Structural Transformation of South Kalimantan's Economy: Analysis of Sectoral Contribution Shifts and Policy Implications
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economic diversification, location quotient, resource-based economy, shift-share, structural transformation
Abstract
South Kalimantan, one of Indonesia’s largest coal-producing provinces, faces a structural paradox in which it remains heavily dependent on the primary sector despite sustained GRDP growth, while industrialization has stagnated. This study analyzes structural transformation during 2010–2024 using Location Quotient and Shift-Share analysis, complemented by sectoral employment data from Sakernas for 2011–2024. The primary sector’s output share fell from 43.82 to 36.75 percent and the tertiary sector rose from 34.87 to 42.61 percent, while the secondary sector stagnated at 20 to 21 percent. Location Quotient confirms the primary sector as a base sector (LQ=1.45) and the secondary sector as non-base (LQ=0.63), with negative Regional Shift in both indicating competitiveness loss. Employment data reinforce this pattern, with the primary sector’s labor share falling from 41.45 percent (2011) to 33.71 percent (2024) as the tertiary sector absorbed most of the released labor. Relative to the national structure, primary dependence is higher and the secondary sector weaker. The findings indicate a premature shift from primary to tertiary activity that bypasses industrialization, a “stuck in the middle” condition consistent with resource curse theory. Recommended policies include downstream industrialization, economic diversification, stronger inter-sectoral linkages, and human resource investment to support a just energy transition.
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