Planning Assessment
Regional Development Status of Sulawesi Island for New Policy Direction
2025 年 13 巻 4 号 p. 228-248
詳細
2025 年 13 巻 4 号 p. 228-248
The formulation of policy and the planning of strategies for island-based provinces presents a distinctive set of challenges, necessitating the consideration of specific factors. The extant literature on the subject of development in island-based regions is scant. The objective of this paper is to evaluate the current state of regional development on Sulawesi Island, Indonesia, and to propose scenarios for future planning. The formulation of strategies is predicated on an analysis of extant conditions. The data were collected through a combination of in-depth interviews, media reports, government statistical publications, direct observation, and focus group discussions. The following conclusions can be deduced from the findings: The analysis reveals several key findings. Firstly, there is considerable inequality in development achievements across provinces. Secondly, the leading economic sectors are agriculture, forestry, and fisheries. Thirdly, no province in Sulawesi has fully met its development targets. Finally, there are significant investment disparities between provinces. The paper proposes a series of recommendations for the enhancement of regional development in Sulawesi. These recommendations include the prioritisation of spatial planning and conservation measures, the reinforcement of agriculture's contribution to food security, the regulation of industrial growth with a focus on downstream industries, the development of sustainable tourism destinations, the construction of integrated and connected infrastructure, the support of energy systems, and the promotion of good governance practices.
In a recent debate, the assessment of a region's development was expanded to include economic performance, social achievement, modernisation, environmental protection, and institutional management (Raszkowski and Bartniczak, 2018). These factors are related to the principle of sustainable development, which aims to achieve a state of equilibrium between economic growth and the improved condition of the natural environment, while also considering social aspects and the effective governance of regional space (Giorgetta, 2002). Brundtland (1987) initially defined the concept of sustainable development as the reconciliation of three objectives: environmental, economic, and social.
The initial facet, economic performance, is influenced by numerous factors, including capital, labour, natural resources, and governance. In accordance with the conventional perspective on economic development, natural capital and human resources are regarded as the primary determinants of spatial development variations (Iyer, Kitson et al., 2005). The second facet of sustainable development is characterised by a transformation of society, whereby traditional relations and production are superseded by more modern methods (Stiglitz, 2002). In order to facilitate this transformation, it is essential that the development strategy identifies both the barriers to change and the potential catalysts for change. The third aspect pertains to environmental sustainability, which has emerged as a pivotal indicator of development in contemporary discourse. The discourse surrounding the growth debate elucidates the expanding human economic subsystem in relation to the finite ecosystem (Goodland, 1995).
In this paper, we contend that, despite the three aspects of sustainability (economy, society and the environment), effective governance is crucial for the management and governance of development at the provincial, regional and national levels. The effectiveness of governance is contingent upon the presence of capable regional public managers. Such managers must be able to provide exemplary leadership, motivate others to achieve set goals, and deploy available intellectual and organisational resources in a skilful manner (Van Gelder, 2005). The qualities that distinguish a proficient manager encompass both intrinsic characteristics, such as charisma, intelligence, and creativity, and acquired attributes, including knowledge and experience. Furthermore, it is imperative to emphasise the attainment of predetermined objectives (Cohen and Eimicke, 1995).
In consideration of the prevailing context, it is imperative to undertake a thorough examination of the present status of development in each region, thereby facilitating the establishment of a comprehensive agenda for the formulation of policy. It is therefore evident that a regional policy is of the utmost importance in guiding the government in its decision-making processes about the measurement and intervention in development, including the formulation of strategies and programmes aimed at achieving sustainable development. The prevailing global process appears to be driving the convergence of world regions and their populations. Evidence suggests that diversity remains persistent, and inequality is increasing among people and places (Schulenberg, Maslowsky et al., 2018).
The objective of this paper is to analyse the existing developmental status of Sulawesi Island and to suggest prospective avenues of development for regional planning. The decision has been taken to select Sulawesi as the case study because the region is currently in the spotlight in the media due to its abundance of natural resources, specifically nickel. Furthermore, the strategic positioning of Sulawesi Island in close proximity to the newly established capital city of Indonesia (Ibu Kota Negara/ IKN) in Central Kalimantan has the potential to stimulate the development of a new emerging city. The following two research questions are addressed in this study:
RQ 1: How does the regional development status of Sulawesi Island?
RQ 2: What are the challenges and opportunities for the acceleration of regional development in Sulawesi Island?
This research contributes to a regional analysis of the current development status in various provinces on Sulawesi Island, with a particular focus on the human development index, poverty, investment, leading sectors, and institutions. It presents an overview of the social and economic indicators of Sulawesi Island's performance and achievements, along with strategic development issues and sustainable development recommendations.
The subsequent sections of this text comprise a review of the extant literature on the subject, together with a detailed exposition of the methodological approach employed. Section 4 is concerned with the presentation of performance results for Sulawesi Island, with these results covering both national and provincial levels. As outlined in Section 5, recommended approaches for progress are provided, while a summary of the paper is provided in Section 6.
In recent decades, there has been an increasing emphasis on regional development through the prism of territorial and chiefly regional innovation models, which embody the fundamental principles of the 'New Regionalism' movement (Moulaert and Mehmood, 2015). The development process of development is inclusive and forward-looking, and it is becoming increasingly evident that the conditions for its realisation are rapidly approaching. Nevertheless, deliberate measures may have been implemented with the objective of enhancing the situation, accelerating progress, and alleviating poverty (Allen, 2003).
The concept of regional development is multifaceted and influenced by a range of socioeconomic factors. The factors that determine regional development may include the availability of natural resources, the quality and quantity of labour, access to capital, investment in production and overheads, entrepreneurial attitudes, the physical infrastructure, the sectoral structure, the technological infrastructure, and progress, as well as a supportive public system (van Lindert, de Jong et al., 2006). Regional development is inherently dynamic, involving complex spatial and temporal intricacies of regions (or an interdependent group of regions).
In order to gain an accurate understanding of the dynamics of a region or group of interdependent regions, it is essential to consider a range of factors, including social, economic, environmental and governance-related elements. The task of comprehending these factors can prove challenging. The term 'social development' is employed to denote the transition of society from conventional practices to contemporary methodologies. This encompasses changes in social relationships, modes of thinking, educational and healthcare systems, and production methods (Stiglitz, 2002). It is essential that development strategies identify the barriers and opportunities that have the potential to facilitate societal transformation. In the field of economics, the term 'development' is employed to denote the process of achieving enhanced macroeconomic and microeconomic indicators, thereby reducing the disparity between less-developed and post-industrialised countries, and enhancing the socio-economic status of individuals living in poverty. However, a potential discrepancy exists between economic progress and ecological conservation, which prioritises the preservation of nature in its natural state with minimal interference in the extraction of natural resources that could have an adverse impact on the environment (Awan, 2013).
In the context of regional development, the concentration of modern industries in a few advanced regions, established as part of an accelerated industrialisation strategy, has the effect of exacerbating regional inequalities within countries. The measurement of regional development is a complex undertaking, and the calculation of gross domestic product (GDP) per capita, or its growth, is a common statistical approximation. Additionally, alternative or complementary measures may be employed, including per capita consumption, poverty, unemployment, labour force participation, and access to public services. These indicators are social in nature and are frequently employed by the United Nations for the purpose of facilitating comparisons with respect to the general welfare of different populations. The Human Development Index (HDI) is a widely utilised and accepted measure of human development in numerous countries. The Human Development Index (HDI) is a composite measure of human development that provides a quantitative assessment of the welfare status of regions or nations. The scale utilised is a standardised metric ranging from 0 to 1, employing quantifiable social data that is standardised across the relevant metrics. The metrics encompass indicators such as employment, life expectancy, and adult literacy.
The development of the local economy and the community in peripheral and semi-peripheral countries is contingent upon the dynamics of locally established production structures and the suitability of institutional arrangements and regulatory frameworks. Local governance is of critical importance in the formulation of policies and strategies for sustainable development. In accordance with the definitions established by UN-Habitat, the term encompasses the operations of local government, their relationships within the societies they serve, and the technical aspects of municipal management that deliver public services and facilitate local economic development. In numerous developing countries, responsibilities and powers are being progressively transferred to local governments as a result of processes of democratisation, state reform and administrative decentralisation. Concurrently, the retreat of the central state has been encouraged by neo-liberal reform and structural adjustment. Consequently, the decentralised management of development offers new prospects for economic, social and environmental development initiatives at the local level. The present paper assesses and compares the economic performance of other provinces, with a view to identifying the factors that support regional development.
Development issues as agenda for policy formulation and directionThe formulation of policy represents a pivotal aspect of the development of public policy. It is imperative that governments and other policy actors inquire and respond to queries pertaining to the manner in which societies can address disparate problems and conditions that impact citizens and organisations in the pursuit of their objectives (Howlett and Mukherjee, 2017). It is vital to maintain objectivity by excluding subjective evaluations, unless such evaluations are clearly indicated. The formulation of policy constitutes a pivotal aspect of the development of public policy. This approach necessitates governments and policy actors to inquire and respond to questions surrounding the means by which societies are able to address issues and conditions that have a negative impact on citizens and organisations, and which hinder their ability to achieve their objectives (Howlett and Mukherjee, 2017).
Policy design theorists posit that an analysis of the causal chain, commencing with the initial policy formulation and design processes, is pivotal to ascertaining the success or failure of policies. This is because these processes exert a substantial influence on implementation outcomes (Barrett and Fudge, 2025; Mthethwa, 2012). The present research is predicated on the assumption of bounded rationality, as postulated by Simon (1985). The constraints imposed on policymakers by the limitations of human cognition and attention, in addition to the inherently incomplete nature of our knowledge of the social world, result in the prioritisation of specific dimensions of a problem over others. Consequently, the assessment of potential solutions is constrained to a limited range. Consequently, research into policy formulation seeks to elucidate the decision-making context and identify any bias in attention. The objective is frequently to enhance awareness of the constraints of rationality in the design process and broaden the search for solutions to enhance policies (Sidney, 2017).
The primary focus of this discussion is on development theories, which are organised thoughts on development rather than a comprehensive account of development. Moreover, development theories function as policy frameworks, thereby conferring significant importance upon them. However, the formulation of actual policies is influenced by a multitude of additional factors. In the domain of social sciences, there exists a predominant consensus that social realities are the result of social construction. Consequently, the manner in which individuals perceive and articulate social realities has significant implications for agendas, policies, legislation, and their interpretation. It is imperative to recognise that perception does not merely reflect reality; rather, it shapes it. In a similar manner, knowledge does not merely reflect reality; it actively constructs it. It is evident that knowledge is inherently political, and therefore it is inevitable that it exerts a significant influence on perceptions, agendas, and policies.
Rohorua (2007) proposes that the primary focus of policy-oriented development is the identification of both the strengths and weaknesses of a given situation. It is imperative that policy is developed on the basis of empirical evidence rather than being driven by theoretical considerations. Nevertheless, it occupies a relatively low position in the hierarchical structure of the social sciences. As asserted by Rohorua (2007), this approach to policy development is problem-driven in nature. In the field of development thinking, the traditional focus on the nation as the unit of development has been a recurring theme, spanning from classical theories to dependency theory. International institutions continue to utilise country statistics as a key measure of development. However, the concept of development is now being considered beyond the nation, with an increasing emphasis on a multilevel and multiscalar approach (Azis, 2020). This encompasses national, regional, provincial, local, and lower-level development policies.
The government's policy on white paper development places significant emphasis on the necessity of considering the dynamics of social, economic, environmental, and institutional factors in any proposed changes. The necessity for change is manifold due to the increasingly complex, uncertain, and unpredictable world in which policymakers must develop policies. The process entails the formulation of policy alterations that are founded upon empirical evidence, equitable, and inclusive, while circumventing the imposition of superfluous constraints upon business enterprises. Engagement with a diverse range of stakeholders in the policy-making process is of significant importance, as is a forward-thinking and outward-looking approach. Furthermore, it is imperative to learn from past experiences (Bullock, H., Mountford et al., 2001). It is imperative that issues are managed in a way that allows for the rapid transition from domestic to international concerns, and that the coordination and harnessing of diverse interests is achieved. It is imperative that governments worldwide are able to respond expeditiously to unfolding events and provide support for individuals to adapt to changes that are necessary for businesses to flourish (Smith, 2004). Technological advancements offer novel tools with the potential to fundamentally alter the manner in which policies are crafted. The government has issued a call to policymakers, encouraging them to prioritise solutions that transcend conventional organisational boundaries and generate demonstrable, tangible change within the real world. In order to achieve credible and effective public policy, it is recommended that policymakers adapt to this new environment (Bullock, H. L., Lavis et al., 2021).
In conclusion, the formulation of development policy is now a matter of decision-making dispersed among a multitude of actors, institutions, and frameworks (Figure 1). The conventional emphasis within development theory on the state must be adapted to accommodate the expanding scope of actors, institutions and frameworks involved in development. In order to achieve this objective, it is imperative to re-conceptualise the notion of development as a public action that operates on multiple scales. The absence of coherence in contemporary development policy can be attributed to the absence of effective articulation between the various levels of development action, including local, microregional, national, macroregional, international, and global. A limited number of studies have been conducted which integrate both national and regional development, with a view to informing policy direction. The present article seeks to address this gap by examining the impediments to achieving balanced regional development at the provincial level.
Sulawesi Island is the eleventh largest island in the world, with a total area of 180,680.7 square kilometres (Indonesia, 2023). The central region of the island is distinguished by a distinctive geology, characterised by rugged mountain ranges. The island is encircled by a number of smaller islands, linked by sea, while the Strait of Makassar runs along its western coastline. Sulawesi Island is bordered to the west by Borneo, to the north by the Philippines, to the east by Maluku, and to the south by Flores and Timor. The island is divided into six provinces: namely, South Sulawesi, West Sulawesi, Central Sulawesi, Southeast Sulawesi, Gorontalo, and North Sulawesi. The island's total population was approximately 21 million. The city of Makassar, located in South Sulawesi, has the highest population density of any city on the island, with 1.6 million people and 196 individuals per square kilometre.
Data collectionThe data for this research were gathered from both primary and secondary sources. The primary data were collected through in-depth interviews with staff at the Ministry of National Development Planning of Indonesia. The author participated in four focus group discussions (FGDs) with local stakeholders from Sulawesi Island. These discussions were conducted between May and November 2023. Secondary data were collected from the Indonesia Statistics Bureau (BPS) and from the Ministry of National Development Planning of Indonesia, including publications such as the Provincial Analysis and the Midterm National Development Planning 2019–2025.
Data analysisThe analytical process employed in this research is a combination of narrative and quantitative. The objective was to analyse the numeric data in order to gain insight into the performance of regional development in the study area. Consequently, the qualitative data gathered from interviews and focus group discussions were integrated into the discussion part by applying thematic and integrated analysis in order to inform future policy direction. The subsequent data analysis was conducted in four stages:
Step 1: Analyse the regional economic performance
The initial phase of the study involves the analysis of secondary data concerning economic achievement at both the national and regional levels. The data was obtained from government statistical sources that are formally published, including: The data was sourced from the Indonesia Statistics Bureau (BPS) and the Ministry of National Development Planning (Bappenas).
The Indonesian government has established a series of macroeconomic objectives, encompassing investment, inflation, non-fuel exports, the contribution of the manufacturing sector, the growth of non-fuel manufacturing, the current account deficit, gross domestic product per capita, the prevalence of poverty, open unemployment, the Gini ratio, and the human development index. These targets are set forth in the Mid-Term National Development Plan for the period 2020-2024 (MNDP). It is anticipated that economic growth will increase by an average of 5.4-6.03% per annum, with a projected growth in GDP per capita of 4.0 +/- 1%. The impetus for this growth is projected to be driven by three key factors: increased productivity, sustainable investment, and enhancements to the quality of human resources, alongside improvements in the labour market. The objective is to achieve economic growth, with a projected increase in gross national income (GNI) per capita (Atlas Method) to USD 5,600–5,930 by 2024, as outlined in the Indonesia Mid-Term National Development Plan (2019). Moreover, the maintenance of stable inflation is considered a paramount objective, with a targeted rate of 3.0 ± 1 percent anticipated for the 2020-2024 period. It is anticipated that these macroeconomic conditions will contribute to an improvement in the quality of growth. It is anticipated that the poverty rate and the open unemployment rate will decline to 6.5-7.0% and 4.0-4.6%, respectively, by 2024. In addition, the Gini coefficient is predicted to decrease to 0.370-0.374 by 2024. Furthermore, it is anticipated that the HDI will increase to 75.54 in 2024, indicating an enhancement in the quality of human resources in the Indonesia Mid-Term National Development Plan (2019).
Step 2: Analyse the Location Quotien (LQ)
In this research, the Location Quotient (LQ) is employed to examine the basic sector within each province. The LQ formula is as follows:
(1)
Step 3: Analyse the challenges and opportunities
The challenges and opportunities are elucidated as an enabler planning environment that could serve as a catalyst for regional development. The data presented herein were collected through the utilisation of two distinct research methodologies: an in-depth interview and a focus group discussion. The challenges and opportunities are presented in a fish bone analysis, a technique which is intended to provide a more comprehensive visual representation.
Step 4: Formulate agenda for future policy
The strategies were devised with the objective of formulating new policies and plans for development. The presentation of these concepts and theories is informed by analytical thinking, with the objective of facilitating informed decision-making.
The results of Indonesia's development performance in 2022 indicate that the level of success attained was only half the targeted amount. The aforementioned indicators encompass investment growth, the proportion of the manufacturing industry, the deficit, inflation, the growth of non-fuel exports, the growth of the manufacturing industry, and the tax ratio. These were part of the macro goals set out in the medium-term Indonesian National Development Plan (2020-2024).
In 2023, the Ministry of Investment/Investment Coordinating Board (BKPM), the Ministry of Industry, Bank Indonesia, the Ministry of Finance, and the Ministry of Trade published documents which set out the attainment of macro goals in the evaluation of performance outcomes. The Medium-Term National Development Planning 2020-2024, also known as RPJMN, sets out corresponding targets for Development Goals, as evidenced by available documentation. As illustrated in Figure 2, the results obtained in 2022 are presented. The present study conducts an analysis of these three components to identify attained objectives and those requiring further effort.
As demonstrated by the data, three of the seven macro targets delineated in the MNDP 2020-2024 have been achieved. The aforementioned objectives encompass investment growth, inflation rate, and non-oil and gas export growth. The primary objective of the MNDP (2020-2024) is investment growth, with a target range of 6.6-7.0%. A comprehensive review of the pertinent documentation has demonstrated that the rate of investment growth attained 54.6% in 2022. Consequently, it can be deduced that the investment objective has been successfully achieved. The initial target was successfully achieved, and the fourth and fifth targets outlined in the MNDP (2020-2024) were surpassed by exceeding the target for inflation rates in 2024 and achieving substantial growth in non-oil exports during the 2020-2024 period. The inflation rate achievement resulted in an increase of 3.36 percentage points, while non-oil and gas export growth in the period 2020-2024 reached 25.78 percent.
Despite the optimistic projections by industry analysts, the targets for industry share, non-oil and gas processing industry growth, tax ratio, and current account deficit have not been met. The overarching objective of the processing industry is to achieve a 21% milestone by 2024. However, the progress report indicates that the achievement rate in 2022 was only 4.83%, which was significantly impeded by the recent economic downturn. Furthermore, the current account deficit is below the target of 1.6% set out in the MNDP (2020-2024). A discrepancy of 0.1% has been identified between the projected achievement of the MNDP (2020-2024) and the current status. It is conceivable that this discrepancy may be further accentuated in 2023. Moreover, the non-oil and gas processing sector has exhibited a mere 5.01% growth, which falls below the established achievement target. The MNDP (2020-2024) has set a target range of 6.6-7.0%, which would result in a difference exceeding 1%. Moreover, the tax ratio development target (2024) has not been achieved, with only 10.39% being attained.
Regional development performance of Sulawesi IslandThe economic macro-indicator demonstrates a discernible pattern of variation in performance across provinces (Table 1). With respect to the investment indicator, South East Sulawesi and South Sulawesi are identified as the leading provinces for domestic investments in Sulawesi, while Central Sulawesi is distinguished as the province with the highest level of foreign investment. Furthermore, South East Sulawesi is distinguished by its status as the province with the highest rate of growth in non-fuel export in non-fuel manufacturing. Furthermore, it is evident that Central Sulawesi has demonstrated notable advancement in terms of foreign investment, contribution to manufacturing industries, GDP, and Gini ratio in comparison to other provinces.
| Macro Indicators | North Sulawesi | West Sulawesi | Southeast Sulawesi | South Sulawesi | Central Sulawesi | Gorontalo |
|---|---|---|---|---|---|---|
| Investment (2022) | ||||||
| Domestic (Billion Rupiah) | 5042,1 | 1313,3 | 7596 | 7528 | 3758,6 | 1113,5 |
| Foreign investment (Billion Rupiah) | 430,5 | 28,3 | 877,9 | 469 | 7486 | 102,9 |
| Inflation * |
0,14 (Manado City, August 2023) |
0,3 (Mamuju, Augs 2023) | 0,38 (Kendari, Sept 2023) |
-0,08 (total 5 cities, Aug 2023) |
0.16 (Palu, Feb 2021) |
-0,35 (Gorontalo City, Sept 2023) |
|
Export Nonfuel (Million USD) |
83,96 | 61,09 | 6,083.40 | 98,46 | 1,189.46 | 13,244 |
| Share In the Manufacturing Industry | 10.50% | 10.13% | 8.1% | 13.48% | 32.78% | 4.51% |
| Growth Nonfuel Manufacture | 5.42 (2022) | 2.30 (2022) | 5.53 (2022) | 5.09 (2022) | 15.17 (2022) | 4.04 (2022) |
| Current Account Deficit (Million USD) | 987.24 (2021) | ** | 3536.06 (2022) | 888.77 (2022) | 8659.3 (2022) | ** |
| Gross Product Domestic Regional Per Capita (Million Rupiah) | 65.59 | 37.1 | 58.8 | 38.75 | 105.55 | 39.9 |
| Gini Ratio (2022) | ||||||
|
0,352 | 0,315 | 0,341 | 0,324 | 0,28 | 0,395 |
|
0,355 | 0,472 | 0,382 | 0,378 | 0,337 | 0,406 |
| Human Development Index | 72,08 | 65,63 | 71,37 | 70,97 | 68,93 | 68,51 |
Note: * Time period is not similar; ** data is not completed in the year 2022. Source: Statistic Indonesia Bureau, 2023
The chart illustrates that in 2022, the provinces of North Sulawesi, West Sulawesi, South Sulawesi, Southeast Sulawesi, and Gorontalo did not achieve the desired level of economic growth. However, the Central Sulawesi Province exceeded the target by attaining a growth rate of 15.17 percent. Figure 3 depicts the economic performance of the provinces in Sulawesi Island.
The Location Quotient (LQ) analysis of the provinces in Sulawesi Island, conducted between 2017 and 2021, indicates that the dominant basis sectors across all six provinces are Agriculture, Forestry, and Fisheries, as well as Government Administration, Defence, and Compulsory Social Security. The elevated LQ values exhibited by these sectors are indicative of their pivotal roles in regional economies. The province of West Sulawesi exhibits the highest LQ for both sectors, reaching 3.1 for Agriculture, Forestry, and Fisheries and 2.55 for Government Administration, Defence, and Compulsory Social Security. This finding highlights a notable regional dependency on these sectors. This finding suggests that West Sulawesi exhibits a higher degree of specialisation in these sectors when compared to the national average, with a notable reliance on agriculture and government activities as drivers of economic growth (see Table 2).
| No | Sector | North Sulawesi | Central Sulawesi | South Sulawesi | West Sulawesi | Southeast Sulawesi | Gorontalo |
|---|---|---|---|---|---|---|---|
| 1 | Agriculture, Forestry and Fisheries | 1.56 | 2.29 | 1.63 | 3.1 | 1.83 | 2.94 |
| 2 | Mining and Quarrying | - | 1.79 | - | - | 2.73 | - |
| 3 | Processing Industry | - | - | - | - | - | - |
| 4 | Electricity and Gas Supply | - | - | - | - | - | - |
| 5 | Water Supply, Waste Management, Waste and Recycling | 1.49 | 1.62 | 1.40 | 2.14 | 2.22 | |
| 6 | Construction | 1.33 | 0.16 | 1.24 | - | 1.29 | 1.1 |
| 7 | Wholesale and Retail Trade; Car and Motorcycle Repair | - | - | 1.16 | - | - | - |
| 8 | Transportation and Warehousing | 2.10 | - | - | - | 1.15 | 1.43 |
| 9 | Provision of Accommodation and Food and Beverages | - | - | - | - | - | - |
| 10 | Information and Communication | - | - | 1.30 | - | - | - |
| 11 | Financial and Insurance Services | - | - | - | - | - | 1.05 |
| 12 | Real Estate | 1.28 | - | 1.19 | - | - | - |
| 13 | Company Services | - | - | - | - | - | - |
| 14 | Government Administration, Defense and Compulsory Social Security | 2.02 | 1.72 | 1.29 | 2.55 | 1.51 | 2.23 |
| 15 | Education Services | - | 1.18 | 1.81 | 1.7 | 1.54 | 1.42 |
| 16 | Health Services and Social Activities | 3.50 | 1.22 | 1.73 | 1.73 | - | 3.13 |
| 17 | Other Services | - | - | - | 1.11 | - | - |
Source: Data analysis, 2024
In addition to these two core sectors, a number of other industries also serve as sectoral bases for five of the six provinces. The sectors in question include water supply, waste management and recycling, construction, education services, and health services and social activities. Collectively, these sectors reflect the broader economic activities on the island. It is noteworthy that the sector of Health Services and Social Activities exhibits the highest LQ in North Sulawesi (3.50) and Gorontalo (3.13), which serves to underscore the relative importance of healthcare services within these provinces. In South Sulawesi, the Education Services sector is of particular note, with an LQ of 1.81, thus illustrating its significant role in the province's economy. Conversely, Southeast Sulawesi exhibits a distinct reliance on the Mining and Quarrying sector, as evidenced by its LQ of 2.73, signifying the province's substantial natural resources in this domain.
Each province exhibits distinctive sectoral strengths, yet the shared regional characteristics of Sulawesi are exemplified by the prominence of the agriculture and government-related sectors. The LQs for Central Sulawesi (2.29) and West Sulawesi (3.1) in the Agriculture, Forestry, and Fisheries sectors underscore the enduring importance of these industries for economic resilience in these regions. This pattern of sectoral specialisation sheds light on the manner in which different regions within Sulawesi contribute to the island's overall economic structure, while concurrently preserving their unique industrial concentrations.
In order to facilitate regional development in Sulawesi, it is imperative to maintain and enhance the high LQ values observed in the agriculture and government sectors across all provinces. This will ensure the continued stability of the regional economy. The specialisation in sectors such as health, education, and waste management in certain provinces indicates growing opportunities for sustainable and inclusive development. Sulawesi's diverse sectoral strengths suggest that regional development strategies should focus on leveraging local expertise in agriculture and natural resource management, while also investing in healthcare, education, and environmental services to foster balanced growth.
No province in Sulawesi has surpassed all the development targetA comprehensive analysis of macroeconomic indicators was conducted across the provinces of Sulawesi Island. The indicators included the economic growth rate (LPE), poverty rate, and open unemployment rate. It was determined that none of the provinces in Sulawesi had accomplished the development targets stipulated in the MNDP 2020-2024 at the provincial level.
It is evident that certain provinces were unable to attain the objectives stipulated within their 2020-2024 mid-term development plans. In particular, three regions on the island of Sulawesi were unable to achieve the desired reduction in the open unemployment rate. The performance of West Sulawesi Province, with a rate of 2.34, is below the national target of 2.70. The province of South Sulawesi attained a value of 4.51, falling short of the targeted 5.00 benchmark. Furthermore, Central Sulawesi attained a mere 3.00, falling short of the targeted 3.20. The aforementioned provinces are West Sulawesi, South Sulawesi, and Gorontalo. However, it is important to note that the poverty rate in all provinces has exceeded the 2020-2024 Mid-term Development Planning target (see Figure 4).
Disparity in investment between provincesIn the year 2020, there was a decrease in investment performance of 2.02% (year on year), accompanied by a decline in both investment credit and working capital credit. This contraction endured until the conclusion of the year, a phenomenon attributable to the global pandemic instigated by the novel coronavirus. The aforementioned pandemic engendered elevated uncertainty and caution among businesses, thereby precipitating a deceleration in expansion. In the fourth quarter of 2020, domestic investment in Gorontalo contracted by 24.65% (year on year), as illustrated in Figure 5. The results of the Bank Indonesia Business Activity Survey suggest that there has been negligible progress in the domain of business investment between the third and fourth quarters of 2020. Domestic investment performance has exhibited an upward trajectory since 2016, with a notable increase in capital, despite fluctuations until 2020.
Human Development Index is lower than national averageThe Human Development Index (HDI) in the provinces of Sulawesi Island is marginally lower than the national average. In 2022, the HDI for North Sulawesi was recorded at 72.99, Central Sulawesi at 69.50, South Sulawesi at 71.66, and Southeast Sulawesi at 71.5. As demonstrated by data from the Indonesia Statistics Bureau, five of the six provinces on the island – Gorontalo, Central Sulawesi, South Sulawesi, Southeast Sulawesi, and West Sulawesi – have HDI scores that are lower than the national average.
The challenges are illustrated in a fishbone diagram below to provide a comprehensive understanding of the intricate dynamics inherent in the development process (Figure 6).
The strategic positioning of Sulawesi Island, situated between Indonesian Archipelago Sea Routes 2 and 3, signifies its potential as a prospective centre and global gateway for Eastern Indonesia. The island's strategic location has the potential to enhance its role as a pivotal hub for regional commerce and trade. Secondly, the establishment of the Nusantara Capital City (IKN) on Kalimantan Island presents an opportunity to enhance economic activity in Sulawesi Island, acting as a buffer zone. Furthermore, the Sulawesi region has the potential to develop in a number of ways, with various value-added commodities and sectors offering promising avenues for future growth. These include agricultural plantation commodities, capture fisheries, the base metal industry, and tourism. The Sulawesi Island region has the potential to become a significant source of nickel and copper, which could support the implementation and development of new renewable energy sources, as well as provide promising export opportunities. The island also has considerable natural resource potential, including commodities such as palm oil, agriculture, and fisheries, as well as industrial sectors related to nickel and copper. The utilisation of these resources has the potential to enhance and facilitate the development of Sulawesi, with a particular focus on optimising the region's current natural resources.
Notwithstanding the Sulawesi Island Region's abundant natural resources, Indonesian policymakers are obliged to address six regional issues. These include economic, social, decentralisation and regional autonomy, defence and security stability, social, cultural, and ecological resilience, and infrastructure. At present, the economic contribution of the Sulawesi Island region to the national GDP is inadequate. It is evident from the growth diagnostics analysis that several factors, including competitiveness, macroeconomic and fiscal constraints, and financing aspects, continue to hinder development in Sulawesi. Moreover, the quality of human resources is suboptimal, particularly in the domains of education, health, and labour.
The implementation of decentralisation and regional autonomy in Sulawesi Island has not been optimised. The issue of defence and security stability, particularly in the sea border area, has not been adequately addressed. For instance, Refly and Esti (2020) explained that the concept of the rule of law and good governance, introduced by international institutions such as the World Bank and UNDP, has not been explicitly reflected in the formulation of development programme planning texts in North Sulawesi. Consequently, a significant proportion of programmes and activities remain unimplemented.
The challenges posed by gender inequality, child marriage and cultural development have been identified as factors that impede the development of social, cultural and ecological resilience in Sulawesi Island (Salenda, 2016). Armitage and Tam (2007) examined the factors that influence power, marginalisation and vulnerability. These factors have the potential to impact the sustainability of livelihoods in Sulawesi. The key issues that require attention include conducting a comprehensive assessment of the nature and extent of ecological change, clarifying resource-related rights and entitlements, articulating feasible and achievable prospects, resolving ethnic and socio-cultural conflicts, and promoting empowerment through improved communication.
The infrastructure in Sulawesi Island is inadequate, encompassing both basic infrastructure and connectivity. Moreover, concerns have been raised regarding the infrastructure surrounding electricity production, despite the fact that Sulawesi features one of the largest mixes of renewable energy generation in the country. At present, the production of electricity is dominated by the use of fossil fuels.
A review of the extant evidence, based on observation and interview, suggests that the level of innovation and technology in Sulawesi Island is less advanced than in Java Island. A comparative analysis of the levels of access to information and communication technology (ICT) in the eastern and western regions of Indonesia reveals a disparity in the levels of access, with the former exhibiting comparatively lower levels of access. Despite the existence of certain communication technology infrastructure, the limited utilisation of information technology skills and knowledge hinders individuals from fully benefitting from technological advancements. The 2024 Statistics Data indicates that individuals residing in the western regions of Indonesia have greater access to technology and more advanced skills in its utilisation than those residing in the eastern regions.
The objective of this paper is to present a series of policy considerations for the long-term development of Sulawesi Island in Indonesia. The agenda is divided into two sections: economic and non-economic. It is imperative to consider the non-economic agenda, as previous development strategies have been unsuccessful due to a narrow focus on specific aspects of transformation without a comprehensive understanding of the context.
The economic transformation agendaIt is posited that the economic transformation agenda may be pursued through a number of different strategies. Firstly, it is recommended that the government accelerate the role of agriculture in order to support food security. It is evident that four of the six provinces on Sulawesi Island derive the majority of their gross domestic product from the agricultural sector, which serves as the region's primary source of income. In addition to meeting local demands, it is recommended that Sulawesi consider the potential for agricultural product supply to neighbouring islands, such as Kalimantan Island and the surrounding regions. The imminent relocation of the Indonesian capital from Jakarta to East Kalimantan serves to underscore the significance of Sulawesi's role in the provision of food and agricultural products. It is imperative to ensure that local communities have access to the resources generated by mining activities, which currently provide the country with a direct source of income. It is therefore imperative to downstream the mining industry. It is the responsibility of the government to ensure that indigenous communities benefit from their land, rather than the investor's country alone deriving advantage. This phenomenon can be attributed to the establishment of enclaves, settlements, housing, and the utilisation of the Chinese yuan within the enclave. Presently, certain nickel mining enterprises recruit labour from China, a factor which has the potential to engender tension between Chinese workers and indigenous populations.
Secondly, the government may wish to increase income by developing sustainable tourist destinations. In order to ensure the sustainability of tourism, it is essential to integrate social, economic, and environmental principles in the planning, development, and implementation of tourism. The tourism sector has the potential to serve as an alternative means of increasing GDP without further exploring the impact on the natural environment (Hu, Kumar et al., 2023). The sector is regarded as being renewable.
Thirdly, the findings of this study indicate that the government of Sulawesi should consider implementing measures to enhance the country's infrastructure and public facilities. Despite the recent increase in infrastructure investment, the completion of these projects will require a significant investment of time. It is therefore recommended that the government should continue to invest in the construction of infrastructure and public facilities on Sulawesi Island in order to facilitate long-term development. The expansion of infrastructure has the potential to serve as a catalyst for the development of smart cities (Correia, Teixeira et al., 2022).
Finally, it is crucial for the government to prioritise energy availability, as all economic activities require energy in order to facilitate the flow of goods and services. Despite the fact that the national electrification rate is 99.20%, Sulawesi Island has only received 4.7% of the total electricity in Indonesia, amounting to 12,120.02 GWh, according to the Statistic Bureau Data in 2023. It is noteworthy that South Sulawesi has the highest electricity consumption in the island of Sulawesi, accounting for over half of all electricity usage.
The non-economic transformation agendaIn addition to the economic strategic agenda, this paper posits that the Indonesian government should also direct its attention to non-economic priorities. Firstly, it would be prudent for the government to consider the implementation of spatial planning strategies for large metropolitan areas, coupled with conservation initiatives. The extensive exploitation of natural resources in Central and Southeast Sulawesi has been the subject of considerable criticism on account of its environmental impact. The land that remains after mining activities cannot be immediately utilised for agricultural or production purposes, as a period of preparation and measurement is required, with the process potentially taking several years. The quality of the environment has been degraded. It is recommended that the government prioritise the inclusion of spatial planning on the agenda. Furthermore, the findings of this study suggest that consideration should be given to the implementation of robust monitoring and evaluation processes. Additionally, the incorporation of an adaptive planning framework that explicitly addresses uncertainty is warranted, in accordance with the findings of Jittrapirom and Jaensirisak (2020).
Secondly, regulatory and enforcement measures must be aligned with the principles of sustainable development. Furthermore, given Indonesia's geographic location and susceptibility to natural disasters, it is imperative to consider the integration of a structural approach to policy within the framework of development planning (Rindrasih, Witte et al., 2019). It is recommended that the government prioritise spatial planning in its agenda. Furthermore, concerted efforts should be made to reduce social inequality. It is important to note that all five of these development strategies regard development as a technical issue that requires technical solutions, such as enhanced planning algorithms, trade and pricing policies, and macroeconomic frameworks. Moreover, the aforementioned strategies did not encompass the full spectrum of society, nor did they deem a participatory approach to be a requisite element.
Thirdly, it is imperative that Indonesia enhances its internal institutional capacities and establishes connections with broader global supply chains. It is imperative to consider the impact of external factors on economic growth within regions. The concept of regional institutional arrangements is characterised by the presence of overlapping networks of locally established institutions, those with abilities devolved or 'hollowed-out' from the national level, and regional nodes of national institutions.
The findings indicate that while there are variations in macroeconomic performance across the island's provinces, these differences are not significant. The results of Indonesia's developmental performance in 2022 indicate that only 50% of the identified indicators have been achieved at the national level. The aforementioned indicators encompass investment growth, the proportion of the manufacturing industry, the deficit, inflation, the growth of non-fuel exports, the growth of the manufacturing industry, and the tax ratio. Of the seven macroeconomic objectives stipulated in the Mid-term National Development Plan for the years 2020-2024, merely three have been accomplished: namely, investment growth, inflation rate, and non-oil and gas export growth. At the regional level, the economic macro-indicators of Sulawesi Island exhibit differing performances across each province, while displaying a recurrent pattern. It is evident that South East Sulawesi has attained a leading position in achieving macroeconomic indicators, with Central Sulawesi following in second place. Nevertheless, achieving high performance in both North and South Sulawesi is challenging. Conversely, West Sulawesi and Gorontalo are exhibiting comparatively slower progress.
The articles presented two strategic agendas: one related to the economy and one unrelated to the economy. With respect to the economic-related agenda, it is recommended that the government expedite the role of agriculture in order to bolster food security, while upholding sustainable principles. It is recommended that the government facilitate the process of ensuring that indigenous communities benefit from their land, rather than solely benefiting investors from other countries. Moreover, the government could investigate the potential for developing sustainable tourist destinations as a means of increasing revenue. It is recommended that Sulawesi implement improvements to its infrastructure and public amenities. Moreover, it is imperative that the government prioritises energy availability, given that all economic activities require energy to facilitate the movement of goods and services.
In addition to the economic strategic agenda, this paper proposes that the Indonesian government should accord priority to non-economic strategic initiatives. It is recommended that the government initially prioritise spatial planning for large metropolitan areas and conservation efforts. It is recommended that the government enhance its internal institutional capabilities and forge links with broader global supply chains. In order to accomplish this objective, it is essential to concentrate on the organisational structures of global production systems and comprehend how particular regions align with these networks. This insight can assist in gauging the disparate impacts on the potential for industrial upgrading (Gereffi, Humphrey et al., 2005).
The framework presented may also be applicable to other Indonesian and foreign archipelagic islands. The efficacy of agenda setting is of paramount importance in directing future development planning and policy. Nevertheless, the article presents a simplified view of a multifaceted phenomenon that encompasses various dimensions and sectors. Consequently, it is proposed that future research should concentrate on a specific region and a single issue to increase awareness of micro-level governance.
Conceptualization, E.R and E.S.; methodology, E.R and E.S.; investigation, E.R.; resources, E.R.; data curation, E.S.; writing—original draft preparation, E.R.; writing—review and editing, E.R and E.S; supervision, E.S. All authors have read and agreed to the published version of the manuscript.
The authors declare that they have no conflicts of interest regarding the publication of the paper.
Thank you for the Ministry of Bappenas Indonesia Regional II that allowing the author to participate in several focus groups discussions.
