Economic contraction and inequality of two provinces with coastal characteristics in Sumatra: what are the causes?

The aim of this research is to find the causes of the problem of economic contraction and economic inequality in the Bengkulu and Kepulauan Riau provinces. The type of data collected is only sourced from secondary data, namely from the Indonesian Central Bureau of Statistics (2022) and data from literature or libraries through the documentation method and literature study. Data analysis was carried out through statistical analysis methods and qualitative descriptive analysis methods. The results showed that the Pearson Correlation between economic growth and economic inequality was 0.696 (in Bengkulu) and 0.689 (in the Kepulauan Riau). The trend of economic growth and economic inequality in both provinces is decreasing. Bad influence (backwash effect) in the form of a global economic recession (economic downturn) and the case of the Covid-19 pandemic (2019 – 2020) are considered to be the cause of economic contraction in the form of a decrease in economic growth (the extreme occurred in 2020, with -0.02 in the provinces of Bengkulu and -3.80 in Kepulauan Riau province). The trend of economic inequality (measured by the Gini index) which has decreased from year to year is considered a form of an anomaly because it is considered contrary to the decline in economic growth at the same time.