THE ANALYSIS OF FOREIGN AND DOMESTIC INVESTMENT DISPARITY AMONG PROVINCE IN EASTERN INDONESIA AFTER DECENTRALIZATION
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The reformation era is signed with the shifting role of policy from central government to local government. The eastern parts of Indonesia have so many potential resources to increase the economic welfare. On the other side, they have several problems and constraints to utilize the natural and human resources. One of the main problems to promote economy of eastern Indonesia is how to increase investment both foreign and domestic investments. Investment is a machine to generate the Indonesian economy. The policy to promote investments is heavily influenced by political will and public administration. Promoting foreign and domestic investments in eastern Indonesia faces a number of factors such as social political conditions, scarcity of economic infrastructure, employment and taxation problems, etc. Investments in eastern Indonesia are also affected by consistent interactions between local government and central government and inter government institutions. The aimof this research is to analyze the growth of foreign and domestic investments among provinces in eastern Indonesia. This research identifies and compares the impacts of decentralization policy on investment disparity both foreign and domestic investment in eastern Indonesia's provinces. The research uses combined research methodology; investment disparity ratio, regression and other economic approaches. The research concludes that there is significant disparity among provinces in eastern Indonesia. The decentralization policy has different impacts to those provinces. The suggestion of this research is to promotong conducive situation by implementing comprehensive economic policies and also maintaining social political stability, providing adequate economic infrastructure and the whilism policy between central and local government and inter government institutions.