Indonesia is a resource-rich nation with a population of approximately 237.6 million and a GDP of $672.45 billion in 2010. The country faces challenges such as revenue sharing conflicts, high poverty rates in resource-rich areas, and issues related to transparency and accountability in public financial management. However, there have been recent reforms, including the adoption of the Extractive Industry Transparency Initiative (EITI) and improvements in environmental laws and public information access.

1. Ridaya Laodengkowe
Coordinator, National Coalition Publish What
You Pay Indonesia

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3.  Capital: Jakarta
 Provinces: 33  490 regencies/municipalities
 Total Area: 1,919,440.00 sq km (741,099.93 sq mi, almost
three times the size of Texas)
 Population 237.556.363 (PS 2010), Estimated Population
in 2050: 337,807,011
 Languages Bahasa Indonesia (official, modified form of
Malay)
 GDP (2010) $ 672,450 million, Tax Ratio 11,9 % (2010)
 Natural Resources
petroleum, coal, copper, gold, tin, nickel, bauxit
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4.  National Revenue 2011 (estimate): US $ 1.100 billion
 GDP composition by sector:
– Agriculture: 14,4%
– Industry: 48,1% (including petroleum and mining)
– Services: 37,5%
 Oil production: 970,000 bbl/day (2011 estimated), last
year (2011) targeted 965 but only 947 in realisation
 Natural gas production: 56 billion cum (2007 estimate)
 Indonesia is a former member of OPEC (until 2008)
 Currently Indonesia is a net oil importer (consumes
around 1,2 million bopd), but oil and gas is still one of the
major export commodity
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5. Resources
Oil 86,9 billion barrel
Gas 384,7 TCF
Coal Bed Methane (CBM) 453,30 TCF
Coal 104,76 billion ton
Nickel 1,9 billion ton
Copper 68,96 million ton
Bauksit 648,88 million ton
Source: MENR, February 2009
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6. Annual Revenue (in million USD)
Revenue
2004 2005 2006 2007 2008
1. Oil & Gas Revenue 12,18 14,26 21,02 20,53 26,35
2. Mining Revenue
1,01 1,82 3,27 4,11 3,66
a. Tax 0,72 1,33 2,54 3,15 2,62
b. Non-tax 0,29 0,49 0,73 0,96 1,05
3. Others revenue 0,02 0,03 0,07 0,14 0,10
TOTAL 13,21 16,11 24,36 24,77 30,12
Total State Revenue 45,37 51,28 72,28 77,92 83,69
% contribution of the sector 29,1% 31,4% 36,1% 30,2% 36,0%
Exchange rate (Rupiah/US$) 8.884 9.657 9.119 9.093 11.500
ICP (US$/barel) 37,17 51,84 63,86 69,69 103,31
Lifting (thousand bopd) 1.036 1.003 957 899 931
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7.  Resource rich areas tend to have history of vertical conflict
(Aceh, Papua)
• Unsatifaction with revenue sharing ---- Greater autonomy status
receive more natural resources revenue transfer from central
government
 Resource rich areas tend to have high poverty rate
 Excess of decentralisation (since 2000): irresponsible concession
awarding by local governments (KP; 7.000): no competitive bidding
process, no appropriate regulatory institutions, unclear revenue
stream
 History of violence and human rights violation in resource rich areas
 “Local resource curse”: social-economic problems surrounding
mining projects, environmental damages, public facilities
disturbances (road, bridges), air pollution
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8.  Weak environmental standard applied
 Tax evasion politico business
connection, corruption in tax institutions
 Lack of transparency
 Revenue data available in aggregated, difficult
even to reconcile sub-data in National Budget
 Contracts of mining are available by request, not
PSC documents (including POD, WP and Budget)
 Different view among Ministries: Energy and
Mineral Resources versus Ministry of Finance and
Ministry of Environment
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9. ..... Some progress
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10.  Public financial management reform
 Access to public information Law
 Extractive Industry Transparency Initiative
(EITI) adoption (2010)
 Mining Law Number 4/2009 --- put some
transparency measures
 Environment Protection and Management
Law
 Preparation of Petroleum Law Revision

11.  Put more transparency in budget process
and management
 There is space for public engagement, but
very limited
 Audit of government financial statements
(agency by agency) are disclouse
 Information of extractive revenue transfer
are available, though questions remain
 Limited disclousure on (country) revenue
from extractive industry

12.  Initiated by the House of Representative
(DPR)
 Government agencies mostly do n ot
realize the significant of the law
 CSOs have been using this for demanding
document related to extractive industry
 Become the legal basis for adopting EITI

13.  Government of Indonesia took 2,5 years to come
up with Presidential Decree to adopt EITI ----
extensive coordinating works inside government
 Become candidate country on December 20, 2010
------ 2 years to achieve compliance country
 Bring uniqueness in EITI implementing countries:
• Oil and gas
• Mining
• Sub-national
 Promote EITI in regional level ---- ASEAN
(Association of South East Asia Nations, 10
countries)

14.  Growing demand for specific laws
 Limitedcapacity of the House‟s members
and their staff
 Tendency to „compete‟ with government
whose staff are more experienced, or more
chance to hire independent experts

15.  Awareness of the important to draw reform agenda
in public finance management (MoF):
efficiency, uplift Indonesia position in global arena
 Awareness of the important to response to new
investment challenges (MoF, MENR)
 There are growing concern internationally on the
important of transparency and accountability
 Need to balance decentralisation with
„ACCOUNTABILITY‟ (MoF, MOHA)