Rural and structural transformation and their impacts on household in East Java

Abstract

Empirical evidence shows that rural transformation and structural transformation in Indonesia vary between provinces in both the depth and speed of the change. One province that the local government has claimed to undergo a rapid rural transformation is the province of East Java. This paper aims to analyze the structural and rural transformations in East Java using district-level secondary data for the 2000-2020 period, obtained from East Java Provincial Statistics. Data analysis uses qualitative and descriptive methods. The results show that structural and rural transformations in East Java vary between districts and development clusters. Some districts in East java experienced a rapid decline in the agricultural sector’s contribution in 1990-2020, both in terms of regional gross domestic product and employment, compared to other districts. The results also show that there has been a transformation within the agricultural sector, with the sub-sectors of non-food (commodities) have gradually shifted out the contribution of the food crop subsector. The relatively rapid structural and rural transformation in East Java has succeeded in increasing rural household incomes and reducing poverty incidence in the province. In the future, to continue increasing household income and reduce poverty, the East Java government needs to maintain the momentum of its success through more targeted pro-growth and pro-poor investment policies.