Understanding the impact of mining activities and human capital improvement on achieving sustainable development goals; evidence from East Luwu, Indonesia

Andi Faisal Anwar, Dyah Wulan Sari, Haura Azzahra Tarbiyah Islamiya, Raja Adzrin Raja Ahmad and Nur Salimah Alias

Cogent Economics & Finance, 2024, vol. 12, issue 1, 2386401

Abstract: Mining activities and efforts to increase human capital in East Luwu Regency, Indonesia, have not been able to contribute significantly to achieving Sustainable Development Goals, namely reducing unemployment and poverty. This study aims to determine whether the contribution of the mining sector and human capital affects the achievement of SDGs, either directly or indirectly. The novelty of this research is that it seeks to explore how much influence human capital and the mining sector in East Luwu, the largest mining center in Indonesia, have on realizing inclusive economic development. The type of research used is descriptive quantitative with a path analysis method approach using secondary time series data in the span of fifteen years, 2008-2022, obtained from the Statistics of Indonesia (BPS). Referring to the research results, it can be concluded that the mining sector’s contribution has a negative effect on reducing unemployment and poverty in East Luwu Regency. Likewise, human capital has a negative effect on reducing unemployment and poverty. Meanwhile, the unemployment rate variable positively affects the poverty rate. Seen from the indirect effect, the mining sector and human capital can reduce poverty indirectly through the unemployment rate variable. The implication of this study is to provide new information for the government and private sector to encourage the mining sector to grow inclusively and consistently in reducing unemployment and poverty, as stated in the vision of sustainable development goals (SDGs).The practical implication of this research is that it is new information as well as targets and strategies for the government and private sectors operating in the mining sector to jointly encourage a mining sector that can involve local communities in terms of labor supply and fulfilment of supply chain need to contribute to reducing unemployment and poverty. Likewise, in the aspect of increasing human capital, the quality should continue to be improved, such as the development of training and skills to be able to participate in mining activities to help vulnerable people get out of the poverty chain. Moreover, the huge government revenue from the mining sector allows the government and private sector to collaboratively contribute to improving the quality of human capital massively and achieving sustainable development, as stated in the vision of sustainable development goals (SDGs).

Date: 2024
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DOI: 10.1080/23322039.2024.2386401

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