Watch out! Dutch Disease Haunted Sarolangun

Gross Regional Domestic Product (GRDP) can provide an overview of economic development in each district.

GRDP is the amount of added value produced by all business units in a certain area and can also be said to be the sum of the final (net) value of goods and services produced by all economic units (BPS, 2013).

From the BPS data of Sarolangun Regency, Sarolangun Regency's economic growth in 2021 grew positively by 6.61 percent and was the highest in Jambi province.

Over the past 5 years, the economic structure of Sarolangun Regency has been dominated by natural resources.

2021, the agriculture, forestry and fishery categories have a role of 29.95 percent, followed by mining and quarrying business fields with a contribution of 19.29 percent.

However, in 2020, Sarolangun Regency's economic growth will experience a slowdown by minus 0.25 percent.

Apart from the COVID-19 pandemic, the Sarolangun economy was contracted by the fall in the price of the main export commodity of Sarolangun Regency, namely coal. Economic conditions that depend on natural resources are very vulnerable to global market shocks.

Economies that depend on natural resources tend to experience a slowdown when the windfall profit phenomenon is over.

The Sarolangun Regional Government is expected to make a breakthrough to slowly shift the role of coal to other sectors in the economy in order to escape the so-called Dutch Disease.

Dutch disease is a phenomenon in the economic field due to the abundance of natural resources so that it has its own impact.

Improvement of the Sarolangun Regional Government system in pushing the economy to the industrial sector is very necessary in order to escape from this disease.

Currently, the role of the manufacturing sector in the formation of Sarolangun's GRDP is still below 10 percent, even during the last 10 years, the contribution of the manufacturing sector has never reached the 5 percent point.

In addition to encouraging the economy in the industrial sector, the development of Sarolangun Regency is expected to prioritize the development of Human Resources in order to encourage changes in the orientation of the economic structure, from one based on natural resources to one based on human resources.

In the process of economic growth, of course, human capital is an important factor.

Quality human resources can be a catalyst for better economic performance.

High exports boost the economy, but we must not be careless. The Sarolangun Regional Government must change, so as not to depend on raw goods, because prices and demand can reverse direction to the lowest point.

Eka Septiana (Statistics of BPS Sarolangun Young Expert)