Track: Systems Dynamics

Abstract

Infrastructure in Indonesia is currently still considered low, both in terms of quality and quantity when compared to other countries, especially in Southeast Asia, where the availability of infrastructure is a condition for a region to change the potential of the region into economic benefits for its people. Realizing this, the government is currently trying to increase the availability of infrastructure in all sectors needed to leverage the national economy. In fulfilling infrastructure needs to increase the added value of a region's potential to regional income, it is influenced by several important variables that need to be considered by policy makers in developing infrastructure financing strategies. This research aims to see and measure the impact of infrastructure development on economic growth by taking a case study in Lumajang Regency, East Java Province. Lumajang Regency was chosen as the object of research considering the region's GRDP growth is quite high while its economic growth is low. The Dynamic System Method is used in the hope that it can see the issue of infrastructure development as a whole both based on its impact and its linkages with other sectors. With the ability to simulate simultaneously, obtained the role of sectors that contribute to the added value of the construction sector with a proportion of 45.7% followed by the transportation and communication sector at 33.2% in second place, and the agricultural sector ranked 3rd with a score of 15%. Based on the results of various scenarios of infrastructure development policy, it is expected that the best policy is to increase GRDP.