ABSTRACT

MOCH. RUM ALIM. Analysis of Intra and Interregional Economic

Linkages and Inequality between Java and Sumatra (BONAR M. SINAGA
as Chairman, MANGARA TAMBUNAN and D. S. PRIYARSONO as
Members of the Advisory Committee).

Interregional economic linkages in Indonesia in term of economic

growth and income distribution have been thoroughly investigated.
The objective of this study is to analyze the causes of the economic
relationship between Java and Sumatra, where recently there is a
strong widening inequality not in favor of Sumatra economy. The
model of Interregional Social Accounting Matrix between Java and
Sumatra (SAMIJASUM) is constructed based on secondary data in the
form of 59 x 59 matrix and using cross entrophy technique for
balancing.

The Stage of Java economy initially was started form services,

agriculture, manufacture, and mining. As economic development took
place, changing of economy of Java to become strong in service and
manufacture sectors. While Sumatra sectors star from primary
commodities, mining and agriculture. The result analyses based on
SAMIJASUM shows that: (1) the trade balance of Java and Sumatra are
imbalance in favor of Java, (2) the linkages of economic sectors of
Sumatra to Java economy was quite stronger, while the Java to
Sumatra is weak, and (3) the spillover effect of Sumatra to Java is
higher than Java to Sumatra in term of economic growth. If national
and local concentrates for Sumatra economy development, it would
equally benefit to Java and Sumatra economy.

Keyword: economic structure, linkages, trade balance, spillover

effect, economic inequality.