Analysis of Economic Growth and Structural Changes and the Implication for Choice of Development Strategy: A Case Study of Pasaman Regency

The average economic growth rate of Pasaman Regency before the administrative division (1993-2002) was 5.8%, then after the division increased slightly to an average of 5.9%. This figure is far lower than the rate of growth of the New Autonomous Region of West Pasaman Regency (6.4 %). After the division, agricultural and mining sectors became more dominant in the economy of Pasaman making up 54.6% but the contribution of the manufacturing sector declined sharply from 10.3% to 4.6% as most of the existing Pasaman processing industry became part of West Pasaman. The comparative advantages of Pasaman Regency are mainly in the sectors: agriculture, forestry and freshwater fisheries. The district’s economic growth is mainly influenced by factors originating from outside the region as indicated by the relatively high regional-share component of 159%. While regional division has benefited West Pasaman, it has provided no significant benefit for the parent region which can still be categorized as underdeveloped. An analysis of the Klassen Typology Matrix indicates that policies and programs that are relevant for the development of disadvantaged areas should be directed at providing employment through the use of labor-intensive technologies. This development should focus on agriculture, forestry and freshwater fisheries producing products with a significantly extensive market.