ANALYSIS OF THE ROLE OF THE INDUSTRIAL SECTOR

CENTRAL JAVA ECONOMY IN 2000 AND 2004

(ANALYSIS INPUT OUTPUT)
Didit Purnomo 1
Devi Istiqomah 1
1 Fakultas Ekonomi Universitas Muhammadiyah Surakarta
E-mail: didiet_p@yahoo.com

ABSTRACT
This research aim to analyse role of industrial sector to other economy sectors in Central
Java and the role in Central Java economy. Research method, which applied that, is Input
Output Analysis Model (Analysis I-O), accompanied by analysis of role of production sector
and output creator of Central Java economy, backward and forward linkage index analysis,
and key sector analysis. Data which used that is I-O table of Central Java year 2000 and
year 2004 with classification 19 sector is obtained from Central Java BPS. Research result
indicate that industrial sector role is seen enough dominant in Central Java economy in the
year 2000 and 2004. From the result, author suggests government so that more give priority
to industrial sectors that become key sector in Central Java in the year 2000 and 2004.
Keywords: backward and forward linkage, key sector

Regional autonomy is an autonomous

PRELIMINARY
Since the economic crisis began to be felt
since June 1997, making economic
development in Indonesia has stagnated,
even in some areas of deterioration. In the
era of globalization and free trade,
Indonesia is required to be ready to
compete with other countries. In order to
compete with other countries, previously
Indonesia must establish beforehand the
economy reeling from a prolonged
multidimensional crisis. Strong economic
fundamentals will improve the readiness of
the government in the era of globalization.
National economic development can not
be separated from economic development
on a regional basis.
In essence regional development is the
implementation of national development in
certain regions that are tailored to the
physical, social and economic regional as
well as be subject to certain rules. For
successful development
That regional economy, the government
imposed a regional autonomy.
authority to regulate and manage the
interests of the local community at its own
initiative based on the aspirations of the
people. This is because the area will be
given a greater role through the submission
all administrative matters and financial
sources, unless the political authority in
foreign policy, defense and security,
justice, monetary and fiscal, religious and
social planning. The inability of the central
finance as a result of the economic crisis,
resulting in the area given the authority to
seek other sources of income and take care
of its own needs in order to load
center to be reduced. According
Kamaluddin (1987: 46), intent and the
ultimate goal of regional autonomy and
decentralized areas are:
1. Reducing the burden of the central
government and
their interventions on issues
local or regional level next
it gives an opportunity for coordination
implementation at the local level.
2. Increasing the understanding and
support
the center in need of business development
area.
3. Preparation of development programs
for repairs and improvements
social economy at the local level
would be realistic.
4. Train and teach people to
can arrange and organize the house
ladder.
5. Creation of coaching and development
area in order unity
national.
In the era of regional autonomy of each
region
or the area claimed to be looking for,
manage and identify the skills
area concerned. For that we need
proper development planning
with regard to the potential economic
has.
Economic growth in Central Java
2005 indicated by the rate of growth
Gross Regional Domestic Product
(GDP) at constant prices in 2000,
improved from the previous year,
ie 5.35 percent (2004 = 5.13%). It is quite
reasonable considering the economic
conditions
relative continued to improve during 2001
until 2005.
Meanwhile, the current provincial
economy Central Java continue to
experience growth,
namely in 2003 (4.98 percent),
2004 (5.13 percent) and 2005
(5.43 percent). Provincial economic
growth
Central Java, relying on a variety of
sectors such as Agriculture (5.33 percent),
Mining (2.73 percent), industry (6,41
percent), Electricity, Gas, and Water (8.65
percent), Building (7.84 percent),
Commerce,
Hotels and Restaurants (2.63 percent),
Transport
and Communications (4.67 percent),
Finance (2.67 percent) and services (5.58
percent). As a way to encourage
significant economic growth,
create jobs, reduce
poverty and improve the welfare
resident, Java Province Government
Middle targeting investment composition
Local Government by 25 percent
and private investment amounted to 75
percent (BPS
Central Java, 2006).
To achieve the goals and objectives
and regional development, especially the
development
economy in Central Java and to
can utilize the economic resources
area optimally, then the construction
areas can be arranged according to the
purpose inter
sector. Sectoral planning intended
for the development of certain sectors
adapted to the circumstances and potential
each sector and development goals
to be achieved.
Didier and Devi - Analysis of the Role of
the Industrial Sector
139
By using the input-Table
Output (I-O) in Central Java in 2000 and
2004 will be translated sectors
into the industrial sector in Central Java.
It is intended to be used as
Comprehensive information so that
appropriate
and right on target for the economy of Java
Central.
Regional economic development is
a process by which local governments
manage resources that exist
forming a partnership scheme between
local government and the private sector
to create a new jobs
and stimulate the development of activities
economy (growth) in the
The region (Arsyad, 1999)
To accelerate the development of economy
area, it is necessary to enlarge
making of investments in the field of
business
which has great relevance
to other economic activities. With
Thus will be pushing the field
Other business support field
businesses that serve key or leading
, so that will be able to increase
overall regional production through
multiplier effects. (Ropingi and Dany
Artanto, 2002).
Industrialization is a process
the interaction between technology
development,
innovation specialization in production and
interstate commerce, which in turn
in line with the increase in revenue
per capita encourage structural change
economy. Industrialization is often
interpreted
as a process of economic modernization
which covers all sectors of the economy
includes all the existing economy
related directly or indirectly
the manufacturing industry. Although
very important for the sustainability of
growth
economy, industrialization itself
not the ultimate goal, but only is one of the
strategies to be
taking steps to support the development
process
economic level in order to mancapai
High per capita income (Tambunan,
2001)
Industry has a role as
sector leaders with their point
it will spur industrial development
and raised the development of sectors
Other sectors such as agriculture and
services.
For example, the growth of industrial
sector
Rapid will stimulate growth
the agricultural sector to provide
bahanbahan
to an industry standard. With
the existence of the industry allows too
the development of the service sector.
According to Hirschman, growth
quickly from one or several industrial push
expansion of other industries
related to the industrial sector
grow first. In the production sector
the driving mechanism of development
(inducement
mechanisme) created as
a result of the relationship between the
various
industry in providing goods
which is used as raw material for
other industries, can be divided into two
kinds of influences backward linkages
(Backward linkage effect) and influence
linkage to the front (forward linkage
effect). Effect of backward linkages
means the level of arousal created
by the development of an industry against
the development of other industries. While
forward linkage effect is
the level of stimulus generated by the
industry
the first for their input
(Arsyad, 1999).
Journal of Development Economics, Vol.
9, No. 2, December 2008
140
RESEARCH METHODS
Data and Data Sources
The data used in this study
is a secondary data Input
Central Java in economic output
2000 and 2004. Table input output
presented in the form of a matrix
classified into 19 sectors of the economy.
Data input output tables economy
Central Java in 2000 and 2004
obtained from the Central Statistics
Agency Java
Central and from other relevant agencies.
Methods and Data Analysis Tools
Data analysis methods used in
This study is the Input-Output Model.
Input-output model was first developed
by Wassily Leontief in 1930-
an. The idea is very simple but capable
became one of the powerful analysis tools
in looking at the relationship between
sectors in
economy (Nazara, 1997: 48). Component
The most important input output analysis
is the inverse matrix of input output tables,
which is often referred to as inverse
Leontif
(Miller, 1999: 15). This matrix contains
important information about how the rise
production of a sector (industry)
led to the development of sectors
more. Inverse matrix summarizes Leontif
the full impact of the changes in the
production
a sector to total production sectors
others into the coefficients the so-called
multiplier (αij). multiplier
These are the numbers seen in
in the matrix (1-A) -1. The analysis
will be calculated in this study is
as follows:
a. Forward linkage analysis.
b. Backward linkage analysis.
c. Using Key Sector Analysis
Forward and Backward Process.
Concepts Basic Input Output
Jhingan (1996: 751) states that
input output analysis is also a variation
best general balance that has
three main elements. First, through
input output analysis focused
the economy is in a state
balanced. Second, do not focus
the analysis of demand but the problem
technical production. Third, this analysis is
based
on empirical research.
There are several benefits that can be
obtained from the use of models input
output. First, through this model can
estimated impact of final demand to
output, value added, import, reception
tax and employment opportunities offered
existing production in various sectors.
Second,
sectors whose influence is most
dominant on economic growth and
the sectors most sensitive to
the economy can be known through the
analysis
input output. Third, the model input output
can also be used to look at the composition
provision and use of goods and
services, particularly in the analysis of the
subtitusinya import needs and possibilities.
Fourth, using models
This can be seen consistency and
weaknesses
various statistical data which in turn
can be used as a foundation repair,
improvement and development
further. Fifth, the preparation of
projections vari-
macroeconomic variables do
by utilizing the input output models.
Sixth, this model is useful in
menganaDidit
and Devi - Analysis of the Role of the
Industrial Sector
141
lysis price changes that can be observed
from
influence directly and indirectly
the input price changes on prices
output (Input Output Indonesia,
2000: 5).
An input output table presents
information about the transactions of
goods and services
which occurs in all of the sectors
in the economy, with the form of
presentation
in the form of a matrix. In an Input
Ouput is open and static,
transaction used in the preparation
input output table must meet three
basic assumptions, namely (Input Output
Indonesia, 2000: 3):
1. The uniformity (homogeneity), namely
the assumption
that every economic sector only
producing one type of goods and services
with a single input arrangement (uniform)
and there is no automatic substitution of
the
input from different sectors.
2. The proportionality (proportionality),
namely
Assuming that the relationship between
input and
ouput on each production sector is
linear function, meaning the increase and
a decrease in the output of a sector will
proportional to the increase and decrease
input from the relevant sectors.
3. The summation (additivity), namely the
assumption
that the total effect of production activities
in various sectors of the sum
of the effect on each
activity.
Based on these assumptions, then the table
input output as quantitative models have
limitations, namely that the coefficient
input
or technical coefficients assumed to
remain
(Constant) over the period of analysis or
projection. Then the manufacturer can not
adjust
changes in inputs or
changing the production process. because
the coefficients
technically considered constant, then the
technology
used by sectors of the economy
in the production process were considered
constant.
As a result, changes in the quantity and
price
input will always be proportional to the
change
quantity and price of output. Although
contains limitations, the model input ouput
remains an economic analysis tool
Detailed and comprehensive (Table I-O
Indonesia, 2000: 3).
In Table 1 are presented examples of Table
I-O
for the economic system which consists of
three production sectors are sectors 1, 2,
and 3.
From the picture it appears that
preparation of the figures in the form
matrix shows a common thread that
each hook of activities between sectors.
As an illustration of the process can be
observed
Table 1. Table Chart Input Output System
Economy by Three Production Sector
Between Demand Production Sector
Input Output Allocation
Between
123
Demand
End
amount
output final demand overseas or region, Xi
1 X11 X12 X13 X1 F1 is the total sector i and Mi is the number
2 X21 X22 X23 X2 F2 Input i sector. Substituting Xij then
Between equation (1) above shall be:
Sector a11X1 + a12X2 a1j Xj + ... + ... + a1n Xn
Production + F1 +
3 X3 X31 X32 x33 F3 E1 = X1 + M1 + a22X2 a21X1 a2j Xj + ...
Primary Input V1 V2 V3 + ... +
Total Input X1 X2 X3 a2n Xn + F2 + E2 = X2 + M2 + AI2 ai1X1
Journal of Development Economics, Vol. X2 + ...
9, No. 2, December 2008 Aij Xj + ... + ain Xn + Fi + Ei = Xi + Mi
142 .... .... ....
allocation of output in Table 1 Output An1X1 + an2X2 ANJ Xj + ... + ... + ann
sector 1 in the table amounted Xn + Fn +
X1 and distributed along the lines En = xn + Mn .......... (2)
by X11, X12, and X13 respectively Equation (2) is simplified into
to meet the demand of the sector 1, matrix equation becomes as follows:
2, and 3, while the rest of F1 Ax + F + E = X + M .......... (3)
used to meet demand Where
end. A technology called the coefficient matrix,
As well as the output sector 2 and 3 the matrix
each of X2 and X3, can which shows the technological input
seen in the same way in the process structure
allocating sector output 1 (Table I-O antarsektor economy aij read
Jakarta, 2000: 65). as a number of sector output i needed
Calculation Method sector j to produce one unit
X11 + Xi2 + ... + ... + X1n X1j + F1 + E1 sector output j (Xij / Xj).
= Equation (3) above is the equation
X1 + M1 identity for input output analysis with
X21 + X22 + ... + ... + X2n X2j + F2 + E2 import treatment on a competitive basis.
= Import
X2 + M2 every sector of the economy is considered
Xi1 + Xi2 + ... + ... + Xin Xij + Fi + Ei = proportionate
Xi + M3 the level of domestic consumption of
.... .... .... the output of the sector. For example
XN1 + XN2 + .... + XnJ + ... + XNN + Fn determined
+ En = this proportion as import coefficients, then
Xn + Mn .......... (1) coefficients of an economic sector can be
Here Xij is the amount of output sector i calculated
The requested sector j as an input for as follows:
production sector output j (request demand among end demand
between), μ imports
Fi is a domestic final demand to output of +
sector i, Ei is an export or =
or
XF
μM
ij +
= Σ thus μi = (ΣXij + F)
Didier and Devi - Analysis of the Role of
the Industrial Sector
143
Thus the equation AX + F + E =
X + M can be changed to:
X = AX + F + E - μAX - μF .......... (4)
Further parts containing X
moved to the left of the equals sign,
be:
X - μAX = AX + F - μF + E .......... (5)
[I- (I - μ) A] X = (I - μ) F + E ... ....... (6)
Then X in the equation (4) above changed
be:
X = [I - (I - μ) A] -1 [(I- μ) F + E] ...........
(7)
X = [I - (I - μ) A] -1 is the inverse
used in the analysis as is known
from equation (7) This equation is formed
of two parts:
X = [I - (I - μ) A] -1 (I- μ) F, without the
Export .......... (8)
X = [I - (I - μ) A] -1 E, only exports ... ...
(9)
X = AX + F + E ......... (10)
Further parts containing
Matrix X is moved to the left
sign equation:
X - AX = F + E .......... (11)
(I - A) X = F + E .......... (12)
Then X in the equation (4) changes to:
X = (I - A) -1 (F + E) .......... (13)
(I - A) -1 is the inverse matrix of Leontief,
(I -
A) -1 F is output caused by
domestic (Final Demand) and (I - A) -1 E
is output caused by exports
(Foreign Final Demand). domestic Final
Demand usually consists of elements of
consumption
households, government spending, and
investment. Matrix Inverse Leontief
often denoted as B, with elements
matriknya bij read as magnitude
i sector output caused by demand
in sector j by one unit.
Data analysis by Matrix Inverse
Leontief
1. Total index Linkage Analysis
The total index linkage is used as
basic formulation of economic
development strategies
to examine linkages between sectors
in an economic system. According to
Rasmussen index covers total linkage
the total index backward linkages and
the total index linkage to the front. Index
total backward linkages of an industry
or a sector shows the relationship
relevance of the effect that the
by one unit of final demand on
The sector of the total purchase of inputs
all sectors in an economy.
The total index linkage forward
shows the corresponding relationships of
the effect caused by one unit
a sector final demand to total
sales output of all sectors in a
economy.
2. Total index Linkage Backward
This concept is defined as the ability
a sector to boost growth
upstream industry. The total index linkage
Journal of Development Economics, Vol.
9, No. 2, December 2008
144
to the rear is also known as power index
deployment (power of dispersion) used
to measure the connection to the rear.
The formula to find the total index value
backward linkages are:
ΣΣ
Σ
==
= ΣΣ
α Σ
=n ==
i1 =
n α
j1 =n
ij i1
n n
i1 j1
ij ij
j n
nb i1
BL j
Where: i
BLJ = total index backward linkages a
sector j X
αij = elements of the inverse matrix of nv
Leontief FL
BLJ magnitude can have the same value Where:
1, a larger one or a smaller one. FLI = total index linkage forward
When BLJ = 1 it means that the power sector i
j sector deployment equal to the average αij = elements of the inverse matrix of
deployment across all economic sectors. Leontief
when BLJ FLI value can be equal to 1, more
> 1 it means power deployment 1 large or smaller 1. When FLI = 1 case
j is above the sector average power That means that the degree of sensitivity
deployment I sector is equal to the average degree
all economic sectors. Instead, sensitizing all sectors of the economy.
when BLJ <1 it means that the power When Fli>
j sector deployment is lower than the 1 it means the degree of sensitivity sector
average i is higher than the degree of sensitivity of
power deployment across all economic the whole
sectors. sectors of the economy. Conversely, if FLI
3. Total Index Linkage Forward <1 case
This concept is defined as the ability That means that the degree of sensitivity
a sector to drive growth i below the sector average degree of
production of other sectors that use sensitivity
input from the sector. Total linkage all economic sectors.
Called front as well as the index degrees 4. Analysis Using Key Sectors
sensitivity (degree of sensitivity) used Forward and Backward Process
to measure the association forward. From I-O analysis can be viewed sectors
Formula to find the value of the total index keys that have backward linkages
linkage (Backward linkages) or also known as
next to that is: a high degree of sensitivity and forward
linkages (linkage to the front) or power
Scatter high. Sectors that have
high spread indicates power sector
it has enough thrust
strong compared to other sectors. While
a sector that has a degree of sensitivity
High indicates that the sector
The have dependencies
higher against other sectors. key sectors
defined as a sector that plays
an important role in turning the wheels
economy and is determined by
Didier and Devi - Analysis of the Role of
the Industrial Sector
145
the total index backward linkages and to
front. Sector is a key sector
has a total index backward linkages
and the future is greater than one.
RESULTS AND
DISCUSSION
Linkage Analysis Results Into Index
Front
The total index linkage forward
has a value greater than one indicates
that the sector has
a strong ability to drive
industrial output growth of downstream or
in other words the ability of the sector
to encourage the growth of production
other sectors that use inputs from
this sector. Output generated by the sector
is an intermediate commodity,
in terms of the raw material for
industries and sectors of the economy
more. These values also indicate
the role of the industrial sector
to encourage economic growth
in Central Java. From the results if the data
Central Java Input Output Table 2000
can be obtained indices degree of
sensitivity
or index forward linkages. In Table 2
presents the seven sectors that have
total index value forward linkages
The input-output table based on Java
The middle of 2000.
Processed from the data input output table
Central Java in 2000, the industrial sector
others have the greatest index value
ie the value of 3.14516. the Values
shows that when there is an increase
final demand on other sectors of
one unit then the other industrial sectors
will increase output by
3.14516 units. sectors of the food industry,
beverages and tobacco amounted to
1.24356,
1.00214 oil refining industry.
While other sectors only complementary
namely the mining and quarrying sector
which has a total value of index linkage
forward or power index sensitivity of
1.40276, the trade value
1.26291 sector financial institutions, real
estate and services trade amounted to
1.06582
and transport and communications
by 1.00164. Output generated by
the sector is an intermediate commodity,
in terms of the raw material
for industries and sectors of the economy
more.
Table 2. Seven Sectors with total index
linkage Forward Biggest According Input
Output in 2000
Code No I-O Sector Index DK
1 9 Other industries 3.14516
2 7 Mining and quarrying 1.42076
3 13 Trade 1.26291
4 8 Industry Food, Beverages and Tobacco
1.24356
5 16 Financial Institutions, Real Estate,
and Business Services 1.06582
6 10 Oil Refining Industry 1.00214
7 15 Transportation and Communications
1.00164
Source: Central Java Input Output Table
2000, processed.
Journal of Development Economics, Vol.
9, No. 2, December 2008
146
While the results of the processed data in
the table
input output Central Java in 2004, also
can be obtained indices degree of
sensitivity or
forward linkage indices presented
in Table 3.
From the results if the data input output
table
Central Java in 2004, the industrial sector
others who have total index value
linkage to the front or the index of
sensitivity
amounted to 1.98493, the next sector
food, beverage and tobacco
with a value of 1.17136 industry sector
in 2004 has decreased.
While other sectors are as
a complement to the mining sector and
extracting the greatest value index
ie the value of 4.07757. the Values
shows that when there is an increase
final demand on other sectors of
one unit of the mining sector and
excavation will increase output
amounted to 4.07757 units and trade
by 1.39055. Where all sectors
which had an index value
total forward linkage is greater than
One is a sector that is able
increase production growth sectors
Another use input from
this sector.
Processed from input-output tables Java
Central in 2000 and 2004, the sector looks
industry that has total index linkage
forward in 2004 decreased
from 2000. In 2000 there were seven
sectors that have linkages index
forward or degree of sensitivity, among
others
Other industry sectors, mining sector
and quarrying, trade, sector
food, beverage and tobacco,
sector, financial institutions, real estate and
company services sector refining industry
oil and transport and communications
sector.
While in 2004, only
There are four sectors that have
degree of sensitivity is more than one
sector
mining and quarrying, industrial
Other, beverage and food industry
tobacco and trade sectors. Next
Other industrial sectors in 2000
has a value of 3.14516 and downhill
sharply in 2004 widened
1.98493. Industrial sectors Food,
Beverages
and Tobacco in 2000 amounted to
1.24356 and in 2004 increased
be 1.17136. Refining industry
Oil in 2004 did not have
a high degree of sensitivity index.
In Table 4 are presented the results of the
index
linkage to the front in 2000 and
2004 as comparison.
Table 3. Total Index Four Sectors with
Largest According to Linkage Forward
Input Output Table 2004
Code No I-O Sector Index DK
1 7 Mining and Quarrying 4.07757
2 9 Other industries 1.98493
3 8 Manufacture of Food, Beverages and
Tobacco 1.17136
4 13 Trading 1.39055
Source: Central Java Input Output Table
2004, processed
Didier and Devi - Analysis of the Role of
the Industrial Sector
147
Linkage Analysis Results Index
to the back
The total index backward linkages
which has a value greater than one
It shows that the sectors
Industry has a strong capability
to attract sector output growth
the upstream. An index value greater than
one
indicates the spread in the sector
is above the industry average power
deployment
all sectors of the economy in Java
Central. From the results if the table data
Input
Output in Central Java in 2000, it can be
obtained the index of the spread or
the index backward linkages as
are presented in Table 5.
Other industrial sector is the sector
which has an index value of linkages
behind the most high at
1.65850, meaning that if there is an
increase
the final demand of the industrial sector
more by one unit then for the sectors
Other economies in Java
Central will experience growth in output
amounted to 1.65850 units. As well as
Other industry sectors that have
Table 4. Total Linkages Forward Biggest
According Input Output
2000 and 2004
2000 2004
No Code
I-O
Sector Code No DK Index
I-O
DK Sector Index
1 9 Other industries 3.14516
1 7 Mining and
excavation
4.07757
2 7 Mining and Quarrying 1.42076
1.98493 2 9 Other Industries
3 13 3 8 1.26291 Trade of Food Industry,
Beverages and Tobacco
4 8 Industry Food, Beverages,
and Tobacco
1.24356 4 13 Trading
5 16 Financial Institutions, Real
Estate, and Services Company
1.06582
6 10 Oil Refining Industry 1.00214
7 15 Transportation and Communications
1.00164
Source: Input Output Central Java in 2000
and 2004, processed.
Table 5. Eight Sector Linkages with Total
Index To Back Largest
According to Input Output Table 2000
No. I-O codes DP Sector Index
1 9 Other Industries 1.65850
2 12 Building 1.30056
3 11 Electricity, Gas, and Water Supply
1.26897
4 8 Industry Food, Beverages and Tobacco
1.22679
5 14 Restaurant and Hotel 1.20395
6 10 Oil Refining Industry 1.16144
7 18 Services 1.03612
8 15 Transportation and Communications
1.01495
Journal of Development Economics, Vol.
9, No. 2, December 2008
148
the index value of backward linkages that
greater than one sector among other
sectors
food, beverage and tobacco
amounted to 1.22629, refining industry
sector
oil amounted to 1.16144. The industrial
sector
that have a high deployment
indicates the sector have power
thrust strong enough compared to the
sector
others.
Based on Table 6, the role
the industrial sector of the economy
looks dominant in Java economy
Central. All groups of industrial sectors
In 2000, namely the food industry sector,
beverages and tobacco, industrial sector
other sectors of the oil refining industry
all of which became the leading sectors.
Industrial sectors is what holds
an important role in turning the wheels
Central Java economy in
2000. The industrial sector of food,
beverage and
Tobacco has an index value of power
deployment
at 1.22629 and the value index
sensitivity of 1.24356. these quantities
indicate if there is an increase in demand
the end of the industrial sector
food. beverages and tobacco by
one unit then the other economic sectors
in Central Java will experience
increase output of 1.22629 units.
Conversely, if there is an increase in
demand
late on other economic sectors
by one unit then the food industry sector,
beverages and tobacco will experience
increase output of 1.24356 units.
Furthermore, other industries that have
dissemination of index values
1.65850 and the value of the index of
sensitivity
by 3.14516. The second value of the index
at
Other industry sectors shows
that if there is an increase in demand
end to the other industry sectors for
one unit then the other economic sectors
in Central Java will experience
increase output of 1.65850 units.
Conversely, if there is an increase in
demand
late on other economic sectors by one unit,
the electricity and gas sectors
will increase output by
3.14516 units. Furthermore, the refining
industry
Oil that has an index value of power
deployment of 1.11644 and the value of
the index
power sensitivity of 1.00214. Value
The second index in the industrial sector
refineries
This oil indicates that if
an increase in final demand to
oil refining industry sector amounted
one unit then the other economic sectors
in Central Java will experience
increase output of 1.11644 units.
Conversely, if there is an increase in
demand
late on other economic sectors
by one unit then the refining industry
sector
oil will increase
output amounted to 1.00214 units.
Table 6. Industry Sector Economy Central
Java Input Output According to Central
Java
2000
Code No I-O Sector Index Index DK DP
1 8 Manufacture of Food, Beverages and
Tobacco 1.24356 1.22629
2 9 Other industries 3.14516 1.65850
3 10 Oil Refining Industry 1.00214
1.16144
Source: Central Java Input Output Table
2000, processed.
Didier and Devi - Analysis of the Role of
the Industrial Sector
149
Based on Table 7 there are only two
sectors of the economy into sectors
industrial economy of Central Java in
2004 that the food industries sector,
beverages and tobacco, and industrial
sectors
more. Sectors is what holds
an important role in turning the wheels
Central Java economy in
2004. The industrial sector of food,
beverage and
Tobacco has the power index value
deployment of 1.20178 and the value of
the index
power sensitivity of 1.17136. magnitude
The show in case
increase in the final demand of the sector
food, beverage and tobacco
by one unit then the economic sectors
others in Central Java will
increased output by
1.20178 units. Conversely, if there
increase in final demand on sectors
Other economic by one unit then
sector industries of food, beverages and
tobacco will be increased
output amounted to 1.17136 units. Next
Other industries that have an index value
power deployment at 1.42724 and the
value
the index of sensitivity of 1.98493.
The second value of the index in the
industrial sector
The other shows that if
an increase in final demand to
Other industrial sectors by one unit then
other economic sectors in
Central Java will increase
output amounted to 1.98493 units. Instead,
if there is an increase of final demand
on other economic sectors amounting to
one unit of the electricity and gas sectors
will
increased output by
1.42724 units. While the industrial sector
oil refineries in 2004 was not
become a key sector. in construction
in Central Java to spur growth
economy in Central Java, the sectors
it deserves to be prioritized. This matter
because these sectors have
strong impetus to the creation
other economic sectors and also has a high
sensitivity to
changes in final demand from sectors
Other economic.
In 2000 there are four sectors
which became the industrial sector
perkonomian
Central Java, among other industrial
sectors
food, beverages and tobacco sector
Other industry, refining industry sector
oil, and transportation and
communication. Meanwhile, in 2004
only into two sectors, namely sectors
food, beverage and tobacco
and other industrial sectors. In Table 8
industrial sectors presented a comparison
of Java
Central in 2000 and 2004.
Economic interpretation is intended to
interpret the results of the analysis based
both economic sciences to the overall
the results of the analysis. From the
analysis of the
the industrial sector the economy Central
Java
Table 7. Industrial Sector Economy
Central Java
Code No I-O Sector Index Index DK DP
1 8 Manufacture of Food, Beverages and
Tobacco 1.17136 1.20178
2 9 Other Industries 1.98493 1.42724
According to the Central Java Input Output
Table 2004
Journal of Development Economics, Vol.
9, No. 2, December 2008
150
In 2000 and 2004 it can be done
economic interpretation based on the
analysis
value added, index analysis linkage
to the rear, the index linkage analysis
forward and analysis of key sectors.
Components of wages and salaries as
forming gross value added in the year
2000 created by economic activity
in Central Java reached Rp. 33,893,355.43
million or 28.78 percent of the total
Rp.117.750.498,96 million in 2000 and
increased by Rp. 58,450,517.29 million
and contributed 30.21 percent
in 2004 with a total value
Rp.193.435.263,05 million. but apparently
wages and salaries component was
relatively more
low when compared with a surplus
business, operating surplus received by
businessman and a half times larger
than the wages and salaries component.
Components operating surplus gives
a contribution of 57.86 per cent or
equivalent
Rp. 68,133,212.52 million in 2000, and
although in 2004 decreased to
51.92 percent by value Rp.100.442.999,19
million. Though wages and salaries are the
only
components that can be added value
directly received by workers. surplus
own business may not necessarily be
directly
enjoyed by the public, as surplus
these efforts some have stored
or planted in the company in the form
retained earnings. In the operating surplus
including the revenue section of force
unpaid work.
The index value linkage forward or
sensitivity index in 2000
There are seven sectors that have an index
linkage to the front or the degree of
sensitivity,
include other industry sectors, sectors
mining and quarrying, trade,
sectors of the food industry, beverage
and tobacco sector, financial institutions,
real estate and business services sector,
oil refining industry and sector
transport and communications.
While in 2004, there were only
four sectors that have degrees sensitivity is
more than one, namely the mining sector
and quarrying, other industrial sectors,
food drink and tobacco industry
and trading sectors. Sector
Table 8. Industrial Sector is Becoming
Key Sectors of Economy in Central Java
According to Table
Input Output Central Java in 2000 and
2004
2004 2000
Code I-O Sector Index
DK
Index Codes DP I-O Sector Index
DK
Index
DP
8 Industry
Food,
Drinks, and
Tobacco
1.17136 1.20178 8 of Food Industry,
Drinks, and
Tobacco
1.24356 1.22629
Other Industries 9 1.98493 1.42724
3.14516 1.65850 9 Other Industries
10 Industry
Refining
Oil
1.00214 1.16144
Source: Input Output Central Java in 2000
and 2004, processed
Didier and Devi - Analysis of the Role of
the Industrial Sector
151
Other industries contributed
the highest compared with
Other sector in 2000 amounted to
3.14516. This value means showing
the effect of any other industry where
an increase in final demand on sectors
Another one million, the sector
Other industries will increase
output amounted to 3.14516. while on
In 2004 the sector which has an index
linkage forward or power sensitivity
high is the mining sector and
excavation of 4.07757. This value means
shows the influence of the mining sector
and excavation if there is an increase
final demand on other sectors
amounting to one million, the mining
sector
and excavation will increase
output amounted to 4.07757. output
generated an intermediate commodity,
in terms of the raw material for
industries and sectors of the economy
more.
The index value backward linkages
or power deployment in 2000
there are eight sectors such as industry
the other, building electricity, gas and
drinking water,
food, beverage and tobacco,
restaurants and hotels, refining industry
oil, services, transport and
communications.
Sectors which have a value index
deployment highest in 2000
Other industries are the sectors that give
contribution of 1.65850, which means
if there is an increase of final demand
the other industrial sectors of the
the unit to other economic sectors
in Central Java will experience
output growth amounted to 1.65850
unit. Whereas in 2004, the sector
oil refining industry is
a sector that has an index value linkage
to the rear of the most high at
2.30278, meaning that if there is an
increase
the final demand of the industrial sector
oil refinery by one unit then
for other economic sectors that
in Central Java will experience growth
output amounted to 2.30278 units. Sector
that have a high deployment
indicates the sector have power
thrust strong enough compared to the
sector
more.
The role of the industrial sector in the
Central Java input output tables in
2000 and 2004 have a role
significant in the production process.
Visible from several industrial sectors
become
a key sector of the economy of Central
Java.
In 2000 the food industry sector,
beverages and tobacco accounted for
Rp. 27,744,377.35 million with
linkage index ahead of 1.24356
and to the rear of 1.22629 or by
13.4 per cent of total output. Next
other industries accounted for Rp.
27,901,202.3 million with an index linkage
ahead of 3.14516 and backward
amounted to 1.65850 or by 13.48 percent
of the total output. While the industrial
sector reduction of oil accounted for Rp.
11,101,830.81 million with an index
linkage
ahead of 1.00214 and backward
amounted to 1.16144 or 5.36 percent of
the amount of output. In the analysis
results
In 2004 the food industry sector,
beverages and tobacco accounted for
Rp. 47,409,368.92 million with
linkage index ahead of 1.17136
and to the rear of 1.20178 or by
22.9 per cent of total output. Next
other industries accounted for Rp.
Journal of Development Economics, Vol.
9, No. 2, December 2008
152
49,280,413.96 million with an index
linkage
ahead of 1.98493 and backward
amounting to 1.42724, or 23.8 percent of
the amount of output. In 2004 the industry
excluding oil refining into
the key sector as declining
from 2000.
CONCLUSION
Based on the analysis input output
using Table Input Output
Central Java in 2000 and 2004
about the role of the industrial sector
Central Java's economy in 2000 and
in 2004 it can be concluded
as follows:
1. The components forming the gross
value added
with the greatest role is surplus
business. In 2000 the role of components
in the formation of value added
Central Java is at 57.86
percent with a value of
Rp.68.133.212,52 million and in the year
2004 decreased to 51.92 percent
with a value of Rp.100.442.999,19
million.
2. The amount of final demand created
respectively in 2000 and
2004 was Rp. 272 703 047 million
and Rp.170.021.068 million. Component
household consumption into users
The biggest contribution during the period
The. If in 2000 there were
55.38 per cent of the GDP in Central Java
used to meet consumption
households in 2004
increased to approximately 65.25 per cent.
Conversely, a decline in the percentage of
the use of the GDP for the establishment
Gross fixed capital. In 2000
as much as 17.13 percent of the GDP use
for investment through the establishment
Gross fixed capital but in
In 2004 the percentage dropped to only
amounting to 16.81 percent. Meanwhile
net exports of Central Java has
a slight increase. In 2000
net exports component of the GDP shows
role by 8.50 percent
but in 2004 his role
increased significantly, ie
became 10.63 percent.
3. The value of the index linkage forward
or
sensitivity index in 2000
There are seven sectors that have
forward linkage index or degrees
sensitivity, among others, other industry
sectors,
mining and quarrying,
trade sector, industrial sector
food, beverages and tobacco,
sector, financial institutions, real estate and
company services sector refining industry
oil and transportation sectors
and communication. While in the year
In 2004, there were four sectors
has a degree of sensitivity over
one is mining and quarrying,
Other industrial sectors, industries
Food beverages and tobacco and
trade sector. Other industry sectors
contributing to the
highest compared with the sector
more in 2000 amounted to
3.14516. This value means showing
pegaruh other industry sectors if
an increase in final demand on
other sectors of one million, the
Other industrial sectors will experience
increased output of Rp. 3.14516
million. Whereas in 2004 the sector
which has an index of links to
Didier and Devi - Analysis of the Role of
the Industrial Sector
153
forward or power high sensitivity is
mining and quarrying sector
by 4.07757. This value means
shows the influence of the mining sector
and extracting the event
increase in final demand on sectors
Another one million, the sector
mining and quarrying will
increased output by
Rp. 4.07757 million.
4. The index value backward linkages or
power deployment in 2000 there
eight sectors such as industry
the other, building electricity, gas and
water
drink, food, beverage and
tobacco, restaurants and hotels, industrial
oil refining, services, transportation
and communication. sectors
has an index value deployment
highest in 2000 is
Other industry sectors that give
contribution of 1.65850, which means
if there is an increase of final demand
to other industrial sectors for
one unit then for economic sectors
more in Central Java
will experience growth in output
amounted to 1.65850 units. while on
In 2004, the industrial sector refineries
Oil is a sector that has
the index value of backward linkages that
The most high at 2.30278,
meaning that if there is an increase
demand
the end of the refining industry sector
oil by one unit then
for other economic sectors
in Central Java will experience
output growth amounted to 2.30278
unit.
5. The key economic sector in Central Java
in 2000 which industries sector
food, beverages and tobacco sector
Other industry, refining industry sector
oil and transportation sectors
and communication. These sectors
which plays an important role in
turning the wheels of the economy of Java
Central in 2000. Meanwhile,
In 2004 there were only two sectors
economy into key sectors
Central Java's economy is agriculture
food, beverage and tobacco,
and other industrial sectors. This
suggest a fall
in the economy of Central Java on
in 2004 when compared with
2000.
6. The role of the industrial sector in the
Central Java input output tables on
2000 and 2004 have
significant role in the
production process. Visible from several
the industrial sector into a key sector
Central Java economy. In the year of
2000 sectors of the food industry, beverage
and tobacco accounted for
Rp.27.744.377,35 million with index
linkage to the front of 1.24356 and
to the back of 1.22629 or by
13.4 per cent of total output. Next
other industries accounted for
Rp.27.901.202,3 million with index
linkage to the front of 3.14516 and
to the back of 1.65850 or by
13.48 percent of total output.
While the refining industry sector
Oil accounted for Rp. 11,101,830.81
million with forward linkage index
amounted to 1.00214 and to the rear of
1.16144 or 5.36 percent of
the amount of output. In the analysis
results
In 2004 the food industry sector,
Journal of Development Economics, Vol.
9, No. 2, December 2008
154
beverages and tobacco accounted for
by Rp.47.409.368,92 million
linkage index ahead of
1.17136 and 1.20178 to the rear of
or 22.9 percent of total
output. Furthermore, other industries
accounted Rp.49.280.413,96 million
the linkage index forward
amounted to 1.98493 and to the rear of
1.42724 or 23.8 percent of
the amount of output. In 2004 refining
industry
oil is not included into
the key sector as declining
from 2000.
From the above conclusion, it can be
argued
some suggestions are expected to be
useful for policy making
government and for further research.
1. The industrial sector of food, beverage
and
tobacco, and other industrial sectors need
attention from the government
Central Java due to the industrial sector
food, beverages and tobacco sector
Other industries was instrumental in
spur economic growth in Java
Central in 2000 and 2004.
The industrial sector of food, beverage and
tobacco, and other industrial sectors
has a strong impetus to the
the creation of other economic sectors
and also has a sensitivity
high to changes in demand
end of other economic sectors.
2. The Government of the province of
Central Java
should pay more attention to
sectors of the oil refining industry
who in 2000 became the sector
but in 2004 the key sectors
it is no longer a key sector.
3. Other Sectors in 2000
and 2004 has an index of links to
forward or power high sensitivity
like other industrial sectors, the sector
mining and quarrying,
trade, sector, financial institutions,
real estate and business services, in trying
Also in order to be a key sector in
subsequent years, by giving
Special regulations from government
Central Java.
4. For further research should
add some more analysis
so it really can analyze
a role against the economic sector
Central Java economy.
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