REDUCING ECONOMIC LEAKAGE: OPTIMIZING LOCAL RESOURCES THROUGH VALUE CHAINS AND APPROPRIATE TECHNOLOGY IN KAMPUNG BERAU

Abstract

Economic leakage is a structural challenge that hinders the optimisation of development benefits for local communities, including in coastal and inland villages of Berau Regency, East Kalimantan. This article critically examines the pattern of economic leakage in the value chain of local resources of Berau Village, with Derawan Island Village as an illustration of the case of a leading marine tourism destination, and formulates optimisation strategies through strengthening the value chain and the application of appropriate technology (TTG). The research uses a descriptive-analytical qualitative approach based on literature studies and official secondary data analysis (BPS Berau Regency, BPS East Kalimantan Province, Satu Data Berau Regency) combined with a synthesis of SINTA- and Scopus-indexed literature published in 2021–2026. The results of the study identified four main points of economic leakage, namely the sale of raw materials without added value, the lack of local processing technology, the dominance of foreign ownership in the accommodation sector and tour operators, and tourist spending which is mostly absorbed outside the village. The novelty of this article lies in the conceptual framework of the "Village Circular Value Chain Model", which integrates MSME clustering, appropriate technology, Village-Owned Enterprises (BUMK) institutions, and digital marketing, accompanied by a proposed Local Leakage Index (LLI) indicator as a measurement instrument for advanced primary research.