issn : 2302 - 9595 volume 2 no 2 juli...

ISSN : 2302 - 9595

Volume 2 No 2 Juli 2013

Pola Dan Implementasi Corparate Social Responsibility

Sebagai Upaya Mendukung Pembangunan Berkelanjutan Sutarni, Analianasari

Analisis Konsep Spatial Approach Untuk Merumuskan Strategi Penanggulangan Kemiskinan Multidimensional di Indonesia

Asih Murwiati

Dampak Saluran Distribusi Terhadap Inflasi

(Studi Terhadap Beberapa Komoditas Di Kota Bandarlampung) Nairobi

Regional Fiscal Disparity In North Maluku Province Chairullah Amin, Nurdin I. Muhammad

Dampak Pembubaran Badan Pelaksana Kegiatan Usaha Hulu

Minyak Dan Gas Bumi (Bp Migas) Terhadap Saham Perusahaan Pertambangan Minyak Dan Gas

Di Bursa Efek Indonesia Tona Aurora Lubis

Analisis Keuntungan Usaha Abon Ikan Lele

Pada Kelompok Wanita Tani (Kwt) Pangan Lestari Di Kecamatan Pagelaran

Dwi Eva Nirmagustina,Sri Handayani, Chandra Utami W

Analisis Struktur Perekonomian Atas Dasar Tenaga Kerja Di Provinsi Lampung

(Melalui Pendekatan Teknik Perencanaan Pembangunan : Analisis Shift-Share)

Anton Suprayogi, Ida Budiarty)

Gedung B Fakultas Ekonomi dan Bisnis Unila

Jl. Soemantri Brojonegoro No 1 Gedongmeneng

Bandar Lampung 35145

Chairullah Amin , Nurdin I. Muhammad

Regional Fiscal Disparity In North Maluku Province

JEP-Volume 2 No.2, Juli 2013

REGIONAL FISCAL DISPARITY IN NORTH MALUKU PROVINCE

By :

Chairullah Amin SE,. M.Si and Nurdin I. Muhammad SE,.M.Si (Lecture Of Economics faculty, Khairun University, Ternate)

ABSTRACT

The research aime to analyse regional fiscal disparity in north Maluku

province. By using data of APBD in all districts of north Maluku since 2006-

2011, it will be able to conduct how fiscal disparity happened in North Maluku.

To achive the goal, the research is done explorative by using secondary

data of each districts and city 2006 – 2011, it then analysed by qualitatif

descriptive with approach using Williamson Index and Theil Index of several

variables in Regional Budget (APBD) such as original income (PAD), Sharing

Revenue (DBH), and Budget Alocation of investment Spending (DAU).

The result shows that since fiscal decentralization done, the fiscal gap

between district and city in North Maluku province is extremely high. It seen

from Williamson Index and Theil Index of PAD role, sharing revenue (DBH),

allocation of investment spending (DAU) and routine spending are too high.

So, it needed a good policy of regional development in which it can decrease

index of fiscal gap. Other side, local government should develop the resources

of original income (PAD) in order to increase the regional revenue.

Keyword : Fiscal Disparity, Indeks Williamson, Theil Index

Introduction

Disparity is a phenomena that happened in all countries in the word through

in underdeveloped, developed, and industrial country. So that the inequality is

an unseparated component in development activities as same as other

problems that it is not avoidable moreover in the early development stage, but

the bigger disparity must be prevented as soon as possible.

Since era of regional autonomy has been done, north Maluku province has

an experience of the highest disparity signal. As same as other regions in

Chairullah Amin SE,. M.Si and Nurdin I. Muhammad SE,.M.Si



172

Indonesia, the income inequality between residence and city in this province is

enough worried. There are some residence has good and fast in moving, but

the others are still bad. It can be seen by the income percapita, population,

investment, and disparity infrastructure quality (Amin, 2012).

Many study of income disparity between regional in Indonesia have been

done by some researchers. But for this one, we would like to discuss in fiscal

aspect focused to research region in north Maluku province. One of the

youngest provinces which has 12 year since separated in 1999 as same as

autonomy government era.

Problems

As one of the island provinces in Indonesia, North Maluku will face many

development challenges with its complexities as geographically almost of it’s

region is oceanic. It’s clear to influence the number of income or transfer fund

from central government that based on population account and wide regional

in which according to land not sea. The other side, it also has many of small

islands whereas distance among one island to others have to use very

unlimited sea transportations. This situation can effect to equality development

process between regions.

Specifically, the problems of the study will formulate into three questions (1)

How far the fiscal disparity happened in North Maluku Province ? (2) What

factors influences the inequality of fiscal ? (3) How the fiscal policy to reduce

the disparity ?

The study is done in order to know how fiscal disparity between residence

or city happened in North Maluku Province, to identified factors that caused

the inequality and what the best policy to prevent high level disparity.

Research Methodology

The study will be done in North Maluku Province of its all residences and

cities. The type of data used in this study is secondary data such as Local

Government Report of Finance, 2006-2011 that given by Finance Auditing

Agent of North Maluku (BPK).

To measure level of fiscal disparity will be analysed descriptively. Firstly

converted PDRB percapita, PAD, DBH, and DAU with amount of population by




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using two measurement indicators, Williamson’s Coefficient of Variation (CVw)

and Theil Index.

The formula for measuring the CVw is as follow :

n

CVw 1 √(YiY )2 Pi

Y I = 1 P

Where : Y = the average per capita income (output), PAD, DBH and DAU of the whole regency Yi = the per capita income (output), PAD, DBH, and DAU in regency i Pi = the population of regency i P = the population of province The formula for Theil Index is as follow :

n yi / Y

Td = yij log

i=1 Y ni / N Where : Y = the average per capita income, PAD, DBH and DAU of the whole regency Yi = the per capita income, PAD, DBH, and DAU in regency i ni = the population of regency i N = the population of province

Results And Discussion

Economy Profile Of North Maluku Province

Until today, the measurement of development performance of region or

country is still based on its economy growth. Whereas, in fact there is other

suitable assessment to measure successfully development is degree of

people wealth seen from its equality dimension. The development that

pursued high level growth will produce any inequality of people wealth

particularly between rich and poor man and inter-regional disparity.

High degree of economy growth of north Maluku province would hopefully

be a good starting for toward devlopment. The figure that can be seen as

follow.




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Figure 1. Percentage of Economy Growth of North Maluku Province Year 2005-2011 (%)

Source : BPS (processed)

Concept of good economy growth must be followed by success in others

aspects such as reducing of poverty degree, unemployment, and regional

economic disparity. In figure 2 as follow show the percentage of poverty and

unemployment that happened in north Maluku.

Figure 2. Percentage of Poverty and Unemployment Degree Of North Maluku Province Year 2005-2011 (%)

Source : BPS Malut (processed)

According to the picture from 2005 to 2011, the poverty degree was

decreasing from 12,68% in 2005 to 11,28% in 2008 and 9,18% in 2011. It is

same with unemployment level also decreasing from 8,88% in 2005 to 6,48%

in 2008 and 5,55% in 2011. This achievement show that economy growth can

effect positively to reduce number of poverty and jobless in north Maluku

province.

But if we see from data of number of poor per cities and residences show

more conspicuous disparity tendency. The number of poor man inter-regional

and others is still high. It can be seen in figure 3 as follow.




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Figure 3. Percentage of Poor of City and Residence in North Maluku, 2010

Source : BPS Malut (2011)

In 2010, central Halmahera is regency which has highest percentage of

poverty that approximately to 25%, then east Halmahera 19%, West

Halmahera 13%, Morotai 11%, south Halmahera 10%, sula 9%, North

Halmahera 8% and Tidore 7%. While Ternate is city which has number of low

poverty as 5%.

The financial Local Government of Regency and City In North Maluku

1. Role of Local Expenditure to Regional Economy

One of purposes implemented fiscal decentralization concept is how

financial local government can directly contribute to regional economy that in

this case it will be able to stimulate the increasing of regional capital output in

PDRB. That indicator can be seen by know the ratio of government

expenditure to PDRB of each regency.

Table 1. Ratio of Local Government Expenditure to PDRB of Disctrict /city North Maluku Province 2006-2011 (%)

Dictrict/City Ratio of Local Government Expenditure to PDRB

2006 2007 2008 2009 2010 2011

West Halmahera 99 167 176 158 90 94

South Halmahera 70 85 103 85 86 111

Central Halmahera 109 52 185 168 41 45

East Halmahera 137 52 190 229 88 86

North Halmahera 68 82 125 111 44 50

Sula 105 124 137 134 38 41

Ternate 63 76 83 85 168 186

Tidore 100 127 141 135 117 128

Morotai - - - -

Average 94 121 143 138 84 93 Source : BPS Malut (Processed)




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Based on ratio accounted above, it can be commented generally the

contribution of spending local government is very high. Until 2011, ratio rate of

local expenditure achieved 94% in 2006 and then up to 138% in 2008 and

93% in 2011. The high of expenditure local show that the highly magnitude of

role of allocation of local government expenses to local revenue in making of

PDRB. It can be confirmed that the role of government consumption highly

affect to the economy growth of regency or city in north Maluku compared to

the foreign direct investment.

The magnitude of the ratio also show that all regions are viewed still high

defendence from central government fund in order to stimulate their economy

growths. It can be seen from the increasing of allocation of fund from central

governemnet such as DBH, DAU and DAK.

1. Local Original Income

Local revenue is one of the most simple parameter to measure the

independence of a region looked from financial aspect or fund. The effort

therefore for increasing of “PAD” must be a priority programme in local

governments in order to augment the income sources to finance the

developing.

But the question then is whether PAD can improve the performance of the

economic development and welfare of the community. It can be seen from the

ratio of PAD to the total of local income of regency or city in north Maluku as

follow.

Table 2. Ratio of “PAD” to Total Income of Regency or city in North Maluku Province

Regency/City Ratio “PAD” to Total Income (%)

Average 2006 2007 2008 2009 2010 2011

West Halmahera 1.62 1.63 0.99 1.16 1.23 1.25 1.31

South Halmahera 5.65 5.95 8.81 5 2.6 5.48 5.58

Central Halmahera 2.2 2.79 3.55 2.95 2.55 1.97 2.67

East Halmahera 10.41 1.08 6.11 7.77 9.04 12.8 7.87

North Halmahera 2.17 3.93 4.72 3.66 15 19.8 8.21

Sula Islands 0.61 1.92 9.11 2.44 2.19 1.26 2.92

Ternate 5.72 5.36 5.73 5.04 4.67 5.94 5.41

TIDORE 2.17 2.54 2.68 2.75 1.77 1.96 2.31

Average 3.82 3.15 5.21 3.85 4.88 6.32

Source : BPK Malut (Prosecced)




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According to average, the highest ratio of PAD to local income of city and

regency is 5,32% in 2011. If seen by regency, looked that Ternate, east

Halmahera, south Halmahera, and east Halmahera are regency of which

“PAD” ratio is up to 5 percent. Whether Tidore, west Halmahera, central

Halmahera and Sula are regency that has ratio of PAD under 5 percent.

This condition illustrates that in general the original local revenue or “PAD”

of area districts or cities in North Maluku province is still very small

contribution to the total amount of local income in order to finance further

development activities are expected to affect the performance of regional

economic growth.

Table 3. “PAD” Percapita of District/City in North Maluku Province 2006-2011 (IDR)

District / City PAD Percapita

2006 2007 2008 2009 2010 2011

West Halmahera 44,383.98 53,055.88 36,558.06 41,700.64 40,785.56 48,815.01

South Halmahera 99,062.69 148,735.53 222,919.91 112,954.68 58,996.89 158,544.47

Central Halmahera 139,587.87 227,948.54 293,384.30 248,372.01 195,065.69 182,780.25

East Halmahera 442,000.60 63,831.14 385,747.63 452,563.39 519,310.63 866,070.28

North Halmahera 42,548.78 102,798.68 128,547.39 96,482.20 341,046.47 640,984.11

Sula Islands 14,256.72 51,992.05 307,089.82 77,686.36 61,636.40 43,732.63

Ternate 102,223.07 108,499.48 132,143.68 128,241.78 115,468.05 164,672.69

TIDORE 62,896.60 89,847.32 97,359.67 102,796.27 76,921.32 100,053.09

Source : BPK Malut (Processed)

If viewed from the PAD per capita, it appears that during the observation

period that the per capita rate of PAD district or city tends to fluctuate in line

with revenue’s changes of local’s PAD receipt. It describes that local income

from PAD side viewed still unstable. For south Halmahera, the PAD per capita

in 2008 up to IDR 222,919.91 then down to IDR 158,544.47 in 2011. North

Halmahera while increasing of revenue per capita is high enough that in 2008

amounted to IDR 128,547.39 then rise to IDR 640,984.11 in 2011.

The table above also shows that the East Halmahera is the district with the

highest per capita rate of PAD compared with other districts, namely in 2011

amounted to IDR 866,070.28. While west Halmahera is the district which has

lowest per capita revenue in north Maluku.




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2. Sharing Fund and General Allocation Fund

Fiscal decentralization policies have consequences on the size

dependence of the central area in need of development finance in the region.

Since decentralization, until recently financial transfers from the central

government is the main source of financing of the district or city. Fiscal

dependence on the center showed that the region has not been able to

finance its own development needs.

This is also reflected in all district or city in North Maluku province. The

widely dependence can be seen from year to year that the number of

receiving financial assistance from the center in the form of revenue sharing,

the General Allocation, and the Special Allocation Fund are still very large.

Table 4. Ratio of Sharing Funds to Total Income of District or City, 2006-

2011

District / City Ratio of DBH to Total Income (%)

2006 2007 2008 2009 2010 2011

West Halmahera 9,45 14,5 11,4 9,9 9,1 8,9

South Halmahera 6,7 21,8 12,0 10,3 16,3 10,6

Central Halmahera 1,31 17,4 14,9 11,7 13,6 10,7

East Halmahera 10,5 12,2 21,5 17,8 19,5 18,2

North Halmahera 6,2 19,6 14,7 13,5 14,1 8,0

Sula Islands 11,6 12,0 8,9 11,1 10,7 8,9

Ternate 14,8 15,4 11,2 10,3 12,3 9,6

TIDORE 10,5 13,5 11,8 10,1 10,1 8,1

Average 21,0 15,8 13,3 11,8 13,2 10,4

Source : BPK Malut (Processed) Table 5. Ratio of DAU to Total Income of District,City 2006-2011 (%)

District / City Rasto of DAU to Total Income

2006 2007 2008 2009 2010 2011

West Halmahera 68,4 61,3 61,4 61,0 70,6 65,5

South Halmahera 75,3 57,9 62,0 68,3 68,2 61,8

Central Halmahera 65,6 59,4 60,0 60,4 68,0 63,0

East Halmahera 61,6 50,8 47,7 47,4 49,8 48,1

North Halmahera 3,8 62,0 66,4 47,1 79,1 38,8

Sula Islands 70,9 68,2 60,3 56,4 63,4 63,1

Ternate 69,0 71,2 61,0 57,1 61,3 59,5

TIDORE 13,8 68,6 68,4 66,7 67,4 66,8

Average 53,5 62,4 60,9 58,0 65,9 58,3





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From the table, the ratio of DBH to total revenue ratio indicates the score of

ratio is still very small. This condition illustrates that the management of

natural resources in the city district of North Maluku province is still not

optimally in order to increase the local revenue from tax sector. It can be seen

that east Halmahera has highest ratio compared with others districts. It also

similarly viewed from DBH and DAU per capita, it appears from year to year

due to an increase in the level of acceptance of the revenue-sharing and block

grants from the center. It can be seen in the table 6 and 7 as follow.

Table 6. DBH Per capita of District / City 2006-2011 (IDR)

District / City

DBH Per capita of District or City

2006 2007 2008 2009 2010 2011 West Halmahera

2,583,796.06 472,797.95 418,865.79 354,910.67 302,651.74 346,527.80

South Halmahera

117,316.90 545,712.41 303,121.68 231,918.68 369,782.25 306,258.36

Central Halmahera

830,574.01 1,419,011.78 1,230,578.10 984,986.19 1,041,185.37 989,792.25

East Halmahera

447,268.72 721,084.04 1,357,748.35 1,037,942.53 1,121,483.28 1,227,563.46

North Halmahera

122,188.55 512,601.66 400,029.79 354,852.63 320,402.54 259,157.18

Sula Islands 272,958.48 323,796.06 300,227.43 354,824.13 300,565.23 308,169.75

Ternate 264,638.45 311,034.46 257,774.38 262,078.45 303,747.46 267,114.75

TIDORE 303,285.06 479,584.82 430,085.89 378,254.53 435,009.99 409,939.40

Source : BPS Malut (Processed) Tabel 7. DAU Per Capita, District/City 2006-2011 (IDR)

District / City

DAU Per Capita of District / City

2006 2007 2008 2009 2010 2011 West Halmahera 1,868,982.32

2,000,040.49

2,256,389.09 2,188,963.82

2,337,638.09 2,557,666.17

South Halmahera 1,319,214.68

1,447,158.89

1,570,526.17 1,541,482.12

1,544,461.27 1,786,254.51

Central Halmahera

4,156,959.22

4,846,833.22

4,958,645.21 5,093,899.98

5,202,335.70 5,830,950.87

East Halmahera

2,613,932.49

3,000,081.83

3,013,952.79 2,758,384.68

2,861,871.55 3,240,313.35

North Halmahera 74,683.90

1,624,240.11

1,809,847.23 1,240,190.77

1,793,744.51 1,250,872.60

Sula Islands 1,660,295.51

1,843,511.31

2,031,446.42 1,794,506.18

1,783,537.08 2,179,608.89

Ternate 1,234,437.91

1,440,124.28

1,406,238.55 1,452,361.79

1,514,686.56 1,650,303.68

TIDORE 399,707.26

2,430,940.28

2,482,850.07 2,490,021.76

2,914,032.15 3,397,488.43

Source : BPS Malut (Processed)




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It appears from the above table shows that the Central Halmahera district

having the largest per-capita rate of DAU of IDR 5,830,950.87 in 2011 and the

lowest is North Halmahera regency of IDR 74,683.90 in 2006.

DAU dominant role in the total revenue receipts of the district or city in

North Maluku province can be seen in Figure 4 below. It seems clearly that the

financing of development in local government is still very large dependence on

funding from the central government. Portion of role PAD in ability to finance

their development activities is very small.

Figure 4. Ratio of PAD, DBH dan DAU Average toTotal Income of District,

City in North Maluku Province 2006 -2011

Source : BPK Malut (processed)

The Finding Research

When implemented, fiscal decentralization has not yet successfully to

create a local fund where it could be self-sufficient to finance its development.

It is viewed from level of the central portion of the funding ratio of DAU to

earnings ratio compared with PAD whose numbers are still very small. As well

as level of DBH ratio of tax revenue is still small as part of local revenue

sources.

Although the funding of the center is still a major source of financing

development activities in local, but it is expected to have an impact on income

distribution in all districts or cities based on the potential owned superior so it

can make a good effect on improving the welfare of the people especially the

poor. The issue is whether the allocation of funds from the center has a large

positive impact on income distribution among districts or municipalities in the

province of North Maluku.




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The Disparity Income Among Districts and Cities in North Maluku Province

Value of income inequality among districts / cities can be seen in Table 8.

Presented in the table with an index of income inequality by GDP indicators pe

capita based on constant prices.

Table 8. Index of Income Disparity in North Maluku Province 2000-2011

Year PDRB Per capita

Williamson Theil Index

2000 0.858 0.80

2001 0.858 0.788

2002 0.857 0.956

2003 0.857 1.024

2004 0.857 1.022

2005 0.857 1.016

2006 0.857 1.022

2007 0.857 1.021

2008 0.840 1.045

2009 0.842 1.041

2010 0.842 1.059

2011 0.841 1.059 Source : BPS Prov.Malut (Processed)

When viewed in the aggregate, index of income inequality of North Maluku

province using visible Williamson index decreased from 0.858 in 2000 to 0.841

in 2011. However, if viewed from the Theil index, the level of inequality is likely

to rise even 0.80 in 2000 to 1,059 in 2011. This suggests that the level of

income inequality among districts / municipalities in the province of North

Maluku is still very high.

The high rates of inequality were allegedly caused more due to

geographical factors consisting of small islands and most of the territory is

ocean. Moreover the distribution of community settlement is unequal. They are

more likely to choose living in small islands and on the coast. In addition, the

economic infrastructure facilities is still very minimal. It certainly greatly affect

the smooth acces to distribution and marketing of local economy products so

that it can increase the amout of local revenue.




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Figure 5. Index of Williamson and Theil of Province of north Maluku

2000-2011


It also allows that the use of Theil index can view the income inequality at

the size of each district or city. Appears in table 9 below shows the variation of

Theil inequality index of each district or city in North Maluku province from

year 2000 to 2011.

Table 9. Theil Index of Each District or City in North Maluku Province

District/City Theil Indeks

Average

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

West Halmahera

0.46 0.46 0.59 0.64 0.63 0.61 0.61 0.6 0.66 0.65 0.66 0.65 0.601

Central Halmahera

2.41 2.4 2.67 2.81 2.83 2.79 2.77 2.72 2.95 2.92 2.96 2.97 2.76

North Halmahera

0.64 0.62 0.8 0.85 0.82 0.78 0.77 0.76 0.57 0.56 0.58 0.58 0.69

East Halmahera 1.09 1.06 1.22 1.28 1.26 1.24 1.24 1.28 1.39 1.38 1.38 1.38 1.26

South Halmahera

0.34 0.33 0.49 0.55 0.55 0.54 0.56 0.56 0.63 0.63 0.64 1.63 0.62

Ternate 0.50 0.48 0.63 0.7 0.69 1.69 0.70 0.71 0.8 0.81 0.83 0.85 0.78

Tidore 0.59 0.58 0.73 0.79 0.8 0.89 0.91 0.92 1.02 1.02 1.04 1.03 0.86

Sula 0.34 0.34 0.49 0.54 0.56 0.56 0.57 0.58 0.65 0.65 0.67 0.67 0.55

Morotai

0.7 0.71 0.72 0.72 0.71


It appears that the district of Central Halmahera and East Halmahera is the

regency that has the greatest level of inequality that is an average of 2.76 and

1.26. It is quite ironic considering the condition of natural resources owned by

the two districts are very rich compared to other districts where there are some




183

nickel mining company that has been making production activities along

several decades. This condition is exacerbated by land transport access is still

limited, and also the connecting road to get

to the two districts in the state were severely damaged. Road infrastructure

was destroyed caused both of districts are very isolated. Thus since 2011 the

local government of each district has worked hard to build the land

infrastructure so that it could be enter and exit smoothly and then the

circulation of the economy can be developed.

For Ternate, Theil inequality index is likely to increase in 2000 of 0.50 rose

to 0.70 in 2006 and again to 0.85 in 2011. Increased levels of inequality in the

city of Ternate in the expected dynamics caused by the rapid development of

the city with the largest growth center in the province of North Maluku so the

current can’t be unstoppable urbanization. By sector, the city of Ternate just

rely on trade, the hotel and the service sector as a source of local revenue

income due to the small total area thus to the development of other sectors

such as agriculture and industry are also limited.

The Unequality of “PAD”

PAD is revenue derived from sources within its own territory is levied by

local regulations in accordance with the laws applicable. These sources

include local taxes, retribution, and local state-owned company results, and

the results of other separated areas management and other PAD legitimate.

In measuring inequality’s PAD used two approaches Williamson and Theil

index with “PAD” as a measure of the income of each district. The results of

these measurements indicate that the numbers of inequality tend to decrease.

The reductions in inequality illustrates an increase in the number of revenue

receipts from each district although it is still small change.




184

Figure 6. Index of PAD Disparity in North Maluku Province 2006-2011


The inequality decreased of PAD is expected to affect the reduction of

income inequality that can impact positively on the level of income equality

among districts or cities of North Maluku province. The efforts to increase the

revenue of which is developing a lead commodity owned by the district that

must consider the quality aspects that have high competitiveness in the global

trade market.

Based on the master plan program of MP3I, North Maluku province into the

corridor VI with industrial development policy priorities namely the fishing and

the nickel mining industry. Both of these industries are expected to contribute

greatly to the level of state revenues. The territory remaining districts or cities

were able to get feedback from DBH greater than tax revenue paid to the

state.

The Disparity of “DBH” and “DAU”

Fiscal decentralization is not yet capable of making areas can be self-

sufficient in financing its construction. The original purpose of the

implementation of the fiscal decentralization system reduce fiscal disparities

among regions has not yet showed satisfactory results. Almost all provinces

and districts of the city in Indonesia experienced a high level of fiscal

imbalance. It is also happened in north Maluku province

If seen from the calculation Williamson and Theil index, DBH and DAU

inequality shows a very large number.




185

Figure 7. Index of DBH Disparity in North Maluku Province 2006-2011


Figure 8. Index of DAU Disparity in north Maluku 2006-2011


Of the two images above, both DBH and DAU inequality index tend to

decline in the aggregate. This decline is also caused in line with declining

revenues of DBH and DAU received from the central government. This means

that the reduction in funding from central sources will have positive impact on

reduction of fiscal imbalances between districts or cities. However, the

decreased number of DAU and also DBH whether it can decrease the level of

income inequality. In fact, the purpose of fiscal incentives from central

government in the form of large DBH and DAU is expected to impact positively

on equitable development.

In the case of North Maluku when seen from Figure 9 below shows that the

decline in inequality index of PAD, DBH and DAU that was able to make the

reduction of income inequality index of GDP. So it can be concluded that high




186

PAD and also decreased DAU can contribute to decline the income disparity

among regions in north Maluku province.

Figure 9. Index of PDRB, PAD, DBH and DAU Disparity of north Maluku

Province 2006-2011

Source : BPK, BPS Malut (Processed)

Conclusions

Based on study results, there are several conclusions that can be noted.

Fiscal decentralization has not successful in reducing the income gap between

the district and city in North Maluku province. The degree of inequality using

the Theil index and Williamson showed a very high score. In addition, fiscal

imbalances between districts or cities are also showing same phenomenon.

The PAD, DBH and DAU inequality index of each district show significant

disparity. The high fiscal imbalance due to several factors, including the level

of acceptance of the PAD of district or city is still very small. That means that

the local government is not maximized in managing its natural resources.

Besides, the local government is also not maximized the potential of

developing a commodity owned so that it can contribute to the improvement of

local revenue from the tax sector. This is reflected in the ratio of the number of

DBH of districts or cities are still small.

Other factors, the increased demand for funds from the center in the form

of a large DAU also apparently failed to give a positive influence on the

distribution of income among regency. An increasingly large of DAU is not

able to solve the problems of income inequality, although the aggregate value

of the index has declined trend.




187

Policy Recommendations

The high index of income imbalances and fiscal should immediately look for

appropriate policy formulation so that the objectives of implementation of fiscal

decentralization can be achieved. Optimization of revenue sources in order to

increase the amount of local tax revenue should be on more increasing. In

addition, the role of BUMD owned by local governmet should be more

improving in order to develop the superior sectors in particularly base

commodities that export oriented, so that local income could be increasing and

finally it have an impact on equal income distribution between districts.

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