Analysis of The Contribution of Increased Investment to GRDP

2020 in Central Java Province

NAMA LENGKAP, NAMA LENGKAP, NAMA LENGKAP, NAMA

LENGKAP
Abstract
One of the ways for the government to find out the level of economic
growth is by calculating the value of national income, especially which is the
focus of the government to be able to increase the per capita income of the
community in each region so that it can contribute to local revenue which will
also increase national income, the government's strategies and efforts to increase
it. investment target figures with strategies and innovations on investment
realization are the government's strength to support high national income figures,
the contribution of investment, especially Central Java as an area with high
population density, is a challenge and opportunity in the application of investment
strategies that can positively affect the value of regional domestic products gross,
therefore by implementing a sufficiently productive investment it can increase the
gross regional domestic product figure and indirectly contribute to Indonesia's
national income.

Keywords : National Income, PMTB, Investment, Investment Strategy, Risk

Management

Introduction

Economy of a country has many components as a measure of the

achievement of economic success, including the level of income, poverty, labor,
education, etc. which have binding characteristics on the value of a country's
income. In general, economic growth can be measured by an increase in the
amount of national income over a certain period. The high value of a country's
national income can be an indicator of the results of an assessment of the amount
of goods and services that can be produced in a certain period by the Indonesian
state, the amount of the production value shows the level of community welfare
and the ability of the community to earn income according to the standard
stipulated by the Indonesian government. Especially Indonesia as a developing
country that continues to implement strategies to increase national income for
high levels of economic growth.

Apart from being a measure of the level of economic growth, the national
income can also be an appropriate measure to determine the success and failure of
a country's economic strategy. This is because the determination of the level of
state income, especially that which is directly practiced in Indonesia, uses
measurements of the price level of goods, employment opportunities, education,
income per capita, and the position of the balance of payments abroad (exports /
imports). From several analyzes, the discussion and application of theories related
to national income as an indicator of Indonesia's economic growth are often pro
and contra by critics of the macroeconomic component as a calculation basis used
to measure national income. One of the supporting components of national
income is GRDP. namely the amount of added value for goods and services
produced by various production units in all regions of a country within a certain
period of time with a calculation period of usually one year being one of the

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focuses of the government in the last 5 years to measure the rate of economic
growth.

Due to the large number of factors related to the calculation of national

income which is basically influenced by many supporting components both from
internal and external to the state, in relation to these calculations there is an
application of the theory and principles of calculating national income in
Indonesia in order to achieve the goals of the prosperity and welfare of the people.
To achieve this goal, the increase in Indonesia's national income needs to
experience a consistent increase based on several calculated components, based on
these problems, here the author will analyze the strategy for the contribution of
increasing investment figures as a supporting factor for increasing gross regional
domestic product as a component of calculating national income. , which the
authors will analyze in more detail, especially in the area of Central Java Province
as one of the provinces with a fairly dense population, due to its high population.
Human resources in Central Java should be able to increase the per capita income
figure which can boost the value of Central Java's original regional income, but on
this side the author will analyze how investment can be a solution to increasing
regional income with the quality of creative and innovative human resources to
realize investment. , both for the community and the government who work
together to achieve the target of investment realization.

Investment is a very important object in economic growth which is

indirectly related to the value of national income, the role of investment as a chain
to generate national income that does not only focus on one industry but directly
on several industries from the largest unit to the smallest unit, the seriousness of
the Indonesian government to increase the investment rate, especially Central Java
Province in order to achieve local revenue that is relatively the same as some
surrounding areas so that there is a balance of regional welfare by implementing a
strong strategy and exploring the potential results of Central Java as the
government's effort to achieve the goal of high national income value.

So from that here the writer will analyze the problems related to the
contribution of increasing investment in Central Java Province as a component of
increasing the value of national income which is analyzed from the point of view
of regional success with strategic planning and creative and innovative work
efforts as part of the factors of increasing Indonesia's national income.

Literature Review
Based on the Republic of Indonesia law number 25 of 2017 concerning
investment or investment, it is stated "that to accelerate national economic
development and realize Indonesia's political and economic sovereignty, it is
necessary to increase investment to transform economic potential into real
economic strength by using capital originating from domestic and foreign ”from
this regulation, it can be seen that investment has an important role in regional
economic development which has an impact on national economic development.

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 Investment can be defined as "an activity carried out by an individual
(natural person) or a legal (personjuridical person), in an effort to increase and or
maintain the value of its capital, either in the form of cash, equipment, immovable
assets. , intellectual property rights, and expertise " (Hasibuan, 2017) on this basis
it is necessary to build awareness and understanding of investment, in this case the
author will analyze the important parts of investment that local governments need
to make as a form of regional autonomy that implements independence in each
region. . To achieve this, it is necessary to design priorities and development
strategies by increasing investment in the regions both from the domestic and
foreign sectors, policies that can be carried out by the government by "directing
the elimination of high cost economies, investment licensing procedures, ensuring
legal certainty, ensuring certainty. efforts, reducing policy overlap between the
central and regional governments, improving investment institutions that are
transparent and non-discriminatory, and creating incentives that are right on target
in an effort to spread more and more investment ” (Lusiana, 2012).
Foreign investment is needed by Indonesia as a developing country to
encourage economic development for very significant changes if in each region it
is successful in investing well so that the funds released by the central government
can provide results for local governments as well as regulatory policies and
strategies of the central government in attract foreign investors to improve the
investment climate in the region. The paradigm shift of the rate of economic
growth by investing has basically been implemented in Indonesia for a long time,
but the existence of inappropriate legal regulations and a lack of government
priorities have resulted in bureaucratic obstacles to investment.
The investment theory which states that empirically diversifying
investment will have an impact and benefits on investors both domestically and
abroad and even internationally, by implementing passive and active investment
strategies in planning and implementing investment as a form of regional
contribution to create increased investment in investment in each region and
reduce economic inequality between regions.
Investment development in the regions, especially Central Java Province
by implementing special strategies and efforts to achieve the investment
realization target is a challenge and opportunity for the success of the government
to support the gross regional domestic product figure based on the application of
investment theory and rules that have been regulated in regional regulation
Number 1 Year 2016 concerning the investment of the Central Java Provincial
government, with a strong regulatory administration basis and implementation
that is managed with the right concepts and strategies can be a very strong
planning package to manage regional revenue flows that greatly affect Indonesia's
national income.

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Research Methodology
1. Type of Writing
Writing of this article uses descriptive analysis which is presented with
statistical data, statistical data used in the form of tables, diagrams, graphs and
others. As a form of real data analysis without statistical testing to describe in
detail the information presented. Descriptive analysis using various literature
sources and articles as material for analysis of research problems to describe
the contribution of investment in Central Java province to increase national
income.

2. Objects of Problem
Object of the problem in writing this article focuses on strategic analysis of
the contribution of investment to the value of the Central Java Province's gross
regional domestic product in 2020 as one of the components of national
income which will be analyzed in depth regarding the problems of internal and
external factors that affect target achievement. Investment realization so that
the achievement value of the investment contribution can be seen in the gross
regional domestic product.

3. Data Source
Data sources used in this article are secondary data sources obtained from
literature reviews from journals, books, documentation, government agency
data and data from related institutions relevant to research and data sources
that are processed to produce new data as supporting the evidence of the
research carried out.

4. Data Collection Techniques

Collection technique used in this article uses literature studies, taking this
literature study is done by collecting data related to secondary data collection
from several academic sources relevant to the research problem.

5. Data Analysis Data

Analysis for processing from various data sources that have been obtained is
analyzed by reading, studying, analyzing and comparing various literature
sources and interpreting the results of data analysis, so that data analysis can
be found to answer all research problems.

Results and Discussion

Achievement of the investment realization target that has been given the
target by the central government to be realized as much as the target for achieving
the investment value of both PMA / PMDN for the last 5 years in Central Java
Province still tends not to be consistent in maintaining the achievement of the
predetermined investment target figures. this is due to a major event in early 2020
which caused the world economy to decline greatly due to the Covid-19
pandemic, of course it is a very big step for the regional government of Central

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Java Province to maintain its investment achievement targets, based on press
release data from DPMPTSP Central Java Province with The total investment
realization in Central Java in 2020 is IDR 50.24 trillion, exceeding the target set at
IDR 24.89 trillion (202%).

Based on the data below, it can be seen that the biggest contribution in
achieving the target of investment realization in 2020 is supported by an increase
in PMDN investment, especially from the MSME sector, based on some news
information and research that has been carried out due to the lack of activity and
productivity of human resources during the Pandemic Covid-19 which greatly
influenced the lack of per capita income of the community because many
companies were closed due to the pandemic, this made the community forced to
be more innovative and creative in forming businesses for survival, this is the
point of success of the Central Java provincial government which of course also
does not escape the quality of qualified human resources. to form small businesses
that can even become large businesses in the midst of a pandemic situation that is
still not over, even based on calculations from the Central Java Province
DPMPTSP data, the investment value of PMDN has increased by 111.65% from
2019, this is shows that the quantity of regions to manage investment figures is
very high in order to boost gross regional domestic product which of course also
greatly affects the value of national income from the high per capita income figure
of the people of Central Java Province.

Image 1 Realization of Investment PMA/PMDN in Central Java 2015-2020

Source : DPMPTSP Central Java Province, 2021

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 Image 2 Presentation of Investment Value at PMTB 2015-2020

2015 2016 2017 2018 2019 2020

Pembentukan
Modal Tetap
Bruto/ Gross 32.335.202,14 246.247.088,50 264.716.106,23 285.045.112,84 298.877.269,25 278.024.570
Fixed Capital
Formation
Realisasi
26.040.684,60 38.183.372,80 51.539.187,88 59.269.113,32 59.503.280,00 50.242.481
Investasi
Persentase 11,20823894 15,50612153 19,46960788 20,79288879 19,90893458 18,07123769
11% 15% 19% 20% 19% 18%

Source : The Data is Processed, Badan Pusat Statistik, 2021

Based on the analysis of the GRDP value in 2020, the Gross Fixed Capital
Formation figure for Q3 shows a contribution of 29% of the Gross Regional
Domestic Product figure, this refers to the component of GDP with the largest
contribution, namely the Household Consumption Expenditure of 59% which is
used for all expenses. Consumption activity (government spending). In addition,
the rate of economic growth can be seen from the PMTB figure which has a fairly
high contribution, especially for investment activities. This is because the results
of the PDRB expenditure for PMTB financing consists of 6 constituent
components including buildings, machinery & equipment, vehicles, other
equipment, CBR, and intellectual property products which are a form of regional
investment or assets. For this reason, it can be said that investment contributes to
the value of the gross regional domestic product.

From the data above, for approximately 6 years, data analysis can be
drawn that there is an increase in the contribution of realization of investment in
PMTB except in 2020 there is a decrease due to the COVID-19 pandemic, so it
can be concluded from this data if investment has a high enough contribution to
the quality of increasing GRDP. Through the high value of PMTB from the
realization of PMA / PMDN investment, so that investment indirectly contributes
to the high value of the Central Java Province's Gross Regional Domestic Product
in 2020.

Conclusions and Recommendation

Conclusion that can be drawn from the analysis of the article is the
strategy of the regional government of Java Province Middle to increase local
revenue and support efforts to increase national income through investment in an
effort to establish investment licensing regulations for both PMA/PMDN easily
and transparently as well as promotion and training efforts to increase number
regional investment, besides that the most important point to increase investment
realization is consistency of innovation and creativity of the government and
society to form new ideas that can compete with the global market.

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