Purpose: As a province located outside Java Island, the provinces in Sumatera Island have diversity in economic growth among the regions which could lead to the inequality of development. This study aims to analyze the convergence of sigma and absolute beta and also to measure the speed of the convergence of the economic growth in the new autonomous regions in Sumatera. Methodology: The research method in this study used the data panel in the form of Fixed Effect model. Results: The result of the research showed that the convergence of sigma occurred over four years during the study period while the convergence of the absolute beta did not occur. It can be seen from the Gross Regional Domestic Product (GRDP) per capita levels of the new autonomous regions which are lower and it does not grow faster than the new autonomous regions which have higher GRDP per capita levels. The absolute convergence rate is 11 percent per year and the time it takes to close half of the initial half-time conversion (the half-time convergence) is six years.

Indonesian authority put the fiscal decentralization as one of the policies established to delegate the authority of the central authority to each region to explore sources of income, to benefit the merit in receiving allocations from the higher level of authority, and to organize routine and investment spending. Poverty alleviation is an important agenda for a country to realize the welfare of its people so that poverty alleviation becomes an abroad and massive issue in implementing Sustainable Development Goals (SDGs). This study aims to see how big the influence of fiscal decentralization is, in terms of authority spending, in the form the allocation funding consisting of the General Allocation Funding (DAU), the Special Allocation Funding (DAK) and the Village Funding (DD) on the Poverty Rate in 34 provinces in Indonesia. This paper used a dynamic panel data analysis through the approach Generalized Method of Moment (GMM). The results of this study concluded that the DAU, DAK, and Village Funding variables becoming significantly influencing the rural poverty reduction in Indonesia.