Jakarta – The Indonesian government, through the issuance of law (UU) No.6/2014 on villages and the ministry of village, least developed regions and transmigration’s regulation No.2/2016 on village development index, has set 12 indicators of village economic resilience in Indonesia.
Based on data from the Palm Oil Agribusiness Strategic Policy Institute (PASPI), the economic resilience index in villages with oil palm plantations increased from 0.41 in 2016 to 0.58 in 2021. The palm oil producing province having the highest economic growth in its oil palm villages in 2016 was Jambi province with the score of 0.49, following by Riau with the score of 0.48. In 2021, Jambi province still maintained such highest achievement with the score of 0.66.
But at the same year the palm oil producing province with the second highest growth in villages was achieved by East Kalimantan province, taking over the position of Riau province with the score of 0.64.
Nationally, the economic growth in oil palm villages reached 40.64 percent during the period of 2016-2021.
PASPI also makes comparisons of economic growth between oil palm villages and non-oil palm villages. Based on its research, the economic development in oil palm villages is higher than those of non-oil palm villages during the period of 2016-2021.
In 2016, the economic development index in oil palm villages was 0.41, while in non-oil palm villages at 0.40. The economic development in the two types of villages saw an increase in 2021, with the economic development in oil palm villages reaching 0.58, while in non-oil palm villages 0.53.
“Based on the analysis of the economic resilience indicators, the rate of economic progress in oil palm villages is higher than that in the non-oil palm villages. The existence of oil palm plantations and their related-activities have proven to be able to generate higher and faster economic growth in the villages with oil palm plantations,” PASPI concluded in its report on Friday, 14 October 2022. (*)
Source: Warta Ekonomi