International Journal of Scientific & Engineering Research Volume 9, Issue 11, November-2018 1167 ISSN 2229-5518 STUDY OF BASIC ECONOMIC SECTOR DEVELOPMENT WITH EXPORT ORIENTED PRE-EMINENT COMMODITIES IN SOUTHEAST SULAWESI PROVINCE Muh. Nur High School of Economic Enam Enam Kendari, Sotheast Sulawesi, Indonesia Email : muh.nur363.gmail.com Abstract -This research activity will be conducted as an effort to assist the government of Southeast Sulawesi Province in solving economic problems based on the efforts of economic growth improvement that can be achieved through identification of economic sectors including in basic economic category. This research aims to: (1) study and analyze economic sectors as the basic sectors in Southeast Sulawesi. (2). Study and analyze the economic sector development with pre-eminent commodities in Southeast Sulawesi province. (3) Study and analyze the pre-eminent commodities with export opportunity pre-eminence in Southeast Sulawesi. This research used Location Quotient (LQ) analysis and RCA (Revealed Comparative Advantage) analysis. This research is expected to be able to show that basic economic sector study can identify development of existing economic sectors in some regions so that dominant potency of leading economic sector can be developed into export commodity. Since study of basic economic sectors can improve economic growth and contribute in a large amount on Gross Regional Domestic Production (GRDP) of each region. Results of the research show that (1). Identification of some economic sectors consisting of agricultural, forestry and fishery sector, mining and quarrying sector, manufacturing industry sector, electricity and gas procurement sector, water supply sector and other economic sectors shows that most economic commodities in each regency / city in the entire Southeast Sulawesi Province can produce commodities that are in the basic category or regional pre-eminent commodities. (2) Results of the regional economy mostly come from economic sectors such as agriculture, forestry and fisheries, mining and quarrying sector with enormous potential to be developed into regional pre- eminent commodities so that they can make a significant contribution to increased regional export commodity value in Southeast Sulawesi. (3) Main commodities in various economic sectors that have export opportunities can provide a major contribution to national export value but have not shown regional comparative advantages, because the regional export commodity value is still dominated by export commodities from the miningIJSER sector. Index Terms : Basic Economic Sector, Pre-eminent Commodities, Export Opportunity —————————— —————————— 1 INTRODUCTION egional economic development is a process in which re- of enactment of the Mining Law stating that it is necessary for R gional government and the society manage resources to manufacturing industry before export for mining products. create work fields to stimulate regional economic growth. During the period of 2010 to 2015, economic condition of In order to implement the development, the government of Southeast Sulawesi Province could be seen from its Gross the Republic of Indonesia sets out development policies in the Domestic Product (GRDP) growth with an average value of National Medium-Term Development Plan (RPJMN, 2015- 9.01%. GDP based on Constant price of economic growth in 2019) whose goal is to strengthen overall development in vari- 2010 was in the range of 8.22% which continued to grow until ous fields including competitiveness of economy based on 2011 by 8.96 percent while in 2012 it still grew by 10.41%. superiority of resources. Based on the direction of the RPJMN However, until 2013, there was a decline in the growth from policy, the government of Southeast Sulawesi Province also the previous year of 7.28% and continued to face a slowdown sets up Regional Medium Development Plan (RPJMD, 2013- in growth until 2014 with a value of 6.5%. (BPS. Southeast Su- 2018) so that it can improve its economic growth in order to lawesi in Figures 2015). improve public economic level through increased pre-eminent During the period of 2010 – 2015, the economic growth in commodity with export opportunity-based economic sector in Southeast Sulawesi was still largely supported by agricultural Southeast Sulawesi. sector. Nevertheless, contribution of the agricultural sector During the period of 2010 - 2015 there was economic kept decreasing during this period. Distribution of Southeast growth in Southeast Sulawesi except for 2014 which faced a Sulawesi GRDP percentage according to business field on the slowdown compared to the previous years. This was a result basis of constant 2010 prices from the agriculture, forestry and IJSER © 2018 http://www.ijser.org International Journal of Scientific & Engineering Research Volume 9, Issue 11, November-2018 1168 ISSN 2229-5518 fisheries sector in 2011 was 26.24% then in 2012 it decreased by tion of environment and SDA (Hudiyanto, 2013). 25.20%, in 2013 by 25.47 percent and back up slightly with a According to (Yuliadi, 2009), to realize the national devel- value of 25.64 percent. Then, it was followed by the contribu- opment goals, it is necessary to formulate development poli- tion of the mining and quarrying sector in 2011 of 19.91% cies in order to increase productivity and economic efficiency which continued to increase with a value of 22.98% and then in a sustainable manner. declined again in 2013 with a value of 21.93% and continued Economic development is seen as a multidimensional pro- to face a slowdown in 2014 with a value of 20, 14%. (Source: cess including all aspects and comprehensive policies both BPS Southeast Sulawesi, 2015) economically and non-economically, (Quintero, James Paul, Although the agricultural sector has decreased contribu- 2007). Development of economic sectors in each region in In- tion to economic growth, this sector is still the mainstay sector donesia must be adjusted to each region potential and priori- forming the Southeast Sulawesi economy. Therefore, the agri- ties, so that the overall development is one whole unit in order cultural sector still has to be prioritized to be developed to to realize national development (Choirullah, 2007). produce pre-eminent commodities with export opportunities. According to (Sri Subandi and Arif Rahman Hakim, 2009) Based on the value of pre-eminent commodities in Southeast it is necessary to develop agricultural sector because by ex- Sulawesi Province, it can be seen from volume and value of panding this sector, it is expected to encourage other economic exports according to the types of commodities as the basic sectors. Linkage analysis can be determined in a decent sector sectors of commodities consist only of mineral fuels, iron and to be a leading sector in spurring economic growth (Daryanto steel, metal ore, slag and ash and fish and shrimp in 2012 with and Hafizrianda, 2010). a volume of 26,541,027.05 with a value of $ US 106,058,994,000. This export value continues to increase significantly so that in 2.2 Economic Growth Concept 2013 the export volume of mineral fuels, iron and steel, metal Sukirno (2008) revealed that economic growth is an economic ore, slag and ash and fish and shrimp was 32,086,631.63 with a development of activities leading to increased public goods decreased value by US $ 97,589,138,000. and services produced so that it will increase public welfare. Although Southeast Sulawesi's export commodities are still Basically, economic growth is an increase in aggregate output limited to some commodities as mentioned above, its contri- (overall goods and services produced by economic activity) or bution to Southeast Sulawesi economy is quite important. This Gross Domestic Product (GDP). According to Sukirno (2013), can be seen from the contribution of the export sector to GRDP economic growth and development have different meanings. in the fourth ranks after household sector expenditures, the Economic growth is the process of increasing per capita out- contribution of import values, government expenditure and put continuously in the long run. Measurements in a country gross capital formation. Contribution of the household con- economy are Gross Domestic Product (GDP). sumption expenditure sector for the period of 2010 to 2015 has GDP measures the flow of income and expenditure in the an average value of 50.12%. Then, it was followed by the con- economy aspect over a period of time. Economic growth is tribution of import value with an average value of 33.79%, related to the process of increased goods and service produc- government expenditure and capital formation with an aver- tion in public economic activities. To measure the economic age value of 31.21%. While theIJSER contribution of the export value growth, GDP value is based on constant prices (GDP Rill) so was 29.85%. This means that there is a great opportunity for that the resulting growth rate is real growth by increased pro- the local government of Southeast Sulawesi Province to con- duction (Mankiw, 2007). tinue to develop the superior potential of various commodities 2.3 International Trade Concept to become export commodities in encouraging acceleration of economic growth and improving public welfare. Issue on the international trade is one issue that is not Various phenomena mentioned above are in order to en- only interesting but also complicated. It is interesting since it courage economic growth in Southeast Sulawesi and are seen has great influences on the economy