The analysis covers 2020–2024, a period that includes Indonesia’s post-pandemic economic recovery. During these five years, Aceh Tamiang’s Gross Regional Domestic Product (GRDP) at constant prices increased from approximately IDR 6.01 trillion in 2020 to IDR 6.67 trillion in 2024.
Despite this increase, Aceh Tamiang’s growth remained slower than Aceh Province’s overall expansion. As a result, the regency’s contribution to provincial GRDP declined from 4.57 percent in 2020 to 4.34 percent in 2024. The figures indicate that Aceh Tamiang is not experiencing absolute economic stagnation. Instead, it is facing relative growth divergence, meaning that its economy is expanding more slowly than the wider provincial economy.
Agriculture Remains the Economic Backbone
Aceh Tamiang’s economy remains heavily dependent on primary industries. Agriculture, forestry, and fishery accounted for 41.01 percent of the regency’s GRDP in 2020. Although its share declined, the sector still represented 39.30 percent of GRDP in 2024.
Mining and quarrying was the second-largest contributor, although its share also declined from 14.08 percent to 13.01 percent during the same period.
At the same time, several sectors began to expand their roles. Manufacturing increased its contribution from 5.75 percent to 6.54 percent, while transportation and warehousing rose from 2.89 percent to 3.70 percent. These changes suggest that economic diversification is beginning to occur, although primary-sector dependence remains substantial.
To understand whether these sectors were becoming more competitive, the researchers used Shift-Share Analysis, a method that separates the effects of overall provincial growth, sectoral structure, and local competitiveness. They also applied Location Quotient (LQ) analysis to identify sectors that are relatively specialized in Aceh Tamiang.
The results reveal a significant structural weakness. The proportional shift, which reflects the influence of the sectoral composition of the economy, was negative at approximately IDR 120.16 billion. The differential shift, which represents local competitive performance, was also negative at approximately IDR 228.70 billion.
Together, these results indicate that Aceh Tamiang is facing two challenges at once. Its economic structure remains concentrated in sectors that are growing relatively slowly, while the competitiveness of many local sectors is also weaker than that of the same sectors at the provincial level.
Agriculture and Mining Classified as Lagging Sectors
The sectoral competitiveness mapping provides one of the study’s most important findings. Among the 17 sectors analyzed, only Other Services Activities was classified as a progressive sector, or Quadrant I. This means it combines a favorable industry structure with positive local competitiveness.
Six sectors were classified as developing sectors in Quadrant II. These include wholesale and retail trade, transportation and warehousing, information and communication, human health and social work, accommodation and food services, and water supply and waste management.
These sectors benefit from favorable growth trends at the provincial level, but their competitiveness in Aceh Tamiang remains below the provincial benchmark.
Three sectors—manufacturing, construction, and financial and insurance activities—were classified as potential sectors in Quadrant III. Manufacturing stands out because it recorded a positive competitive shift of approximately IDR 62.30 billion.
The most concerning result is the classification of seven sectors as lagging sectors in Quadrant IV. These include agriculture, forestry and fishery, and mining and quarrying—the two major pillars of Aceh Tamiang’s economy.
Manufacturing Offers a New Growth Opportunity
The Location Quotient results provide another important perspective. Agriculture, forestry and fishery recorded an LQ of 1.43 in 2024, while mining and quarrying reached 1.74. An LQ above one indicates that a sector has a higher concentration in Aceh Tamiang than in Aceh Province as a whole.
However, specialization does not automatically mean strong competitiveness. Both agriculture and mining are classified as lagging sectors under the Shift-Share analysis.
This creates a structural paradox: Aceh Tamiang is highly specialized in sectors that form the foundation of its economy, but those same sectors are losing relative competitive strength.
Manufacturing presents a different trajectory. Its LQ increased from 1.25 in 2020 to 1.53 in 2024, while its local competitive effect remained positive.
According to the study, this combination makes manufacturing a promising target for medium-term development. One important opportunity is downstream processing, in which local agricultural, plantation, mining, and fishery commodities are processed into higher-value products instead of being sold primarily as raw materials.
Productivity and Infrastructure Are Critical
Rahmilia Hadiyani, Darlis Azis, and Haikal Syauqan recommend that Aceh Tamiang’s development strategy should move beyond simply maintaining traditional economic sectors. The region needs to raise productivity while gradually transforming its economic structure.
For agriculture, the recommendations include modernization, production intensification, commodity diversification, and better access to credit for smallholders. For manufacturing, policymakers are encouraged to support downstream industries based on local commodities such as palm oil, rubber, and fishery products.
Infrastructure is another major priority. Trade, transportation, warehousing, and communication sectors are operating within favorable provincial trends, but local competitiveness remains weak. Improving roads, ports, and logistics hubs could help Aceh Tamiang capture more of the growth occurring in these sectors.
The researchers also identify Other Services Activities as a local success story. Although the sector accounted for only 1.99 percent of GRDP in 2024, it was the only sector classified as progressive. Further research into the businesses and organizations operating in this sector could help identify practices that might be replicated elsewhere.
What the Findings Mean for Aceh Tamiang
The study suggests that Aceh Tamiang’s main economic challenge is not a lack of growth, but a lack of sufficient competitiveness and structural transformation.
The regency’s economy expanded by 11.07 percent between 2020 and 2024, yet Aceh Province grew by 16.87 percent. This gap caused Aceh Tamiang’s share of provincial GRDP to fall from 4.57 percent to 4.34 percent.
For policymakers, the message is clear: maintaining dependence on agriculture and mining without increasing productivity and value-added processing could make it increasingly difficult for Aceh Tamiang to catch up with faster-growing areas of Aceh.
The researchers therefore emphasize modernization of the primary sector, downstream industrialization, improved infrastructure, and stronger local productivity as key components of a more competitive regional economy.
Author Profiles
Rahmilia Hadiyani — Universitas Syiah Kuala, Aceh. She is the corresponding author of the study and is affiliated with USK. Her work in this article focuses on regional economic structure and sectoral competitiveness.
Darlis Azis — Universitas Syiah Kuala, Aceh. He is a co-author of the study examining economic structure and sectoral competitiveness in Aceh Tamiang.
Haikal Syauqan — UIN Ar-Raniry, Aceh. He is a co-author of the study focusing on the regional economic development dynamics examined in Aceh Tamiang.
The published article does not provide academic degrees or more detailed professional biographies for the three authors beyond their institutional affiliations and the subject of the study.
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