Investment and industrial sector in regional economic performance: Development strategies to Papua-Indonesia

• Published in: Journal of Infrastructure, Policy and Development Vol. 8; no. 7; p. 4094
• Main Authors: Rahim, Dian Anggraeny, Supartoyo, Yesi Hendriani, Setiawan, Sigit, Kasikoen, Ken Martina
• Format: Journal Article
• Language: English
• Published: 25.07.2024
• ISSN: 2572-7923; 2572-7931
• DOI: 10.24294/jipd.v8i7.4094

Papua, one of the provinces in Indonesia, is recognized for its limited infrastructure and high poverty rates. This limitation undoubtedly emphasizes the government’s special attention toward augmenting foreign and domestic investments by expanding industrial sectors to absorb more labor, thereby aiming to enhance the region’s economic performance. The focus of the study seeks to assess the extent to which foreign and domestic investments, industrial employment, and the proliferation of industries in Papua contribute to increasing the Gross Development Product (GDP) and reducing poverty. By employing secondary data from 2016 to 2022 and utilizing the Regression Data Panel method, it encompasses 29 districts. The findings reveal that domestic investment, employment in the industrial sector, and the number of industries significantly influence poverty rates. However, as conclusion, foreign investment, surprisingly, demonstrates no substantial impact on economic performance. This unexpected result might be attributed to issues linked with the inadequate quality of financial performance, which doesn’t align with the available investment funds. Utilizing the analytical network process (ANP), the study outlines two primary strategies. The first involves prioritizing investment expansion by focusing on both domestic and foreign investments. The second strategy emphasizes industrial revitalization through augmenting the number of industries and enhancing labor participation in the industrial sector.