IV. OVERVIEW
4.1 Overview of Riau Province
Riau Province consists of land and water area, with the total width approximately 8,915,016 hectares 89,150 km
2
. Presence stretches from the slopes of the Bukit Barisan to the Strait of Malacca lies between 01 ° 05 00
south latitude - 02 ° 25 00 latitude north or between 100 ° 00 00 - 105 ° 05 00 East Longitude. According to Law No. 32 of 2004, Riau province also has
twelve miles of ocean shoreline BPS Riau, 2012. Through a provisional data on the area width and its usage that as stated in the report of the National Lands
Agency, Riau Province includes 43,290.63 hectares of rice fields and dry lands area lie in 2,965,251.20 hectares. These data are actually provisional because of
many changes in boundary determination. The boundaries of Riau Province based on its geographical position and borders with other countries and provinces are as
follows: a.
North side : The Straits of Malacca and North Sumatra Province b.
South side : Jambi and West Sumatra Province c.
East side : Province of Riau Islands and the Strait of Malacca d. West side : West Sumatra and North Sumatra.
Riau province consists of ten regencies and two cities, Pekanbaru and Dumai. The population of the Riau Province in 2010 is up to 5,543,031 people
BPS Riau, 2012. Pekanbaru has the largest population with 903,902 people, while the smallest population is Meranti Islands District by 176,371 inhabitants.
4.2 Economic Development
In terms of expenditure and budget planning, the government adheres to the principles of balanced budgets and dynamic economic development priorities.
Total budget spent by the government of Riau Province in 2009 was amounted to 3,749.80 billion rupiah, which mostly was granted to the general administration of
the government by 1,480.28 billion rupiah, followed by budget of public works by 751.73 billion rupiah, and also the spending in education sector by 372.30 billion
rupiah. On the other hand, the realization of Riau Province in 2009 was 3,231.91 billion rupiah in total. If this value is compared with the realization of revenue
from Riau Province in 2008, which was amounted to 4,209.29 billion rupiah, there was a decreased of 23.22 percent.
Actual expenditure of Riau Province in 2009 was amounted to 3,757.48 billion rupiah; which consisted of indirect expenditures, amounted to 1,640.71
billion rupiah and direct expenditures amounted to 2,116.77 billion rupiah. Revenue from the tax of land and building PBB, BPHTB, income tax, VAT and
import duty VAT, and also other taxes are quite high, up to 8.21 billion rupiah in 2009. The breakdown revenue were 1.55 billion rupiah UN, BPHTB was 0.13
billion rupiah, income taxes amounted to 4.27 billion rupiah, VAT and sales tax was 2.21 billion rupiah, while other taxes was 0.05 billion rupiah.
World economic growth is likely to continue improving that will bring direct or indirect positive impact on national economic growth including Riau
Province. This huge contribution also comes from the pulp and paper industry in Riau Province with two largest companies that produce nearly all of the
Indonesian pulp and paper production.
4.3 Profile of Pulp and Paper Industry
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