Supporting the G20 Presidency's Commitment, Jambi Province's Economic Growth Is More Inclusive

During his handover speech for the G20 presidency in Rome last year, President Joko Widodo emphasized that Indonesia's presidency at the G20 would boost the world's economic recovery through the big theme "Recover Together, Recover Stronger". "Indonesia's leadership in the G20 is committed to efforts to encourage inclusive, people-centered, environmentally friendly and sustainable growth." (President Joko Widodo, at the Closing session of the G20 Summit in Rome, Italy, 31 October 2021) Then, what is meant by inclusive economic growth? Economic growth is said to be inclusive if it is able to reduce poverty, reduce inequality in income distribution, and reduce unemployment. Many countries are trapped in an exclusive economy, namely the desire to pursue high economic growth, mainly by spurring economic growth in the secondary sectors (processing and construction industries) and tertiary sectors (trade sector, accommodation providers, and food and drink, transportation, financial, and other services). In Indonesia, as an agricultural country, the secondary and tertiary sectors do provide a high contribution to economic growth but in employment it is not as large as the primary sector (agriculture, forestry, and fisheries, as well as mining and quarrying). On the other hand, the primary sector has received less attention even though it is the mainstay of employment. This has resulted in a widening gap in income inequality between residents. What about the economy of Jambi Province? In the midst of global economic uncertainty, the Jambi Province's economic growth rate before the Covid-19 pandemic managed to grow in the range of 4-7 percent (2014-2019). This economic growth is increasingly inclusive. This is indicated by inflation which in 2014 reached ± 8 percent, gradually suppressed until in 2019 it was around 1-2 percent. Meanwhile, the income gap can be narrowed based on the Gini ratio data which fell from 0.329 in 2014 to 0.321 in 2019. The poverty rate also fell from 7.92 percent in 2014 to 7.6 percent in 2019. Meanwhile, the unemployment rate continued to decline, from 5.08 percent in 2014 to 4.06 percent in 2019. It can be seen that all aggregate economic indicators of Jambi Province are in inclusive growth path. Until finally, the Covid-19 pandemic ravaged a number of these indicators. Jambi Province's 2020 economic growth contracted minus 0.44 percent, along with the fall of the economy in all parts of the world. In 2021 until now, the economy of Jambi Province is trying to return to an inclusive path. Economic growth which was initially negative in the first quarter of 2021, became positive 5 percent in the following quarter. This stability is maintained until 2022. The percentage of the poor gradually decreased from 8.09 percent (data for March 2021) to 7.62 percent (data for March 2022). The open unemployment rate has also begun to decline from 5.13 percent (2020) to 5.09 percent in 2021. In 2021 inflation will be maintained at around 1.66 percent. The economic structure of Jambi Province, which 31.56 percent (2021) is supported by the agriculture, forestry, and fisheries sectors, causes economic activity to expand, if supported by high commodity selling prices and a guaranteed market.

For example, when the prices of palm oil and rubber latex commodities, as the leading commodities of Jambi Province, increase dramatically, the economic activity of the community is very high, marked by increasingly crowded markets, which have an impact on opening up job opportunities, increasing employment, and finally the percentage of poverty is also reduced. The development of the primary sector, especially the agricultural sector, of course not only builds the physical infrastructure, but also builds human resources who are able to innovate, a guaranteed market, and a strong downstream industry to support these agricultural products. Building the primary sector intensively means that it has supported inclusive economic development. According to the World Bank, inclusive growth can be pursued by focusing on expanding economies of scale, expanding access to economic assets and successfully expanding markets and creating equal opportunities for the next generation. An important condition for creating inclusive growth is to reduce income disparities between workers in the primary and non-primary sectors. Joseph Eugene Stiglitz, a professor of economics who won the 2001 Nobel Prize in Economics, once explained about the adverse effects of economic growth which had no effect on reducing inequality. Stiglitz said, the imbalance between economic growth and employment growth made the gap bigger. The economic gap is a warning to conduct an evaluation in order to create a conducive economic climate, which is free from injustice and fraud. Economic growth should be able to close the gap. It's not just quantity that needs to be pursued, but quality is also prioritized. Therefore, the key word for inclusive economic growth is the efforts of all stakeholders to jointly reduce inequality, unemployment, and poverty.