Income Inequality Between Districts and Their Impact on Poverty in Aceh Province

Abstract

The problem of income inequality and poverty is a key issue that is always associated with economic development, both in developed and developing countries. Eliminating poverty and reducing economic inequality are absolutely necessary in order to realize social welfare. If the government does not actively intervene in economic activities, then economic activities will be regulated by market mechanisms and then have a negative impact on further development, namely the widening of the welfare gap from time to time between rich and poor areas as a result of the economic activities of richer areas. smoothly compared to poor areas. Aceh is one of the regions, regions or parts of the Republic of Indonesia. In 2013 the Province of Aceh was divided into 18 districts and 5 cities, consisting of 284 sub-districts, 755 mukim and 6,450 gampong or villages with an area of Aceh Province of 5,677,081 ha and a population of 4,597,308 people (BPS Aceh, 2013). The Central Statistics Agency (BPS, 2021) noted that there were 834.24 thousand poor people in Aceh in March 2021, an increase of 0.04 percent compared to September 2020 of 833.91 thousand people. However, the poverty rate in Aceh has decreased from 10.43 percent in September 2020 to 10.33 percent in March 2021. In detail, the poverty rate in rural Aceh has decreased from 17.96 percent in September 2020 to 17.78 percent in March 2021. Meanwhile, the urban poverty rate in Aceh will increase from 10.31 percent in September 2020 to 10.46 percent in March 2021. This research was conducted in all districts and cities in Aceh Province starting from Simeulue, Aceh Singkil, South Aceh, Southeast Aceh, East Aceh, Central Aceh, West Aceh, Great Aceh, Pidie, Bireuen, North Aceh, Southwest Aceh, Gayo lues, Aceh Tamiang, Nagan Raya, Aceh Jaya, Banda Aceh, Sabang, Langsa, Lhokseumawe, Bener merry, Pidie Jaya and Subulussalam. To see income inequality between districts in Aceh Province, the variable is limited to income per capita and the population of each district is analyzed from the 2010-2020 period. The data used is secondary data, obtained from the Aceh Province Central Statistics Agency, BAPPEDA Aceh and a number of reports and literature especially from several offices and related agencies. The model used to see the direction of development inequality is the Williamson Coefficient Formula. Regional development is considered evenly distributed if the Williamson Coefficient is equal to zero or close to zero. Vice versa, development inequality will occur if the coefficient value is further away from zero. Of the 23 regencies/cities in Aceh Province, the most evenly distributed income per capita with a Williamson coefficient value below 0.05 is Aceh Singkil, South Aceh, Sabang, Langsa, Subulussalam, Aceh Tamiang, Nagan Raya, Bener Meriah, Gayo Lues, Central Aceh. , West Aceh, Aceh Besar, Bireuen and Southwest Aceh District. The second order for districts/cities with a fairly even level of income distribution and having a Williamson coefficient value between 0.05-0.09 is Simeulue, Southeast Aceh, Pidie, North Aceh, Aceh Jaya and Pidie Jaya districts. The third order for districts/cities with an uneven level of income distribution and having a Williamson coefficient value above 0.10 is East Aceh District, Lhokseumawe City and Banda Aceh City. It turns out that the income inequality that occurs increases the level of poverty that occurs in Aceh Province. It is hoped that local governments can identify all the potential resources contained in their respective regions and then explore them to increase the Gross Regional Domestic Product, so that in turn it can increase per capita income itself and will reduce the number of poor people. For further research, it is expected to be able to add economic growth variables to see the link between inequality and economic growth itself in Aceh Province