Article Sidebar

Download
PDF

Main Article Content

Abstract

This study aims to identify and interpret the paradox between exports, GRDP, and fiscal capacity in island provinces, which has not been widely researched in Indonesian fiscal literature. This study uses a quantitative descriptive analysis approach based on official secondary data, including the North Maluku Provincial Economic Report (Bank Indonesia, August 2025 edition) and the Regional Fiscal Review (KFR) for the first quarter of 2025 (Ministry of Finance). All data were analyzed at the quarterly level (Q1–Q2 2025) and compared with national economic performance to provide a comparative context. This study found several findings. First, North Maluku's economic growth in 2025 confirms the central role of nickel downstreaming as the driving force behind the GRDP. Economic dependence on the mining and manufacturing sectors dominates the economic structure, shifting the contribution of the agricultural industry and the role of domestic consumption. Second, a comparative analysis between exports and GRDP reveals structural imbalances. The phenomenon of exports exceeding GRDP indicates a very high level of economic openness as well as excessive dependence on global markets. Third, the gap becomes even more apparent when comparing exports with regional fiscal capacity. This fact confirms that, despite North Maluku being the center of Indonesia's nickel exports, the budgetary benefits received by the region are minimal. These findings support Lewis' (2023) criticism of Indonesia's weak fiscal decentralization, as well as the conclusions from Ahmad et al. (2024) that island provinces receive a smaller share of transfers due to a land-biased formula. Fourth, high logistics costs, market fragmentation between islands, and the concentration of growth in large industrial areas have widened the gap between regions. Small islands continue to face high prices for necessities and limited fiscal capacity, despite collectively recording large export surpluses. The results of this study confirm that North Maluku faces a double paradox: it is an “export giant” but “fiscally weak.” Spectacular economic growth due to nickel downstreaming has not translated into fiscal independence and inclusive prosperity. Therefore, there is a need for national fiscal policy reforms that are more equitable for the islands, an increase in the share of mining revenue, diversification of the local revenue base, and downstreaming policies that are more integrated with local socio-economic needs. Without these measures, North Maluku risks being trapped in an island version of the resource curse.

Keywords

Resource boom Fiscal dependency Archipelagic economy Revenue Sharing Fund Nickel downstreaming Fiscal inequality

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Adam, M., & Nurwanah, A. (2025). Resource Boom and Fiscal Dependence in an Archipelagic Province: Evidence from North Maluku, Indonesia. Amkop Management Accounting Review (AMAR), 5(2), 892–905. https://doi.org/10.37531/amar.v5i2.3168
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Ahmad, A. C., Effendi, N., Budiono, B., & Hadiyanto, F. (2024). Fiscal transfer redistribution and regional inequality between island and non-island provinces in Indonesia. Indonesian Interdisciplinary Journal of Sharia Economics, 7(2), 23–59.
  2. Ariansyah, K., Yuliana, A., & Setyawan, D. (2014). Local revenue and fiscal dependency in Jambi Province. Jurnal Ekonomi Pembangunan, 15(1), 45–56.
  3. Auty, R. (2020). Natural resource abundance and economic growth revisited. Resources Policy, 65, 101–119. https://doi.org/10.1016/j.resourpol.2019.101119
  4. Bahl, R., & Bird, R. (2021). Fiscal decentralization and local finance: Theory and practice in the twenty-first century. Public Finance Review, 49(2), 124–151.
  5. Bank Indonesia. (2025). Laporan Perekonomian Provinsi Maluku Utara, Agustus 2025. Kantor Perwakilan Maluku Utara.
  6. BPS Maluku Utara. (2025). Produk Domestik Regional Bruto Menurut Lapangan Usaha 2025. Badan Pusat Statistik Provinsi Maluku Utara.
  7. Collier, P., & Goderis, B. (2012). Commodity prices and growth: An empirical investigation. European Economic Review, 56(6), 1241–1260.
  8. Frankel, J. (2010). The natural resource curse: A survey. NBER Working Paper Series.
  9. Gereffi, G. (2019). Global value chains and development. Cambridge University Press.
  10. Haryanto, T., & Sari, N. (2021). Infrastructure inequality and regional growth in Indonesia. Bulletin of Indonesian Economic Studies, 57(3), 345–368.
  11. Hidayat, R., & Hasan, A. (2024). Governance and resource conflict in Indonesia’s nickel industry. Extractive Industries and Society, 15, 101278. https://doi.org/10.1016/j.exis.2023.101278
  12. Hilmawan, R., & Clark, J. (2021). Resource dependence and the causes of local economic growth: An empirical investigation. Australian Journal of Agricultural and Resource Economics, 65(3), 596–626. https://doi.org/10.1111/1467-8489.12429
  13. Jha, R., & Mohanty, M. (2022). Resource dependence and fiscal sustainability: Evidence from emerging economies. Journal of Asian Economics, 81, 101478.
  14. Juswanto, W., & Simorangkir, I. (2021). Decentralization, fiscal transfer, and inequality in Indonesia. World Development, 141, 105389.
  15. Kementerian Keuangan RI. (2025). Kajian Fiskal Regional: Maluku Utara Triwulan I 2025. Direktorat Jenderal Perbendaharaan.
  16. Khan, H., & Roy, P. (2020). Resource booms, fiscal policy, and inequality. Journal of Development Economics, 145, 102481.
  17. Kusumastanto, T. (2020). Archipelagic state and economic disparity: Maritime connectivity challenges in Indonesia. Marine Policy, 115, 103856. https://doi.org/10.1016/j.marpol.2020.103856
  18. Lewis, B. D. (2023). Indonesia’s new fiscal decentralisation law: A critical assessment. Regional Studies, 57(2), 240–255. https://doi.org/10.1080/00343404.2022.2123456
  19. Martinez, L., & Murphy, J. (2023). Intergovernmental fiscal transfers and spatial inequality in developing countries. World Development, 165, 106163.
  20. McLure, C. E. (2021). The assignment of natural resource revenues in federations: A theoretical framework. Fiscal Studies, 42(2), 145–167.
  21. Nurhadi, M., & Setiawan, H. (2022). Impact of mining sector development on local fiscal capacity in Indonesia. Journal of Indonesian Economy and Business, 37(2), 155–174.
  22. Oates, W. (1972). Fiscal federalism. Harcourt Brace Jovanovich.
  23. Oei, P., & Mendelevitch, R. (2020). Prospects of mining regions in the energy transition. Energy Policy, 137, 111102.
  24. OECD. (2021). Regional economic outlook in Southeast Asia. OECD Publishing.
  25. Perez-Sebastian, F., & Raveh, O. (2016). The natural resource curse and fiscal decentralization. Journal of Development Economics, 123, 94–106.
  26. Polanyi, K. (1944). The great transformation. Farrar & Rinehart.
  27. Pritchett, L. (2022). Growth, governance, and resource rents in developing countries. World Bank Policy Research Paper.
  28. Raihan, S., & Dey, S. (2020). Natural resources and inequality: New empirical insights. Resources Policy, 67, 101667.
  29. Ramey, V. A. (2020). Macroeconomic shocks and fiscal responses. Journal of Economic Perspectives, 34(2), 25–46.
  30. Rauf, F., & Rahman, A. (2021). Intergovernmental transfers and local fiscal inequality in Eastern Indonesia. Jurnal Ekonomi dan Pembangunan Indonesia, 21(2), 145–167.
  31. Rodden, J. (2021). Fiscal federalism and the resource curse: Lessons for decentralizing economies. Comparative Political Studies, 54(3-4), 412–439.
  32. Rosser, A. (2020). Resource nationalism and the political economy of mining in Indonesia. Contemporary Southeast Asia, 42(1), 1–30.
  33. Sachs, J., & Warner, A. (1995). Natural resource abundance and economic growth. NBER Working Paper Series.
  34. Saparina, I., & Anwar, F. (2021). PAD and fiscal stress in resource-rich provinces of Indonesia. Jurnal Akuntansi Multiparadigma, 12(1), 85–102.
  35. Setyawan, A., & Sihombing, P. (2022). Inequality in archipelagic regions: Evidence from Eastern Indonesia. Journal of Indonesian Applied Economics, 14(1), 23–40.
  36. Sovacool, B. K., Ali, S., & Bazilian, M. (2024). The paradox of resource-based energy transitions: Evidence from nickel mining for EVs. Energy Research & Social Science, 106, 103284.
  37. Sudirman, M., & Wibowo, A. (2023). Mining, fiscal decentralization, and poverty in Eastern Indonesia. Asia Pacific Journal of Public Administration, 45(2), 98–114.
  38. Suryahadi, A., & Hidayat, R. (2021). Social inequality and economic growth in Indonesia: A provincial perspective. Bulletin of Indonesian Economic Studies, 57(2), 215–235.
  39. Tiebout, C. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), 416–424.
  40. UNCTAD. (2023). World Investment Report 2023: Natural resources and sustainable development. United Nations.
  41. Wahyuni, T., & Kusuma, R. (2022). Fiscal performance of local governments in mining regions. Jurnal Akuntansi dan Keuangan Indonesia, 19(1), 56–74.
  42. World Bank. (2020). Indonesia economic prospects: Fiscal reform for inclusive growth. Washington DC.
  43. World Bank. (2022). Commodity markets outlook. Washington DC.
  44. Yusuf, A. A., & Resosudarmo, B. P. (2020). Fiscal decentralization and environmental sustainability in Indonesia. Ecological Economics, 169, 106515.
  45. Zhang, Y., & Lin, H. (2021). Resource rents and local government behaviour: Evidence from developing economies. Journal of Asian Public Policy, 14(3), 341–360.
  46. Zhao, S., & Xie, Y. (2023). Fiscal redistribution and inequality in resource-rich regions. Energy Economics, 118, 106524.
  47. Zulfikar, M., & Nugroho, Y. (2020). Local fiscal autonomy in Indonesia’s mining areas: Problems and prospects. Jurnal Ekonomi dan Kebijakan Publik, 11(2), 211–226.
  48. Zulkarnaen, A., & Latief, A. (2024). Spatial inequality and intergovernmental fiscal transfers in maritime Southeast Asia. Journal of Southeast Asian Economies, 41(1), 25–48.
  49. Times Malut. (2025). Gubernur Sherly paparkan kondisi fiskal daerah. Retrieved from https://timesmalut.com
  50. Infopublik Kemenkeu. (2025). Realisasi APBD Maluku Utara 2024: Pendapatan turun. Retrieved from https://infopublik.id

Similar Articles

1 2 3 4 5 6 7 8 9 > >> 

You may also start an advanced similarity search for this article.