MAKASSAR – Makassar is one of the cities that is the key to the economy in Indonesia.
According to the Asean Australia Smart Cities Trust Fund, it is known that Makassar City is the largest city in South Sulawesi which accounts for 20% of the population and more than 50% of the estimated GDP.
The city’s thriving economy is said to be built on trade, construction and manufacturing.
Not only that, the report compiled in 2021 also states that Makassar has a relatively autonomous system from the central government.
However, the public sector still plays an important role in the functioning of the economy.
Around 42% of the population in Makassar city go to work, but around a quarter of them live in poverty or extreme poverty line.
Using the PBB indicator, it is known that 12.6% or around 190,000 people in Makassar live in the extreme poverty line with an income of less than USD1/day or around IDR15,537 per day.
Meanwhile, 25% of the population or around 380,000 people live in poverty with an income of less than USD2/day or around IDR31,074 per day.
“This finding is much higher than the Indonesian national average,” as released by the World Bank in 2018.
This number was obtained based on data from the Central Statistics Agency (BPS), with Makassar’s inflation rate for the January 2020 calendar year of 0.66 percent and the year-on-year inflation rate (January 2020 against January 2019) of 2.25 percent.
Makassar’s economy had grown at 6.20 percent at the beginning of 2020 but slumped to 2.8 percent in the second quarter of the same year.
Due to the Covid-19 pandemic, Makassar City’s economic contraction which is expected to grow in 2020 and 2021 has also undergone changes.
To overcome this, Makassar Mayor Mohammad Ramdhan Pomanto also called as Danny Pomanto, did several things.
Among them are loosening economic activities by implementing strict health protocols and ensuring the supply and distribution of goods to maintain price stability.
Then, his party also developed an assistance scheme to maintain production continuity and allocate effective regional budgets in the stimulus program for economic activities.
Danny Pomanto also targeted development in six sectors, including trade, transportation, processing industry, construction, accommodation, food and beverage service, and corporate services.
Industry
Makassar’s economic foundation lies in the tertiary and secondary sectors.
The top 5 sectors that accounted for 71% of Makassar’s economy during the 2015–2019 period include 1) manufacturing, 2) wholesale and retail trade, motor vehicle repair, and motorcycles.
3) Construction, 4) information and communication, and 5) finance and insurance activities.
Economic vision
Still from the same data, apart from the Covid-19 pandemic, it is predicted that the Makassar economy will begin the recovery phase with the condition that maximum improvements are made in strategic sectors.
The strategies implemented by Danny Pomanto include preparing special economic stimulus for superior SMEs (small and medium enterprises), assistance schemes to maintain production continuity, setting up social safety nets for those affected, F refocusing, and budget reallocation.
The main development of this city which is expected to stimulate the local economy in 2022 and beyond is the development of the new Makassar Port, cargo train from Makassar to Parepare, and a new train station.
There is also an international integrated business center (global business district expansion to the reclaimed area), a new recreation & sports center, as well as plans to grow residential areas for middle-high income people.
Lastly is the maritime center, which includes a fishing port, warehouse, manufacturing, cold storage, education center for the marine and fisheries industry (in the northeast of Makassar).
