Abstract:

Indonesia's economic history, marked by continuous development and intermittent contractions during economic recessions, highlights the vulnerability of dependency on foreign nations, especially for essential commodities. To achieve economic self-reliance, Indonesia, with its substantial population and abundant natural resources, needs to efficiently process these resources for domestic purposes. Sectoral analysis, using Input-Output (I-O) tables, provides valuable insights into historically engaged sectors, their roles in production, input absorption, and intersectoral dynamics. Integrating sectoral and regional perspectives, focusing on key sectors within each province, can stimulate regional development, foster national economic growth, and promote regional equity. Understanding goods flow within sectors and regions is vital for region-centric development strategies. The 2016 Indonesian Interregional Input-Output (IRIO) Table, covering 34 provincial economies and 52 economic sectors within each province, offers extensive insights into Indonesia's goods and services movement. This study utilizes the IRIO dataset to conduct simulations, identifying sectoral potential, assessing the responsiveness of sectoral development strategies, and exploring impacts on key economic indicators. The research aims to identify leading sectors, assess investment implications, evaluate the impact of investments on provincial and national economies, and understand sectoral consequences, trade patterns, and domestic goods distribution dynamics. The research provides a foundational framework for sectoral development strategies, offers insights into regional-based domestic economies, and suggests strategies to reduce import dependency, contributing to Indonesia's economic self-reliance.

Keywords:

Indonesia, interregional input-output, regional development, investment impact, sectoral analysis.

How to Cite:

Firmansyah, Franciscus Xaverius Sugiyanto, Purbayu Budi Santosa and Siti Hilmiati Azyzia. Indonesia's Sectoral Economic Development Strategy: Investment Simulation Using Interregional Input-Output Analysis. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a306/