5.5 Key Sectors in The Economy of Riau Province
Rammusen 1956 explained that the determination of a key sector in the economy could be based on the categories of input-output analysis such as linkage
analysis, dispersion or multiplier effects. In the development of a region economics, the appearance of sectors that nearly qualify as key sectors is needed.
Based on Total Output Multiplier TOM and Total Income Multiplier TIM analysis for the sectors in the economy of Riau Province, it can be
determined what sector are the key sectors that need to develop further in Riau Province. TOM is the sum of the output multiplier Type I and output multiplier
Type II while TIM is the sum of the income multiplier Type I and income multiplier Type II.Industry of food products, beverages and tobacco products
placed in the first position on both TOM and TIM analysis with the total of TOM is 4.52597 and the total of TOM and TIM is 11.6291.
Pulp industry placed in the top ten priority of key sectors whether in TOM analysis or TIM analysis. The TOM for pulp industry is 3.81672 or at sixth
position while the TIM is 3.87338 or at seventh position, and the overall total multiplier of pulp industry in the economy of Riau Province is 7.69010 or placed
in the sixth priority of key sectors in Riau Province.Paper industry is not in the top ten priority sectors in Riau Province, because the TOM is only 2.96680 or placed
at sixtenth position and for the TIM is 2.26129 or placed at twentieth position. Overall the paper industry has the value of total multiplier of 5.22809 or placed at
eighteenth priority in key sectors of Riau Province.
Table 5.12 TOM and TIM Key Sectors Analysis
Sector TOM
Rank TIM
Rank Total
Priority Agriculture
3.00274 15
3.83497 8
6.83771 11
Wood 2.52304
19 2.57145
15 5.09449
19 Other forest products
2.24008 21
5.59627 2
7.83635 5
Mining and Quarrying 2.28754
20 2.27642
19 4.56396
21 Industry of Food Products, Beverages
and Tobacco Products 4.52597
1 11.6291
1 16.15515
1 Industry of Textiles and Wearing
Apparel 4.14031
3 2.61044
14 6.75075
12 Industry of Wood and Furniture
4.02323 4
3.06031 12
7.08354 8
Pulp Industry 3.81672
6 3.87338
7 7.69010
6 Paper Industry
2.96680 16
2.26129 20
5.22809 18
Paper Products Industry 3.56735
11 4.89218
5 8.45953
4 Mining Industry
2.86946 18
2.17826 21
5.04772 20
Industry of Fertilizer and Chemical Products
3.23342 13
2.34143 18
5.57485 17
Industry of non-metallic Products 4.34750
2 5.68891
3 10.03641
2 Industry of Fabricated Metal Products
3.70251 7
3.20290 11
6.90541 10
Other Industries 3.58396
10 2.43345
17 6.01741
15 Electricity, Gas, and Water Supply
3.63951 8
3.03715 13
6.67666 13
Construction 3.41988
12 2.52107
16 5.94095
16 Trade, Hotels and Restaurants
3.08388 14
4.33011 6
7.41399 7
Transport and Communications 3.63786
9 3.41178
10 7.04964
9 Financial Institutions, Leasing and
Corporate Services 2.92455
17 3.59924
9 6.52379
14 Services
3.92838 5
5.25366 4
9.18204 3
Others 2.00000
22 0.00000
22 2.00000
22
Source: Riau Province Input- Output Table, 2010 calculated
Pulp industry has more priority than paper industry for the development of the industry. The top ten sectors should be develop further to faster the economic
growth of Riau Province. The paper industry, even though it does not has high priority, it still has the ability to improve the economy of Riau Province by
contributed to the GRDP of Riau Province. Therefore, pulp and paper industry is consider as the sector that needs to be develop further.
VI. CONCLUSIONS AND SUGGESTIONS
6.1 Conclusions
Based on the analysis of the Input-Output Table of Riau Province in 2010, the role of pulp and paper industry in the economy of Riau Province can be
conclude as follows: 1.
In the output structure, pulp industry value is 35,525,195 million rupiah while paper industry value is 4,233,851 million rupiah. In the demand
structure, the intermediate demand for pulp industry is 16,591,780 million rupiah while for paper industry is 2,446,353 million rupiah. The gross value
added for pulp industry is 18,211,169 million rupiah while for paper industry is 2,323,999 million rupiah. As for the investment, pulp industry
value is 647,874 million rupiah while paper industry value is 228,476.99 million rupiah. The value of nett export-import for pulp industry is
17,494,714.99 million rupiah while for paper indutry is 666,256 million rupiah. Overall, the value of pulp industry is higher than paper industry in
term of output structure, demand structure, gross value added, investment, and export-import.
2. Based on the linkage analysis, pulp industry has higher linkages to other
sectors or to the sector itself whether directly or directly and indirectly than paper industry.
3. Judging from the dispersion analysis, pulp industry has the high ability to
attract upstream sectors with a value of 1.10025 and has the low ability to attract its downstream sectors by 0.91889, while paper industry has low