Abstract
In 2016, the forestry sector produced a Gross Regional Domestic Product (GRDP) of Rp. 3.8 trillion or around 0.45% of the total GRDP of the province of Central Java, Indonesia (BPS Central Java, 2017). The Forestry Sector growth has increased, but the role of the sector shows a downward trend in GRDP. By employing the Input-Output analysis, this study intends to identify the structure of the Central Java forestry sector, through backward and forward linkages and mapping the path of the impact of the forestry sector's economic activities through simulations, toward the economy and sectoral income levels in Central Java. This study finds that the forestry sector is intermediate ouput that is used by other sectors to become their production inputs, so this sector has a good multiplier for the economy.
Highlights
Central Java Province, Indonesia has a lot of natural resources in the form of wood and other forest products
This study identifies the map of the forestry sector structure in Central Java, through backward and forward linkages, by employing the Input-Output Analysis
From the component of the forming value added of the Wood and Other Forestry Products Sector, it shows that two sectors of forestry are attractive sectors for investors because they have a portion of the business surplus of 69% and 72% of all value added
Summary
Central Java Province, Indonesia has a lot of natural resources in the form of wood and other forest products. The performance of the forestry sector in 2016, based on the figure of Gross Regional Domestic Product (GRDP), is Rp. 3.8 trillion or around 0.45% of the total provincial GRDP (Badan Pusat Statistik Jawa Tengah, 2017). As the agricultural sector, the forestry subsector with the agriculture and fisheries subsector, ranks second in the economic structure of Central Java. In the second quarter 2017 period, The Agriculture, Forestry and Fisheries sectors accounted for 14.36% of Central Java's economic growth or in the second position after the Manufacturing Industry which contributed 34.97% of economic growth. The contribution of the Forestry sector from GRDP recorded continued to decline, which amounted to 0.56% in 2013, dropped to 0.50% in 2015 and lastly 0.45% at the end of 2016 (Badan Pusat Statistik Jawa Tengah, 2017)
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