Mapping Regional Economic Resilience of Indonesian Provinces Through PCA and K-Means Analysis to Support Regional Development Policy Optimization

Abstract

In Indonesia’s post-decentralization era, assessing regional economic resilience is critical to promoting inclusive development. This study constructs a composite resilience index using seven indicators Human Development Index (HDI), Open Unemployment Rate, GRDP per capita, Gini Ratio, Economic Growth, Capital Expenditure, and Own-Source Revenue (OSR) across 34 provinces from 2020–2024. Principal Component Analysis (PCA) and K-Means clustering are applied to identify resilience patterns and classify provinces into high, moderate, and low resilience categories. The findings reveal significant interprovincial disparities. Provinces such as DKI Jakarta (HDI: 81.65), Bali (HDI: 76.54), and DI Yogyakarta (HDI: 80.22) consistently demonstrate high resilience, supported by low unemployment (e.g., Jakarta: 5.78%) and robust fiscal capacity (e.g., OSR share: Jakarta 58.29%). In contrast, Papua and West Papua exhibit lower resilience scores, characterized by HDI below 65, limited OSR below 15%, and economic growth volatility. Correlation analysis indicates a strong positive association between HDI and fiscal indicators (r = 0.82), while OLS regression confirms OSR and Capital Expenditure as significant predictors of resilience (p < 0.05). Spatial mapping highlights geographic clustering of resilience, with Western Indonesia outperforming the Eastern region— underscoring persistent spatial inequalities. These findings reinforce the necessity for regionally differentiated policies. The study recommends enhancing fiscal autonomy, investing in human capital, and integrating Fintech-based financial inclusion, especially for lagging regions. The study recommends boosting fiscal autonomy, investing in human capital, and leveraging Fintech for inclusive growth. This framework supports evidence-based policies aligned with Indonesia’s SDG and post-2024 development goals.