Abstract

The problem background of this research was Indonesia’s national economy that has stagnant growth of income inequality (Gini ratio) and increasing number of poor people, in despite of the national GDP growth indicator (GNP) has been increasing for several years. Regional economic growth in South Sumatra also increased based on GDP indicators, but the income distribution inequality has been slightly increased and South Sumatra’s inflation rate has greatly fluctuated in 2007-2017. Furthermore, farmer exchange rates, export values, human development index, and interest rate movements in South Sumatra has been declining in 2017 compared to 2007, despite the fact that overall infrastructure development has a tendency to keep increasing annualy. The purpose of this study was to examine and analyze the direct effects of inflation, farmer exchange rates, exports, human development index, infrastructure, and interest rates on the income distribution inequality in the South Sumatra. The research findings show that independent variables such as inflation, farmer exchange rates, exports, human development index, infrastructure, and interest rates have a significant effect simultaneously on income inequality in South Sumatra, while the exchange rate of farmers, exports and infrastructure has a significant partial effect on inequality income in South Sumatra. Furthermore, this study also finds that income inequality has a significant effect on poverty in the South Sumatra. Keywords: Inequality of Income Distribution, Inflation, Farmer Exchange Rates, Exports, Human Development Index, Infrastructure, Interest Rates, Poverty

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