Implementation of Local Economic Management to Improve the Welfare of the People of Sibolga City

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FORMOSA NEWS - Sibolga - Integrated Local Economic Strategy Needed to Lift Sibolga City Out of Sectoral Fragmentation. Unintegrated local economic management is leaving key workforce sectors behind in coastal North Sumatra, according to a 2026 study published in the Asian Journal of Management Analytics. The research shows that while targeted support has boosted small business revenues, the coastal city's fishermen continue to struggle with earnings well below the regional minimum wage. The investigation was conducted by Kaharuddin from the Institut Bisnis dan Teknologi Al Washliyah Sibolga alongside Fauziah Nur Simamora from Universitas Muhammadiyah Tapanuli Selatan. Published in July 2026, the four-month study evaluated how Sibolga City manages its local economic potential across the fisheries, trade, and micro, small, and medium enterprise (MSME) sectors. The authors conducted the research to identify structural obstacles preventing the port city from translating its strategic coastal geography into broad community welfare.

Background: Coastal Potential vs. Economic Realities
Sibolga City serves as a major trade gateway along the west coast of Sumatra and connects key supply routes to the Nias and Batu islands. Despite high population density and active port operations, local economic activities have historically operated in silos. Small-scale producers face major competitive hurdles, including limited access to capital, insufficient cold storage facilities, and lack of direct market channels. Consequently, raw catches and local goods yield minimal profit margins for small producers while external traders capture much of the added value.

Methodology: Holistic Fieldwork Across Key Sectors
The researchers utilized a qualitative case study methodology to examine economic operations across three key districts: North Sibolga (fisheries and port hubs), Sibolga City District (commercial markets), and South Sibolga (seafood processing and coastal settlements). Data collection techniques included:

• In-Depth Interviews: Primary data gathered from government officials, BUMN (State-Owned Enterprise) representatives, cooperative heads, 15 MSME owners, 20 fishermen, and traditional market traders.
  
• Focus Group Discussions (FGDs): Interactive sessions bringing together municipal policymakers, business actors, academics, and community leaders.
  
• Participatory Observations & Document Analysis: Field assessments of port facilities and markets, alongside evaluations of municipal strategic planning documents (RPJMD).
• Data was analyzed using the Miles, Huberman, and Saldana framework involving data condensation, visual display, and source triangulation.
  

Key Findings: The Welfare Disparity
The study revealed a stark divergence in economic outcomes resulting from fragmented program implementation:

• Low Fishermen Earnings: Traditional fishermen earn an average of IDR 1,850,000 per month—significantly below the 2025 Sibolga Minimum Wage (UMK) of IDR 2,800,000. Fishermen allocate 65% of their household income solely to food, highlighting severe economic vulnerability.
  
• MSME Mentoring Success: Micro-entrepreneurs supported by the local BUMN House experienced an average income increase of 15% to 20% following six months of targeted managerial and packaging assistance, reaching average monthly incomes of IDR 3,200,000.
  
• Market Trader Stagnation: Traditional market vendors averaged IDR 2,450,000 monthly, relying heavily on seasonal consumer purchasing power without structural capacity-building support.
  
• Structural Bottlenecks: Key barriers include weak inter-agency coordination between fishery and trade offices, lack of fish cold storage infrastructure, damaged coastal road networks, and an absence of formal municipal regulations protecting local goods.
  

Real-World Impact and Policy Implications
The findings offer actionable insights for municipal authorities, urban planners, and economic development agencies in coastal regions. To bridge the welfare gap, the study recommends establishing an integrated multi-stakeholder Local Economic Forum to eliminate inter-agency silos. Furthermore, the authors stress the urgency of drafting regional regulations specifically designed to protect local products, ease MSME licensing, and fund essential cold-chain logistics. Transitioning from short-term charitable aid to continuous, structured managerial mentoring can ensure long-term business resilience for coastal communities.

Author Profiles
Kaharuddin, M.M.: Researcher and academic faculty member at Institut Bisnis dan Teknologi Al Washliyah Sibolga, specializing in local economic management, MSME development, and regional business strategy.
Fauziah Nur Simamora, M.Si.: Researcher at Universitas Muhammadiyah Tapanuli Selatan, with expertise in public economics, regional development policy, and community empowerment.

Source

Kaharuddin, Fauziah Nur Simamora. Implementation of Local Economic Management to Improve the Welfare of the People of Sibolga City. Asian Journal of Management Analytics (AJMA) Vol. 5, No. 3 2026, Hal. 573-586.
DOI : https://doi.org/10.55927/ajma.v5i3.16669
URL: https://journal.formosapublisher.org/index.php/ajma