Perpustakaan Digital ITB

Indonesia has a large abundance of natural resources, especially in the mineral mining sector. Several mineral commodities that utilized for economic development are copper, gold, and nickel. However, there is a concern in the mineral mining sector about Resource Curse theory, studies the negative effect of natural resource abundance on economic growth. One of indication Resource Curse presence in the economy aspect is Dutch Disease phenomenon. This research investigates potential of Dutch Disease in the three of Indonesian provinces by analyzing the dynamic relationship among economic data such as inflation, consumption, Gross Domestic Regional Product (GDRP) of mining, manufacturing, agriculture, and services sectors as the key of regional sustainable development. The research location are Papua, Nusa Tenggara Barat, and South Sulawesi Provinces. Data from 1986 to 2016 were analyzed using restricted vector autoregressive (VAR) modelling consisting of impulse response function (IRF) and variance decomposition (VD). The results suggest that mineral mining sector has an impact to the inflation and non-mining sector performance. Mining sector was found to respond positively to a shock in inflation and GDRP of service sector but respond negatively to shock in GDRP of manufacturing and agriculture sector. As conclusion, although mineral mining sector has a significant role in the economic growth, it is necessary for the government to adopt regulation that develop non-mineral mining sector for regional sustainable development.