Leading Sector And Employment Opportunities in Denpasar City

LEADING SECTORS AND EMPLOYMENT OPPORTUNITIES IN DENPASAR CITY

I Gusti Bagus Indrajaya

e-mail: indrajaya@unud.ac.id

Introduction

Development is an effort carried out continuously by a nation to achieve better community welfare. Development can be seen from the economic growth and progress of the social conditions of the people. Noting this reality, many developing countries have turned their attention to development strategies that lead to development policies to provide employment opportunities that are able to absorb the majority of the workforce. While the development objectives are (1) increasing the availability and expansion of the distribution of staple goods. The goods in the form of clothing, food and shelter needs as well as other supporting needs such as health, education to security, (2) improvement of living standards, this goal does not only include increasing income but also must include employment opportunities, improving the quality of education and community life both materially and fostering the identity contained in each nation, (3) expansion of economic and social choices for each individual, which includes the liberation of society from the nature of servitude to someone as well as to everything that might degrade the life of the community.

Economic growth which has been indicated as a successful development performance has not been able to reduce unemployment. Efforts to overcome development problems, especially employment issues, are actually not new. Developing countries with high levels of economic growth apparently have not had a significant influence on the welfare of the people, even a decline in the level of real life. Unemployment and false unemployment rates have increased in rural and urban areas, inequality in income distribution between the rich and the poor, and regional inequality has given rise to widening inequality (Yustika, 2004: 23). To achieve these objectives, various allocations of development resources namely natural resources, human resources, capital and technology have been utilized to the fullest but the results achieved are still causing gaps, both between regions, between regions, between sectors, between groups, and between cities and villages. The implementation of development so far, even though it has shown positive results, is still widely felt by the inefficiency of the allocation of economic resources.

The role of the government

In overcoming problems related to regional development, many Western economists argue that government intervention in regional development planning must be done more broadly. Several reasons have been put forward to prove the importance of broad government interference in regional development. Among others, to prevent the adverse effects of market mechanisms on development in various regions and to ensure that the development created can be enjoyed by various regions. Government intervention is very important in creating development in developing countries. Among economists and other social scientists have long been aware of the inability of market mechanisms to create rapid development in developing countries. Therefore, broad government intervention is necessary if these goals are to be achieved by each developing country. It has also been realized that government intervention will achieve maximum results if there is effective coordination of various businesses, and for this purpose development planning needs to be carried out. According to Lincolin Arsyad (1999), there are 4 (four) roles that can be taken by local governments in the regional economic development process, namely; (1) entrepreneur, the local government is responsible for running a business. Local governments can develop their own businesses in the form of Regionally Owned Enterprises (BUMD). Regional government assets can be better managed so that it is economically profitable, (2) coordinators, local governments can act as coordinators to set policies or propose strategies for development in their regions. In their role as coordinators, local governments can also involve other government institutions, the business community, and the community in the formulation of economic goals, plans, and strategies, (3) facilitators, local government can accelerate development through improving the attitudinal environment (community behavior or culture) in the area. This will speed up the development process and better planning procedures and zooning arrangements, (4) stimulators, local governments can stimulate creation and use

Leading sector

Leading sectors are quantitative techniques using location quotient analysis (LQ) to determine the export capacity of the regional economy and the degree of independence of an economic sector (Tri Widodo, 2006). In the LQ analysis, the economic activities of a region are divided into 2 (two) types, namely; (1) sector activities that serve markets in the region itself or outside the area concerned are called leading sectors (base industries), (2) sector activities that serve markets in these regions, this type is called non-leading sectors (local industries). Leading sectors produce goods and services that can be sold outside the region and in a chain will increase consumption and ultimately will increase investment which means creating new jobs. The increase in regional income besides increasing demand for the superior sector results also increases demand for the non-leading sector. Leading sectors need to be developed in order to spur economic growth in a region which in the end regional income will immediately increase if the leading sector has expanded, while the increase in new employment opportunities will be felt in the long run.

Emperical data

Denpasar City is one of the second-tier regions in Bali Province with a population of 897,300 people in the middle of 2016 or 21.36 percent of the total population in Bali Province which makes Denpasar as the most populous and most populous area in Bali, Denpasar City has its own challenges in mitigating the unemployment rate. One of the causes of the high unemployment rate in Denpasar City is the high influx of migrants due to the attractiveness of Denpasar City as the capital of the province encouraging residents of other regions to stay either to find work or for other purposes such as to get better education. The high flow of migrants certainly brings very complex problems. Economic competitiveness is quite high and the arrival of migrants who are often not accompanied by sufficient expertise will actually lead to new problems for the economy of Denpasar City. Therefore, although with a GRDP contribution of 18.86 percent of the total GRDP of Bali Province, the high number and population growth makes it a special task for the City of Denpasar to continue to improve its welfare as indicated by an increase in GDP per capita through a strategy by relocating the development budget of the economic sector non superior to leading economic sectors. The results of the constant GDP price data processed in 2010 during the 2013-2017 research year showed that 53 percent of the economic sector of Denpasar City was in the prime economic sector group, namely the economic sector with greater growth and contribution compared to the same economic sector in the Province of Bali, 35 percent the economic sector is in the developing and potential group, and 12 percent of the economic sector in Denpasar City is in the backward group with slow growth and a small contribution to the GRDP. The prime economic sector consists of electricity and gas procurement, water supply, waste management, waste and recycling, construction, wholesale and retail trade, car and motorcycle repair, financial and insurance services, real estate, company services, education services, and health services and social activities.

To obtain the leading economic sector which is shown by the LQ value of the largest among other prime economic sectors, the constant price GRDP data processing in 2010 for the period 2013-2017 was conducted. The results of the processed data show that the economic sector of electricity and gas procurement as well as the economic sector of education services during the observation year are the leading economic sectors. Increasing economic value added in each economic sector can create jobs through several leading sectors. The analysis shows that the partial value of the leading economic sectors of education services has a positive and significant effect on employment in Denpasar City. The regression coefficient of the leading economic services sector of education by 0.837 states that every increase of one LQ value assuming the leading economic sector of electricity and gas procurement is constant or constant, the employment rate in Denpasar City increases by 83.7 percent. Denpasar City Government in an effort to expand employment opportunities should be able to synergize leading economic sectors with economic sectors that have not been superior by providing fiscal stimulus to investors who will establish businesses in economic sectors that are not yet superior.