Table 5.5 Export and Import in Riau Province, 2010
Sector Export
Import X-M
Total million rupiah
Total million
rupiah Agriculture
3,021,934.83 1.70
1,824,872.23 6.70 1,197,062.60
Wood 2,002,789.78
1.12 517,865.01 1.90
1,484,924.77 Other forest products
856,320 0.48
25,245.01 0.09 831,074.99
Mining and Quarrying 77,365,017.42
43.4 6,337,723.18 23.2
71,027,294.24 Industry of Food Products,
Beverages and Tobacco Products
47,408,825.34 26.6
700,685.08 2.57 46,708,140.26
Industry of Textiles and Wearing Apparel
67,925 0.04
15,368.02 0.06 52,556.98
Industry of Wood and Furniture
1,340,701.75 0.75
188,089.16 0.69 1,152,612.59
Pulp Industry 18,285,504.99
10.2 790,790
2.90 17,494,714.99
Paper Industry 1,318,738.97
0.74 666,256
2.45 652,482.97
Industry of Paper Products 120,142.01
0.07 33,254.06 0.12
86,887.95 Mining Industry
7,071,404.20 3.97
3,549,376.01 13.0 3,522,028.19
Industry of Fertilizer and Chemical Products
612,252.95 0.34
383,427.23 1.41 228,825.72
Industry of non-metallic Products
4,263,573.64 2.39
130,936.02 0.48 4,132,637.62
Industry of Fabricated Metal Products
37,425.94 0.02
25,570.01 0.09 11,855.93
Other Industries 154,621.89
0.09 112,195.14 0.41
42,426.75 Electricity, Gas, and Water
Supply 144,573.15 0.53
-144,573.15 Construction
6,379,857.38 23.4 -6,379,857.38
Trade, Hotels and Restaurants
7,452,422.08 4.18
1,858,911.78 6.83 5,593,510.30
Transport and Communications
2,140,845.09 1.20
1,837,920.76 6.75 302,924.33
Financial Institutions, Leasing and Corporate
Services 286,246.01
0.16 393,738.93 1.45
-107,492.92 Services
4,278,175.07 2.40
1,315,376.93 4.83 2,962,798.14
Others
Total 178,084,866.95
100 27,232,031
100 150,852,835.8
Source: Riau Province Input- Output Table, 2010 calculated
5.2 Linkage Analysis 5.2.1 Direct Linkage
Direct linkage values obtained from input coefficients through the analysis of Input-Output Table. Direct linkage of sectors in the economy of Riau Province
can be seen in Table 5.6, where it shows that mining and quarrying sector has the
biggest value of direct forward linkage by 0.08230 followed by agriculture with forward linkage of 0.07184, followed by the sector Industry foods, beverages and
tobacco products and wood sector with each value of 0.06519 and 0.03130 in the third and fourth positions. From Table 5.6 can also be seen the direct backward
linkage of all sectors in the economy of Riau Province. Industry of non-metallic product has the strongest direct backward linkage that is equal to 0.72688,
followed by the industry of food, beverages and tobacco products, wood products and furniture industries with each value of 0.68111 and 0.62359 in the second and
third. Pulp industry has direct forward linkage value of 0.02797 or placed in sixth
position and has direct backward linkage value of 0.46511 or placed in eight positions, while paper industry has direct forward linkage of 0.00412 in the
thirteenth position and value of direct backward linkage of 0.29373 on sixteenth position. The direct forward linkage value shows the direct linkage of a sector
with its downstream sectors. This suggests that any increase in final demand of pulp industry for one million rupiah, then the output of pulp industry will be
allocated directly to other sectors or to the sector itself as input for 0.02797 million rupiah, while if there is an increase in final demand in paper industry for
one million rupiah, the output of paper industry will be allocated directly to other sectors or to the sectors itself as input for 0.00412 million rupiah.
Table 5.6 Direct Forward Direct Linkage Backward Linkage
Sector Direct Linkage
Forward Backward
Agriculture 0.07184
0.31337 Wood
0.03130 0.19147
Other forest products 0.00429
0.07442 Mining and Quarrying
0.08230 0.08907
Industry of Food Products, Beverages and Tobacco Products 0.06519
0.68111 Industry of Textiles and Wearing Apparel
0.00004 0.45119
Industry of Wood and Furniture 0.00149
0.62359
Pulp Industry 0.02797
0.46511 Paper Industry
0.00412 0.29373
Industry of Paper Products 0.00050
0.46719 Mining Industry
0.01488 0.21378
Industry of Fertilizer and Chemical Products 0.00272
0.40862 Industry of non-metallic Products
0.00174 0.72688
Industry of Fabricated Metal Products 0.00023
0.39166 Other Industries
0.00028 0.32895
Electricity, Gas, and Water Supply 0.00197
0.61191 Construction
0.00706 0.52394
Trade, Hotels and Restaurants 0.03124
0.31997 Transport and Communications
0.01045 0.46054
Financial Institutions, Leasing and Corporate Services 0.01110
0.26848 Services
0.00565 0.59769
Others 0.00000
0.00000 Source: Riau Province Input- Output Table, 2010 calculated
The direct backward linkage value shows the direct linkage of a sector with its upstream sectors. If the final demand in pulp industry increase for one million
rupiah, pulp industry will directly increase the demand for input to other sectors or to the sector itself for 0.46511 million rupiah. The direct backward linkage of
paper industry indicates that if the final demand in paper industry increase one million rupiah, the paper industry will directly increase demand for direct input to
other sectors or the sector itself for 0.29373 million rupiah. From the direct linkage analysis we can see that pulp industry has higher value than paper
industry. This indicates that pulp industry has stronger linkage than paper industry.
5.2.2 Direct and Indirect Linkages
Direct and indirect linkages obtained from the inverse closed Leontief matrix, where the household as endogenous variable of the model. Table 5.6
describes the relationship of direct and indirect linkage sectors in the economy Riau Province. Sectors that have the largest value of direct and indirect forward
linkages are mining and quarrying sector by the number of direct and indirect forward linkages of 3.78465, followed by agriculture and wood sector to the value
of direct and indirect forward linkages of 3.11880 and 2.21036. For direct and indirect backward linkages, the highest value is industry of
food, beverages and tobacco products with the value of direct and indirect backward linkages of 2.23068, followed by industry of non-metallic products and
industry of textiles and wearing apparel sector with a value of direct and indirect backward linkages of 2.12123 and 1.95537. Based on Table 5.7, through linkage
analysis can be seen that pulp industry has direct and indirect forward linkage of 1.90618 and direct and indirect backward value of 1.99686. These values
indicates that if the final demand in pulp industry increase for one million rupiah, the output of pulp industry will be allocated directly and indirectly to other sectors
or to the sector itself for 1.90618 million rupiah, while every increase in final demand of pulp industry for one million rupiah, pulp industry will directly and
indirectly increase the demand for input to other sectors or to the sector itself for 1.99686 million rupiah. The value of direct and indirect forward linkage of paper
industry is 1.32871, which is ranked eleventh in the economy of Riau Province. This indicates that every increase for one million rupiah in paper industry, the
output generated from paper industry directly or indirectly will be allocated to other sectors and the sector itself of 1.32871 million rupiah.
The value of direct and indirect backward linkages of paper industry in the economy of Riau Province amounted to 1.32322, or occupies on seventeenth
position, which indicates if there was an increase in final demand of paper industry for one million rupiah, paper industry will increase the demand directly
and indirectly for inputs from other sectors or the sector itself by 1.32322 million rupiah Table 5.7.
Table 5.7 Direct and Indirect Linkages
Sector Direct and Indirect
Linkages Forward Backward
Agriculture 4.33615
1.60402 Wood
2.57374 1.32119
Other forest products 1.23431
1.14786 Mining and Quarrying
3.95118 1.24800
Industry of Food Products, Beverages and Tobacco Products 3.38080
2.33665 Industry of Textiles and Wearing Apparel
1.00465 2.33188
Industry of Wood and Furniture 1.29078
2.24510
Pulp Industry 1.90618
1.99686 Paper Industry
1.36286 1.84865
Paper Products Industry 1.02872
2.05490 Mining Industry
1.81428 1.89076
Industry of Fertilizer and Chemical Products 1.13290
1.98639 Industry of non-metallic Products
1.80845 2.29351
Industry of Fabricated Metal Products 1.60741
2.33680 Other Industries
1.09130 2.35773
Electricity, Gas, and Water Supply 1.14290
2.05964 Construction
1.27414 2.01643
Trade, Hotels and Restaurants 3.03381
1.70653 Transport and Communications
1.69672 2.22466
Financial Institutions, Leasing and Corporate Services 1.73027
1.58255 Services
1.39822 2.16377
Others 1.00000
1.00000
Total 4.01328
3.05915
Source: Riau Province Input- Output Table, 2010 calculated
The results of linkage analysis have not been able yet to establish the key sectors in the economy due to differences in the role of final demand in each
sector that led to the indicator of linkage analysis cannot be compared between one to another. Therefore, the average impact of each sector should be compared
to all sectors through the analysis of dispersion.
5.3 Dispersion Effect Analysis 5.3.1 Coefficient of Dispersion
Coefficient of dispersion is often referred to as the backward linkage because it is a multiplication of the output directly and indirectly to the back of
each sector, which is then divided by the total direct and indirect linkages of all sectors. Overall in the economy of Riau Province there are thirteen sectors that
have a coefficient value of more than one. This means that there are thirteen sectors that are very sensitive to the effects of economic growth in Riau Province.
From Table 5.8, the strongest coefficient of dispersion is industry of food products, beverages and tobacco products by 1.2969, followed by the Industry
non-metallic products by 1.25796 and industry of textiles and wearing apparel by 1.23460, at the second and third positions. The value of the coefficient of
dispersion more than one indicates that the sectors have the ability to attract the growth of its upstream sectors. Pulp industry has the value of coefficient of
dispersion more than one 1.10025, which indicates the ability to attract its upstream sectors wood sector, while paper industry is not included in the
thirteen sectors with the coefficient of dispersion more than one. The coefficient of dispersion of paper industry is 0.92871. This indicates that paper industry has
low ability to attract the growth of its upstream sectors.
Table 5.8 Coefficient of Dispersion
Sector Coefficient of
Dispersion Agriculture
0.87379 Wood
0.72761 Other forest products
0.63977 Mining and Quarrying
0.67212 Industry of Food Products, Beverages and Tobacco Products
1.29696 Industry of Textiles and Wearing Apparel
1.23460 Industry of Wood and Furniture
1.19452
Pulp Industry 1.10025
Paper Industry 0.92871
Paper Products Industry 1.07508
Mining Industry 0.92370
Industry of Fertilizer and Chemical Products 1.00513
Industry of non-metallic Products 1.25796
Industry of Fabricated Metal Products 1.16637
Other Industries 1.15275
Electricity, Gas, and Water Supply 1.08770
Construction 1.04215
Trade, Hotels and Restaurants 0.91206
Transport and Communications 1.12833
Financial Institutions, Leasing and Corporate Services 0.85606
Services 1.15932
Others 0.56505
Source: Riau Province Input- Output Table, 2010 calculated
The low value of coefficient of dispersion in paper industry due to the existence of vertical integration in paper industry, which led to dependence on
other sectors for inputs are relatively weak because the principal inputs are provided mainly by imports or from its own mills. Paper companies in Riau
Province, namely PT. IKPP and PT. RAPP have vertical integration of its upstream sectors, which is the most important sector in the paper industry, pulp
industry. Both of the companies owned pulp mills and paper mills. Therefore, PT. the companies have the ability to obtain input pulp from the upstream sectors
through the integration, so this has resulted in overall the ability of paper industry to attract growth in its upstream sectors is weak. However, the presence of vertical
integration in large enterprises will facilitate the production process and can achieve efficiency in production.
5.3.2 Sensitivity of Dispersion Sensitivity of dispersion is an index that shows the relative effect caused
by an economic sector that will lead to a change in the output of other sectors that use the output of the sector either directly or indirectly. Based on Table 5.9, can
be seen that industry of fabricated metal products has the strongest sensitivity of dispersion with the value of 1.40632. This indicates that the sector is one of the
important sectors in the Riau Province that will provide an overview of strong ability in supporting the economy as a whole Riau Province.
In addition, there are eleven other sectors in the economy of Riau Province which has a strong sensitivity of the dispersion, which are agriculture sector
1.22270, wood sector 1.40350, other forest products sector 1.08589, paper products industry 1.18609, mining industry 1.08154, industry of chemical and
fertilizer 1.28287, industry of fabricated metal products 1.40632, electricity, gas and water supply sector 1.33966, trade, hotels and restaurants sector
1.10138, transport and communications sector 1.13233 and financial institutions, leasing and corporate services sector 1.35975.
Sectors that have a value less than one for the sensitivity of dispersion do not mean that the sectors cannot be relied upon in promoting economic growth, as
it still can be seen from the analysis of the output multiplier and income multiplier. Pulp industry and paper industry are one of the sectors with low value
of sensitivity of dispersion. The pulp industry and paper industry have the low
ability to develop the downstream sectors. The low ability of pulp industry is happen because the vertical integration of pulp industry with the downstream
industry, which is paper industry as well as the vertical integration that owned by paper industry of its downstream industry paper products industry. The players
in pulp and paper industry such as PT. IKPP and PT. RAPP have their own vertical integration from upstream sectors to its downstream sectors.
Table 5.9 Sensitivity of Dispersion
Sector Sensitivity of
Dispersion Agriculture
1.22270 Wood
1.40350 Other forest products
1.08589 Mining and Quarrying
0.72835 Industry of Food Products, Beverages and Tobacco Products
0.98041 Industry of Textiles and Wearing Apparel
0.84302 Industry of Wood and Furniture
0.75660
Pulp Industry 0.91889
Paper Industry 0.96581
Paper Products Industry 1.18609
Mining Industry 1.08154
Industry of Fertilizer and Chemical Products 1.28287
Industry of non-metallic Products 0.62993
Industry of Fabricated Metal Products 1.40632
Other Industries 0.87130
Electricity, Gas, and Water Supply 1.33966
Construction 0.56565
Trade, Hotels and Restaurants 1.10138
Transport and Communications 1.13233
Financial Institutions, Leasing and Corporate Services 1.35975
Services 0.64777
Others 0.49025
Source: Riau Province Input- Output Table, 2010 calculated
Through the analysis of coefficient of dispersion and sensitivity of dispersion, pulp industry has higher value for coefficient of dispersion and lower
value of sensitivity of dispersion than paper industry. This shows that pulp industry has the ability to attract its upstream sectors wood sector. Meanwhile,
pulp and paper industry has low value of sensitivity of dispersion, which indicates that pulp and paper industry has the low ability to attract its downstream sectors.
5.4 Multiplier Effect Analysis 5.4.1 Output Multiplier
