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THE CONTRIBUTION OF FISHERIES SUBSECTOR PERFORMANCE IN

INCREASING ECONOMIC GROWTH IN THE EASTERN INDONESIA

REGION

Said Latuconsina

, Darwati Susilastuti

, Meirinaldi

, Widiyarini

Universitas Borobudur, Jakarta, Indonesia

1,2,3

Universitas Indraprasta PGRI, Jakarta, Indonesia

sconsina@gmail.com

, darwati_[email protected]

, meirina[email protected]m

vwidiya2513@gmail.com

ABSTRACT

This research was conducted to determine the contribution of the performance of the fisheries subsector

to economic growth in the Eastern Indonesia Region. Fishing is important for maintaining community

identity, social cohesion and individual fishing status, and as the glue that binds communities together.

Solutions to challenges in the marine and fisheries sector require a trend of insight and synergy at the

regional level, such as IUU fishing, marine waste, fisheries trade barriers that are linked to tariffs. The

Pooled Least Square Linear Regression method is used to analyze panel data using a quantitative

approach. The sample data used is provincial data in WPPN RI 714, 715 and 718, which consists of 10

provinces cross-section data, 7 years of time series data. The result is that the performance of the fisheries

subsector has a significant and positive influence on economic growth in the Eastern Indonesia Region.

The magnitude of the influence of Fisheries Subsector Performance on Economic Growth is very strong

and the increase is inelastic. The performance of the fisheries subsector can explain 89.92 percent of

changes in economic growth. Measurable fishing is carried out to ensure the sustainability of fish

resources is maintained and can provide fishermen's welfare, provide expansion and employment

opportunities, increase added value and competitiveness due to fisheries, ensure business certainty,

contribute to the world of business, and can increase economic growth.

Keywords: Fisheries Subsector Performance; Economic Growth

INTRODUCTION

Being the largest archipelagic country with a maritime area that can be managed at 5.8

million km2, the maritime sector is very strategic for Indonesia. Indonesia's fisheries potential is

the largest in the world, both capture fisheries and aquaculture. To maximize fisheries potential,

the government issued Government Regulation number 11 of 2023 concerning Measurable

Fishing. as well as issuing Minister of Maritime Affairs and Fisheries Regulation number 28 of

2023 concerning Regulations for Measurable Fishing applications. This regulation regulates that

Measurable Fishing Zones are determined in each WPPN RI in sea and high seas waters as 6

Zones. The fishing quota in the Measured Fishing Zone consists of: (1) industrial quota, (two)

fishermen's quota and (three) activity quota not for commercial purposes.

Capture fisheries are the backbone of many coastal communities and contribute to the local

economy, employment and food security. It is estimated that globally more than 39 million people

work in the capture fisheries sector. At the same time, trade in fishery products is one of the most

advanced sectors because 38 percent of world fish production enters international trade (FAO,

2021). The income level of fishermen is an indicator to see the level of welfare of fisheries

farmers. The performance of the fisheries subsector has a major influence on economic growth

and has an impact on the welfare of fishermen (Béné et al., 2016; Purno, 2023; Widiyarini et al.,

2022). But unfortunately, workers who work in the fisheries sector still experience many

obstacles, including a lack of knowledge and a lack of technological adaptation (Alagappan &

Kumaran, 2013; Fernandes-Salvador et al., 2022; Hosain et al., 2014).

The shrimp commodity is the largest foreign exchange contributor to the fisheries sector.

In 2019, shrimp commodities were successfully produced reaching 861,300 tonnes with an export

value of US$ 1.7 billion. Shrimp became the most exported fishery commodity in 2020. Its

volume was recorded to have increased by 15.2% from 2019. In 2020, the export volume of

fishery products from Indonesia was 1.26 million tonnes with a value of US$5.2 billion. This

The Contribution of Fisheries Subsector Performance in Increasing Economic Growth in The Eastern 
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number increased 6.8% compared to the previous year which amounted to 1.18 million tonnage. 
homogeneously, the average increase in export volume of fishery products was 4.2% in the last 
five years. In 2021, shrimp commodities constitute the largest part of the national fisheries export 
composition using the value of US$. 2.2 billion. Shrimp is a strategic fishery commodity that 
needs joint support for development, global business and investment. Apart from shrimp, other 
commodities such as tuna, tuna and skipjack were also exported at 195.76 thousand tons. then, 
seaweed exports amounted to 195.57 thousand tons. Squid, cuttlefish and octopus were exported 
with a volume of 140.04 thousand tons. The export volume of small crabs and crabs reached 27.62 
thousand tons. ad interim, the export volume of other fishery products reached 464.58 thousand 
tons (KKP, 2023). 
The fisheries sector contributes to the country's net domestic product, nutritional security, 
and job creation. Considering the important role of public investment in the growth of the fisheries 
sector, there must be an increase in fisheries sector investment sponsored by the government 
(Baba et al., 2019). The government must improve the business environment, so that it can provide 
a stable investment flow and sustainable economic growth in the long term (Rizal et al., 2019). 
The  marine  and  fisheries  sector  has  a  role  in  regional  economic  development,  especially  in 
providing protein food and providing employment opportunities. However, the government has 
not paid special attention to the fisheries sector and entrepreneurs are still only looking for short-
term profits (Widiyarini & Latuconsina, 2022). The fisheries sector makes an important contribution 
in providing employment and generating large revenues from exports of fish and fish products. 
This sector can develop into an engine of rural economic growth and social development (Gupta, 
2019; Pascoe et al., 2019). The fisheries sector also contributes to creating new socio-economic 
opportunities for fishermen and improving the livelihoods of one of the poorest communities in 
society while maintaining coastal and marine natural resources (Freduah et al., 2017; Nader et al., 
2013). 
Various kinds of information on fisheries management in Indonesia have the potential to 
threaten the preservation of fish resources and the environment, the sustainability of people's 
livelihoods in the marine and fisheries sector, food security, and economic growth that originates 
from the utilization of marine and fisheries resources. The practice of fishing activities that violate 
regulations (illegal fishing), are not reported (unreported), and are not regulated (unregulated 
fishing) are a threat to Indonesian fishermen. As a maritime country whose territory consists 
mostly of maritime origin, Indonesia is not free from the threat of fish theft or illegal fishing. 
Illegal fishing is often carried out by foreign vessels and results in huge losses for Indonesia. 
Illegal fishing is illegal fishing activities or fishing activities carried out contrary to the provisions 
of laws and regulations in the fisheries sector. Another problem in the fisheries sector is the rate 
of  return  on  investment.  Fishing  communities  continue  to  suffer  the  impacts  of  irrational 
investments. The development of the fisheries sector is not necessarily commensurate with the 
level  of  investment  in  the  sector,  unlike  the  industrial  and  processing  sectors.  Unplanned 
investments have a negative impact on the productivity of fishing units, thereby affecting the 
socio-economic situation of small-scale fishermen (Guedri & Chakour, 2016; Lloret et al., 2018). The 
level  of  investment  in  the  fisheries  sector  is  growing  faster  than  the  agricultural  sector,  but 
investment efficiency in this sector is showing a decline. Over a certain period of time, the level 
of capitalization in the fisheries sector is very high, but catches tend to decrease (Grimm et al., 
2012; Suresh & Shinoj, 2018). 
 
RESEARCH METHOD 
This  research  was  conducted  to  determine  the  contribution  of  the  performance  of  the 
fisheries subsector to economic growth in Eastern Indonesia. The research method used in this 
research  is  Pooled  Least  Square  Multiple  Linear  Regression  and  simple  panel  data  with  a 
quantitative approach that uses secondary data. The sample data used is provincial data in WPPN 
RI 714, 715 and 718. The number of provinces used is 10 provinces, which in this study is called 
a cross-section, while the time series data uses 7 years, which in this study is considered a time 

The Contribution of Fisheries Subsector Performance in Increasing Economic Growth in The Eastern

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series. The number of observations is 70 panel data consisting of 10 cross-section data and 7 time

series data. The data used in this research comes from the Ministry of Maritime Affairs and

Fisheries from 2016 to 2022, in the form of panel data.

The sampling technique used is probability sampling, namely a sampling method in which

each member of the population has a specific, non-zero chance of being selected as a sample.

Sampling in this way allows the research results to be generalized. Random sampling often makes

sense for cross-section data, where at a certain point in time, units are selected at random from

the population. Wooldridge (2010) proves that random sampling, if stated correctly and there are

no restrictions on the dimensions of the time series, allows for temporal.

Table 1 Variables and Indicators

Variables

Indicators

Fisheries Subsector Performance

(x)

Gross Regional Domestic Product based on constant prices

for the fisheries subsector, in rupiah units per year.

Economic Growth (y)

Growth rate of Gross Regional Domestic Product based on

constant prices for the fisheries sector, in percentage units

per year

Source: Ministry of Maritime Affairs and Fisheries, 2022

The data used in this research is panel data in the form of annual reports which have been

compiled and published/published by the Ministry of Maritime Affairs and Fisheries in Eastern

Indonesia (WPPN RI 714, 715 and 718) in various editions and various other relevant sources.

such as national and international journals, dissertations, websites, textbooks and other research

results affiliated with this research.

RESULT AND DISCUSSION

Statistical Analysis Results

Table 2 Stationary Unit Root Test Results

Variables

Level

First Difference

Chi-square

Statistic

Chi-square

Statistic

Fisheries Subsector

0,3382

26.2975

0,0047

45.8107

Economic Growth

0,1892

29.8673

0,0037

46.6513

Source: data processed by eviews 10

From the results of the unit root test with ADF-Fisher, the results showed that all variables

were not stationary at level level, so it was necessary to carry out a stationary unit root test at the

first difference level. At the difference level, the results of the stationary unit root test with ADF-

Fisher Chi-square showed that all variables were stationary at the first difference level, so the

model could be continued using panel data regression.

Table 3 Simple Linear Regression Results Fixed Effect Model

Economic growth

Variable

Coefficient

Std. Error

t-Statistic

Prob.

55.68444

5.219638

10.66826

0.0000

Fisheries Subsector

0.444497

0.214573

2.071540

0.0419

R-squared

0.899159

Source: data processed by eviews 10

The interpretation of the regression equation is as follows:

y = 55,684 + 0,444 x

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Constant value = 55.684, which is a statistical calculation, if all ceteris paribus variables

(economic factors) have continuous values, then the Economic Growth value is 55.684. The

coefficient value β1 = 0.444 is the elasticity value of Fisheries Subsector Performance towards

Economic Growth of E = 0.444. An E value < 1 indicates that the increase in Fisheries Subsector

Performance is inelastic to Economic Growth. The magnitude of the influence of Fisheries

Subsector Performance has a strong influence on Economic Growth in the Eastern Indonesia

Region as shown by R-square = 0.899159 or 89.92 percent, meaning that the Fisheries Subsector

Performance variable can explain 89.92 percent of changes in Economic Growth, the remaining

11, 08 percent is influenced by other factors outside the model studied.

Based on the test results shown in Table 3 above, it can be explained the influence of

fisheries subsector performance variables on economic growth variables in the Eastern Indonesia

Region. The probability value (p-value) is 0.0419 < 0.05 so that Ho (insignificant influence) is

rejected and Ha (significant influence) is accepted. Thus, it is proven that the performance of the

Fisheries Subsector has a significant influence on Economic Growth in the Eastern Indonesia

Region.

Discussion

The Eastern Indonesia region is a warehouse for the fisheries sector, but due to the lack of

infrastructure, investors are less interested in investing in the fisheries sector. Currently the

fishing industry is still concentrated on the island of Java because the infrastructure has been

built. Therefore, using MP3EI requires infrastructure development in eastern Indonesia to be

realized. Maritime affairs and the economic activities associated with them offer many

opportunities. Therefore, building a sustainable marine economy is one of the most important

tasks and greatest opportunities in this era (Agustino et al., 2023; Martín Míguez et al., 2019).

Fisheries Economic Sustainability planning states policies and procedures for sustainable use of

the sea as well as maximizing benefits and enhancing value for present and future generations.

This plan provides a framework for resolving conflicts over the use of the sea and its resources,

and enables sustainable maritime economic growth in the long term.

Management of marine resources and ecosystems can overcome the challenges of coastal

and natural resource degradation, climate change and marine pollution, as well as the socio-

economic vulnerability of coastal people who are affected by changes in the condition of marine

and coastal ecosystems. The impact of climate change on the maritime and fisheries sector is very

large as a result of which the Indonesian government has decided on various policies, carried out

mitigation efforts to strengthen its identity as a maritime country, eradicated illegal, unreported,

unregulated (IUU) fishing, implemented a moratorium on used foreign vessels, increased speed

national economic growth, increasing food sovereignty and encouraging maritime and marine

economic development (Atmaji et al., 2021). Global projections until 2050 to meet projected food

needs, fish production must increase by 50% from current levels. But growth in domestic fish

production is projected to slow due to climate change and other constraints (Dey et al., 2016; Rice

& Garcia, 2011).

Solving challenges in the marine and fisheries sector requires a trend of insight and synergy

at the regional level, such as IUU fishing, marine waste, fisheries trade constraints related to

tariffs, as well as other challenges in the marine and fisheries sector that can be resolved together.

The challenges currently faced in marine and fisheries development, especially capture fisheries,

include: (a) Inadequate fishing control which has the potential to threaten the sustainability of

fish resources and ecosystems; (b) governance of capture fisheries that has not been integrated

and has not optimally grown the regional economy in accordance with the potential of its natural

fisheries resources; (c) Fishing port infrastructure and connectivity, including other facilities and

infrastructure, are inadequate and uneven; and (d) Unstable availability of raw materials due to

inadequate competitiveness and quality of fishery products.

To overcome the problems and challenges faced, the Government has prepared a

Measurable Fishing policy to become a reference for managing capture fisheries in Indonesia

while maintaining marine ecology which contributes to national economic growth and claims for

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Indonesia's maritime health. The Measurable Fishing Policy is implemented with the aim of

maintaining ecology and biodiversity, increasing regional economic growth and the welfare of

fishermen. A Measurable Fishing Policy is needed to eliminate the practice of fishing activities

that violate the law (illegal fishing), are not reported (unreported), and are not regulated

(unregulated fishing).

Through Measurable Fishing, the Indonesian Government can make optimal use of the

exploitation of fish resources by paying attention to the existing carrying capacity and its

sustainability through setting measured fishing zones and fishing quotas. Measurable fishing is

intended to be a way to ensure the sustainability of fish resources is maintained and can provide

fishermen's welfare, provide expansion and employment opportunities, increase the added value

and competitiveness of fisheries, ensure business certainty, contribute to the global struggle, and

for the country. The fisheries sector can play an important role in job creation and poverty

alleviation which will then lead to economic development (Bomdzele et al., 2021; Deka, 2021).

This sector can increase investment, the number of jobs and can absorb a lot of work energy

(Christensen et al., 2014). The tax allowance policy can encourage the development of the

fisheries sector which targets investment at home and abroad (Sundawa et al., 2021), fishermen

and fish cultivators. small scale can achieve long-term sustainability (Bjorndal et al., 2014).

In 2021, the fisheries sector showed positive growth, namely an increase of 9.69 percent

even though the Covid-19 pandemic was still hitting Indonesia. The Covid-19 pandemic has an

impact on the demand and supply chain for agricultural commodities such as fish and fishery

products due to the prolonged national lockdown which has a direct impact on the distribution of

production and marketing of inland fisheries, marine capture fisheries, seed supply and exports

of marine products (Purkait, 2020), and also impacts the lives of millions of people who depend

on this sector (Bhendarkar et al., 2021), as well as resulting in a lack of transportation to markets,

restrictions on exports of fish and fishery products, and low fish prices (Alam et al., 2022).

Indonesia has great potential to carry out a blue recovery after the Covid-19 pandemic

(Blue Recovery) and encourage the transition from extractive efforts to create added value and

productivity. The blue economy is a space for creating new discoveries and creativity, both in

existing and developing sectors, so that the blue economy can become a driver for increasing

inclusive prosperity.

For economic recovery and transformation after the Covid-19 pandemic, Blue Economy

means a new approach and new sources of economic growth that are more inclusive and

sustainable. The blue economy is a new engine for sustainable and inclusive Indonesian economic

growth. The Blue Economy potential is estimated at US $. 1.33 billion and can absorb 45 million

jobs.

The development of the blue economy can expand the use of opportunities to develop high-

added value economic activities, such as quality tourism, renewable energy development, circular

economy, and marine resource-based processing industries. The development of the blue

economy is beneficial for preserving marine biodiversity and marine and coastal ecosystems, and

sustainable livelihoods, especially for coastal people. Indonesia's transition to a blue economy is

needed as a model for sustainable marine-based industrial development that reduces economic

dependence on the extractive sector.

CONCLUSION

This research was conducted to determine the contribution of the performance of the

fisheries subsector to economic growth in the Eastern Indonesia Region. Fishing is important for

maintaining community identity, social cohesion and individual fishing status, and as the glue

that binds communities together. Solving challenges in the marine and fisheries sector requires a

common view and synergy at the regional level, such as IUU fishing, marine debris, fisheries

trade barriers related to tariffs.

The magnitude of the influence of the performance of the fisheries subsector on economic

growth is very strong and the increase is inelastic. The performance of the fisheries subsector can

explain 89.92 percent of changes in economic growth. Measurable fishing is carried out to ensure

The Contribution of Fisheries Subsector Performance in Increasing Economic Growth in The Eastern 
Indonesia Region 
1260                                        Return: Study of Management, Economic And Business, Vol 2 (12), December 2023 
 
the sustainability of fish resources is maintained and can provide fishermen's welfare, provide 
expansion and employment opportunities, increase added value and competitiveness of fishery 
products, ensure business certainty, contribute to the business world, and can increase economic 
growth. 
For  economic  recovery  and  transformation  after  the  Covid-19  pandemic,  the  Blue 
Economy is a new approach and a new source of economic growth that is more inclusive and 
sustainable. The blue economy is a new engine for sustainable and inclusive Indonesian economic 
growth. 
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