Indonesia Economic Update

dadang-solihin.blogspot.com 2

Name : Dr. Dadang Solihin, SE, MA
Place of Birth : Bandung, 6 November 1961
Campus : Darma Persada University Jln. Radin Inten II (Terusan
University, Jln
Casablanca) Pondok Kelapa – Jakarta 13450
Office Ph/Fax : +6221 864 9057
Cell Phone
C ll Ph : +6281 2932 2202
PIN BB : 277878F0
Email : dadangsol@yahoo.com
Website : dadang-solihin.blogspot.com
Japan : 1. Regional Development and Planning Training Course, JICA, Sapporo,
Experience Hokkaido, 1999
2. Local Government Administration Training Course, JICA,
Higashihiroshima, Hiroshima, 2001
3. International Symposium on Intergovernmental Transfers in Asian
Countries, Hitotsubashi University, Tokyo, 2001
4.
4 Assistant Professor at G d
A i P f Graduate S h l of A i P ifi Studies,
School f Asia-Pacific S di
Waseda University, Tokyo, 2004
5. Assistant Professor at Graduate School of Asia-Pacific Studies,
6
6. Assistant Professor at Graduate School of Asia-Pacific Studies
Asia Pacific Studies,
7. Assistant Professor at Graduate School of Asia-Pacific Studies,
8.
8 Assistant Visiting Professor on Public Administration National
Administration,
Graduate Institute for Policy Studies (GRIPS), Tokyo 2012

Outline
• Remarkable Indonesia
• Regional Economic Performance
• Post Crisis Economic Performance
• Persistent Disparity Amidst High
Economic Growth
• Master Plan to Accelerate Economic
Growth (MP3EI) and Poverty Reduction
(MP3KI)
• Political Update

Sources:
1. Ginandjar Kartasasmita (2012)
2. Investment Coordinating Board (
g (2012)
)

United Nations Conference on Trade
and Development (UNCTAD):


Regional Economic Performance
eg o a co o c e o a ce
Major Regions (yoy,%) ASEAN (yoy,%)
(y y, )
% yoy
4,0 %, yoy
4,0 2,92,5
29 27 2,9
29 16
2,7
1,82,01,7 14 2009 2010
2,0
12 2011* 2012*
0,0 10
-0,7
-2,0 8

-2,6 6
-4,0
-4,1 4

-6,0 2
-6,3 0
-8,0 Indonesia Singapore Malaysia Thailand Phillipina
-2
US Europe
p Japan
p
-4
*Projection 2009 2010 2011* 2012* *Projection
Source: WEO, IMF Juni 2011 Source: WEO, IMF Juni 2011


GDP Gro th
Growth


Why I d
Wh Indonesia is M
i More R ili t?
Resilient?

• Measures taken in 1998/1999
not only to overcome the
y
crises
• but also to better prepare the
economy against future
i tf t
(external) economic shocks,
establishing safety
mechanism and crisis
protocol.


1/2
Export
E port to GDP Ratio

45
40.8
40 39.1
34.0
34 0
35
32.7 31.0
29.4
30 32.1 29.9
30.5

25 26.4
24.6
24.1
20

15
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


2/2
Export to GDP Ratio
Compared to Other Regional Countries
Asian Countries
Malaysia Philippines Singapore Thailand Korea Taiwan Hong Kong

2006 116.5 47.5 234.4 73.7 39.7 68.0 205.2

2007 110.1 42.9 218.9 73.3 41.9 72.0 207.9

2008 103.0 37.2 233.4 76.4 53.0 73.0 212.4

2009 96.2 32.4 199.9 68.3 49.8 62.3 194.5

2010 97.4 35.0 211.1 71.3 52.4 73.6 222.9


Indonesia’s Export Destination
I d i ’ E t D ti ti


E port
Export


Rupiah Movement
R piah Mo ement


Fiscal Deficit (%)


Debt Profile
(Trillion Rp) (% GDP)
4,000 47% 50%

3,500 45%
39%
40%
3,000 35%
33% 35%
2,500 28%
26% 30%
25% 24%
2,000
2 000 22% 25%
20%
824 807 808 20%
1,500 779
853 754 774 15%
1,000
1 000 655 609 652
10%
500 836 902 1,034 1,134 1,205 1,221 5%
659 693 737 784
0 0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Domestic Foreign % GDP (right)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GDP 2,774 3,339 3,957 4,954 5,613 6,423 7,227 8,120 9,123 10,278
Total Debt 1,313 1,302 1,389 1,637 1,590 1,677 1,813 1,958 2,012 2,029

Debt to GDP Ratio
in Selected Countries (2009)


PRC = People’s Republic of China, UK = United Kingdom, US = United States.
1Daily stock price indexes of combined Shanghai and Shenzhen composites, weighted by respective market capitalizations

Source: ADB, 2011


National Currency Reserve
Net International Reserves


Inflation

Source: BPS

Poverty


Unemployment
Unemplo ment


Rising Gini Ratio


Regional Disparity
35
31.9 32.0

30

25 23.0
21.2
19.6 19.7
20 18.8
16 9 17.5
16.9
15.8 15.8 16.1
15 13.9 14.214.2 14.6
11.3
10.3 10.7
10
0 8.5 8.5 8.6 8.7 9.0 9.2
7.4
6.6 6.8
5.3 5.8 6.3
5 3.7 4.2

0

P.Barat
Keppri

orontalo

Papua
Sumut
Jambi

Maluku
Jakarta

Yogya
Sumbar

Sumsel
Babel

Kaltim

Aceh
Sultra
Jatim
Banten

NTT
ampung
Sulut

engkulu
Malut
Kalbar

Jateng

NTB
Sulteng
Kalsel

Kalteng

Sulbar
Jabar
Bali

Sulsel
Riau

S

Be
La

Go

Western vs Eastern Indonesia
% RGDP 1980 1990 2000 2010

WI 80 84 83 82

EI 20 16 17 18

%
1980 1990 2000 2010
Population
WI 83 82 81 80

EI 17 18 19 20

Gini
2007 2008 2009 2010
Coefficient
WI 0.33 0.31 0.32 0.35

EI 0.34 0.33 0.34 0.38

Western Indonesia: Aceh, Sumut, Sumbar, Riau, Kepri, Jambi, Sumsel, Babel, Bengkulu, Lampung, DKI,
, , , , p , , , , g , p g, ,
Jabar, Banten, Jateng, DIY, Jatim, Bali
Eastern Indonesia: Kalbar, Kalteng, Kalsel, Kaltim, Sulut, Gorontalo, Sulteng, Sulsel, Sultra, Sulbar, NTB,
NTT, Maluku, Malut, Papua, Papua Barat


Open Unemployment and
Under-
Under-employment (2005-2010)
(2005-
2005 2010
Open Unemployment (Not Working) 11,9 Million (11,2%) 8,3 Million (7.1%)
Under employment
Under-employment (Working Less than 35 Hours/Week) 28,9
28 9 Million (30 8%)
(30,8%) 33,3
33 3 Million (30 7%)
(30.7%)

OPEN UNEMPLOYMENT AND UNDER
2001 - 2010

MILLION)
LLION)

11,9 33,3
33,5 12
10,9
10 9

OYMENT (M
YMENT (MIL

32,2 31,6 11
10,3
9,9 10,0 31,1
30,9 30,4 10
9,4
9,1

OPE UNEMPLO
9,0
90
ER-EMPLOY

29,6 28,9
29,2
28,9 29,1 9
8,3
8,0
28,3 27,7 27,9 8

EN
UNDE

27 7
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

UNDER-EMPLOYMENT OPEN EMPLOYMENT


Unemployment by Age
p y y g
3.500.000

Age 15-24
%
3.000.000 Years
2007 (Ø) 35
2.500.000 2008 (Ø) 29
31%
2009 (Ø) 28
29%
NEMPLOYED

2.000.000
2010 (Ø) 29
15 -
UN

1.500.000
1 500 000 19
20 - Ø = Average February and
24
25 - August
29
1.000.000 30 -
34
35 -
39
40 -
500.000 44
45 -
49
50 -
54
-
2007 2008 2009 2010 2011 *)


Imbalance Economic and
Employment Structures
ECONOMIC STRUCTURE EMPLOYMENT STRUCTURE
2010 February 2011
y
Services (10,19%) Agriculture (15,34%)
Social Services (15,30%)
Finance (7,21%)
Finance (1,85%)
Agriculture (38,17%)
Transportation (6,50%) Mining (11,15%) Transportation (5,02%)

Trading (13,72%) Trading (20,88%)
Mining (1,22%)
Manufacturing (24,82%)
g( , ) Construction (5,02%)
Construction(10,29%)
C t ti (10 29%) Manufacturing (12 31%)
M f t i (12,31%)
Electricity, gas, water (0,23%)
Electricity(0,78%)

Unemployed
0% 7%
Others
Manufacturing/
15%
y
Industry
6%

Agriculture
72%

Poor Household

Imbalance in Land Available for
Farming Households (%)

GINI RATIO
0.562
Households
Land

Source: BPS


Tradables and Non Tradables
in
i GDP 2001-2010 (%)
2001-
10,00
8,96
9,00 8,55
8,19
7,81
8,00 7,43
7,13
7 00
7,00 6,30
6,02
6,00 5,28
4,89
5,00 3.81
3 81 3.85
3.86 3.85
4,00 3.51 3.23 3.72 3.47 3.05

3,00 6,35 6,01 6,10
2.64 5,69
, 5,50
4,78 5,03
5 03 4,58
2,00 4,50
3,64
1,00
0,00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PDB
GDP Sektor non tradable
Non Tradable Tradable tradable
Sektor
Sektor tradable: (1) Agriculture, Animal Husbandry, Forest and Fishery, (2) Mining (3) Manufacturing Industry.
Sektor non-tradable: 1. Electricity, Gas, Clean Water, 2. Construction, Trading, Hotel, and Restaurant, 3. Transportation
and Communication, 4.Finance, Real Estate and Corporate Service, 5. Social Services.


Human Development Index
p
Indonesia, 1980-2011
1980-

Source: Human Development Report – UNDP, 2011


HDI Asean 2010
2010
Country
y
Level
L l Index
I d
Singapore 27 0.846
Brunei 37 0.805
0 805
Malaysia 57 0.774
Thailand 92 0.654
0 654
Phillipines 97 0.638
Indonesia 108 0.600
0 600
Viet Nam 113 0.572
Cambodia 124 0.490
0 490
Myanmar 132 0.451
# Countries 169
In 2009 Indonesia’s HDI was 111
Source: HDR 2010: The Real Wealth of Nations (UNDP)
( )


HDI by Components
(Selected Countries, 2011)
Means Years Of Expected Years
Life Expectancy
Schooling
g Of Schooling
g

Philippines 68.7 8.9 11.9
China 73.5
73 5 7.5
75 11.6
11 6
Thailand 74.1 6.6 12.3
Malaysia 74.2
74 2 9.5
95 12.6
12 6
Indonesia 69.4 5.8 13.2
Viet Nam 75.2
75 2 5.5
55 10.4
10 4

Source: HDR 2010: The Real Wealth of Nations (UNDP)


MP3EI
Number of Projects and Amount of Investment

2011 2012
Institution Investment Project No. Investment Project No.
(Rp. Trillion) (Rp. Trillion)
Government 76.6 24 66.2 15
SOE 131 24 90.3 20
Private 168.6 38 301.6 38
Mix 128.3 8 78.2 11
Total 490.5 91 356.3 84


Investment Plan and Employment Created by
Economic Corridor Activities
Investment (Trillion Rupiah) New Employment
p y
SUMATERA;35,6 JAWA; 117,2 (Thousand) JAWA;188,0
SUMATERA; 93,9
KALIMANTAN;
1 074
. ,2
PAPUA-
KEPULAUAN
MALUKU;440,9
KALIMANTAN; PAPUA
-
488 ,1 KEPULAUAN SULAWESI;
693,4
;
MALUKU;
3.422, 4

BALI NUSA
-
TENGGARA; 1
, 57,
SULAWESI;
189,7 BALI- NUSA
TENGGARA;
241,0
SUMATERA JAWA - -
KALIMANTAN SULAWESI BALINUSA TENGGARA PAPUAKEPULAUAN MALUKU SUMATERA JAWA KALIMANTAN SULAWESI BALI-NUSA TENGGARA PAPUA-KEPULAUAN MALUKU

INVESTMENT
Rp. 1.328,6 Trillion
R 1 328 6 T illi

NEW EMPLOYMENT
5.713,0 Thousand
,


Employment to be Created in Each Economic Corridor
KALIMANTAN CORIDOR SULAWESI CORIDOR
SUMATERA CORIDOR
Leading Sector: Palm Oil, Leading Sector: Steel, Leading Sector: Nickel;
Coal, and JSS (Sunda Strait Bauxite; Palm Oil, Coal; Oil Agriculture Food; Oil; Cocoa
Bridge) and Timber and Fisheries

JAWA CORIDOR
PAPUA-MALUKU ISLANDS
Leading Sector: Food
g BALI-NUSA TENGGARA CORIDOR
Beverages, Textiles; CORIDOR
Transportation Equipment; Leading Sector: Nickel;
Shipping; iron steel, and Leading Sector: Tourism, Copper; Agriculture Food; Oil
defense Livestock and Fisheries and Fishing

NEW NEW NEW NEW NEW NEW
EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT
(Thousand) (Thousand) (Thousand) (Thousand) (Thousand) (Thousand)

93,9 188,0 1.704,2 693,4 241,0 3.422,4


Clusters of Poverty Alleviation Programs

3rd CLUSTER
[Assist to have fish-rod & boat]
2nd CLUSTER
[Facilitate with fish rod] Micro- & Small-scale
1ST CLUSTER Enterprise Empowerment
p p
[Provide fish] Community
Empowerment Programs Micro credits provision (<
Assistance & Rp 5 million) through
Social Protection Programs Block grants for 6,408 sub-
g banks, & other types of
, yp
Target: 17.5 mil. poor HH: districts (rural, urban, dis- financial assistance
advantaged regions, regional
rice subsidy, cash & village infrastructures)
transfers, health PNPM Mandiri
insurance, & scholarships
i h l hi Target: SMEs
Target: poor communities
of subdistricts
Target: the poorest, poor 4th Cluster
& near poor Households
6 Pro-Poor Programs
and 3 additional
programs

Political Update
• Indonesia is coping well with
democratic imperatives.
– Strong parliament
– Strong media
– Strong civil society
• Indonesia’s Democracy:
stable, vibrant and d
t bl ib t d dynamic. i


• Political temperature is rising
ahead of 2014 Parliament and
Presidential Election.
• With democracy comes:
– Human rights
– Freedom of association
– F d
Freedom of expression
f i
– Etc.


• Giving rise to conflicts:
– Sectarian
– Environmental
– Local interest
– Labor and wage disputes
• Political implications of economic
policies subsidy issue

• Governance and Corruption
Issues.
• These are the challenges that
g
Indonesia as a young, functioning
democracy has the cope with,
wisely,
wisely peacefully and fairly
fairly.


Indonesia-Japan
Indonesia-

 BILATERAL  G to G
 REGIONAL  G to P
 MULTILATERAL
 P to G

 P to P


Indonesia Economic Update

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