"Discussions on regional development have recently mounted particularly those emphasizing the need for prioritizing eastern Indonesia. The equity concern is of-course very relevant in this respect. However, another noticeable justification begins to surface. The increased importance of expanding exports, particularly those of the non-oil & gas category, suggests that the existing potentialities spreading throughout the country ought to be further explored. With respect to the resource use and other environmental consideration Jawa should perhaps no longer be the priority region in the future. The carrying capacity of the island has been surpassed, and therefore much attention needs to be given to the development of the outer islands. It is on these two concerns the review of Indonesia’s regional development in this paper will be based.
The equity issue, with particular reference to the interregional disparity and the gap between eastern and western Indonesia, is discussed along with the role of centralregional trans fers. Prior to the discussion, a brief analytical description on the transition of regional production structure is presented. The second concern, i.e the export performance and its relation with the regional comparative advantage, is elaborated in the subsequent section."