THE EFFECT OF EXPLOITATION OF NATURAL RESOURCES TO ECONOMIC GROWTH AND HUMAN DEVELOPMENT INDEX IN SOUTH KALIMANTAN PROVINCE

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1 THE EFFECT OF EXPLOITATION OF NATURAL RESOURCES TO ECONOMIC GROWTH AND HUMAN DEVELOPMENT INDEX IN SOUTH KALIMANTAN PROVINCE Lydia Goenadhi & Nur Astri (Sekolah Tinggi Ilmu Ekonomi Indonesia Banjarmasin) ABSTRACT South Kalimantan has enormous potential for natural resources, but whether the magnitude of natural resource potentials has an effect on increasing prosperity and prosperity of the people, which could have an impact on increasing economic growth and human development index of South Kalimantan Province. This study analyzes the effect of natural resources exploitation on economic growth and improvement of human development index in South Kalimantan province. The analysis used quantitative method with Random Effect model in panel data of time series 2010 until 2016, to see the effect of exploitation of natural resources on economic growth and Human development index. Then reinforced with descriptive qualitative analysis, which aims to observe directly about the effect of exploitation of natural resources on community life at the points of the area where exploitation. The results showed that there was an increase in the rate of economic growth and human development index but the increase was not significant only ranged from 0.66 to 1.2 points only. This shows that the exploitation of natural resources does not have a major impact on economic growth and an increase in the human development index. This means that the slogan that has been echoed that the exploitation of natural wealth can increase prosperity and prosperity, by providing the flow of foreign exchange, the provision of jobs, accelerate economic growth, reduce poverty. But the presence of the oil and gas industry creates an economic enclave, and causes environmental damage that adds misery to the communities surrounding the exploitation area. The government needs to think about other potentials of South Kalimantan in order to increase local revenue, increase economic growth and human development index, from the tourism aspect which is the exploitation of natural resources that are not environmentally destructive and can be directly enjoyed by the local community. Keywords: Exploitation, natural resources, economic growth, human development index A. Background South Kalimantan is a province located on the island of Kalimantan with a total area of 37, km2 and consists of 12 districts. In essence, economic development is a series of businesses aimed at increasing people's income, expanding employment, leveling people's income sharing, improving economic relations among regions, as well as seeking shifting economic activity from the primary sector to the secondary or tertiary sectors. To realize the economic development is absolutely necessary planning, control and evaluation of the right, so that the development can be implemented on time and on target. In that case statistical data

2 has a very important role in every stage of development implementation. One of the most widely used statistical data for this purpose is the Gross Regional Domestic Product (GRDP). GRDP is a regional macroeconomic indicator that can reflect the economic performance of a region. The magnitude of GDP at any given time can be used as a reflection of economic performance and as a picture of the economic structure of a region, while the time-varying GRDP ratio can be used as an indicator of economic development progress in the area. South Kalimantan's economy in the second quarter-2017 measured by the amount of Gross Regional Domestic Product (GRDP) reached Rp trillion. The economy of South Kalimantan in the second quarter of 2017 compared to the second quarter-2016 (y-on-y) grew by 5.15 percent, this condition increased compared to the growth (y-on-y) in quarter II-2016 which amounted to 4.51 percent, decrease compared to the first quarter-2017 of 5.30 percent. This growth is supported by all business categories. The highest growth was achieved by information and communications of 9.90 percent followed by financial and insurance services of 8.56 percent and transportation and warehousing by 8.11 percent. The structure of GDP of South Kalimantan by business field based on current prices in Quarter II-2017 is still dominated by three main business fields: mining and quarrying by percent; agriculture, forestry and fisheries by percent and the processing industry by percent. When viewed from the creation of South Kalimantan's economic growth sources in Quarter II-2017 (y-on-y), the mining and quarrying categories have the highest growth source of 1.25 percent; followed by agriculture, forestry and fishery category of 0.69 percent and the manufacturing industry by 0.53 percent. Human development can be sustainable if supported by economic growth. Although both do not have a relationship automatically, but if the two things are integrated into a single development policy, will create a force that can encourage each other. So that economic growth will be very effective to improve human development. The achievement of human development is measured by considering three aspects, namely longevity, health, knowledge and decent standard of living. Therefore, the improvement of Human Development Index (HDI) achievement could not be separated from the improvement of each component. Human Development Index (HDI) of South Kalimantan Province according to life expectancy at birth (AHH), school life expectancy (HLS), average school length (RLS) and per capita expenditure adjusted from 2011 to 2016 as shown in table 1 below : Table1. Human development Index (HDI) of South Kalimantan By Component, from

3 Component Unit Life expectancyat birth School long Expectation Average School period Per capita exppenditure adjusted IPM / IPM Growth (%) Source: BPS Kalimantan Selatan, 2016 Human Development Index in South Kalimantan in 2016 continues to progress marked by the increasing Human Development Index (HDI). In 2016 South Kalimantan's HDI has reached This number increased by 0.67 points compared to 2015 by Based on Gross Domestic Revenue (PDRB), human development and economic growth contributes to the improvement of HDI in South Kalimantan Province. Economic growth increases the supply of resources needed for human development. Increasing resources along with appropriate allocation of resources and an increasingly widespread distribution of opportunities, particularly employment opportunities, encourage better human development. In the Province of South Kalimantan, there are several regencies / municipalities that contribute substantially to the Gross Regional Domestic Product (GDP) of the natural resources are Kotabaru, Tanah Bumbu, Banjar, Balangan and Tabalong Districts Based on Gross Regional Domestic Revenue (PDRB ), human development, and economic growth that contributed to the improvement of HDI South Kalimantan Province. Human development can be sustainable if supported by economic growth. Although both do not have a relationship automatically, but if the two things are united in a unified development policy, it will create a force that can encourage each other. So that economic growth will be very effective to improve human development. To improve the welfare of the community, it is necessary to increase economic growth and equitable distribution of income, the development of a State can be directed to three main things namely increasing the availability and distribution of basic needs for the community, improving people's living standards and improving the community's ability to access both economic activities and social activities in its life. Human development is defined as the process of enlarging people choice. HDI is an important indicator for measuring success in building the quality of human life (community / population). IPM explains how people can access development outcomes in obtaining income, health, education, and so on. This research would like to see the effect of natural resource exploitation on economic

4 growth and human development index in South Kalimantan. The purpose of this research is to analyze the effect of natural resources exploitation on economic growth and human development index in South Kalimantan. B. Literature Review Exploitation comes from English, is for the benefit of economy or welfare. Exploitation of natural resources means taking and using the natural resources for the purpose of fulfilling human needs. Exploitation of natural resources that neglect the environment will threaten the sustainability and availability of natural resources. Article 33 Paragraph (3) of the 1945 Constitution states that "Earth and water and the wealth contained therein are controlled by the State and used for the greatest prosperity of the people". One of the important principles in the utilization of natural resources in Indonesia's development is the renewal of the renewable management of natural resources. Therefore, for the sustainable use, natural resource exploitation measures should be accompanied by protection measures. Maintenance and development of the environment must be done in a rational way, among others, as follows: a. Utilize renewable and cautious renewable natural resources, such as water, soil, and air. b. Using replacement materials, such as metallurgical results (mixtures) c. Developing efficient methods of mining and processing, as well as recycling, d. Implement environmental ethics based on the philosophy of living in peace with nature. Natural resources are a potential value possessed by a certain material or element in life. Resources are not always physical, but also non-physical. Natural resources are something that can be utilized for the various interests and needs of human life for a more prosperous life that exists around our natural environment. Exploitation of Natural Resources shall be all efforts made to excavate and utilize natural resources contained in a particular object or region in order to obtain and utilize them for the purpose of meeting the needs of the public.in general, natural resources (SDA) by their nature can be categorized into renewable and non renewable natural resources. Renewable natural resources are natural resources that can continue to exist as long as their use is not over-exploited. Plants, animals, microorganisms, sunlight, wind, and water are some examples of renewable natural resources. Although the amount is very abundant in nature, its use must remain limited and maintained to be sustainable. SDA can not be

5 renewed is the limited number of natural resources because its use is faster than the process of its formation and if used continuously will run out. Economic Growth is defined as a long-term increase in per capita output. There are three aspects that need to be considered in the definition, namely: (1) process, (2) output per capita, and (3) long term. Economic growth is a process, not an economic picture at a time. Simon Kuznet (2007) defines the economic growth of a State as "the country's ability to provide an ever-increasing economic good for its people, the growth of this capability based on technological and institutional advancement and the ideological adjustment it needs." In his in-depth analysis, Kuznet separates the six characteristics that occur in the growth process in almost all countries and from this opinion below shows that one of the most important factors to increase economic growth is trade (export): 1. Two aggregative economic variables: the high growth rate of output per capita and population and the high rate of productivity increase in overall production factors or especially labor productivity. 2. Two structural transformations: the high level of transformation of economic structure and high levels of social transformation and ideology. 3. Two factors influence the widespread growth of the international economy: the tendency of developed economies to reach the whole world to gain market (export) and raw materials and economic growth is only enjoyed by one third of the world's population. Meanwhile, according to theory, economic growth is defined as an explanation of what factors determine the increase in per capita output in the long run and explanations of how these factors interact with each other, resulting in the growth process Economic growth improves people's welfare and to support other development policy objectives. Economic growth is a process of changing a country's economic conditions on a sustainable basis to a better state for a certain period. Economic growth can be interpreted also as a process of increasing the production capacity of an economy which is realized in the form of an increase in national income. The existence of economic growth is an indication of the success of economic development in people's lives. Output or Gross Domestic Income (GDP) (Widodo, 1990) is the value of all finished goods and services acquired and constitutes the value of all domestically produced production, regardless of whether the product is made of a factor of production originating in that State or factor of production originating from other countries used by that State. It should be noted that economic growth does not reflect the prosperity of a country. It is therefore necessary to measure growth rates

6 using GDP per capita so that it not only measures GDP increases but also increases in population. In contemporary times development is often equated with higher economic growth because believers, developmental outcomes will naturally trickle down as is the case in nowadvanced countries. So, what needs to be done in development is how to achieve the goal of high economic growth. During this time many developing countries have managed to show high economic growth rate, but still many unsolved development problems, such as: high unemployment rate, uneven distribution of income added, there is still a lot of absolute poverty, average education level still low, health services are still lacking, and a very small group of very rich people tends to get richer while most people are still struggling with poverty, which is not trickle down but trickle up. This situation is alarming, many development economists are starting to question the meaning of the building. Economic growth is a process of changing a country's economic conditions on a sustainable basis to a better state for a certain period. Economic growth can be interpreted also as a process of increasing the production capacity of an economy which is realized in the form of an increase in national income. The existence of economic growth is an indication of the success of economic development in people's lives. According to UNDP (United Nations Development), human development is a process to enlarge choices for human beings. The concept or definition of human development basically includes a vast development dimension. Human development is defined as the process of enlarging people choice. The Human Development Index (HDI) is an important indicator for measuring success in building the quality of human life (explaining how people can access community development outcomes). Human Development Index (HDI) There are three indicators used to measure the average achievement in human development, namely: the length of life measured by life expectancy at birth, the education measured by the average length of school and the literacy rate of the population aged 15 years up and living standards as measured by per capita expenditure. C. Research Methodology This study was conducted in four districts in South Kalimantan Province, which has a major contribution to the PDRB of the region in the business sector of natural exploitation, namely mining and quarrying. The four regencies are Kotabaru, Tanah Bumbu, Banjar and Tabalong. The data used are primary data and secondary data with data collection technique, through field observation to see the exploitation area of natural resources that is the existing

7 mining area in the regency, and data collection from Statistical Agency of the four districts taken samples and Statistics Agency of South Kalimantan Province. Data analysis in this research uses descriptive quantitative method with random effect model in panel time series data from 2010 until 2016 to see the effect of natural resources exploitation on economic growth and human development index in South Kalimantan Province. D. RESULTS AND DISCUSSION The result of exploitation of natural resources has a major contribution to PDRB Kotabaru regency, Tanah Bumbu regency, Banjar regency, and Tabalong regency. However, with the decline in world demand and decline in commodity prices from 2012 to 2015, this has resulted in a decline in output of its products as evidenced by the contribution of the mining sector and the excavation of the district GDP in Figure 1 below, which indicates the following decline: Figure 1. Contribution of mining and quarry sector to Regency GDP kotabaru tanah bumbu banjar tabalong For districts where the GRDP structure is dominated by mining and quarrying or from the exploitation of natural resources, the decline in natural resources production results in a decrease in economic growth as well as for the new Kota District and Tanah Bumbu Regency The decline in the mining and quarrying business sectors in these four districts caused a decline in economic growth, seen in Figure 2 below

8 Figure 2 Economic growth of four districts of KotaBaru Banjar Tanah Bumbu Tabalong In 2016 there is an increase in economic growth, because there has been a change in the economic structure that forms GRDP in the four districts. This is a change in economic structure that contributes to GRDP from other rising sectors, such as manufacturing, agriculture, plantation and fishery sectors, transportation and other sectors (HDI indicators from economic aspects). However, the decline in Revenue in mining and quarrying sectors contributing to GDP reflects the decline in economic growth. The effect of GDP decline is not followed by a decline in the Human Development Index (HDI). This is a change in economic structure that contributes to GRDP from other rising sectors, such as manufacturing, agriculture, plantation and fishery sectors, transportation and other sectors (HDI indicators from economic aspects). Human Development Index (HDI) of South Kalimantan Province based on life expectancy at birth (AHH), school life expectancy (HLS), average school duration (RLS). Human Development Index (HDI) based on the achievements of AHH, HLS, RLS can be seen in table 2 below:

9 Figure 3 Human Development Index (HDI) by District in South Kalimantan, kotabaru tanah bumbu banjar tabalong Based on Figure 3 above the HDI by Kotabaru, Tanah Bumbu, Banjar and Tabalong districts from 2011 to 2016 increase. This illustrates the increase in prosperity in the four districts. To improve the welfare of the community, it is necessary to increase economic growth and equitable distribution of income, so the development of a State can be directed to three main things: increasing the availability and distribution of basic needs for the community, improving people's living standards and improving the community's ability to access both economic activities and activities social in life. HDI is an important indicator for measuring success in building the quality of human life (community / population). IPM explains how people can access development outcomes in obtaining income, health, education, and so on. Based on the results of the analysis above shows that the exploitation of natural resources affect the economic growth, but does not affect the human development index. In KabupatenKotabaru, KabupatenBanjar, Tanah Bumbu and Tabalong Regencies according to life expectancy at birth (AHH), school duration (HLS), average school duration (RLS) and per capita expenditure increased.

10 E. CONCLUSION The results show that there is an increase in economic growth rate and human development index but the increase is not significant only ranges from 0.66 to 1.2 points only. This suggests that the exploitation of natural resources does not have a major impact on economic growth and an increase in the human development index. This means that the slogan has been echoed that the exploitation of natural wealth can increase prosperity and prosperity, by providing foreign exchange flow, providing employment, accelerating economic growth, reducing poverty. However, the emergence of the oil and gas industry, as well as the economic and creative indigenization of the economy created a source of local economic revenue that contributed to the increasing economic growth and HDI of South Kalimantan Province. To that end, the Government needs to think of other potentials of South Kalimantan in order to increase local revenue, increase economic growth and human development index, from the tourism and creative industries aspect which need not exploit natural resources that do not damage the environment and can be enjoyed directly by the community local. F.REFERENCE Berita Resmi Statistik No.45/08/63/Th.XXI, 7 Agustus2017, Pertumbuhan Ekonomi Kalimantan Selatan, BPS Provinsi Kalimantan Selatan Badan Pusat Statistik Kabupaten Kotabaru, Pendapatan Domestik Bruto (PDRB), Pertumbuhan Ekonomi dan Indeks Pembangunan Manusia, Badan Pusat Statistik Kabupaten Banjar,Pendapatan Domestik Bruto (PDRB), Pertumbuhan Ekonomidan Indeks Pembangunan Manusia, Badan Pusat Statistik Kabupaten Tanah Bumbu, Pendapatan Domestik Bruto (PDRB), Pertumbuhan Ekonomi dan Indeks Pembangunan Manusia, Badan Pusat Statistik Kabupaten Tabalong, Pendapatan Domestik Bruto (PDRB), Pertumbuhan Ekonomi dan Indeks Pembangunan Manusia, Fauzi, Akmad,2004,Ekonomi Sumberdaya Alam dan lingkungan, Penerbit Gramedia Pustaka Utama Todaro, Michael P dan Stephen C.Smith,2013,Pembangunan Ekonomi edisikesebelas, Jakarta, Erlangga Widodo,TriyantoSuseno, 1990, Indikator Ekonomi, Dasar Perhitungan Perekonomian Indonesia, Penerbit Kanisius, Yogyakarta