The Hendra Esmara Lecture on Regional Development was convened on Wednesday, 1 July 2026 in Padang (West Sumatra) by the Faculty of Economics and Business, Universitas Andalas and the Indonesian Regional Science Association (IRSA), and ANU Indonesia Project, in honour of the late Professor Hendra Esmara for his pioneering work in the field of regional analysis in Indonesia. More than 130 people participated in person (mostly Universitas Andalas faculty members and students) and 160 people participated online.

The 3rd Hendra Esmara Lecture on regional development was delivered by Professor Arief Anshory Yusuf (Universitas Padjadjaran and Dewan Ekonomi Nasional) entitled Seventy years of the Kuznets Curve: is education a facilitator of structural transformation or a driver of inequality? Abstract of the talk is provided below.

Professor Yusuf reinterprets the Kuznets hypothesis by examining whether education promotes structural transformation while simultaneously affecting income inequality. Building on two recent studies, it argues that Kuznets did not propose a fixed inverted-U relationship but instead emphasized understanding the drivers of inequality. Using Indonesia’s 1978–79 school-year reform as a natural experiment, the analysis finds that education facilitates movement into formal non-agricultural employment, supporting structural transformation. However, decomposition analyses show that education can also increase inequality, primarily by widening wage disparities within modern sectors rather than between sectors. The presentation introduces RIF–Oaxaca–Blinder decomposition as a method for analysing the determinants of inequality beyond average income effects.

The second part of the seminar discussed extractive industries and regional inequality with Professor Werry Darta Taifur (Universitas Andalas), Professor Budy Resosudarmo (The Australian National University).

In his research co-authored with Abdul Nasir, Professor Resosudarmo examines whether oil extraction generates a local-level natural resource curse in Indonesia. Using a natural experiment based on villages where oil drilling occurred but where production succeeded only in some locations, the study estimates the causal effects of oil production on local economic activity. Combining village-level data from the Ministry of Energy and Mineral Resources, BPS, and the 2016 Economic Census, the results show that oil-producing villages have significantly fewer small enterprises and lower employment than comparable non-producing villages. Extensive robustness and instrumental variable analyses confirm these findings, suggesting that resource extraction can weaken local economic diversification despite contributing to national economic development.

In his presentation, Professor Taifur recounted Hendra Esmara’s vision of balanced regional development and regional autonomy, evaluating Indonesia’s decentralization experience since Reformasi. While decentralization expanded opportunities for provinces outside Java, the presentation argues that persistent extractive institutions, oligarchic influence, and weak law enforcement have prevented these reforms from achieving their full potential. Drawing on institutional economics and Indonesian case studies, it highlights how resource-rich regions continue to experience inequality despite economic growth. Professor Taifur concludes that reducing regional disparities requires transforming extractive institutions into more inclusive governance, strengthening accountability, improving legal certainty, and ensuring decentralization benefits local communities rather than entrenched elites.

Download all slides from this link

Undergraduate students are invited to take part in an instagram challlenge based on Professor Arief Yusuf’s lecture. The challenge runs from 1 July through 7 July; the best content will be announced on Friday, 10 July.

To participate:

• Attend the lecture (in person or online) or watch the recording
• Create an Instagram post/feed based on the lecture and your own reflection and/or analysis
• The content can take any form (reels, carousel, etc) and be either in English or Indonesian – be creative!
• You can make as many contents as you wish and post it on you Instagram account between 1 July through 7 July 2026.
• Your account should be public so we can see it, and please tag us: @forum.pembangunan