Integration of Indonesian Provinces: Alienated Neighbours?

What is the likely regional impact of an economic disturbance in a certain province in Indonesia? Using a refinement of the regional linkages concepts that have been applied to the EC case, this paper looks at the effects of certain regions on other regions, thereby providing a new perspective on the issue of economic distance among Indonesian provinces. This paper shows that economic distance among provinces is different from physical distance. Further, the paper shows that there are only weak interactions among various Indonesian islands which has led to the formation of several regional clusters within Indonesia. The paper also draws several policy conclusions regarding regional development in Indonesia.