AN ANALYSIS OF THE DEVELOPMENT OF THE INDUSTRIAL ESTATES FROM THE LEADING ECONOMIC SECTORS DUE TO THE POTENTIAL INCREASE IN USAGE OF THE TRANS SUMATERA TOLL ROAD: A CASE STUDY OF THE NORTHERN SUMATERA REGION

Abstract

In order to increase economic growth, the Government of Indonesia is making efforts to accelerate infrastructure projects, one of which is the Trans Sumatera Toll Road. This is expected to help increase economic growth and connectivity on the Sumatera island. Sumatera Island is an area that has abundant natural resource potential. However, this potential has not been fully developed by considering the construction of the Trans Sumatera Toll Road. This study aims to develop a leading sector-based industry in the Northern Sumatera Region to increase the potential use of the Trans Sumatera Toll Road. Determination of industrial focus is carried out using location quotient analysis by considering regional development indicators in the form of Gross Regional Domestic Product distribution, sector potential and the Human Development Index. Estimated initial cost required is calculated by benchmarking approach and price survey. The results show that the development of leading sector-based industries in the Northern Sumatera Region is estimated to require initial costs of USD 1,025.53 million for the rice processing industry, integrated coconut processing, food processing, and palm oil processing. The results of this study can be an input for the Indonesian government to increase the potential use of the Trans Sumatera Toll Road through industrial development of leading economic sectors in each region.