Research Paper

HOW INDONESIA ATTAINS THE NATIONAL GOALS THROUGH

INFRASTRUCTURES, SPACE ARRANGEMENT ALLOCATION, AND ALSO
CONTROLLING PRICES OF SERVICES.
The Relation between Space Structures and Spaces Patternes to Spread Out Wealth and Subsidizes
in Indonesia

Destarita Indah Permatasari, S.T., M.E. 1

Eva Fauzyah Rahmah, S.IP. ²
Salatiga Land Office, Salatiga, Indonesia1 destaritaindah@gmail.com
Bogor Agricultural Institute ² Evafauzyah@gmail.com

Abstract
From the purchase value datas, sales value datas, and trades balances data are shows that development in Indonesia has not been fully successful; where the economy
in Indonesia is no longer dependent on the island of Java with the improvement of economics on the Island of Kalimantan – Sulawesi, but has not succeeded in
strengthening the role of Sumatera Island and Bali-Nusa Tenggara-Maluku-Papua in fourth.

The fluctuations of productivity of textiles and appareals industries can be exlplaines as that’re. Eventough there is still a domainancy of Java as many as 97,65 % -
99,59 %. Followed by Bali and Nusa Tenggara as many as 0,21 % - 1,32%. Lied on the third is Sumatera by 0,09 5 – 1,33 %. The forth rank is Sulawesi by 0,02 % - 0,08
%. With percentages of 0,00 - 0,07 % is Kalimantan.
From the morphology conditions from each Island / Islands above, we can see that all Island / Islands are most consist of land. In Java as the lowest land with 20.036
villages. While Sumatera is at the second with 16.969 villages. Sulawesi with 7.676 is in the third. In other hand the forth and the fifth are Bali and Nusa Tenggara as
many as 3.129 and 2.745.

Nationally, the cumulative domestic direct investment in 2009-2018 is still dominated by the industrial sector at 616 T, followed by agriculture at 144 T, and mining at
107 T. The DDI in agricultural sector is still dominated by Papua Island as much as 65.80%, Kalimantan Island as much as 43.32%, then Bali and Nusa Tenggara as much
as 26.74%. While the last four are Sumatra, Sulawesi, Java, and Maluku respectively as much as 20.43%, 15.14%, 1.41% and 0.61%.

Methodologies are some variants of methods used to calculate and analyse to prove arguments and theories.In this research, the methods are : Econometric Analysis
as quatitives calculation; as a start of this study description, this section relates to the literature study as stated in CHAPTER 2, that the choices of variables and methods
refers to the results of the respective examination. Simple scoring ( probit) calculation. To determine the direction of the investment locations in agricultural sector, it
will be carried out by weighing the factors that influence the investment, namely: the field area, the availability of water sources, the unemployment, and the minimum
wages are associated with the forest zones enactment policies. The determination of this parameter is based on the availability of data at the Central Statistics Agency
in the period of 2009–2018. And direct assumption as qualitative method.

I try to grouped the results and the polocies recommendation, between infrastructures developments and the space arrangements. Maybe there were a correlation
with the background, maybe it won’t. The use of land can be approached from the use of forest for agriculture and mining, while the rest of land which are non forest
land become industries and small and medium enterprises areas.

Based on Econometrics Analysis, there were some result as that are : valleys and slopes had negative but significant relations at alfa 1 % to productivity of Textiles and
Appareal Industries. While nominal wages also showed the same result.

There are several variables one of which is the minimum wages which is a control variable that is affected by the foreign direct investment (FDI) inflows. On the other
hand, the electricity variable, CPI, and dummy of island or islands spatial planning are variables affect significantly to the flow of FDI by industry in Sumatra, Java, and
Sulawesi. At the same time, other variables, namely road and labor, do not significantly affect the flow of FDI by industry in those three islands.

In therm of arrangement policies related to permit and funding, the Central and Local Government have to make priorities based on significancies variables impacted
productivity of Textiles and Appareal Industries. Which are : increasing nominal wages, reducing the industries locations on the valleys and slopes to control the
fluctuation. In formulating licensing and funding policies, the central government and local governments need to scale up priorities according to the significance of the
variables affecting FDI flows and should also prioritize increasing the amount of electricity distribution to industry and CPI to encourage FDI by industry inflows in
Sumatra, Java, and Sulawesi. In addition, government should increase the minimum wages and limit the area of industrial area to control the flow of FDI by industrial
sector in Java, Sumatra, and Sulawesi.

When it comes to forest zone enactment policy, the proposed policy recommendations are as follows:
• Protecting forest zones in Papua Island according to the current conditions;
• Adding forest zones in Sumatera and Sulawesi;
• Reducing the forest zones in Java, Kalimantan, Bali and Nusa Tenggara, and also Maluku.

Keywords: Regional Economic Activity : Growth Development, Environmental issues, and Changes, State and Local Government : Intergovernmental Relations,
Wages,Compensation, and Labor Costs, Labor – Management Relations, Trade Union, and Collective Bargaining, and Development Planning and Policy.

1. Introductions
Indonesia's development aims to realize national goals, namely: accelerate economic growth, increase equitable welfare, and continue the sustainable environment.
As stated by the Deputy Minister of Public Works at konreg PU, 2013. Where each is projected PDRB value, poverty rate, and amount of carbon emissions. In our
research, we focused only on contributing to the purchase value, sales value, and trade balance, while the poverty rate and fluctuations in carbon emissions were not
the scope of the study. Taking into account the availability of data, the accuracy of the research, and the coverage of the regions we grouped based on the Islands
cluster in Indonesia.
In general, the value of purchases in Indonesia increased, despite the change in order in 2017 and 2018. In 2017 the largest in Java Island in the first place, followed
by Sumatra Island in second place. Third and fourth respectively Bali Island - Nusa Tenggara-Maluku- Papua and Kalimantan Island - Sulawesi. While in 2018 the order
changed as follows: the first and second order respectively Kalimantan Island - Sulawesi and Java Island. While the island of Sumatra in third and the island of Bali -
Nusa Tenggara - Maluku - Papua in fourth. (BPS, 2021).

Table Purchase Values

Tahun sumatera Jawa Kalimantan-Sulawesi Bali-Nusa Tenggara-Maluku-Papua Indonesia
2017 124.548.474 1.427.999.463 44.288.889 120.835.070 1.717.671.896
2018 209.056.372 671.033.719 4.758.051.753 69.710.927 5.707.852.771
Source: bps.go.id

Chart Purchase Values

 Purchase Values

6000000000
5000000000
4000000000
3000000000
2000000000
1000000000
0

2017 2018

Source: bps.go.id

In general, the value of sales in Indonesia increased, despite changes in order in 2017 and 2018. In 2017 the largest in Java Island in the first place, followed by Sumatra
Island in second place. Third and fourth respectively Bali Island - Nusa Tenggara-Maluku- Papua and Kalimantan Island - Sulawesi. While in 2018 the order changed as
follows: the first and second order respectively Kalimantan Island - Sulawesi and Java Island. While the island of Sumatra in third and the island of Bali - Nusa Tenggara
- Maluku - Papua in fourth. (BPS, 2021).
Table Sales Values

Tahun Sumatera Jawa Kalimantan-Sulawesi Bali-Nusa Tenggara-Maluku-Papua Indonesia

2017 139.380.292 1.870.125.934 50.680.976 91.752.165 2.151.939.367
2018 182.174.480 1.143.882.629 6.870.604.152 12.412.225 8.209.073.486
Source: bps.go.id

The Chart of Sales Values

 Sales Values

9E+09
8E+09
7E+09
6E+09
5E+09
4E+09
3E+09
2E+09
1E+09
0

2017 2018

Source: bps.go.id

In general, the trade balance in Indonesia increased, despite changes in order in 2017 and 2018. In 2017 the largest in Java Island in the first place, followed by Sumatra
Island in second place. Third and fourth respectively – Kalimantan Island – Sulawesi and Bali Island – Nusa Tenggara-Maluku - Papua. While in 2018 the order changed
as follows: the first and second order respectively Kalimantan Island - Sulawesi and Java Island. While the island of Sumatra in third and the island of Bali - Nusa
Tenggara - Maluku - Papua in fourth.

Table of Trades Balances

Tahun sumatera Jawa Kalimantan-Sulawesi Bali-Nusa Tenggara-Maluku-Papua Indonesia
2017 14.831.818 442.126.470 273.379 -43.413.906 413.817.761
2018 -26.881.889 372.848.912 2.103.646.397 -57.398.701 2.392.214.719
Source: bps.go.id

The Chart of Trade Balances

 Trades Balances

2500000000
2000000000
1500000000
1000000000
500000000
0
-500000000

2017 2018

Source: bps.go.id

From the purchase value data, sales value data, and trade balance this shows that development in Indonesia has not been fully successful. It is said to be successful
where the economy in Indonesia is no longer dependent on the island of Java with the improving economy on the island of Kalimantan - Sulawesi, but has not succeeded
in strengthening the role of Sumatra Island and Bali-Nusa TenggaraMaluku-Papua Island. So we need to know what factors affect the condition.
I try to look in depth on the usage of land, for the forest and non forest area, the infrastructures development, about road, electricity, fuel station, telecommunication
and transportation (port and air port).

INDUSTRIAL DATAS APPROACHS

capital / input value (per year) in millions rupiahs

2013 2014 2015
indonesia 300777949 311111481 349626357
west 257323521 237908689 301236497
 east 43454428 73202792 48389860

Table 1.1.
Source : Ministry of Industry, 2017

capital / input value (per year)

400000000
350000000
300000000
250000000
200000000
150000000
100000000
50000000
0
2013 2014 2015

indonesia west east

Table 1.2.
Source : Ministry of Industry, 2017

labor amount (per year) in people

2013 2014 2015
Indonesia 9734111 8362746 8735781
West 7901109 6538924 7195984
East 1833002 18223822 1539797
 labor amount (per year)
20000000
18000000
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
2013 2014 2015

indonesia west east

Table 1.3.
Source : Ministry of Industry, 2017

labor cost ( per year) in millions rupiahs

2013 2014 2015
Indonesia 86546669 48602183 48188828
West 73118315 37654464 39942804
East 13428354 10947719 8246024
 labor cost ( per year)
100000000
90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
2013 2014 2015

indonesia west east

Table 1.4.
Source : Ministry of Industry, 2017

producer / Number of micro and small industries / companies (per year)

2013 2014 2015
Indonesia 3418366 3505064 3668873
West 2610866 2659782 2971231
East 807500 845282 697642
 producer / Number of micro and small industries
/ companies (per year)
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
2013 2014 2015

indonesia west east

Table 1.5.
Source : Ministry of Industry, 2017

output value (per year)

2013 2014 2015
Indonesia 489861304 513309953 570366901
West 413679797 388275108 482250498
East 76181507 125034845 88116403
 output value (per year)
600000000

500000000

400000000

300000000

200000000

100000000

0
2013 2014 2015

indonesia west east

Table 1.6
Source : Ministry of Industry, 2017
value added (per year)
2013 2014 2015
indonesia 300777949 55658747 220740544
west 257323520 150366420 181014001
East 43454429 5182053 39726543
 value added (per year)
350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2013 2014 2015

indonesia west east

Table 1.7
Source : Ministry of Industry, 2017

production growth (per year)

2013 2014 2015
Indonesia 7,51 4,91 5,71
West 3,85 4,56 4,19
East 3,56 7,63 10,29
 production growth (per year)
12

10

0
2013 2014 2015

indonesia west east

The Tables of Production Amounts of each Island / Islands

Source: Ministry of Industry, 2017

Figures Output Amount in 2014

PULAU / KEPULAUAN NILAI PRODUKSI

JAWA 311.664.831.064
SULAWESI 263.701.045
BALI - NUSA TENGGARA 1.510.012.534
SUMATERA 3.254.857.022
KALIMANTAN 233.244.008
 NILAI OUTPUT 2014

JAWA SULAWESI
BALI - NUSA TENGGARA SUMATERA
KALIMANTAN

Source: Ministry of Industry. 2017

Figure Output Amount Percentages in 2014

PRESENTASE NILAI OUTPUT 2014

JAWA SULAWESI BALI - NUSA TENGGARA SUMATERA KALIMANTAN

Source: Ministry of Industry. 2017

the highest contribution of The output amount of textiles and appareals industries is Jva. The second is Sumatera. Followed by Bali and Nusa Tenggara are the third.
While Sulawesi and Kalimantan are on the fourth and fifth. With the details are as follow :
Table of Islands / Island Contribution of Textile and Appareal Productivity
PERCENTAGES
ISLAND / ISLANDS
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
JAWA 99,59% 98,99% 99,11% 98,56% 98,76% 98,36% 98,60% 97,65% 98,97% 98,34%
SULAWESI 0,02% 0,08% 0,06% 0,06% 0,03% 0,03% 0,04% 0,05% 0,07% 0,08%
BALI - NUSA TENGGARA 0,29% 0,35% 0,28% 0,30% 0,27% 0,26% 0,21% 1,32% 0,15% 0,48%
SUMATERA 0,09% 0,58% 0,54% 1,07% 0,92% 1,33% 1,12% 0,96% 0,80% 1,03%
KALIMANTAN 0,01% 0,00% 0,01% 0,01% 0,02% 0,02% 0,02% 0,02% 0,02% 0,07%
Sources: Ministry of Industry, 2017

The fluctuations of productivity of textiles and appareals industries can be exlplaines as that’re. Eventough there is still a domainancy of Java as many as 97,65 % -
99,59 %. Followed by Bali and Nusa Tenggara as many as 0,21 % - 1,32%. Lied on the third is Sumatera by 0,09 5 – 1,33 %. The forth rank is Sulawesi by 0,02 % - 0,08
%. With percentages of 0,00 - 0,07 % is Kalimantan.

Table The Morfologies of each Island / Islands

VALLEYS SLOPES LANDS

Jawa 490 4772 20036

Sulawesi 624 2108 7676
Bali –NusaTenggara 327 1671 3129
Sumatera 1103 3315 16969
Kalimantan 64 225 2745
Source: bps.go.id

From the morphology conditions from each Island / Islands above, we can see that all Island / Islands are most consist of land. In Java as the lowest land with 20.036
villages. While Sumatera is at the second with 16.969 villages. Sulawesi with 7.676 is in the third. In other hand the forth and the fifth are Bali and Nusa Tenggara as
many as 3.129 and 2.745.
The use of land can be approached from the use of forest for agriculture and mining, while the rest of land which are non forest land become industries and small
and medium enterprises areas.
Figure Domestic Direct Investment (DDI) Fluctuation during 2009-2018

source: nswi.bkpm.go.id, 2019

In general, the DDI of the agricultural sector in the period 2009–2018 increased. The decrease was only in 2013.
Table 1
The contribution of DDI in each island/archipelago during 2009-2018

DOMESTIC DIRECT INVESTMENT (DDI)

Investment value
island/archipelago total
Agriculture mining industry
Sumatera 35.631.305,60 12.815.117,70 125.965.483,60 174.411.906,90
Jawa 5.919.166,20 18.102.312,20 394.551.834,80 418.573.313,20
Bali dan Nusa Tenggara 3.294.250,80 6.045.892,00 2.981.143,50 12.321.286,30
Kalimantan 89.191.516,10 63.249.857,70 53.448.400,70 205.889.774,50
Sulawesi 7.313.352,50 7588706,4 33410143,9 48.312.202,80
Maluku 27.634,10 0:00:00 4.513.042,90 4.540.677,00
Papua 3.329.032,20 60.599 1.669.412,50 5.059.043,80
 National 144.706.257,50 107.862.485,10 616.539.461,90 869.108.204,50
source: nswi.bkpm.go.id, 2019

Nationally, the cumulative domestic direct investment in 2009-2018 is still dominated by the industrial sector at 616 T, followed by agriculture at 144 T, and mining at
107 T.

Picture 2
The contribution of DDI in agriculture in each island/archipelago

source: nswi.bkpm.go.id, 2019

The DDI in agricultural sector is still dominated by Papua Island as much as 65.80%, Kalimantan Island as much as 43.32%, then Bali and Nusa Tenggara as much as
26.74%. While the last four are Sumatra, Sulawesi, Java, and Maluku respectively as much as 20.43%, 15.14%, 1.41% and 0.61%.

Table 2.
Forest Area in each Island/Archipelago
Island/Archipelago Forest Area
 Sumatera 22.918.163,10
Jawa 3.313.547,97
Bali dan Nusa Tenggara 2.920.044,01
Kalimantan 36.722.401,65
Sulawesi 13.512.845,00
Maluku 12.228.357,00
Papua 40.100.636,00
source: BPS, 2019

Based on the forest zones enactment policy, it can be seen that Papua Island has the largest forest area with 40 million hectares. This is followed by the island of
Kalimantan with 36 million hectares. In the third place is Sumatra with 22 million hectares. Sulawesi is in the fourth place with 13 million hectares. The last three are
Maluku, Java, and Bali and Nusa Tenggara respectively with 12 million hectares, 3 million hectares, and 2 million hectares.

Table the percentage and differences on Big Trade Price Indexes

Sektor/Kelompok Barang IHPB 2017 2018 2019

Desember Desember Oktober

percentage and differences on Big percentage and differences on Big

Trade Price Indexes Trade Price Indexes

percentage and differences on Big Trade

Price Indexes
 The Changes The Changes The Changes
The The The
compared to compared to compared to
Shares Shares Shares
IHPB a month IHPB a month IHPB a month
of IHPB of IHPB of IHPB
before before before
(%) (%) (%)
(%) (%) (%)

I. Bahan Baku 138.82 0.50 0.50 143.58 0.15 0.15 144.78 0.09 0.09
1.1 Pertanian 284.01 1.28 0.23 285.14 0.48 0.09 288.34 -0.34 -0.06
1.2 Pertambangan dan Penggalian 122.54 -0.01 0.00 129.36 -0.35 -0.02 132.21 0.06 0.00
1.3 Industri 136.57 0.41 0.22 141.66 0.16 0.08 142.74 0.21 0.11
Impor 104.58 0.25 0.05 109.30 0.02 0.00 109.79 0.16 0.04
II. Barang Konsumsi 195.00 0.75 0.75 199.22 0.37 0.37 201.29 0.02 0.02
1.1 Pertanian 523.47 1.28 0.42 524.13 0.56 0.18 526.19 -0.71 -0.23
1.2 Pertambangan dan Penggalian 170.78 0.20 0.00 170.25 0.32 0.00 173.91 0.12 0.00
1.3 Industri 148.36 0.51 0.32 152.81 0.29 0.19 154.91 0.38 0.25
Impor 155.96 0.11 0.01 166.52 0.00 0.00 168.04 0.10 0.00
III. Barang Modal 122.75 0.10 0.10 126.98 0.40 0.40 128.24 0.29 0.29
1.1 Pertanian 205.91 1.08 0.02 179.33 -2.05 -0.03 194.57 0.18 0.01
1.2 Pertambangan dan Penggalian 93.07 -0.24 0.00 104.36 -1.02 -0.01 106.73 0.00 0.00
1.3 Industri 118.93 0.06 0.05 123.76 0.61 0.48 125.14 0.33 0.26
Impor 135.93 0.18 0.03 139.11 -0.22 -0.04 138.92 0.12 0.02

Source: bps.go.id
Tabel 1.10. Realisasi Foreign Direct Investment dan Domestic Direct Investment berdasarkan klasifikasi sektor di Indonesia pada periode 2012 - 2017
sumber : nswi.bkpm.go.id, 2019
 NO PROVINSI NAMA KAWASAN ANDALAN
1. Nanggroe Aceh Darussalam • Kawasan Banda Aceh dsk
• Kawasan Lhokseumawe dsk
2. Sumatera Utara • Kawasan Perkotaan Metropolitan Medan – Binjai – Deli
Serdang – Karo
• Kawasan Pematang Siantar dsk
• Kawasan Rantau Prapat – Kisaran
• Kawasan Tapanuli dsk
• Kawasan Nias dsk
3. Sumatera Barat • Kawasan Padang Pariaman dsk
• Kawasan Agam – Bukittinggi
• Kawasan Mentawai dsk
4. Riau • Kawasan Pekanbaru dsk
• Kawasan Duri – Dumai dsk
• Kawasan Rengat – Kuala Enok – Taluk Kuantan – Pangkalan
Kerinci
• Kawasan Ujung Batu – Bagan Batu
5. Kepulauan Riau • Kawasan Zona Batam – Tanjung Pinang dsk
6. Jambi • Kawasan Muara Bulian Timur Jambi dsk
7. Sumatera Selatan • Kawasan Muara Enim dsk
• Kawasan Lubuk Lingau dsk
• Kawasan Palembang dsk
8. Bengkulu • Kawasan Bengkulu dsk
• Kawasan Manna dsk
9. Bangka Belitung • Kawasan Bangka
• Kawasan Belitung
10. Lampung • Kawasan Bandar Lampung – Metro
• Kawasan Mesuji dsk
11. Daerah Khusus Ibukota Jakarta – Jawa • Kawasan Perkotaan Jakarta
Barat – Banten
12. Banten • Kawasan Bojonegaram- Merak – Cilegon
13. Jawa Barat • Kawasan Bogor – Puncak – Cianjur
 • Kawasan Purwakarta – Subang – Karawang
• Kawasan Cekungan Bandung
• Kawasan Cirebon – Indramayu – Majalengka – Kuningan
• Kawasan Priangan Timur – Pangandaran
14. Jawa Tengah • Kawasan Surakarta, Boyolali, Sukoharjo, Karanganyar,
Wonogiri, Sragen, Klaten
• Kawasan Kendal, Demak, Ungaran, Salatiga, Semarang,
Purwodadi
• Kawasan Bregas
• Kawasan Juwana, Jepara, Kudus, Pati, Rembang, Blora
• Kawasan Purwokerto, Kebumen, Cilacap dsk
15. Daerah Istimewa Yogyakarta • Kawasan Yogyakarta dsk
16. Jawa Timur • Kawasan Gresik, Bangkalan, Mojokerto, Surabaya, Sidoarjo,
Lamongan
• Kawasan Malang dsk
• Kawasan Probolinggo – Pasuruan – Lumajang
• Kawasan Tuban – Bojonegoro
• Kawasan Kediri – Tulung Agung – Blitar
• Kawasan Situbondo – Bondowoso – Jember
• Kawasan madiun dsk
• Kawasan Madura dan kepulauan
17. Bali • Kawasan Denpasar – Ubud – Kintamani
18. Nusa Tenggara Barat • Kawasan Lombok dsk
• Kawasan Bima
• Kawasan Sumbawa dsk
19. Nusa Tenggara Timur • Kawasan Kupang dsk
• Kawasan Meumere – Ende
• Kawasan Komodo dsk
20. Kalimantan Barat • Kawasan Pontianak dsk
• Kawasan Singkawang dsk
• Kawasan Ketapang dsk
21. Kalimantan Tengah • Kawasan Sampit – Pangkalan Bun

22. Kalimantan Selatan • Kawasan Banjarmasin Raya dsk

• Kawasan Batulicin
23. Kalimantan Timur • Kawasan Tanjung Redeb dsk
• Kawasan Sangkuriang, Sangata, dan Muara Wahau
• Kawasaan Tarakan, Tanjung Salas, Nunukan, Pulau Bunyu,
dan Malinau dsk
• Kawasan Bontang – Samarinda – Tenggarong, Balikpapan
Penajam dsk
24. Sulawesi Utara • Kawasan Manado dsk
25. Sulawesi Tengah • Kawasan Poso dsk
• Kawasan Kolonedale dsk
• Kawasan Palu dsks
26. Sulawesi Selatan • Kawasan Mamminasata dsk
• Kawasan Bulukumba – watampone
• Kawasan Pare pare dsk
27. Sulawesi Barat • Kawasan Mamuju dsk
28. Sulawesi Tenggara • Kawasan Asesolo / Kendari
• Kawasan Mawedong / Kolaka
29. Maluku • Kawasan Kei – Aru – Pulau Wetar – Pulau Tanimbar
30. Maluku Utara • Kawasan Ternate, Tidore, Sidangoli, Sofifi, Weda dsk
• Kawasan Kepulauan Sula
31. Papua Barat • Kawasan Fak – Fak dsk
• Kawasan Sorong dsk
32. Papua • Kawasan Timika dsk
• Kawasan Biak
• Kawasan Merauke dsk

Tabel 1.12. Indikasi Lokasi Kawasan Andalan Menurut Rencana Tata Ruang Wilayah Nasional
sumber : Direktorat Penataan Ruang Wilayah Nasional, 2008
 NO PROVINSI 2010 2011 2012 2013 2014
1. Nanggroe Aceh Darussalam

2. Sumatera Utara

3. Sumatera Barat

4. Riau

5. Kepulauan Riau

6. Jambi

7. Sumatera Selatan

8. Bengkulu

9. Bangka Belitung

10. Lampung

11. Daerah Khusus Ibukota Jakarta – Jawa Barat - Banten

12. Banten

13. Jawa Barat

14. Jawa Tengah

15. Daerah Istimewa Yogyakarta

16. Jawa Timur

17. Bali

18. Nusa Tenggara Barat

19. Nusa Tenggara Timur

20. Kalimantan Barat

21. Kalimantan Tengah

22. Kalimantan Selatan

23. Kalimantan Timur

24. Sulawesi Utara

25. Sulawesi Tengah

26. Sulawesi Selatan

27. Sulawesi Barat

28. Sulawesi Tenggara

29. Maluku

30. Maluku Utara

31. Papua Barat

32. Papua

33. Gorontalo

34. Kalimantan Utara

Tabel 1.12. Realisation of Value Added on Textiles and Appaerals Industries in every province during 2010 - 2014
Source: Ministry of Industry, 2016

Literatures Reviews
From my previous study related to the impact of geographical location to industry output, released conclucion that the located of industry in slopes and valleys have correlation
with productivity. While another variables, which nominal wages also showed the same relation.

According to the theoretical analysis in chapter 4, the changes in FDI flows are influenced by the setting of regional minimum wages, gross regional domestic revenue, and
infrastructure development. The setting of regional minimum wages above or below the average of regional minimum wages in each province in Java affects the amount of
the FDI inflows by industrial sector (this is in line with the theory of Sichei (2012) and Marcelia). On the other hand, the increase in regional minimum wages in each province
in Java Island affects the reduction in employment in the industrial sector there, and causes a decrease in the FDI inflows by industry sector. The increase or decrease in gross
regional domestic revenue is also influenced by the amount of regional minimum wages. In addition, the infrastructure development has a positive influence on the increase
of FDI by industry inflows in Java.

The elucidation of the data and the results of the study show findings that are in line with the details of the theoretical analysis shown by the theories that have been previously
stated. The details of theoretical analysis are shown from at least 1 province results that are in line with theory 1 (Sichei, 2012) and theory 4 (Marcelia) which explain the
influence of high labor costs on low FDI flows. We found that the results for DKI Jakarta Province were compatible but for Banten Province were not. For theory 2 (Yogatama,
2012) and theory 5 (Mankiw, 2003), low labor costs promoting high FDI. This is compatible for provinces in West Java and East Java but incompatible for provinces in Central
Java and DI Yogyakarta.

Theory 3 (Frederica and Juwita, 2010) describes that the increase in wages promotes the FDI decrease. It shows a compatible result for all industries FDI in West Java Province,
FDI of labor-intensive industries in Banten Province, and FDI of capital-intensive industries in East Java Province. On the other hand, other provinces show incompatible results.
Theories 6 and 9, both of which are put forward by Makiw in 2003, explain that if there is an increase in wages, the income of the company and the productivity of workers
will also increase. It shows a compatible result for provinces of DKI Jakarta and Banten. Theory 7 (Aschaeur, 2010) explains that if wages are high, the number of workers
decreases–showing compatible result for DKI Jakarta but the other way around for Banten province. Another case is related to theory 10 (Jayne, 2010). If transportation
infrastructure increases, FDI then increases. It shows a compatible result for all provinces. Furthermore, there is a theory that is impossible to prove, namely theory 8 (theory
3 Mankiw, (2003) of the third wage efficiency theory) due to the absence of expected policies or conditions. For example, in theory 8 wages are decreased, so the number of
workers changes. Therefore, it cannot be proven because in Java there was no decreased in wages in the industrial sector.

Value Addes responsed negative and significant to total Factors Production ( Ilyas, et.al, 2010) by 5 %. While the FDI and market share showed the positive and significant by
1 %, too.

2. Methodologies

Methodologies are some variants of methods used to calculate and analyse to prove arguments and theories.

I use three kinds of Methodologies, which are :

a. Econometric Analysis as quatitives calculation;
As a start of this study description, this section relates to the literature study as stated in CHAPTER 2, that the choices of variables and methods refers to the results of the
respective examination. In this study, researcher uses panel data of foreign direct investment (FDI) by industry from 10 (ten) provinces of Sumatra Island, 6 (six) provinces of
Java Island, and 6 (six) provinces of Sulawesi Island from 2009 to 2018. The number of observations is 10 x 22 = 220. Analysis of the data in this study uses regression of 22
provinces cross section panel data approach and time series of the last 10 years (2009-2018). In this case, panel data regression will be applied to the secondary data since it
is bound by the realization of the total foreign direct investment (FDI) by industry. Those 22 provinces specifically are Aceh, North Sumatra, West Sumatra, Riau Islands, Riau,
Jambi, Bengkulu, South Sumatra, Lampung, Banten, DKI Jakarta, West Java, Central Java, DI Yogyakarta, East Java, North Sulawesi, Gorontalo, Central Sulawesi, West Sulawesi,
South Sulawesi, and Southeast Sulawesi. The method employed is panel regarding to the minimum regulation of 220 observations. Relies on the data availability, time series
cannot be applied with respect to the data availability from 2009 to 2018. The observation period is 10 years.

b. Simple scoring ( probit) calculation;

To determine the direction of the investment locations in agricultural sector, it will be carried out by weighing the factors that influence the investment, namely: the field
area, the availability of water sources, the unemployment, and the minimum wages are associated with the forest zones enactment policies. The determination of this
parameter is based on the availability of data at the Central Statistics Agency in the period of 2009–2018.

c. And direct assumption as qualitative method.

I try to grouped the results and the polocies recommendation, between infrastructures developments and the space arrangements. Maybe there were a correlation with the
background, maybe it won’t.

3. Result and Discussions

Result and Discussions are the beginning of analysis from the variables which are predicted affected the use of land the infrastructures development.

The increase in Labor was 1.000 people, correlated with a decrease in capital input of 0.065 trillion rupiah. So these two things are negatively correlated. While the
coefficient of determination is 20%.

Correlation Labor Cost and Capital Input

360

350

340
Capital Input (Trillion Rupiah)

y = -0,0165x + 467,71
330 R² = 0,2077

capital / input value (per

320
Linear (capital / input valu

310

300

290
8200 8400 8600 8800 9000 9200 9400 9600 9800 10000
Labor Amount (Thousand People)

The increase in labor costs amounted to 1 trillion rupiah, correlated with a decrease in capital input of 0.78 trillion rupiah. So these two things are negatively correlated.
While the coefficient of determination is 45%.
 labor cost ( per year) and Capital Inputs in Trillions rupiahs
360
Capital Input (Trillion

340
320
Rupiah)

y = -0,7895x + 367,89 labor cost ( per year) in Trillions rupiahs

300
R² = 0,4539 Linear (labor cost ( per year) in Trillions rupiahs)
280
0 10 20 30 40 50 60 70 80 90 100
Labor cost (Trillion Rupiah)

The increase in 1 unit of MSMEs, correlated with an increase in capital input of 0.0002 trillion rupiah. So these two things are positively correlated. The coefficient of
determination is 98%.

producer / Number of micro and small industries / companies (per year) in unit (hundred)
360
Capital Input (Trillion

340 y = 0,0002x - 387,34

320 R² = 0,9826 producer / Number of micro and small industries /
Rupiah)

companies (per year) in unit (hundred)

300
280 Linear (producer / Number of micro and small
3400000 3450000 3500000 3550000 3600000 3650000 3700000 industries / companies (per year) in unit (hundred))
Micro and Small Industries (Unit)

The increase in 1 Trillion Output, correlated with an increase in capital input of 0.61 trillion rupiah. So these two things are positively correlated. The coefficient of
determination is 99%.

output value (per year) in Trillions rupiahs

360
Capital Input (Trillion

340 y = 0,6161x - 2,8458

320 R² = 0,9941
output value (per year) in Trillions rupiahs
Rupiah)

300
280 Linear (output value (per year) in Trillions
480 490 500 510 520 530 540 550 560 570 580
Output Value (Trillion Rupiah)

The increase in 1 Trillion Value Added, correlated with a decrease in capital input of 0.003 trillion rupiah. So these two things are negatively correlated. While the
coefficient of determination is 0.03%.
 value added (per year) in trillions rupiahs
360

Capital Input (Trillion Rupiah)

350
340
330
y = -0,0037x + 320,71
320 value added (per year) in trillions rupiahs
R² = 0,0003
310
Linear (value added (per year) in trillions rupiahs)
300
290
0 50 100 150 200 250 300 350
Value Added (Trillion Rupiah)

If you look at the graph above, the growth of the number of workers is linear with labor costs, while the input trend seems to be influenced by other things.

Amount and labor cost and input values in Indonesia on the period of time 2013 - 2015
10000 400

Labor cost and Inpput Value (Trillion Rupiah)

Labor Amount (Hundred People)

350
9500
300

9000 250

200
8500 150

100
8000
50

7500 0
2013 2014 2015
Axis Title

labor amount (per year) in people (Hundred) labor cost ( per year) in Trillions rupiahs
capital / input value (per year) in trillions rupiahs Linear (labor amount (per year) in people (Hundred))

The number of MSMEs in Indonesia from year to year has increased, but, this is not linear with value added growth, but linear with output. This possibility is due to the
cost of input materials, raw materials, and services for production experiencing price increases.

It can be seen from the graph of input values that continue to increase even though the number of workers is experiencing a downward trend.
 The number of MSME, Output Values and Value Added in Indonesia during Period of Time 2013 -
2015
3700000 600

Number of Producer of micro and

Output and Value Added (Trillion

3600000

small industtry (Hundred Unit)

3500000 400
3400000 200
3300000
3200000 0

Rupiah)
2013 2014 2015
Tahun

producer / Number of micro and small industries / companies (per year) in unit (hundred)
output value (per year) in Trillions rupiahs
value added (per year) in trillions rupiahs

Production growth has decreased in trend, although the output trend has increased. Seeing the trend of the number of workers and labor costs that are decreasing, this
possibility is due to an increase in the number of MSMEs. Although MSMEs are increasing, the number of workers decreases is very reasonable, because usually the
MSME work system is family, so it is likely that workers working in the MSME sector are not registered as workers. (This needs to be checked).

Input Values, Output Values, and Growth Production in Indonesia during Period of Time 2013 -
2015
600 8

Production Growth (%)

Input and Output Value (Trillion Rupiah)

500
6
400
300 4
200
2
100
0 0
2013 2014 2015
Axis Title

capital / input value (per year) in trillions rupiahs output value (per year) in Trillions rupiahs
production growth (per year) in percent Linear (output value (per year) in Trillions rupiahs)
Linear (output value (per year) in Trillions rupiahs)

The increase in Labor as many as 1 million people, correlated with an increase in capital input of 10 trillion rupiah.

So these two things are positively correlated. The coefficient of determination is 5%.
 Correlation betweeen amount of labor and Input Values in West Region during Period of Time 2013 - 2015
400

Capital Input (Trillion

300 y = 10,541x + 189,46
R² = 0,0511
200

Rupiah)
100
0
0 1 2 3 4 5 6 7 8 9
Labor Amount (Million People)

The increase in Labor Cost amounted to 1 trillion rupiah, correlated with a decrease in capital input of 0.263 trillion rupiah. So these two things are negatively correlated.
While the coefficient of determination is 2%.

Correlation between Input Values and Labor Cost in West Region during Period of Time 2013
- 2014
350

300
Input Value (Trillion Rupiah)

y = -0,2638x + 278,1
250 R² = 0,0266

200

150

100

50

0
0 10 20 30 40 50 60 70 80
Labor Cost (Trillion Rupiah)

The increase in the number of MSMEs as much as ten thousand units, correlated with an increase in capital input of 180 trillion rupiah. So these two things are positively
correlated. While the coefficient of determination is 90%.
 Correlation Between Input Values with the Number of Micro, Small, and Medium
Enterprises in West Region during Period of Time 2013 - 2014
350

y = 180x - 221
300 R² = 0,9067
Input Value (Trillion Rupiah)
250

200

150

100

50

0
2,55 2,6 2,65 2,7 2,75 2,8 2,85 2,9 2,95
Number of micro and small industries (thousand unit)

The increase in the value of output amounted to 1 trillion rupiah, correlated with an increase in capital input of 0.67 trillion rupiah. So these two things are positively
correlated. While the coefficient of determination is 90%.

Correlation Between Input Values and Output Values in West Region during Period 2013 -
2014
350
y = 0,6716x - 22,236
Input Value (Trillion Rupiah)

300 R² = 0,9974

250

200

150

100

50

0
0 100 200 300 400 500 600
Output Value (Trillion Rupiah)

An increase in added value of 1 trillion rupiah, correlated with an increase in capital input of 0.04 trillion rupiah. So these two things are negatively correlated. While the
coefficient of determination is 0.5%.
 Correlation between Inputt Values and Value Added During in West Region during Period of
Time 2013 - 2014
350

Input Value (Trillion Rupiah)

300
y = 0,0429x + 256,59
R² = 0,0052
250

200

150

100

50

0
0 50 100 150 200 250 300
Value Added (Trillion Rupiah)

The decrease in production growth by 1%, correlated with a decrease in input value of 30 trillion rupiah. So these two things are positively correlated. While the coefficient
of determination is 10%.

Correlation Between Input Values with Growth Production in West Region during Period of
Time 2013 - 2014
350

300
Input Value (Trillion Rupiah)

y = -30,293x + 392,23
250 R² = 0,1079

200

150

100

50

0
3,8 3,9 4 4,1 4,2 4,3 4,4 4,5 4,6
Production growth (%)

In the western regions, the decrease in the number of linear labor with a decrease in labor costs is theoretically reasonable, but correlated negatis with input costs /
capital inputs where it is increasing. It is likely that variable cost costs such as raw materials and other services increase, or there may be purchases of technology for
production efficiency.
 Input Values, Labor Cost, and Amount of Labor in West Region during Period of Time 2013 -
2015
9 350
7,9

Input Values and Labor Cost (Trillion Rupiahs)

Amount of Labor ( Thousand Perople)
8 7,1 301 300
7 6,5
257 250
6 237
5 200
4 150
3
100
2 73
1 50
37 39
0 0
2013 2014 2015
Tahun

labor amount (per year) in thousand people capital / input value (per year) in trillion rupiahs
labor cost ( per year) in Trillion rupiahs Linear (labor amount (per year) in thousand people)

The trend line of the number of MSMEs from 2013-2014 increased although not significantly, an increase in the number of linear MSMEs with output values. Theoretically,
if MSMEs increase indeed output will increase, but this data only illustrates the linear relationship of the number of MSMEs with output. If you want to see if the increase
in MSMEs per unit will increase output, then you should use MSME / Output value ratio data, applying also to added value.

Input Values, Labor Cost, and Amount of Labor in West Region during Period of Time 2013 - 2015
600 413 257 482 300
388

Output Values and Values Added

Medium Enterprises ( thousands

400 200
Number of Micro, Small, and

150 181
200 100
0 2,6 2,6 2,9 0

(Trillion Rupiahs)
2013 2014 2015
Units)

Tahun

output value (per year) in trillion

producer / Number of micro and small industries / companies (per year) in Million unit
value added (per year) in trillion
Linear (producer / Number of micro and small industries / companies (per year) in Million unit)

If you look at the chart above, the trend of input and output values is linear. If the input increases, then the output increases. While the increase in production of inputs
and outputs is seen to be negatively correlated with the growth in production costs, this is likely because the industry in 2014 was efficient in production or in conditions
of decreasing return to scale, but in 2015, the growth in input and output values did not correlate with production growth, likely due to price factors.
 Input Values, Output Values, and Production Growth in West Region during Period of Time 2013 -
2015
600 482 5

Growth Production (%)

Input Values and Output
413 388

values(Trilion Rupiahs)
4,56 4,5
400 301
257 237 4,19
4
3,85
200
3,5
0 3
2013 2014 2015
Tahun

capital / input value (per year) in trillion rupiahs output value (per year) in trillion production growth (per year) in percent

An increase in the number of workers as many as one million people, correlated with an increase in capital input of 1.67 trillion rupiah. So these two things are positively
correlated. The coefficient of determination is 8%. But, the 2014 data on the number of labor data is an outlier so that the relationship.

Correlation Between Input Values with Amount of Labor in East Region during Period of Time 2013 - 2014
80
y = 1,6773x + 42,758
70 R² = 0,9707
Capital Input (Trillion Rupiah)

60

50

40

30

20

10

0
0 2 4 6 8 10 12 14 16 18 20
Labor Amount (Million People)

An increase in labor costs of 1 trillion rupiah, correlated with a decrease in capital input of 1.7 trillion rupiah. So these two things are negatively correlated. While the
coefficient of determination is 7%.
 Correlation Between Input Values and Labor Cost in East Region during Period of Time 2013 - 2014
80

Capital Input (Trillion Rupiah)

70
60
y = -1,7105x + 72,342
50
R² = 0,0717
40
30
20
10
0
0 2 4 6 8 10 12 14
Labor Cost (Trillion Rupiah)

The increase in the number of MSMEs as many as one thousand units, correlated with an increase in capital input of 0.12 trillion rupiah. So these two things are positively
correlated. While the coefficient of determination is 33%.

Correlation between input values and the amount of Micro, Small and Medium Enterprises in East Region
during period of time 2013 - 2014
80

70
Capital Input (Trillion Rupiah)

y = 0,121x - 40,094
60 R² = 0,335
50

40

30

20

10

0
0 100 200 300 400 500 600 700 800 900
Amount of Small and Micro Industries (Thousand Unit)

The increase in the number of MSMEs as many as one thousand units, correlated with a decrease in capital input of 0.79 trillion rupiah. So these two things are negatively
correlated. The coefficient of determination is 99%.
 Correlation between Input Values and the Value Added in East Region during Period of Time 2013 - 2014
80

70

Capital Input (Trillion Rupiah)

60

50
y = -0,7683x + 76,949
40 R² = 0,9964

30

20

10

0
0 5 10 15 20 25 30 35 40 45 50
Value Added (Trillion Rupiah)

The increase in the number of MSMEs as many as one thousand units, correlated with an increase in capital input of 0.62 trillion rupiah. So these two things are positively
correlated. The coefficient of determination is 99%.

Correlation between Inout Values and Output Values in East Region during Period of Time 2013 - 2014
80
Capital Input (Trillion

60 y = 0,6272x - 5,757
R² = 0,9935
40
Rupiah)

20
0
0 20 40 60 80 100 120 140
Output Value (Trillion Rupiah)

An increase in production growth of 1%, correlated with an increase in capital input of 1.29 trillion rupiah. So these two things are positively correlated. While the
coefficient of determination is 7%.

Correlation between Input Values with Production Growth in East Region during Period of Time 2013 - 2014
100
(Trillion Rupiah)

y = 1,2947x + 45,396
Capital Input

50
R² = 0,0746
0
0 2 4 6 8 10 12
Production Growth (%)

In 2014, the number of workers increased significantly, but fell back in 2015 (we need to find out why). If you look at the graph above, the input value and the amount
of labor have a linear correlation while the labor costs are negatively correlated.
 Amount of Labour, Input Values, and Labor Cost in East Region during Period of Time 2013 - 2015
20 80
18

Capital Input and Labor Cost (Trillion Rupiah)

18 73

Labor Amount (Million People)

70
16
60
14
12 48 50
43
10 40
8 30
6
20
4
13
1,8 1,5
2 10 8 10

0 0
2013 2014 2015
Year

labor amount (per year) in million people capital / input value (per year) in trillion rupiahs

labor cost ( per year) in Trillion rupiahs Linear (labor amount (per year) in million people)

If you look at the data above, then the output value and added value are negatively correlated, while the added value with the number of MSMEs is positively correlated,
it's just that in 2014 it became an outlier.

Number of Micro,Small, and Medium Enterprises; Output Values and Value Added in East Region during Period of Time 2013
- 2015
1000 845 140
807

Output Value and Value Added

Number of Producer (Thousand Unit)

125 120
800 697
100
600 88 80

(Trillion Rupiah)
76
400 60
43 39 40
200
20
0 5 0
2013 2014 2015
Axis Title

producer / Number of micro and small industries / companies (per year) in thousand unit output value (per year) in trillion value added (per year) in trillion

If you look at the chart above, the input and output trends are linear. While the trend of production growth seems to be influenced by other things.

If you refer to the previous data, the number of workers increased sharply in 2014, followed by production growth of approximately 3% and continued to experience a
significant increase in the number of production in 2015, even though the number of workers decreased significantly in 2015 (it is necessary to find out why).
 Production Growth, Input Values and Output Values in East Region during Period of Time 2013 - 2015
12 140
10,29

Output and Input Value (Trillion Rupiah)

125

Production Growth (%)

10 120
7,63 100
8
88
76 80
6 73
60
3,56
4 43 48
40
2 20
0 0
2013 2014 2015
Year

production growth (per year) in percent output value (per year) in trillion capital / input value (per year) in trillion rupiahs

From Productivity of Textiles and Appareals Industries, the number of valleys, slopes, and lands in Java are still the biggest in number. The same condition are happened in
Bali and Nusa Tenggara and Kalimantan. The reverse condition are in Sulawesi and Sumatera, in condition that the number of valleys, slopes, and lands in Java are still are
more than Bali and Nusa Tenggara and Kalimantan, but the productivity of Textiles and Appareals Industries are less.

Table 3
Average Minimum Wages in Each Island/Archipelago during 2009-2018
Island/Archipelago Average minimum wages Scoring
Sumatera 1.982.696 4
Jawa 1.672.083 6
Bali dan Nusa Tenggara 1.571.850 7
Kalimantan 2.043.720,2 2
Sulawesi 1.984.833 3
Maluku 1.728.133 5
Papua 2.336.000 1
Source: BPS, 2019

Based on the average minimum wages in each island/archipelago, the scoring is done by giving the highest score for the island/archipelago with the lowest minimum wages
and the lowest score for the island/archipelago with the highest minimum wages.
Table 4
Clean water production capacity in each island/archipelago during 2009-2018
Island/Archipelago Clean water production capacity Scoring
6
Sumatera 47924
7
Jawa 105295
5
Bali dan Nusa Tenggara 23444
4
Kalimantan 21866
3
Sulawesi 20221
2
Maluku 2339
1
Papua 1983

Source: BPS, 2019

 From the amount of clean water production in each island island/archipelago, the scoring is done by giving the
highest score for the island/archipelago with the highest amount of clean water production while the lowest
score is for the island/archipelago with the least amount of clean water production.

Table 5
Unemployment percentage in each island/archipelago during 2009-2018

Island/Archipelago Unemployment Scoring

5
Sumatera
5,01
6
Jawa
5,80
1
Bali dan Nusa Tenggara
2,70
4
Kalimantan
4,92
2
Sulawesi
4,35
7
Maluku
6,02
3
Papua
4,75
Source: BPS, 2019

from the percentage of unemployment in each island/archipelago, scoring is done by giving the highest score for the island/archipelago with the highest percentage of
unemployment while the lowest score is for the island/archipelago with the least percentage of unemployment.
Table 6
Field area in each island/archipelago during 2009-2018
Scoring
Island/Archipelago Field area
6
Sumatera 2.200.950
7
Jawa 3.223.523
3
Bali dan Nusa Tenggara 517.826
5
Kalimantan 1.055.877
4
Sulawesi 1.009.453
1
Maluku 25.196
2
Papua 54.588
Source: BPS, 2019

From the number of field areas in each island/archipelago, the scoring is done by giving the highest score for the island/archipelago with the highest amount of field area
while the lowest score is for the island/archipelago with the least percentage of field area.
Based on Table about Indication Location of Prioritized Zones according to National Spatial Planning and The Table entitled Value Added Realization, still with theme of Industry
of Textiles and Appareals in every provinces during period 2010 – 2014 showed that there were unsuitable condition of indication locations and that’s realization.
From 32provinces, 27 of it are suitable (Aceh, Sumatera Utara, Sumatera Barat, Riau, Kepulauan Riau, Jambi, Sumatera Selatan, Bangka Belitung, Lampung, Daerah Ibukota
Jakarta, Banten, Jawa Barat, Jawa Tengah, Daerah Ibukota Yogyakarta, Jawa Timur, Bali, Nusa Tenggara Barat, Nusa Tenggara Timur, Kalimantan Barat, Kalimantan Tengah,
Kalimantan Selatan, Kalimantan Timur, Sulawesi Utara, Sulawesi Tengah, Sulawesi Selatan dan Sulawesi Barat),while 5 of them are not (Bengkulu, Maluku, Maluku Utara,
Papua Barat, dan Papua). And another province had recorded it’s realization eventough not listed yet in National Spatial Planning ( Gorontalo).
If we looked more details, there are connection with survivability of business actors. If we compared with the business permit which are released during 2010 – 2014 there
were a unconsistency of value added and also the enlargement of the scales of industries ( textiles to appareals).
While compared with the regional development policies there were 7 provinces with run a bussines in two lines (circular provinces), while other 20 are not ( linear Provices).

4. Conclusions and Policies Recommendations

Conclusion

Conclusion are list of End Calculations from relevant datas and calculations.

Based on Econometrics Analysis, there were some result as that are : valleys and slopes had negative but significant relations at alfa 1 % to productivity of Textiles and
Appareal Industries. While nominal wages also showed the same result.
There are several variables one of which is the minimum wages which is a control variable that is affected by the foreign direct investment (FDI) inflows. On the other
hand, the electricity variable, CPI, and dummy of island or islands spatial planning are variables affect significantly to the flow of FDI by industry in Sumatra, Java, and Sulawesi.
At the same time, other variables, namely road and labor, do not significantly affect the flow of FDI by industry in those three islands.

Based on Theory Analysis can be sum up that :

d. The number of Labors and Capital Input in Western Region showed the positively relationship with the coefficient 5 %;
e. Production growth and Capital Input in Eastern Region showed the positively relationship with the coefficient 7 %;
f. Value Added and Capital Input in Western Region showed the negatively relationship with the coefficient 0,5 %;
g. Value Added and Capital Input in all of Indonesia Region showed the negatively relationship with the coefficient 0,03 %;

Analysis and results are obtained by sum up the scores of each variable as follows:
Table 7
The scoring results of each variable in each island/archipelago
Island/Archipelago Average Clean Water Unemployment Field Area Total Scoring
Minimum Production
Wages Capacity
Sumatera 4 6 5 6 21
Jawa 6 7 6 7 26
Bali dan Nusa 7 5 1 3 16
Tenggara
Kalimantan 2 4 4 5 15
Sulawesi 3 3 2 4 12
Maluku 5 2 7 1 15
Papua 1 1 3 2 7
Source: researcher’s analysis, 2021
The calculation shows the following results: The highest score is Java Island with total score of 26. The second place is Sumatra island with total score of 21, Bali and Nusa
Tenggara in the third place with total score of 16. Kalimantan and Maluku is 15 at the score, while in rank 6 and 7 are Sulawesi and Papua with total scores of 12 and 7,
respectively.

Table 8
The Comparison of the total scoring and the change in the number of forest zones
Island/Archipelago The need for Forest zone Changes
non-forest zone
Sumatera 2 3 Addition
Jawa 1 6 Reduction
Bali dan Nusa Tenggara 3 7 Reduction
Kalimantan 5 2 Reduction
Sulawesi 6 4 Addition
Maluku 4 5 Reduction
Papua 7 1 Unchanged
source: researcher’s analysis, 2021
Policies Recommendations

Policies Recommendation are aimed to address the gaps between current condition and future goals.

In therm of arrangement policies related to permit and funding, the Central and Local Government have to make priorities based on significancies variables impacted
productivity of Textiles and Appareal Industries. Which are : increasing nominal wages, reducing the industries locations on the valleys and slopes to control the fluctuation.

In formulating licensing and funding policies, the central government and local governments need to scale up priorities according to the significance of the variables affecting
FDI flows and should also prioritize increasing the amount of electricity distribution to industry and CPI to encourage FDI by industry inflows in Sumatra, Java, and Sulawesi.
In addition, government should increase the minimum wages and limit the area of industrial area to control the flow of FDI by industrial sector in Java, Sumatra, and Sulawesi.

Linkaging with Industry Sector, there are several recommendation as follows:

a. Increasing the number of Labors , Capital Input, and Value Added in Eastern Region; and
b. Increasing Growth Production and Capital Inputs in Western Region.

When it comes to forest zone enactment policy, the proposed policy recommendations are as follows:
• Protecting forest zones in Papua Island according to the current conditions;
• Adding forest zones in Sumatera and Sulawesi;
• Reducing the forest zones in Java, Kalimantan, Bali and Nusa Tenggara, and also Maluku.

Re-arranging of transportation flow ( in and out) of Indonesia as pictures below:

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