procurement of electricity and gas, (5) water supply, waste management, waste and recycling, (6) construction, (7) wholesale and retail trade, and so on. Economic Growth Economic growth is an increase in overall community income that occurs in the region, namely an increase in all added value. Calculation of regional income was initially made in the current price. However, in order to see the increase from one period to the next, it must be stated in real value, which means that it is expressed in constant prices (Tarigan 2009: 46). According to Jhingan (2007: 57) economic growth is as a long-term increase in the ability of a country to provide more types of economic goods to its population, this ability grows in accordance with technological progress and institutional and ideological adjustments needed. Then, Mankiw (2005: 13) further states that economic growth is an important indicator to see the successful of economic development in a country in addition to other indicators such as unemployment rates, poverty rates, inflation rates, and so forth. Rapid and stable economic growth is expected to have a positive impact both directly and indirectly on other economic variables. Based on the theory explanation above, it can be explained that economic growth is an increase in output in the long run, or an increase in the production of goods and services and is an important indicator in the success of a nation's economic development in the world.

MATERIAL AND METHODS Scope of Research Sope of research includes Gross Regional Domestic Product (GRDP) on the basic of constant price (ADHK) in 2000 in Aceh Province, Gross Regional Domestic Product of West Aceh district and aasic_8 AASIC 8 +66 631 831 201 @aasicofficial th 8 ASIAN ACADEMIC SOCIETY INTERNATIONAL CONFERENCE website: http://www.aasic.org ; email: [email protected]

its expantion area in the period 2010-2019 (10 years). Source of Data The data obtained from Central Bureau of Atatistics of Aceh Province and Regional Development Planning Agencies in each district (West Aceh district, Nagan Raya district, Aceh Jaya district and Simeulue district). Beside that, this study uses secondary data. Model Analysis The data analysis model used is quantitative analysis by using quasi-location analysis in four district. Therefore, Tarigan (2009: 82) explain that the location quotient (quasien location) or abbreviated as LQ is a comparison of the magnitude of the role of a sector / industry in an area towards the magnitude of the role of a sector / industry nationally. The formula is as follows:

!" #$%& LQ = '" (1) ()* Where: xi = Added value of sector i in an area (districts and both) GRDP = Gross Regional Domestic Product

Xi = National sector i added value (province) GNP = Gross National Product

RESULTS AND DISCUSSION Base Sector and Non-base of West Aceh Districts and its Expantion Area Dependencing of circumstances, it was obtained that the value of the base sector by using the location quota analysis and was ranked based on the highest sector by using the West Aceh district and its expansion area is GRDP data and the provincial PNB data for 10 years can be seen in the following graph.

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1,80 1,65 1,59 1,55 1,60 1,46 1,48 1,33 1,33 1,32 1,32 1,40 1,30 1,20 1,00 0,80 0,60 0,34 0,36 0,37 0,35 0,40 0,24 0,29 0,15 0,17 0,19 0,21 0,20 0,00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Base Sectors of West Aceh Non-base Sectors of West Aceh

Source: Analyzed Data (September 2020). Graph 1. LQ of Base Sector and Non-base Sector in West Aceh District in 2010-2019 In 2010, the Location Quotient (LQ) at 1.46, and dramatically increased until 2012. The highest base sector of 1.65 occurred in 2012, where this year was the highest of the rehabilitation and reconstruction phase due to the disaster of the and in December 2004. Next, in 2013 to 2019 the value of LQ continue to decline until 1.30 in 2019. Its occur when the pandemic Covid-19 begins. Base Sector and Non-base of Simeulue District As one of oldest regencies in West Aceh and its expansion area, that was born in 1999 and as a area with special autonomy. The value of LQ that obtained from GRDP data of Simeulue district and the provincial PNB data.

2,50 2,18 2,18 2,15 2,13 2,09 1,95 1,88 2,00 1,82 1,79 1,78

1,50

1,00

0,50 0,23 0,23 0,25 0,23 0,22 0,12 0,13 0,14 0,15 0,17 0,00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Base Sectors of Simeulue Non-base Sectors of Simeulue

Source: Analyzed Data (September 2020). Graph 2. LQ of Base Sector and Non-base Sector in Simeulue District in 2010-2019

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In the first five years, the average LQ of value is above 2.00. That reflects the good LQ value for the base sectors. Next, in 2015 to 2019, the LQ value is slightly decreased and the lowest is still at 2019, while the pandemic Covid-19 still its begins. Base Sector and Non-base of Nagan Raya District Nagan Raya district is one of part West Aceh district before expantion, that expanded since 2003. The value of LQ can be seen in the following graph:

3,50 2,88 3,00 2,65 2,64 2,61 2,55 2,50 2,31 2,02 2,07 1,90 1,93 2,00

1,50

1,00

0,50 0,25 0,25 0,26 0,29 0,25 0,24 0,25 0,25 0,24 0,24

0,00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Base Sectors of Nagan Raya Non-base Sectors of Nagan Raya

Source: Analyzed Data (September 2020). Graph 3. LQ of Base Sector and Non-base Sector in Nagan Raya District in 2010-2019 In the first five years, the value of LQ is slowly increased, and in 2015 it sharply increased and the highest is in 2015 with 2.88 value of LQ. This increased occurred in the mining and quarrying sector, followed by oil palm plantation sector, while that district as a palm oil production centers in south west of Aceh province. However, in non-base sectors its always slighly fluctuated starting 2010 until 2019. Base Sector and Non-base of Aceh Jaya District Aceh Jaya district expansion occurred in 2003. That district is the most beautiful tourist area on the south west coast of Aceh province. The LQ value can be seen at the graph below:

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2,00 1,81 1,79 1,76 1,72 1,80 1,65 1,56 1,60 1,45 1,42 1,36 1,35 1,40 1,20 1,00 0,80 0,60 0,40 0,23 0,23 0,22 0,22 0,20 0,19 0,19 0,18 0,17 0,17 0,20 0,00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Base Sectors of Aceh Jaya Non-base Sectors of Aceh Jaya

Source: Analyzed Data (September 2020). Graph 4. LQ of Base Sector and Non-base Sector in Aceh Jaya District in 2010-2019 In 2010 to 2011, value of LQ is the highest that another LQ. Beside that, from next six year from 2010, the value of LQ slighly decreased to 1.56 in 2015. Therefore, its steady in 2016 to 2017, and drop again in 2018 and 2019 at 1.36 and 1.35.

Economic Growth of Aceh Province The data on the economic growth of Aceh Province in the period 2010-2019 can be seen in graph 5:

9,00% 8,00% 7,70% 7,00% 7,23% 6,00% 5,43% 5,69% 5,00% 4,94% 4,61% 4,27% 4,31% 4,00% 3,97% 4,15% 4,02% 4,18% 4,15% 3,00%

2,00% 1,76% 1,92% 1,00% 1,22% 0,00% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Economic Growth

Source: Central Bureau of Statistics of Aceh Province (July 2020). Graph 5. The Rate of Economic Growth in Aceh Province in 2010-2019

Graph 5 describes that the economic growth in 2004 1.76 percent, and drop to 1.22 percent because it was impacted from earthquake and tsunami in December 2004. In 2006 it becomes the aasic_8 AASIC 8 +66 631 831 201 @aasicofficial th 8 ASIAN ACADEMIC SOCIETY INTERNATIONAL CONFERENCE website: http://www.aasic.org ; email: [email protected] highest of economic growth in Aceh province, and sharply decreased until 2008 at 1.92 percent. In addition, it deteriorated significantly in 2008 because most of the services ended. Then, between 2009 to 2011 it was raisen, and stated from 2013 to 2019. Furthermore, data on the base and non-base sectors according to the business / sector field can be seen in the following table:

Table 1. Leading and Non-Leading Sectors in West Aceh and its Expantion Area in 2010-2019 No Year District Value of LQ Base Sectors Value of LQ Non-base Sectors 1. 2010- West 1.Financial Services 1.Processing Industry 2019 Aceh 2.Mining and Construction 2.Waste Management 3.Agriculture 3.Other Services 2 2010- Simeulue 1.Govertment Administration 1. Mining and Construction 2019 2.Health Services 2.Waste Management 3.Company Services 3.Other Services 3 2010- Nagan 1. Mining and Construction 1. Waste Management 2019 Raya 2.Agriculture 2. Processing Industry 3.Construction 3.Other Services 4 2010- Aceh 1. Construction 1.Company Services 2019 Jaya 2.Transportation 2.Financial Services 3.Education 3. Processing Industry Source : Analyzed Data (September 2020).

Based on the table above, the business sectors in the base sectors fluctuate with the initial data in 2002 in the service sectors and in 2004-2005 in the building sector. Furthermore in 2007, they fluctuate the trade, hotel and restaurant sector, as well as in 2008 to 2019, they fluctuate services sector. Non-base sectors in the mining/quarrying and processing industries. Between 1992 to 2001, agricltural is the highest sector in Aceh Province. This is in line with Azhar’s study, et.al (2012) who became the base sector in the Province of Nanggroe Aceh Darussalam was the agricultural sector with an average LQ value of 1.31, the mining sector and excavation were 2.70 as well as the manufacturing industry sector was 1.17.

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CONCLUSION a) Between 2010 to 2019, the three base sectors that dominated in West Aceh and its expansion area is mining and construction, agriculture and financial services. b) The non-base sector with the lowest LQ is processing industry, waste management and health service. c) Therefore, needed to strenghen the capacity of the health care sectors reduce countermeasures of Covid-19.

SUGGESTION a) The regional government of Aceh Barat District and its expansion area should pay attention to the base and non-base sectors b) The Government of West Aceh District and its expansion area should conduct a segregation of all business sectors, and which sectors continue to provide added value to GRDP growth.

REFERENCES Azhar, Syarifah Lies Fuaidah dan M. Nasir Abdussamad. 2012. Analisis Sektor Basis dan Non Basis di Provinsi Nanggroe Aceh darussalam. Faperta. Universitas Syiah Kuala. Banda Aceh. BPS. 2017. Aceh Dalam Angka. Badan Pusat Statistik Provinsi Aceh. Banda Aceh. Gujarati, Damodar N. 2006. Dasar-dasar Ekonometrika.. Edisi Ketiga. Erlangga. Jakarta Jhingan, ML. 2007. Ekonomi Pembangunan dan Perencanaan. PT. Raja Grafindo Persada. Jakarta. Mankiw, Gregory. 2005. Principles of Economics. Edisi Ketiga. Salemba Empat. Jakarta Sukirno, Sadono. 2006. Makro Ekonomi Teori Pengantar. Edisi Ketiga. PT Raja Grafindo Persadas. Jakarta. Tarigan, Robinson. 2009. Ekonomi Regional Teori dan Aplikasi. Edisi Revisi. PT Bumi Aksara. Jakarta.

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