Report No.

2788-IND
Indonesia: Long-Run Developmen!ILE GUIY
and Short-Run Adjustment
February 20, 1980
East Asia and Pacific Regional Office
FOR OFFICIAL USE ONLY
Document of the World Bank
This document has a restricted distribution and may be used by recipients
only in the performance of their official duties. Its contents may not
otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
Before November 15, 1978
US$1.00 Rp 415
Rp 1.00 = US$0.0024
Rp 1 million US$2,410
After November 15, 1978
US$1.00 = Rp 625
Rp 1.00 = ITS$0.0016
Rp 1 million US$1,600
FISCAL YEAR
Government - April 1 to March 31
Bank Indonesia - April 1 to March 31
State Banks - January 1 to December 31
FOR OFFICIAL USE ONLY
PREFACE
This report is based on the findings of a mission comprising
Lyn Squire (mission leader), Laurens Hoppenbrouwer, Sarath Rajapatirana
and Andrew Steer which visited Indonesia in October 1979. A draft of
the report was discussed with the Government in February 1980.
This document has a restricted distribution and may be used by recipients only in the performance
of their official duties. Its contents may not otherwise be disckosed without World Bank authorization.
INDONESIA: LONG-RUN DEVELOPMENT AND
SHORT-RUN ADJUSTMENT
Table of Contents
Page No.
SUMMARY AND CONCLUSIONS ... . . . . .. .. . . . . . . i
1. INTRODUCTION .... . . . . . . .. . . . . . . . . . . . .
2. LONG-RUN OBJECTIVES: REPELITA III . . . . . . . . . . . . . 2
Structural Transformation and Growth . . . . . . . . . . . 2
Equity and Employment . . . . . . . . . . . . . . . . . . 4
3. RECENT DEVELOPMENTS: DEVALUATION AND THE TERMS OF TRADE . . 7
International Price Competitiveness . . . . . . . . . . . 7
Domestic Price and Wage Movements . . . . . . . . . . . . 10
The Impact on Production and Trade . . . . . . . . . . . . 12
Implications for Public Sector Resources . . . . . . . . . 14
Inflation Policy .16
4. MINIMIZING THE COSTS OF SHORT-RUN ADJUSTMENT . . . . . . . . 21
An Historical Review . . . . . . . . . . . . . . . . . . . 21
Policy Options in the Short-Run . . . . . . . . . . . . . 24
Monetary Policy .... . . . . . . . . . . . . . . . . . 28
Trade Policy .... . . . . . . . . . . . . . . . . . . . 29
Investment Licensing ... . . . . . . . . . . . . . . . . 30
Administrative Capacity ... . . . . . . . . . . . . . . 31
5. RESOURCE MANAGEMENT, 1980-85 ... . . . . . . . . . . . . . 33
Oil Sector Developments, 1980-85 . . . . . . . . . . . . . 33
Budget Projections, 1980/81-1983/84 . . . . . . . . . . . 35
Balance-of-Payments Projections, 1980-85 . . . . . . . . . 37
The Resource Gap .38
External Assistance, Borrowing and Debt 1980-85 .41
Aid Recommendation .45
PROJECTIONS APPENDIX TO CHAPTER 5 . . . . . . . . . . . . . 47
MAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
STATISTICAL ANNEX . . . . . . . . . . . . . . . . . . . . . 59
Text Tables
Table No. Page No.
2.1 Structural Transformation During Repelita II and
Repelita III . . . . . . . . . . . . . . . . . . . . 3
2.2 Development Expenditures in Repelita II and III . . . 5
3.1 Crude Oil Prices 1970 - February 1980 . . . . . . . . 14
3.2 Central Government Budget Summary 1976/77 - 1979/80 . 15
3.3 Balance of Payments 1976/77 - 1979/80 . . . . . . . . 17
3.4 Consolidated Balance Sheet of Banking System . . . . . 20
4.1 Use of Incremental Oil Revenues 1974/75 and 1975/76
over 1973/74 . . . . . . . . . . . . . . . . . . . . 22
4.2 Credit Outstanding 1973-75 .. . . . . . . . . . . . . 24
4.3 Labor Intensity of Production . . . . . . . . . . . . 25
4.4 Foreign Exchange Content of Investment, Production
and Consumption . . . . . . . . . . . . . . . . . . 26
5.1 Oil Production and Consumption . . . . . . . . . . . . 34
5.2 Budget Revenues 1979-83 . . . . . . . . . . . . . . . 36
5.3 Projected Resource Gap and Summary Balance of
Payments, 1979-85 . . . . . . . . 40
5.4 Projected Public Sector Borrowing, Disbursements,
Debt Service, 1980-85 . . . . . . . . . . . . . . . 44
Text Figures
Figure No.
1 Indonesia: Trade-Weighted Exchange Rate Deviations
from Purchasing Power Parity . . . . . . . . . . . 9
2 Indonesia: International Competitiveness and Export
Profitability . . . . . . . . . . . . . . . . . . . 9
SUMMARY AND CONCLUSIONS
1. Since the distribution of the last Bank Report (Indonesia: Growth
Patterns, Social Progress and Development Prospects, Report No. 2093-IND,
February 20, 1979), the availability of foreign exchange to Indonesia has
increased substantially. Favorable movements in the international prices not
only of oil but also of Indonesia's other major traditional exports have, in
the space of a few months, transformed Indonesia's tightening resource
constraint into a temporary surfeit. Although the basic development issues -
especially the generation of job opportunities and the expansion of nonoil
exports - identified in last year's report remain as critical as ever, the
increased availability of foreign exchange has improved the prospects of
achieving the long-run targets established in Repelita III, the third
five-year plan (April 1979-March 1984). At the same time, it has complicated
the short-term task of limiting domestic inflation and maintaining the gains
in international competitiveness secured by the devaluation of November, 1978.
This report reviews recent events and assesses current policy options with
reference to the dual objectives of long-run development and short-run mone-
tary stability. The report concludes with a reassessment, and reconfirmation,
of the need for external assistance.
2. Repelita III contains a comprehensive statement of the government's
long-run objectives. The Trilogi Pembangunan or Development Trilogy comprises
equity, growth and national stability. Although rapid growth is fundamental,
Repelita III attaches great importance to an equitable development of the
economy especially through efforts to expand and equalize employment oppor-
tunities. The plan, prepared before the major 1979 increases in the price of
oil, projects an average GDP growth rate of 6.5% a year. A higher growh rate
- 7.5% a year - can now be expected, which given a projected population growth
rate of 2% a year, implies that per capita incomes at 1979 prices will
increase from US$370 in 1979 to US$460 by the end of Repelita III. A signifi-
cant portion of Indonesia's population, which by then will exceed 150 million,
will, nevertheless, remain among the poorest in the world.
3. To stimulate export and import-substituting activities, the Govern-
ment devalued the Rupiah by 34% in November 1978. The immediate improvement
in international competitiveness has since been modified by increases in the
world prices of Indonesia's traditional exports and by the Government's
success in containing domestic price increases. Crude measures suggest that
by September 1979 the gains in competitiveness over predevaluation levels for
traditional exports, import substitutes and manufactured exports were 65%, 28%
and 20% respectively. Some of these gains, however, have been at the expense
of real wages: employees in all but large enterprises may have suffered losses
in real income of up to 20%. Since labor productivity has, at worst, not been
reduced and may well have been increased by devaluation, real wage increases
can be anticipated. In order to further stimulate shifts into more productive
sectors, additional measures - for example, tariff reductions and administra-
tive improvements - will be required. Although GDP growth in 1979 is unlikely
to reach the Repelita III target, partially as a result of business
uncertainty after the devaluation, but mainly because of the low growth rate -
- ii -
less than 2% - in agriculture, one of the objectives of the devaluation - an
increase in manufactured exports - is being achieved. Encouraged by simpli-
fied export procedures, additional incentives and the devaluation. exports of
textiles, for example, are provisionally estimated to be about US$100 million
in 1979 compared with only ZJS$20 million in 1978.
4. Allowing for both the impact of devaluation and world inflation on
the domestic prices of internationally-traded goods, the increase in the
cost-of-living index that would be consistent with the maintenance of the
devaluation-induced gain in competitiveness is estimated to be about 27% for
the year ending October 1979; the actual increase was 31%. As on previous
occasions, the government has again demonstrated its ability to control
inflation in difficult circumstances. Compared with earlier expectations, the
subtantial increase in the export price of oil - 115% between January 1979 and
February 1980 - increased foreign exchange earnings by about US$2.5 billion,
and, coupled with favorable movements in other export prices, resulted in a
balance of payments surplus of around US$2 billion in 1979/80. The monetary
effect of the foreign exchange inflow is expected to be largely offset by the
contractionary impact of the Governtent's budget operations because, although
oil revenues increased by about Rp 1.5 trillion, nonoil revenues and
disbursements for routine and development expenditures are more or less in
line with budget estimates. The government's inflation policy also includes
subsidies for selected items including rice and oil products, export quotas,
reductions in import duties and sales taxes and a restrictive credit policy.
In real terms credit extended to the private sector has not increased
substantially during 1979/80. While this is consistent with overall liquidity
targets, a restrictive credit policy may unduly limit the expansion of
certain sectors of the economy, and may compromise to some extent the
Government's long-run objective to expand employment opportunities. Having
successfully controlled inflation in the immediate aftermath of devaluation
and the increase in the export price of oil, the Government can now consider a
more expansionary policy in pursuit of its long-run goals.
5. The disposition of incremental foreign exchange resources arising
from the 1913/74 increase in the export price of oil may provide guidance for
the most appropriate allocation of the current unanticipated increase.
Excluding the repayment of Pertamina debt, the increase in resources in
1974/75 and 1975/76 in 1979 dollars amounted to US$15 and US$22 per capita
respectively compared with US$18 in 1979/80 and US$25 in 1980/81. On the
earlier occasion, domestically financed development expenditures increased in
real terms by 45% in 1974/75 and a further 11% in 1975/76, while routine
expenditures increased by 24% in 1974/75 but then declined by 14% in the
following year. The relatively low import content of much of this expenditure
implied a significant increase in the demand for domestic construction
services and domestically produced intermediate and consumer goods. Although
many of the industries supplying such goods are located in the private sector,
credit extended to private enterprise declined in real terms by 6% a year from
1973/74 to 1975/76. Omitting Pertamina debt repayment, credit extended to
public enterprises, however, increased at a rate of 49% a year in real terms
over the same period. The Government's efforts to control total liquidity
- iii -
coincided with a new policy of redirecting private sector credit towards
economically weak groups. This occurred at a time when the demand for goods
produced by the private sector was increasing rapidly as a result of the
expansion of both routine and development expenditures. The Government's
deflationary policy proved successful in limiting price increases: the
increase in the Jakarta cost of living index declined from 33% in 1974 to 20%
in 1975 and 14% in 1976. In addition, employment increased substantially but
efforts to secure higher real wages seem to have been less successful.
Available evidence, albeit scant, suggests that real wages have stagnated in
recent years. A more expansionary credit policy towards the private sector
might have ensured a more rapid supply response that would have served the
dual purpose of limiting price increases and promoting employment
opportunities.
6. As on the earlier occasion, a rapid expansion in public expendi-
tures can be expected in 1980/81. The recently announced Budget indicates
that in nominal terms the allocations for routine expenditures will be
increased by 60% and development expenditures by 44%. Increased public
investment in agriculture and irrigation, and physical and social
infrastructure would be consistent with the objectives of Repelita III with
respect to employment creation and an equitable social development. This
would, however, test the capacity of domestic industry especially in the
private sector to respond to a sudden increase in demand. If inflation is to
be controlled without limiting the expansion of job opportunities, it is
essential that steps be taken to accelerate supply response. Ensuring the
availability of more domestic financial resources to the private sector
through, inter alia, greater flexibility in credit policy, reducing and
rationalizing import tariffs, improving import procedures, and simplifying
approval of investment licences are some of the options open to the
government.
7. Projections through 1985 demonstrate that the recent increase in the
export price of oil has postponed but not eliminated the tightening resource
constraint predicted in last year's report. Net foreign exchange revenue
from oil and LNG is expected to increase from US$9 billion in 1980 to around
US$17 billion in 1985, while earnings from nonoil exports will rise from
US$6.4 billion in 1980 to over US$14 billion in 1985. Given the projected
increase in imports and nonfactor services from US$13 billion in 1980 to
almost US$33 billion in 1985, the resource gap is expected to progressively
widen to between US$2 billion and US$4 billion by 1985. Although investment
in the short run will be constrained by institutional factors including
implementation capacity in the public sector rather than by the availability
of resources, these projections suggest that long-run growth will be limited
by a shortage of foreign exchange unless nonoil exports and the net flow of
external resources are increased at that time. This conclusion is a direct
consequence of the extent of poverty and the magnitude of the development task
confronting Indonesia relative to the expansion in resources provided by the
recent increases in the price of oil. These increases notwithstanding, the
argument for continued external assistance to Indonesia remains strong.
- iv -
8. During 1979, ODA commitments reached the level of US$1,925 million
recommended in our last report, the shortfall in commitments of about
US$150 million from bilateral IGGI members and non-IGGI sources being offset
by multilateral members. Nonconcessional borrowing by the public sector
exceeded the recommended level of US$850 million, although that recommendation
was made before the increase in the price of oil. Of the US$1.3 billion worth
of commitments made during the year, about US$450 million was for the Krakatau
steel project. In addition, the government successfully negotiated a
US$425 million consolidation loan that was used to repay debt on harder terms.
For the duration of Repelita III, it is recommended that the average level of
new ODA commitments - US$2.3 billon a year - agreed at last year's IGGI
meeting, should be considered a minimum; given current and projected rates of
international inflation, the real value of the recommended ODA levels would be
about 15% to 20% lower than was anticipated a year ago. In order to ensure
adequate net resource transfers in the mid-1980s when the resource constraint
is expected to re-emerge, it is recommended that ODA commitments in 1980 be of
the order of US$2.1 billion and be increased regularly thereafter. ODA
commitments for 1980 would thus show no real increase over the recommended and
actual amount of ODA for 1979. On the expectation that multilateral financial
institutions and sources outside IGGI will provide US$1.1 billion, it is
recommended that bilateral IGGI members aim at providing about US$1.0 billion
in loans and grants during 1980. Provided the government limits its commer-
cial borrowing at competitive terms to prudent levels - about US$1.5 billion
in 1980 but increasing thereafter - the debt service ratio will remain around
12% and official reserves will be maintained at about 6 months worth of
imports.
CHAPTER 1: INTRODUCTION
1.01 The 13,000 islands comprising the Republic of Indonesia sustain a
population of over 135 million at an average level of GDP per capita of about
US$370 in 1979.11 Java supports over 63% of the population but accounts for
only 7% of total land area. While the population remains predominantly rural,
agriculture's contribution to GDP is only slightly over 30%. Since the new
government assumed power in 1966, economic achievements have been substantial
with real GDP growth averaging 7.5% a year. Despite such an encouraging
performance, latest available estimates indicate that in 1976 per capita
consumption of 50 million people was less than $90 a year. The dimensions of
poverty in Indonesia, although declining, remain overwhelming.
1.02 The recent economic history of Indonesia has been dominated by
large, discrete movements in the international price of oil: in 1973/74 the
nominal price of oil increased by 270% and in 1979/80 by 115%. As a result,
the availability of resources to Indonesia has oscillated unpredictably from
scarcity to relative abundance thereby complicating the task of maintaining
short-term stability while pursuing programs to address the large and critical
development needs of the country. Given that the underlying global demand and
supply parameters are likely to exert continued upward pressure on oil prices,
Indonesia's development prospects would be better served if periods of slowly
declining real oil prices interspersed with dramatic increases were avoided in
favor of more moderate but more frequent price adjustments. This approach
would ensure a more regular progression towards Indonesia's long-run
development objectives and minimize the costs associated with short-run
monetary adjustments.
1.03 These arguments provide the basis for our analysis of the 1979
increase in the price of oil. While recognizing that large swings in the
availability of resources generate severe problems of economic management,
decisions pertaining to the long-run development of the economy should remain
independent of oscillations around the trend. Accordingly, this report
examines recent events including the devaluation (Chapter III) and policy
options in the immediate future (Chapter IV) from the perspective of both
short-run monetary stability and long-run development, whereas the analysis of
foreign exchange requirements (Chapter V), although allowing for the current
surplus of resources, is focussed on the long-run needs and creditworthiness
of the economy. In particular, access to external assistance and commercial
borrowing is seen as an important means of offsetting fluctuations in real
export revenues. Similarly, the review of Repelita III, the Government's
third five-year plan, in Chapter II examines the long-run structural changes
that are anticipated and compares them with the achievements of Repelita II.
/1 All US$ figures in this paragraph are derived by application of the
current exchange rate to Rupiah values expressed at 1979 prices.
- 2 -
CHAPTER 2: LONG-RUN OBJECTIVES: REPELITA III
2.01 Repelita III (April 1979-March 1984) affirms Trilogi Pembangunan,
the Development Trilogy, as the guiding principle for Indonesia's development
strategy. The three goals - equity, growth and national stability - are to be
pursued by a variety of means, the most important of which is the generation
and diffusion of job opportunities. Since at the time of preparing Repelita
III the increase in oil revenues was not fully anticipated, and because
details of implementation will only emerge from the annual budget process,
this chapter focusses on aspects of long-run structural transformation and
contrasts Repelita III expectations with respect to sectoral GDP growth and
the allocation of development expenditures with the achievements of Repelita
II (April 1974-March 1979).
Structural Transformation and Growth
2.02 The structural transformation of the economy achieved during
Repelita II and anticipated for Repelita III is shown in Table 2.1. Agricul-
ture's contribution to GDP at current prices declined from 32.7% in 1974/75 to
31.1 % by the end of Repelita II and is expected to further decline to 27.2%
by the end of Repelita III. The contribution to GDP from manufacturing, on
the other hand, increased from 8.3% in 1974/75 to 9.3% in 1978/79 and is
projected to rise to 12.6% by the end of Repelita III. The mining sector's
contribution which declined from 22.2% at the beginning of Repelita II to
17.8% by the end of Repelita II is expected to fall to 15.9% by the last year
of Repelita III, due mainly to slower growth of oil production.
2.03 The strategy for the agricultural sector has two new elements: a
greater emphasis on secondary food crops; and increased efforts to extend the
area of cultivation. Rice production is to be increased by 3.5% annually,
compared to the 4.7% target in Repelita II, and production of secondary food
crops - maize, cassava, sweet potatoes, soybeans and peanuts - is to be
increased by 5-7% a year during Repelita III. This latter target entails a
substantial effort, as actual production increases in secondary crops during
Repelita II are estimated to be less than 2% a year. To support the food
production effort within the context of expanding the cultivated area, 700,000
ha of new irrigation systems are to be constructed, 400,000 ha of tidal swamp
irrigation are to be developed and 135,000 ha of swamp areas are to be
reclaimed. The irrigation program also includes rehabilitation of 536,000 ha
of existing systems.
2.04 The program for the industrial sector indicates an 11% annual growth
rate in industrial value added. Strategic industries (steel, metal, chemi-
cals) are expected to grow at 14% a year, consumer goods industries (food
processing, textiles, household goods and pharmaceuticals) at 10.7% a year and
small and cottage industries at 6-7% a year. To improve the investment envi-
ronment for private industrial activity, Repelita III contemplates a number of
policy reforms, including simplification of investment approval procedures,
Table 2.1: STRUCTURAL TRANSFORMATION DURING REPELITA II AND REPELITA III
Sectoral Composition of Production/a Sector Growth Rates
Repelita II Repelita III Repelita II/b Repelita III/c
1974/75 1978/79 1979/80 1983/84 1974/75-1978/79 1979/80-1983/84
-------------- (Percent) --------------- (Annual percentage growth rate)
Agriculture 32.7 31.1 31.4 27.2 3.4 3.5
Mining 22.2 17.8 17.9 15.9 4.6 4.0
Manufacturing 8.3 9.3 10.2 12.6 12.3 11.0
Construction 3.8 5.2 4.9 5.5 13.5 9.0
Transport and communication 4.1 4.7 4.6 5.4 11.9 10.0
Other 29.3 31.9 31.0 33.4 8.3 8.1
Total 100.0 100.0 100.0 100.0 6.8 6.5
/a At current prices.
/b At constant 1973 prices.
/c At constant 1978/79 prices.
Sources: Annex, Tables 2.2 and 2.3, and Repelita III.
- 4 -
financial assistance through the banking system, and technical assistance for
marketing, management and production planning. In order to achieve a rapid
expansion in industrial employment and to raise manufactured exports, a growth
rate of about 13 to 15% in manufacturing value added will be required.
2.05 An average annual GDP growth rate of 6.5% is expected during
Repelita III. This compares with the 7.5% GDP growth rate targeted for
Repelita II and the 6.8% actually achieved. The lower growth target in
Repelita III reflects the increased emphasis on social considerations in the
plan and recognizes the declining opportunities for quick yielding investments
in rehabilitation projects and the increasing financial constraints perceived
at the time the plan was prepared. Because the increase in the export price
of oil has released some of these constraints, a higher growth rate can be
expected. Accordingly, the projections presented in Chapter 5 are based on a
GDP growth rate of 7.5% a year. Gross domestic investment is expected to
reach 24.6% of GDP by 1983/84 compared with 16.7% in 1974/75 and 20.3% in
1978/79. Given both past trends and the increase in oil revenues, the overall
investment target for Repelita III appears feasible. Private sector
investment is expected to account for 49% of total GDI in Repelita III
compared with 46% in Repelita II. Available evidence, however, suggests that
the rate of private investment fell during Repelita II, and that the high rate
of overall investment reflected substantial increases in public sector
investment as a result of the 1973/74 increase in the price of oil.
Equity and Employment
2.06 Changes in the composition of central Government investment are
shown in Table 2.2. Repelita III's emphasis on social development is
reflected in the increased share of development expenditures being allocated
to education, health and housing. The substantial increase in the allocation
to manpower and transmigration is a further manifestation of the Government's
efforts to alleviate poverty on Java. The sectors showing a decrease are
industry, mining and electric power, and transport and tourism. Agriculture's
share remains constant at about 14%.
2.07 The achievements of Repelita II with respect to the social and
economic well-being of the Indonesian population were documented at length in
last year's report. Among the more impressive accomplishments were the
quadrupling of the numbers of health centers, the construction of more than
31,000 schools, a substantial reduction in the number of people lying below
various arbitrary measures of poverty, and a decline in fertility on Java and
Bali. Despite these successes, Indonesia remains a very poor country: for
example, preliminary estimates suggest that GDP per capita in 1979 is only
US$370; life expectancy at birth - 48 years - remains very low by
international standards; about 0.6 million infants less than one year old die
annually; over 100 million people do not have access to safe drinking water;
almost 30 million people aged 15 and over remain illiterate; daily wages in
many parts of Indonesia are less than US$1.
Table 2.2: DEVELOPMENT EXPENDITURES IN REPELITA II AND III
(Rp billion)
Sectoral distribution of
development expenditures /a
Repelita II Repelita III
(Actual) (Planned)
Agriculture & irrigation 1,154 (13.5)/b 3,049 (14.0)/c
Industry, mining & energy 1,655 (19.4) 4,118 (18.3)
Transport & tourism 1,627 (19.0) 3,384 (15.5)
Manpower & transmigration 196 (2.3) 1,241 (5.7)
Regional development 1,019 (11.9) 2,143 (9.8)
Education, national culture &
development of the young generation 763 (8.9) 2,277 (10.4)
Health, family planning & welfare 255 (3.0) 829 (3.8)
Housing & water supply 193 (2.3) 532 (2.9)
Other Id 1,680 (19.7) 4,277 (19.6)
Total 8,542 (100.0)/b 21,850 (100.0)
/a Figures in parentheses are shares expressed in percentages.
/b Excludes Rp 609 billion for the fertilizer subsidy.
/c Includes unspecified amount for fertilizer subsidy but excludes several
expenditure items previously included in this category.
/d Includes trade and cooperatives, religion, law, defense and security,
information, science and technology, staff apparatus, natural resources
and investment through the banking system.
Sources: Annex, Table 5.5 and Repelita III.
2.08 In the light of these statistics, the expansion of social services
noted above assumes increased importance. The Government's commitment to the
eradication of poverty implied by this investment program is underscored by
the specific targets of the plan. For example, the number and functions of
health centers are to be expanded especially in subdistricts of more than
30,000 people. Sanitary drinking water is to be provided for 30% of the total
population, and more than 150,000 low cost houses will be constructed through
public programs. In urban areas the Kampung improvement program will cover an
area of 15,000 ha serving 3.5 million people, and in rural areas the village
rehabilitation program will encompass 6,000 villages. In education, the
enrollment ratio of the 7-12 age group is to be increased to 100%, some
230,000 teachers will be recruited and 140,000 school buildings will be
constructed.
2.09 The plan expects to create at least 6.4 million new jobs during
Repelita III. While the achievement of this target would ensure that all
expected labor force entrants during the five year period would find employ-
ment, the plan does not specify in which sectors they will be employed nor
does it draw any inference with respect to real wage developments. Given that
Indonesia's goal of poverty alleviation is crucially dependent on the genera-
tion of remunerative job opportunities, the employment and wage implications
of both the plan and the annual budgets warrant the closest attention.
CHAPTER 3: RECENT DEVELOPMENTS: DEVALUATION AND THE TERMS OF TRADE
International Price Competitiveness
3.01 The devaluation of the rupiah by 34% from $1 = Rp 415 to $1 = Rp 625
on November 15, 1978 /1 was designed to reverse the adverse relative price
movements that had occurred in previous years and thus to encourage a shift of
resources towards import-substitution and export industries. While the
nominal exchange rate vis-a-vis the US dollar had remained fixed between
August 1971 /2 and November 1978, the rupiah exchange rate against a trade-
weighted basket of currencies had gradually depreciated with the dollar (see
Figure 1). Between 1971 and 1973 the depreciation of the rupiah largely
offset the gap between domestic and international inflation, and the "real"
exchange rate, the trade-weighted exchange rate deflated by relative price
levels, remained roughly constant (see Figure 1). Following Indonesia's
dramatic accumulation of financial resources in 1973-74 domestic inflation
rose well above the international rate and Indonesia's competitiveness was
severely eroded. This trend continued until 1976, when the weakening dollar
and the reduction in the Indonesian rate of inflation brought about a
depreciation of the real exchange rate which, by October 1978, had restored
about 65% of the earlier loss of competitiveness./3 Following the devaluation
of November 1978, Indonesia's real exchange rate, when defined as in Figure 1,
was more competitive than at any time in the 1970s.
3.02 Clearly, no single measure of international competitiveness is able
to capture trends in profitability in all export and import substitution
industries. It is useful, therefore, in assessing prospects for changes in
volume and composition of production and trade to examine separate measures of
competitiveness. Figure 2 shows recent developments in indices of inter-
national competitiveness for traditional exports, manufactured exports
/1 While the official link with the US dollar was broken at the time of
devaluation, the monetary authorities have chosen to maintain the dollar-
rupiah rate since then. As a result, the trade-weighted exchange rate
has appreciated by about 4% (see Figure 1).
/2 When the rupiah was devalued 9.5% from $1 = Rp 378.
/3 This gain in competitiveness of about 25% between 1976 and October 1978
is relative to Indonesia's major trading partners; competitiveness
vis-a-vis other Asian countries remained at an historically low
level. See Fig. 2.
- 8 -
and import substitutes. Since the devaluation, the profitability of
traditional nonoil export commodities /1 has increased by about 65% (October
1978-October 1979), although the imposition of extra taxes and export quotas
makes it difficult to ascertain the extent to which these gains have reached
smallholders and estate owners./2 This improvement has resulted as much from
price developments in international markets as from the devaluation. For
example, during the same period the nonoil external terms of trade improved by
40% and the overall terms of trade by 51%./3 Given the possibility of
recession in the OECD countries, it should not be assumed that such gains will
be increased or even maintained in the near future.
3.03 Exports of manufactured goods compete on the international market
with products from other Asian developing countries and an index has been
constructed accordingly./4 Following the devaluation, the profitability of
this export sector increased by 27% (January 1979 over September 1978). This
gain was maintained until mid-year because, despite lower rates of domestic
inflation in competitor countries, their currencies appreciated vis-a-vis the
dollar, while the rupiah did not. In the third quarter of 1979 increased
costs of manufacturing in Indonesia resulted in a modest loss in competitive-
ness, but in September 1979 the index in Figure 2 shows that Indonesian
/1 In a "small" trading country domestic profitability is often a better
measure of competitiveness than price differences since producers are
"price-takers" and unable to influence the demand for their product.
Emphasis should therefore be placed on supply, rather than demand, con-
ditions. This is, of course, especially true for primary exports. Here
the measure is the ratio of the non-oil export component of the
Wholesale Price Index (WPI) to the Price Index for Essential Commodities
in Rural Java and Madura.
/2 The imposition of export quotas and taxes has caused domestic price
increases to diverge substantially from international increases. For
example between September 1978 and September 1979 the international price
of coffee, in terms of rupiah, rose by 220%, while the domestic price rose
by 46%. For copra the price increases were 65% and 7% respectively, and
for tea (to June 1979) 19% and 12% respectively.
/3 Measured as the ratio of the export component of the WPI to the import
component.
/4 Ratio of Consumer Price Indices of eight developing Asian nations
to the manufactured goods component of Indonesia's WPI, adjusted for
exchange rate changes.
' FIGURE 1
FIG-URE 2
INDONESIR: TRRDE-WEIG~HTED EXCHRNGE RATE INOONESIA:INTERNRTIONRL COMPETITIVENESS
DEVIRTIONS FROM PURCHASING POWER PARITY AND EXPORT PROFITPBILITY
200
250
ISO
225 _
F
0~~~~~~~~~~~~~~~~~~~~~~~~~
C.) geR*t 4
CD
160
/ '... ~~~~~~~~~~~~ ~~~T-ditionat
200
Ii fofrts
T,mde-Weighted
- f~~~~~~~~~~~~~~~~ ~~~Exchange Rate ( 140
r- 175 I0
150 72
120 7
C.)srai 42 K 2
av n Mdr
14.J
0
125 -,
Sri 100
C) -
0
eai"tEacf,anne CD
,rt Slbutor iois
(ID 100 Ra e
75fuot
7 1 72 73 7 4 75 76 77 78 79 80 7 1 72 73 7 4 75 76 77 78 7 9 80
SpqIStII2NS: Tr!d!-y.delghtd according to lapo,tance of countries in indnnenaWa trading DEPFINITIONS: Traditional E. arts. Ratio of .n.nil Export -opo.nnt of Indoo...ia'n
pattern (Sing-pore 9%; Japan 45%; USA 21%; Holland 5%; German.y 11%; ihlal rc oe oPieIdxfrEenilCnoiini ua
Austral a 42;St5) Java and Mladura.
RaiEchneRte i .. orpor.ten differences in consamer price inflation Ma...factured Exports. Ratio of averape price indlce. of eight Aniso
among trading partoora and thus indicates deviation, foam purchasing conre NMl;ysi., Thailand, Singapore. Philippin.s, Taiwan, Korea,
power parity.
Sri Lanha, and India) to Manufactured Good, comPOnent in Indon..sial. WPU.
IPorjt_S2b!tjtj!t.a. Ratio of Export unit vaIues of a--a Indatrial
Source: International Financial Statistica.
-outrina' (sane teifhta no in Pif. I) to Consumer Price Index in Ind-oic..
- io -
manufactured exports were still 20% more competitive than a year earlier.
With respect to the competitiveness of import-substituting industries,/l an
initial improvement of 42% (October-December 1978) had by September 1979 given
way to an overall improvement of 28%.
Domestic Price and Wage Movements
3.04 The devaluation resulted in an almost immediate adjustment in the
rupiah prices of exports by the full 50% which, when coupled with increases in
world prices of primary commodities, resulted in an overall increase in
non-oil export prices of 110% between October 1978 and October 1979 (130%
including oil). The rupiah prices of imports were slower to adjust to the
devaluation principally because foreign suppliers apparently were willing to
accept temporary reductions in profit margins in order to avoid cancelled
orders. Nonetheless, by July 1979 import prices had risen 45% since the
previous October. The extent to which these increases influence the consumer
price index depends on the share (both direct and indirect) of traded goods in
overall consumption and on the response of nontraded goods prices to increases
in the prices of traded goods./2 Of most importance in this respect is the
extent to which nominal wage and profit rates rise in the nontraded sector to
maintain real income levels. If it is assumed that the prices of these
nontraded goods should increase at the same rate as world prices, the
"'appropriate" increase in the Consumer Price Index (CPI) following the
devaluation can be roughly calculated by estimating direct and indirect
foreign exchange components in each disaggregated component of the price
index, and by applying exchange rate adjusted international rates of
inflation./3
3.05 In April 1979 a new Consumer Price Index (CPI) was introduced to
replace the old Jakarta Cost of Living (COL) Index, which had been based on
a 1966 expenditure survey. The new index, based on a 1977/78 survey, is
/1 The index measures the ratio of weighted export unit price indices of
seven industrial countries with Indonesia's import shares as weights,
adjusted for exchange rate changes.
/2 The term "traded goods" refers to internationally traded commodities;
that is, exports and import substitutes. Nontraded goods are those -
construction, for example - that are not usually traded internationally.
/3 "Appropriate" is defined here as the rate of price increase which would
maintain the improvement in price competitiveness following the devalua-
tion; i.e., the gains in competitiveness would not be eroded by domestic
inflation.
- 11 -
more representative of present consumption patterns and assigns a lower
weight to government-controlled prices./1 Two indices are now announced:
the Jakarta CPI and the CPI for Indonesia which is calculated as a weighted
average of the indices for 17 cities. Using the latter, calculations based
upon the foreign exchange content and international rates of inflation for
various items suggest that "appropriate" price increases in the 12 months
from October 1978 would have been about 27% for food, 19% for housing, 38%
for clothing and 34% for miscellaneous. An "appropriate" twelve-month
increase in the CPI would have been about 27%. These hypothetical rates of
inflation compare with actual rates /2 of 29% for food, 30% for housing, 46%
for clothing 28% for miscellaneous) and 31% for the general index./3 Although
the actual rate of inflation has been somewhat higher than that required to
maintain all of the competitive advantage gained by the devaluation, it is
clearly not realistic (nor perhaps desirable) to expect incomes in the
"non-traded" goods sectors to increase in nominal terms at the international
rate of inflation given a 12-month domestic inflation rate of about 30%. The
overall inflation performance since the devaluation has therefore been quite
creditable and should by no means be regarded as indicative of inadequate
monetary management.
3.06 Since the devaluation nominal wages have generally kept pace with
inflation in large commercial firms using few imported inputs but in many
mid-size and small firms increases in money wages have been as low as 10%,
indicating a fall in real wages of over 20%. While a reduction in real wages
/1 The number of commodities included in the CPI varies by city from 115 to
150 (compared with 62 commodities in the old COL). The basket of
commodities in the Jakarta index costs about Rp 70,000 ($169) in 1978
prices. The expenditure weights are roughly 40% for food (including 11%
for rice compared with 20% in the COL); 28% for housing; 10% for
clothing; and 22% for other expenditure (including 9% for transport, 3%
for medical services, 3% for education, 3% for recreation). The new
index attempts to take changes in quality into account.
/2 Although the CPI was only introduced in April 1979, unpublished BPS
statistics allow the extension of the analysis to October 1978.
/3 The CPI only indicates the behavior of prices in urban areas, where
the influence of international factors on consumer prices may be
particularly strong. There is some indication that price rises in rural
areas may have been smaller. For example, the index of prices of
essential commodities in rural markets of Java and Madura (which
admittedly contains a high proportion of government-controlled prices)
rose by only 18% between October 1978 and June 1979.
- 12 -
is usually considered necessary to effect a shift of resources into export and
import-substituting industries, it is not obvious that excessively high real
wages were the cause of Indonesia's predevaluation lack of competitiveness.
Other factors, especially administrative controls and business uncertainty,
may have been of more significance in this respect. Moreover, the same
factors can be expected to limit the structural changes that the devaluation-
induced shift in relative prices was supposed to secure. To accelerate the
restoration of real wages while maintaining the gains in international
competitiveness effected by the devaluation, the removal of administrative
barriers that increase the costs of producing traded goods and hinder the
movement of resources into more productive sectors is essential. In this
regard the Government has begun to take important steps to improve investment
and export licensing procedures and the administration of credit to exporters
and small-scale labor-intensive enterprises. These "non-price" improvements
in competitiveness are needed to complement the devaluation and in the long
run may prove of more importance. These issues are discussed further in
Chapter 4.
The Impact on Production and Trade
3.07 It is very unlikely that real GDP growth in 1979 will equal the 7.2%
rate of 1978, mainly because the production of food crops, which rose by 9.6%
in 1978, remained almost constant in 1979. The record rice crop of 17.6
million tons was not repeated and the agricultural sector as a whole is
estimated to have grown by less than 2% in real terms. Production of extrac-
tive industries is thought to have remained fairly constant in 1979 with a
3% decline in oil production being offset by a small increase in other mineral
and LNG production. The construction sector is estimated to have grown by
about 5% which is well below its 1973-78 average of 13.5%. This was due to
considerable uncertainty fpllowing the devaluation and the need to renegotiate
many rupiah denominated contracts. These estimates would imply an increase in
GDP of about 5%. GDY, however, rose at a considerably faster rate because of
favorable developments in the terms of trade: GDY growth, estimated at 10%,
was higher than the 7.7% recorded in 1978 despite the slower growth of GDP.
3.08 Both the devaluation and the improvement in Indonesia's external
terms of trade influenced the trade balance significantly during 1979 although
care must be taken in attempting to assign quantity responses to changed price
incentives. The supply response of primary commodities is generally slow and
increases in exports of these commodities occurring in 1979 were due mainly to
substitution away from the home market to the more profitable international
market; this prompted the Government to introduce a system of export quotas
in December 1978 (see para. 3.15). Compared with those in the first quarter
of 1978, export volumes in the first quarter of 1979 were up 4%, 6%, and 18%
for timber, rubber and coffee respectively, and down 24%, 5% and 12% for palm
oil, tea and petroleum products. Manufactured exports did particularly well,
increasing in value by 61% but the major components of the manufactured sector
- cement and fertilizer - have increased quite independently of the devalua-
tion. Exports of textiles in the first half of 1979 were up 200% in volume
- 13 -
terms from the low base of the previous year; they are expected to continue to
do extremely well with exports rising from $18 million in 1978 to about $100
million in 1979.
3.09 As would be expected, imports were more rapid in their response to
the devaluation than were exports, although the substantial decline in the
first half of 1979 was probably due more to a reduction in overall demand and
delays caused by price adjustments and uncertainty, than to a switch in demand
towards home-produced goods. This is indicated by the general decline in
capital and intermediate imports in addition to the expected fall in consumer
goods imports. In the first half of 1979 total imports were down by 15% in
real terms compared with the first half of 1978; intermediate and capital
goods imports had fallen by 10% while consumer goods imports had fallen by
35%./l By the third quarter of 1979, capital and intermediate imports
appeared to be recovering, reflecting in part a "catching up" process and in
part the increased buoyancy of investment demand.
3.10 In an economy as large and complex as that of Indonesia, there have
inevitably been regional variations in the impact of the devaluation. Before
devaluation the export-oriented provinces of Sumatra and Kalimantan already
had higher average incomes than the provinces of Java: for example, rough
calculations show that regional GDP per capita excluding oil in 1976 was 25%
higher than the national average in Jambi, Riau, Central Kalimantan and East
Kalimantan whereas it was below- the average in East, Central and West Java and
Jogjakarta. The initial devaluation-induced rise in the prices of Indonesia's
traditional exports together with favorable movements in world prices have
certainly benefitted the provinces exporting these products even in the
absence of a positive supply response. Net importing provinces such as those
of Java suffered a short-run loss in real income as a result of the
devaluation, although a number of policies - market intervention, tariff
reduction and export controls - discussed in paras. 3.15 and 3.16 have offset
some of the price effects.
3.11 Apart from the immediate price effects, output responses are also
important in assessing the regional impact of the devaluation. The available
evidence shows that, with the exception of cassava, there has been little, if
any, increase in the volume of agricultural or mineral exports from the outer
islands, whereas manufactured exports from Java, encouraged by the devaluation
and other export incentives (see para. 4.15), have grown rapidly: The monthly
volume of exports passing through the ports of Surabaya and Cirebon during the
first five months of 1979 were 42% and 35% above their respective 1978 levels.
/1 BPS 1979 import values deflated by 13% (World Bank estimate of interna-
tional inflation).
- 14 -
Implications for Public Sector Resources
3.12 Both the devaluation and the improvement in the terms of trade
favorably affected the availability of resources to the public sector. Since
foreign exchange revenues accruing to the Government exceed foreign exchange
expenditures, the devaluation increased the value of this surplus measured in
rupiah by about Rp 1.3 trillion in 1979/80. As long as domestic prices do not
rise by the full 50%, the devaluation also operates as a tax on private net
purchases of foreign exchange. Given the size of the private sector's
balance-of-trade deficit, this real transfer is estimated to be about Rp 300
billion in 1979/80. With respect to the terms of trade, the average price of
Indonesian crude oil was raised in several stages to US$30.50 per barrel by
February 1980, about 115% above the level prevailing at the beginning of 1979
(see Table 3.1). As a result of these price changes, net export earnings and
budget revenues exceeded original expectations by about US$2.5 billion and
Rp 1.5 trillion respectively despite a shortfall in oil production.
Table 3.1: CRUDE OIL PRICES 1970-FEBRUARY 1980
(US$ per barrel)
Average annual price /a
1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80
1.70 2.40 3.00 5.95 11.70 12.70 12.80 13.55 13.70 22.75
1979 prices
1980 prices
Jan. 1 Apr. 1 May I June 15 Jul. 15 Nov. 17 Dec. 16 Jan. 1 Feb. 4
14.20 16.00 16.70 19.00 21.75 23.50 26.00 28.50 30.50
/a Official prices (weighted average for all crudes) which do not reflect
discounts/surcharges.
3.13 Recent developments in the budget and the balance of payments are
shown in Tables 3.2 and 3.3. Total budget revenues for 1979/80 are now
expected to be about Rp 7.1 trillion. In view of the large, budgetted
increase in routine expenditures - 40% in nominal terms over 1978/79 - and the
difficulties during the first half of the year surrounding project implementa-
tion as a result of protracted renegotiations of rupiah-denominated contracts
and budget approvals, it is unlikely that the additional revenues will be
fully disbursed in the fiscal year. The resulting monetary contraction is
estimated to be about Rp 1.3 trillion during 1979/80 (see Table 3.4).
- 15 -
Table 3.2: CENTRAL GOVERNMENT BUDGET SUMMARY 1976/77-1979/80 L
(Rp billion)
1976/77 1977/78 1978/79 1979/80
(Budget)
1. Domestic revenues 2,877 3,508 4,266 5,441
of which Corporate
tax on oil - 1,593 1,946 2,309 3,345
2. Routine expenditures 1,610 2,121 2,744 3,446
of which Oil subsidy 0 65 197 220
3. Government savings
(1-2) 1,267 1,387 1,522 1,995
4. Development
expenditures 2,044 2,157 2,556 3,488
5. Balance (3-4) -777 -770 -1,033 -1,494
6. Aid and loan -
disbursements 784 773 1,036 1,494
7. Accounting surplus
(6+5) 7 3 2 -
/a Total may not add due to rounding.
Source: Analysis and Projections Appendix, Table 9, and Annex,
Tables 5.1, 5.2 and 5.3.
- 16 -
3.14 Following overall deficits in 1974/75 and 1975/76 and a fall in
reserves to about one month's worth of imports, the balance of payments
recovered strongly with cumulative surpluses of US$2.3 billion during the
period 1976/77 to 1978/79, even though public sector net resource transfers /1
declined from a peak of US$1.7 billion in 1975 to US$300 million in 1978. At
the end of 1978/79 official reserves stood at about US$3 billion or a
comfortable four months' worth of imports. During 1979/80 export earnings are
estimated to have increased by about 60% as a result of the steep increase in
oil prices and favorable prices - on average 40% higher than in the previous
year - for nonoil exports. Increases in volume were significant only for
manufactured exports (see para. 3.08) and a number of minor agricultural and
mineral exports. Imports, especially of consumer goods other than rice which
increased to 2.7 million tons, were generally depressed as a result of the
devaluation. The current account, in deficit by about US$1.2 billion in
1978/79, is estimated to show a surplus of about US$2 billion in 1979/80. The
overall balance-of-payments surplus is estimated to be around US$2 billion; in
addition State Banks are expected to have added about US$0.8 billion to their
foreign assets. Official reserves at the end of 1979/80 stood around US$5
billion representing about 6 months' worth of imports,/2 while foreign assets
held by the State Banks amounted to about US$1.3 billion.
Inflation Policy
3.15 A freeze on all consumer prices was ordered by the Government in the
confusion immediately following the devaluation in order to prevent
unreasonable increases. A December 1978 order announced maximum price
increases (0-46%) for 207 items but these restrictions were phased out by
mid-1979 and the Government continues to influence specific prices by market
intervention rather than by edict. Prices of a number of key food items
(rice, sugar, corn, flour, etc.) are modified by purchases and sales by BULOG,
the Logistics Agency. The farmer support (buying) price for paddy and the
intervention (selling) price for rice have been increased more or less in line
with consumer prices generally and have not been employed significantly to
hold down the rate of inflation./3 In 1980, the scope of BULOG's activities
/1 Gross disbursements of public sector medium- and long-term loans minus
debt service payment plus grants. See Appendix, Table 7.
/2 This measure expresses end-of-year reserves as a ratio of last year's
import bill. Compared with next year, existing reserves could only
finance less than five month's worth of projected imports.
/3 Paddy prices were raised from Rp 75/kg to Rp 85/kg in February 1979 and
to Rp 95/kg in May. The price for the first 1980 crop has been an-
nounced at Rp 105/kg (i.e., a 40% increase since the devaluation).
BULOG's selling price for rice was increased from Rp 140 to Rp 160 in
May 1979 and it is planned to maintain the consumer price between
Rp 185-207/kg into 1980.
- 17 -
Table 3.3: BALANCE OF PAYMENTS 1976/77-1979/80
(US$ million)
1976/77 1977/78 1978/79 1979/80
(Est.)
1. Exports
6,573 7,952 7,989 13,050
Of which Oil and LNG (net) 3,710 4,445 4,010 7',100
Timber 885 943 1,130 2,000
Rubber 577 608 774 1,050
2. Imports (including net NFS) -6,657 -7,777 -8,129 -9,875
3. Resource balance (1+2) - 84 175 -140 3,175
4. Factor services - 718 -865 -1,015 -1,175
5. Balance on current account (3+4) - 802 -690 -1,155 2,000
6. Direct foreign investment 287 285 271 250
7. Capital grants 100 100 100 100
8. Public M and LT loans (net) 1,897 1,130 658 1,200
9. Other capital (net) - 481 -174 834 -1,20O0a
10. Change in official reserves
(-5-6-7-8-9) -1,001 -651 -708 -2,350
11. Net official reserves 1,557 2,208 2,916 5,265
12. Reserves in months of imports /b 2.8 3.4 4.3 6.4
/a Includes capital transactions of State Banks.
/b Official reserves at the end of each fiscal year in months of imports
(including net NFS) in preceding 12-month period.
Source: Analysis and Projections Appendix, Tables 1 and 3.
- 18 -
will be widened with the aim of establishing greater stability in the farmgate
prices of secondary food crops in line with the Government's new emphasis in
this area and to provide for greater control over consumer prices. Farmer
support prices have recently been announced for soybeans, groundnuts and green
beans (kacang hijau). The prices of public sector services have risen at
rates generally reflecting increased international prices and costs of
production tempered by the Government's competing goals of reducing inflation
and eliminating budget subsidies. For example in March 1979 prices for some
forms of transportation rose by an average of about 20%,/1 postal charges by
40-50% and telephone charges by over 100%. The domestic prices of petroleum
products were increased by an average of over 40% in April and May compared
with an increase in the export price of oil of 60% between March and July
1979. Fertilizer prices paid by farmers have not increased, and remain
substantially below the f.o.b. price. In addition, export quotas were placed
on about 20 commodities /2 in order to ensure adequate supplies for the
domestic market and thus limit increases in domestic prices.
3.16 In April 1979 the Government announced a reduction in sales tax on
approximately 1,000 domestically produced goods. Rates were reduced from
10% to 5%, from 5% to 2.5% and from 1% to 0%. In September there was a 50%
reduction in tax on a further 400 items. Tariffs on international trade
have also been adjusted in order to ease the pressure of international
factors on domestic prices./3 Tariffs on imports of raw materials for
/1 Inter-city transport (17%), railways (25%), domestic sea (8%), domestic
air (35%). Fares and tariffs on city buses, local trains and the trans-
portation of nine essential commodities were not increased.
/2 In December 1978, when first introduced, the list included fertilizer,
cement, car tires, iron reinforcing rods, salt, wheat flour, paper,
asphalt, sugar, maize, soybeans, rice, copra, coconut oil, palm oil, and
meat. Other items were later added including weaving yarn and coffee.
The export of raw hides was banned in July 1979 as was unprocessed
rattan. In addition a certain proportion of logs felled annually must
be domestically processed. (In many instances the domestic capacity for
such processing does not exist.) Since mid-1979 most of the export
quotas have not been enforced.
/3 The switch from ad valorem to specific import duties for a number of
goods (notably garments) in April, 1979, however, generally resulted
in higher domestic prices.
- 19 -
domestic production were reduced by 50% at the time of the devaluation, export
taxes on some primary commodities (e.g., black tea, stearin, palm oil) were
raised in July, and special export taxes were introduced on palm oil, tea,
coffee and pepper./1 These increases in export taxes have, along with the
selective imposition of export quotas, served to insulate the domestic price
of these commodities from the international market.
3.17 Monetary policy continues to play an important role in the Govern-
ment's inflation policy. The appropriate expansion of overall liquidity is
predicated on the anticipated rate of growth of real output in the economy and
on the rate of increase in prices that the monetary authorities see fit to
"taccommodate." Evidence from recent years indicates that, assuming a 7% real
growth of output, money supply can increase at about 12% annually without
causing inflation. The increase in total liquidity in 1978/79 was 27% (Rp 880
billion; see Table 3.4) which accommodated an increase in consumer prices of
just over 17%./2 Credit to the private and public enterprise sectors was
increased by 29% and 27% respectively./3 The banking system's net holdings of
foreign assets also increased dramatically in rupiab terms due to the
revaluation of foreign exchange and to the $700 million surplus in the balance
of payments. Other factors affecting the money supply exerted a dampening
effect on liquidity expansion, partially offsetting increases in net foreign
assets and claims on public and private enterprises: the Government increased
its holdings with Bank Indonesia by Rp 250 billion; import deposits rose by
33%; and "net other items" exerted a very large negative impact on the money
supply, due principally to the revaluation of foreign assets. A disaggrega-
tion of banking system liabilities shows that both currency and demand
deposits grew in real terms by about 15%, but that time deposits fell in real
terms by about 4%, due to unattractive real interest rates and the preference
for more liquid assets in the post-devaluation environment of uncertainty and
inflation. In 1979/80 monetary expansion is estimated to have been about 30%.
The large increase (Rp 1.3 trillion) in the Government's holdings with Bank
Indonesia has largely offset the increase in Bank Indonesia's holding of
foreign assets (US$2.3 billion), enabling bank credit to private enterprise to
rise by about 25%. This would imply a 3-4% real increase in funds available
to the private sector which is lower than the target growth rate of output
and, while clearly appropriate from the standpoint of monetary stability, may
have constrained investment.
/1 It is planned to add rubber to this list. The revenues from this tax
will form a special fund, DTE, in the Ministry of Finance, to be
channelled into the development of smallholder production of these
export crops.
/2 Although the CPI was only introduced in April 1979, unpublished BPS data
were used to obtain the estimate reported in the text.
/3 27% and 21% respectively when the November 1978 revaluation of foreign
exchange is excluded.
- 20 -
Table 3.4: CONSOLIDATED BALANCE SHEET OF BANKING SYSTEM /a
(End of period figures in billions of Rupiah)
1979/80
1976/77 1977/78 1978/79 (est.)
1. Net foreign assets /b 169 764 1,616 3,614
2. Domestic credit 3,409 3,423 4,811 4,532
Claims on:
(0.4%) (41%) (-6%)
Central Government -334 -626 -918 -2,218
Official entities &
public enterprises 1,935 1,877 2,924 3,250
(-3%) (56%) (11%)
Private enterprises
& individuals 1,808 2,173 2,805 3,500
(20%) (29%) (25%)
3. Import deposits -85 -127 -169 -225
(49%) (33%) (33%)
4. Other items (net) -648 -786 -2,103 -2,500
(21%) (168%) (19%)
Total liquidity (1+2+3+4) 2,845 3,275 4,155 5,421
(15%) (27%) (30%)
Currency
853 1,036 1,369
(21%) (32%)
Demand deposits 962 1,075 1,431
(12%) (33%)
Time deposits 1,029 1,164 1,355
(13%) (13%)
la Figures in parentheses show percentage increase over previous year.
/b Government blocked account subtracted.
Source: Bank Indonesia and mission projection.
- 21 -
CHAPTER 4: MINIMIZING THE COSTS OF SHORT-RUN ADJUSTMENT
An Historical Review
4.01 The 1973/74 increase in the price of oil provides an important
empirical point of reference for the exploration of current policy options.
At 1979 prices, that increase implied an unforeseen addition to foreign
exchange resources of US$26 per capita in 1974/75 and US$28 per capita in
1975/76. As shown in Table 1, however, a certain proportion of the increment
was committed to the repayment of Pertamina debt. For purposes of comparison
with the 1979 oil price increase, therefore, it is more appropriate to focus
solely on the increment in resources net of Pertamina foreign exchange debt
repayment, since this was the quantity of additional uncommitted foreign
exchange that was actually available for disposition at the Government's
discretion and that threatened monetary stability. On this basis, the
increment in resources amounted to US$15 per capita in 1974/75 and US$22 per
capita in 1975/76. The corresponding figures for the 1979 increase in oil
prices are US$18 and US$25 per capita for 1979/80 and 1980/81 respectively.
Thus, after the exclusion of Pertamina debt repayment, the increment in real
resources after the 1973/74 rise in oil prices is between 80 and 90% of that
expected after the 1979 increase. An examination of the disposition of the
former increment should, therefore, enlighten policy discussions concerning
the allocation of the latter increment.
4.02 Aspects of the distribution of incremental oil revenues in 1974/75
and 1975/76 are shown in Table 4.1. Regarding the balance of payments, the
potential impact on money supply following a large and sudden inflow of
foreign exchange was totally avoided by an equally large and sudden expansion
of most imports with the notable exception of consumer goods. Of unusual
importance in this respect, was the increase in fertilizer imports amounting
to 41% and 22% of the increase in discretionary foreign exchange in 1974/75
and 1975/76 respectively (see Table 4.1). Imports of capital goods also
expanded rapidly especially in 1975/76 when the increment in this item
equalled 82% of the increase in foreign exchange from oil. Despite the size
of the inflow of resources (net of Pertamina debt repayment), the expansion in
imports was so large that reserves declined slightly in 1974/75 and more
substantially in 1975/76.
4.03 Routine and development expenditures also increased markedly.
Increases in wages and salaries represented 20% and 26% of incremental cor-
porate taxes on oil in 1974/75 and 1975/76 respectively. The substantial
increase in consumer expenditure from this item alone must have exerted
considerable pressure on domestic supplying industries especially in the
private sector, the main producer of consumer goods, because, although rice
imports increased by US$104 million in 1974/75, imports of nonrice consumer
goods declined by US$150 million in that year and had only surpassed 1973/74
levels by US$20 million in 1975/76. The expansion in development expenditures
especially in agriculture and irrigation, and physical and social infra-
structure (see Table 4.1) must also have imposed heavy demands on domestic
construction and input-supplying industries, although the substantial increase
in intermediate imports (see Table 4.1) partially alleviated the impact
- 22 -
Table 4.1: USE OF INCREMENTAL OIL REVENUES
1974/75 AND 1975/76 OVER 1973/74
A. Selected Components of the Balance of Payments (US$million)/a
Incremental changes
1973/74 1974/75 over 1973/74 1975/76 over 1973/74
1. Net oil 641 1,997 2,497
2. Selected Items from the Capital Account
(i) Cash loan - 1,049
(ii) Pertamina debt repayment /b -819 -1,550
Discretionary resources 641 1,178 (100) 1,996 (100)
(1+2)
Selected Import Items
(i) Fertilizer (commercial) -51 -482 (41) -432 (22)
(ii) Other intermediate goods -1,163 -517 (44) -176 ( 9)
(iii) Capital goods - 776 -453 (38) -1,637 (82)
1974/75 1975/76
Decrease in Reserves 9 (1) 364 (18)
B. Selected Components of the Budget (Rp billion)/a
Incremental changes
1973/74 1974/75 over 1973/74 1975/76 over 1973/74
Corporate tax on oil 347 626 (100) 858 (100)
Selected Routine Expenditures
(i) Wages and salaries 167 126 (20) 220 (26)
(ii) Subsidies to regions 113 94 (15) 144 (17)
Selected Domestically-Financed Development
Expenditures
(i) Fertilizer subsidy 34 191 (30) 100 (12)
(ii) Agriculture and irrigation (excluding 46 2 ( -) 47 ( 5)
fertilizer subsidy)
(iii) Physical infrastructure /c 155 107 (17) 146 (17)
(iv) Social infrastructure /d 49 14 ( 2) 101 (12)
(v) Industry and mining 5 1 ( -) 39 ( 5)
1974/75 1975/76
Budget Surplus 26 (4) 21 (2)
/a Figures in parentheses indicate percentages of incremental discretionary resources in Part A and
and of incremental corporate tax on oil in Part B.
/b This item appears in Other Capital Flows in the balance of payments.
/c Includes Electric Power, Transport and Tourism, and Regional Development.
/d Includes Education, Health, and Rousing and Water Supply.
Sources: Analysis and Projections Appendix, Tables 2 and 3, and Annex Tables 5.1, 5.2, 5.3 and 5.5.
- 23 -
on the latter. In real terms, domestically-financed development expenditures
increased at a rate of 27% a year between 1973/74 and 1975/76 and must,
therefore, have been an important factor in the expansion in imports of
capital goods.
4.04 From the perspective of monetary stability, the increased foreign
exchange revenues from oil were offset by the repayment of Pertamina debt and
the large increase in the import bill. Given the Government's objective, and
achievement, of a balanced budget, the control of inflation thus depended
crucially on credit policy. Between 1973 and 1975 private sector credit
declined in real terms at an annual rate of 6%, whereas the real growth rate
of credit to public enterprises was in excess of 100% a year in total and
approximately 50% a year if Pertamina debt repayment is excluded (see Table
4.2). This decline in private sector credit occurred at precisely the time when
the demand for private sector products - consumer goods, intermediate inputs
and construction - was increasing rapidly. A more expansionary credit policy
towards the private sector might have secured a faster supply response. State
enterprises, on the other hand, were able to undertake a variety of invest-
ments including a number of capital-intensive projects such as the LNG plants.
4.05 The decrease in the rate of inflation as measured by the Jakarta
Cost of Living Index is one indication of the success of the Government's
stabilization policy: after increasing by 33% in 1974, the index increased
by 20% in 1975 and only 14% in 1976. In part, this achievement reflects
external events, especially the decline in the rate of increase in interna-
tional prices after 1974. To a considerable extent, however, it can be
attributed to Indonesia's monetary and related policies, of which the primary
measures were the introduction of credit ceilings and stricter reserve
requirements, higher interest rates, and tighter control of foreign borrowing.
In addition, however, price subsidies were an important component of the
package. Prices that were heavily weighted in official measures of inflation
- rice, kerosene, wheat, sugar - were subsidized. By this means, the
Government succeeded in insulating the domestic consumer from the abnormally
high international prices especially of rice during those years.
4.06 Another measure of the government's success in absorbing the
increment in foreign exchange resources is provided by changes in employment
and real wages. Between 1971 and 1976 total employment grew at a rate of 4.7%
a year, considerably higher than the rate of population growth. While this
statistic lends itself to a relatively favorable interpretation of labor
market developments in the first half of the decade, other factors point in
a different direction. For example, the available evidence, albeit scant,
suggests that real wages have not increased noticeably. Table 4.3 illustrates
these developments from another perspective. The measures of labor intensity
shown there reveal clearly the employment-generating potential of agriculture.
Development expenditure on irrigation and rural infrastructure and the exten-
sion of credit to estates, both of which increased rapdily, can be expected to
have increased employment considerably. Public enterprises in the industrial
sector, however, typically have very low rates of labor use compared with both
- 24 -
Table 4.2: CREDIT OUTSTANDING 1973-75
(Rp billion)
1973 1974 1975
Credit extended to public enterprises 185 484 1,411
Credit extended for Pertamina debt repayment - - 726
Credit extended to private sector 932 1,078 1,376
ANNUAL REAL GROWTH RATES (%) /a
1973-74 1974-75 1973-75
Credit extended to public enterprises
(i) Total 76 159 115
(ii) Excluding Pertamina debt repayment 76 26 49
Credit extended to private sector -22 14 -6
/a Nominal values expressed in real terms by application of GDP deflator:
1973=100; 1974=148.1; and 1975=165.7.
Source: Review of Economic Developments, IMF, various years.
agricultural activities and private sector industry. With regard to industry,
therefore, much of the credit extended during 1974/75 and 1975/76 was deployed
in sectors that contribute relatively little to job creation. The success of
the Government's short-run stabilization policies may have been, at least to
some extent, at the expense of its long-run objectives with respect to
employment creation in the industrial sector.
Policy Options in the Short Run
4.07 The unanticipated increase in foreign exchange revenues from both
oil and other primary commodities threatens the gains in international
competitiveness derived from the devaluation. This can be avoided if the
Government finds some means of increasing the use of imports that does not
require a change in relative prices. Increasing the foreign exchange
component of public expenditure is an obvious solution that merits attention.
Table 4.4 shows the direct foreign exchange costs of selected investments
typically financed through the budget or undertaken by public enterprises. In
- 25 -
Table 4.3: LABOR INTENSITY OF PRODUCTION
Indices of Labor Input /a
Direct Total
Agricultural Activities
Maize 800 818
Padi 456 464
Rubber 48 110
Coconut and palm oil 18 84
Private Industry
Wood and wood products 344 431
Processing and preserving foods 100 215
Textile, leather and weaving apparel 94 184
Beverage industries 14 142
Machinery, electrical appliances,
apparatus and accessories 60 112
Public Industry
Cement 151 233
Iron and steel basic industries 16 96
Chemical industries 11 74
Fertilizer and pesticide 18 63
Petroleum refining 16 35
Construction 35 100
/a The direct index measures jobs per unit of output employed directly
in the output-producing sector. The total index measures jobs
generated per unit of final demand in both the output-producing
sector and all sectors supplying inputs to that sector. Total jobs
created by a unit expansion in final demand for construction has been
arbitrarily chosen as the base for the index.
Sources: Input-Output Table Indonesia, 1971, Central Bureau of Statistics,
Tables Bl, B14 and B15.
Table 4.4: FOREIGN EXCHANGE CONTENT OF INVESTMENT,
PRODUCTION AND CONSUMPTION
First Round Effects Second Round Effects
Direct foreign exchange Direct foreign exchange
content of investment (Z) cost of production (Z)
Industry
Cement 60 Construction 35
Iron and steel 70 Textiles 44
Basic chemicals 75 Processed food and drink 50
Fertilizer 78 Wood and wood products 64
Infrastructure and Agriculture Direct foreign exchange
Thermal generating unit 60 cost of consumption (Z)
Roads and bridges 50
Rubber estate expansion 45 Expenditure out of wages:
Drainage and flood control 45 Urban Java 27
Urban Outer Islands 28
Rural Outer Islands 39
Rural Java 44
Source: Bank staff research paper and Bank staff estimates.
- 27 -
conjunction with Table 4.3, Table 4.4 demonstrates that investments with a
high proportion of direct foreign exchange costs are generally those that
contribute least in terms of job creation./1
4.08 Exclusive focus on direct foreign exchange content, however, can be
misleading. Local costs, whether in the form of wages or payment to local
supplying industries, generate a second-round demand for imports (see Table
4.4). For example, the direct foreign exchange content of expenditures out of
wages in rural Java is estimated to be over 40%. Compared with an approach
that relies heavily on investments with a high proportion of direct foreign
exchange costs, an approach that gives more weight to agricultural and
infrastructural projects will have a different intertemporal sequencing of
demand for imports but not necessarily a noticeably lower total impact on
imports. Nevertheless, the impact on the domestic price level may be
substantially different if the supply of locally-produced intermediate inputs
and consumer goods is not very responsive to changes in the economic environ-
ment: price rises may occur before domestic supplies can be increased. For
this reason, it is essential that the economic environment be conducive to a
rapid supply response.
4.09 While it is clearly inappropriate to articulate a detailed invest-
ment strategy in the absence of specific information on individual projects,
from the present macroeconomic perspective infrastructural and agricultural
projects should receive high priority on the grounds of their potential
contribution to job creation. In this respect, efforts should be made to
expand development expenditures substantially and to at least equal the
proportion of incremental expenditures allocated to physical and social
infrastructure achieved when the last resource increase took place and to
increase the share budgeted for investment in agriculture and irrigation. The
1980/81 Budget accords well with these suggestions: development expenditures
are to be increased by 44%; compared with the previous year's budget, 30% of
the increment will be allocated to physical infrastructure, 25% to social
infrastructure and 20% to agriculture and irrigation. The achievement of
these targets, however, is crucially dependent on the availability of adequate
administrative and executive capacity within the implementing ministries.
Moreover, the achievement of these targets in a manner that does not generate
unacceptably high rates of inflation depends critically on the overall
expansion and composition of monetary aggregates and on the responsiveness of
domestic supply. These issues are addressed below.
/1 Ideally, the comparison should be based on jobs created per unit of
investment. Unfortunately, the sectoral attribution of investment
costs in infrastructure remains problematical and is not attempted
here. Within the industrial sector, however, evidence on capital-output
ratios strengthens the argument made in the text.
- 28 -
Monetary Policy
4.10 In 1980/81 the monetary authorities will attempt to keep inflation
to about the international rate. Given an anticipated rate of world inflation
of about 10%,/1 this would imply a target for overall liquidity expansion of
of around 22% (see para. 3.17). If the balance of payments develops as
projected and if the monetary impact of the budget is not sufficiently
contractionary, there may be room for only a small increase in credit which
could severely constrain production and investment and thus compromise the GDP
growth and employment targets of Repelita III. Since the private sector seems
to have the capacity for accelerated supply response which is needed as part
of an anti-inflation program and for the attainment of long-term employment
growth objectives, more credit to this sector is required. In order to allow
a reasonable margin for real growth, an increase in the amount of credit
extended to the private sector at least equal to the expansion in total
liquidity would appear a minimum requirement.
4.11 Existing controls on both public and private credit include an
overall credit ceiling as well as sectorally differentiated interest rates for
Central Bank refinancing. In addition, investment credits from the State
Banks are confined to state-owned and indigenous private enterprises. The
Government is rightly anxious to foster indigenous entreprenuership. In this
regard, the efforts to stimulate indigenous investment demand through, inter
alia, promoting the development orientation of the banking system, providing
equity capital through various channels including State Banks, and stream-
lining administrative procedures to speed up the approval of loans which are
eligible for rediscounting with Bank Indonesia, deserve to be strengthened and
expanded. But, at the same time, longterm employment and growth considera-
tions suggest the need for efforts to stimulate private investment in general.
Hence, the Government might consider giving private enterprises easier access
to domestic money and capital markets, and allowing financial institutions
greater flexibility to lend at market rates to the private sector for
productive purposes. This would probably also lead to greater efforts to
increase deposits and thus mobilize domestic financial resources. Until
recently, time deposits generally increased at an average real annual rate
of about 10%. However, due to unattractive interest rates, following the 1978
devaluation, this increase has diminished recently; in 1979 time deposits fell
in real terms. If, as a result of increased flexibility in credit policies,
greater encouragement is given to the banking system to attract savings, more
domestic financial resources could effectively be channeled into productive
investment.
4.12 Such easier access to domestic money and capital markets would also
enable some entrepreneurs to switch from off-shore borrowing to borrowing from
the domestic sources. In times of foreign exchange shortage, off-shore
borrowing offers a potentially valuable means of increasing the economy's
total availability of foreign exchange. However, in times of resource
/1 World Bank projection.
- 29 -
buoyancy, it is less important to maximize the inflow of foreign exchange.
Thus, to the extent that such access would cause a switch from off-shore
borrowing to domestic financing, the government may consider this preferable
to holding additional foreign exchange reserves. It would also be consistent
with the objective of monetary stability. For private investors it has the
advantage of reducing exchange rate risk.
4.13 Since the projections of Chapter 5 assume certain levels of subsidy
for oil products, it is important to explore their implications for the
measured rate of inflation. A 40% increase in the domestic price of oil
products in 1980/81 (see para. 5.03) would raise the CPI by 3%./1 Such an
increase may well be acceptable, since the rate of inflation remains substan-
tially lower than in the preceding year. Moreover, the substantial reduction
in import duties suggested below may well offset much of this increase.
Trade Policy
4.14 As noted in para. 4.07, the rise in the prices of oil and other
primary commodities threatens the gain in international competitiveness
stemming from the devaluation. A partial appreciation of the real exchange
rate could, however, be achieved by reducing the cost of imports without
compromising the gain in competitiveness enjoyed by exporting industries. In
fact, a reduction in the cost of imported inputs will further boost competi-
tiveness in export-producing industries and a reduction in the cost of
imported consumer goods will increase the foreign exchange content of
expenditure out of wages. While a movement towards a lower and more unified
structure of tariffs should be considered an important follow-up to the
devaluation designed to rationalize and improve the efficiency of domestic
industry, it would also lower the domestic price level. For example, a 50%
overall reduction in import tariffs can be expected to reduce the domestic
price level by approximately 2%. This tariff reduction would have three
additional benefits. First, the resulting increase in imports would reduce
the build-up of reserves and thereby impart a dampening influence to total
liquidity creation. Second, it would decrease the profitability of smuggling.
And third, the reduction in tariffs and simplification of the tariff structure
would curtail the scope for corruption in the customs service by reducing the
profitability of such activities.
4.15 Customs procedures have in fact been identified by many businessmen
as a major constraint on their ability to expand and to export. While a
number of significant improvements have been made in the export climate
through the devaluation, export certificates, reduced interest rates for
/1 Calculated by multiplying the direct and indirect fuel content of each
component of the CPI by the component's weight in the CPI and summing.
Further ramifications such as increased wage rates are not allowed for.
The assumed increase in the price of oil is consistent with the 1980/81
budget estimate for the oil subsidy.
- 30 -
exporting and simplification of export procedures, little has been done to
improve access to the imported inputs that are essential to production for
both domestic and export markets. Efforts to reduce the number of clearances
required for importing, to extend the period for which import licenses are
valid, to grant automatic licenses for clearing goods imported in connection
with approved investments, and to limit the import licensing activities of the
Ministry of Industry to that of registering importers rather than controlling
imports deserve high priority. The elimination of the additional costs
imposed by an inefficient customs service can be expected to secure a reduc-
tion in the domestic price level in the same, but quantitatively more impor-
tant, way as a reduction in tariffs.
4.16 All the policy suggestions affecting imports - reduction and
unification of tariffs, improved customs service, and elimination of import
controls - effectively reduce the protection afforded domestic industry. If
the recommended policies were implemented abruptly, severe dislocation could
result. Nevertheless, the Government should weigh very carefully the costs
and benefits of sustaining inefficient domestic producers against the merits
of a lower domestic price level and the long-run development of an inter-
nationally-competitive
industrial sector. The recommended measures can be
introduced gradually and can also be preceded by statements concerning the
Government's intentions. In this way the dislocation costs can be minimized.
Moreover the mobility of factors of production is likely to be greater during
a period of relative prosperity and growth than during one of stagnation. In
this respect, the prospect of a comparatively strong growth performance based
on the increased availability of foreign exchange resources suggests that the
present is a propitious moment for the successful implementation of such
policies.
Investment Licensing
4.17 Investments in Indonesia are regulated by the Foreign Investment and
Domestic Investment Laws of 1967 and 1968 respectively and the Regulation of
Business Law of 1934. The first two laws apply to investments that seek the
incentive package offered by the Investment Coordinating Board (BKPM) while
the latter governs all other investments. All foreign investments, however,
must be approved by BKPM. The investment approval procedures of BKPM have
recently been simplified : in 1978 the responsibility of BKPM was widened and
a one-stop investment system was established to supercede existing regulations
which required investors to obtain licenses from five separate ministries.
4.18 Although these measures have simplified investment approval, the
administration of many other licenses - import and purchasing licenses,
regional licenses, permits to buy or lease land, building permits, industrial
permits, land certificates - can be improved. Moreover, the present system of
regulating investment suffers from a number of drawbacks. For example,
because market saturation appears to be the primary criterion on which
license-granting is based, the economically most efficient enterprises are not
necessarily those that obtain approval. Similarly, because of the requirement
- 31 -
that indigenous entrepreneurs provide at least 20% of initial domestic equity
in joint ventures and because of the restrictions imposed on domestic
investment lending, foreign investment is to some extent limited by the
availability of indigenous entrepreneurs and by the supply of domestic capital
funds. Further efforts to concentrate license-granting power in BKPM and to
rationalize and simplify the criteria for approval could substantially
accelerate supply response in the private sector.
Administrative Capacity
4.19 Reliance on direct controls to govern the economy has the unfor-
tunate consequence of increasing the demand for managerial and administrative
skills that are so desperately needed for the genuine task of implementing
public sector projects and programs. The movement towards deregulation of
trade, investment and credit outlined in Repelita III and advocated in this
report is the most important short-run method of increasing the supply of
managerial manpower. For the longer run, investment in education emerges as
an especially attractive use of the increased wealth flowing from oil. Some
of the increased foreign exchange revenues could be used to finance a major
expansion in scholarship funding for overseas training, particularly in
accountancy and engineering.
4.20 Another approach that warrants consideration is to increase the
ability of provincial and lower level governments to prepare and execute their
own projects and programs. This will permit the tailoring of activities to
more specific regional development patterns and needs. The various INPRES
programs have been the main source of reasonably discretionary investment
financing to local governments, and, through their rapid growth, have
demonstrated convincingly that lower level governments can increase their
activities and at the same time improve their administrative structure and
skills. Local governments are also starved for routine funds. Paradoxically,
this can prove economically more costly in the long run than allowing a higher
level of routine expenditure, because the maintenance of assets suffers and
replacement or complete rehabilitation becomes necessary earlier than would
otherwise be the case. Because local governments can be expected to take on a
more prominent role in future, current efforts to strengthen their planning
and implementation capacity deserve strong encouragement.
4.21 The ability of local governments to use funds well is typified by
the broadly successful results of the INPRES programs. For example, in terms
of assets created, the INPRES Kabupaten program has made a visible improvement
in amenities in many areas through road improvements, drainage ditches, drink-
ing water suplies, irrigation channels, schools, markets and other facilities.
Although in many cases it is difficult to quantity the benefits arising from
these small projects, it is clear that they are a positive factor in raising
production and productivity, especially in the isolated and relatively
neglected areas. Despite the remaining weaknesses of local governments, there
is no evidence to suggest that cost levels are higher than they would be if
similar assets had been created through central government projects.
- 32 -
4.22 The need for a quantum leap in the level of investment in small
improvements of the type presently supported through local governments is
clear. In most areas outside Java, basic infrastructural investment including
in particular roads and bridges, has lagged far behind such developments in
Java and the more highly developed parts of Sumatra and Kalimantan. Main-
tenance is a very serious problem in many areas outside Java. Much investment
needs to be turned towards directly or indirectly productive activities
in such areas. Yet despite the admitted weakness of many local governments,
it will be impossible to manage the right balance of such investment through
centralized decision making. Ongoing efforts to strengthen local government
institutions must be expanded pari passu with increased investment.
- 33 -
CHAPTER 5: RESOURCE MANAGEMENT, 1980-85
5.01 Although Indonesia's balance of payments for 1979/80 showed a
healthy surplus - around US$2 billion - and official reserves equal about six
months' worth of imports, for the purpose of recommending a level of external
assistance a longer time horizon is required. Accordingly, two sets of
projections have been prepared that differ primarily as a result of different
assumptions regarding policy. The main focus of attention is the first half
of the 1980s; the implications of an extension of the analysis through 1990,
however, are discussed especially where they bear directly on policy decisions
that are required in the early 1980s. Both forecasts illustrate a widening
resource gap in the mid-1980s, and demonstrate the need for levels of external
assistance at least as large as those of the recent past. The implications of
the analysis for Indonesia's overall debt management are also developed.
Oil Sector Developments, 1980-85
5.02 Crude oil production is expected to decline further in 1980 but
should improve thereafter with the implementation of the Minas recovery
program and the start of production from new discoveries. However, production
growth is likely to be modest, and output will remain well below Repelita III
targets. The exportable surplus may increase marginally between 1981 and 1985
if domestic consumption growth can be moderated through a combination of
substitution policies and drastic price increases. Nevertheless, a decline in
the exportable surplus beyond 1985 appears likely. Crude oil prices are
projected to reach an average of US$32 per barrel during 1980 and to increase
thereafter by about 3% a year in real terms. With an increasing proportion of
production coming from higher cost offshore fields and secondary recovery,
Indonesia's share of earnings is expected to decline and, given the projected
level of exportable surpluses (Table 5.1), net oil export earnings at constant
1979 prices are projected to remain constant between 1980 and 1985 and decline
thereafter. Prospects for LNG earnings are more favorable. On the basis of
proven gas reserves the existing capacity of the plants at Badak and Arun
could be roughly doubled if appropriate sales and financing arrangements can
be made. Since the price of LNG is essentially linked to the international
price of crude oil, our projections assume that by 1985 the net value of LNG
exports (before public debt service) may reach about $2.5 billion at current
prices. Beyond 1985, the combined net value of oil and LNG earnings would
almost certainly decline in real terms (see para. 5.11).
5.03 Domestic oil pricing remains one of the key fiscal issues
confronting the Government. In order to prevent subsidies from absorbing an
excessive share of resources,/l it is suggested that the Government aim, as
/1 In 1979, net oil budget subsidies (nearly Rp 600 billion) amounted to
about 12% of the corporate tax on oil. In the unlikely event that
domestic oil prices do not change during 1980-83, net budget subsidies
would absorb about 30% of the corporate tax on oil by 1983.
- 34 -
Table 5.1: OIL PRODUCTION AND CONSUMPTION
(Million barrels) /a
Actual Est. Projlected
1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1985
Production 489 502 477 550 615 597 580 565 575 600 625 670
Consumption 60 70 79 89 102 112 128 143 157 173 190 230
Exportable
surplus /b 429 432 398 461 513 485 452 422 418 427 435 440
International
oil price
index 16 40 53 57 60 60 100/c 141 161 180 198 238
/a Crude equivalent.
/b Equal to total exports of crude and products minus imports of crude and products.
Ic The time-weighted average price during 1979/80 was nearly US$23 per barrel.
Source: World Bank projections.
- 35 -
a minimum, at containing the net oil subsidy at its 1980/81 budget level of
about Rp 800 billion a year. This would involve a price increase of about
40% in 1980 and an average annual increase of about 25% during 1981-83.
Such action would serve to gradually reduce the economic distortions arising
from the underpricing of oil products. Nevertheless, by 1983 the domestic
price would still be only half the economic cost. A realistic pricing
policy as part of a comprehensive energy policy package should result in a
deceleration of domestic oil consumption growth. Our projections assume that
the growth rate would nevertheless average about 10% a year up to 1985,
compared with 13.5% during 1973-79.
Budget Projections 1980/81-83/84
5.04 In line with projected production levels and international price
developments (para. 5.02), oil and LNG budget revenues are expected to
increase from the 1980/81 budget projection of Rp 6.4 trillion (US$10.2 bil-
lion) for 1980/81 to Rp 10 trillion (US$16 billion) in 1983/84 (Table 5.2,
line 1). Since supplies (of either crude /1 or final products) for incremen-
tal domestic oil consumption during Repelita III must be procured by Pertamina
at world market prices,/2 a substantial increase in oil and LNG revenues, net
of oil subsidies, can only be achieved if domestic prices are raised. At the
suggested maximum level of Rp 800 billion (para. 5.03), subsidies would by
1983/84 absorb about 8% of revenues from oil and LNG compared with an
estimated 12% in 1979/80: revenues net of subsidies would reach Rp 9.1
trillion by 1983/84 (Table 5.2, line 3) and increase in real terms by about 8%
a year during 1979/80-1983/84. Higher domestic oil prices thus contribute
significantly in mobilizing domestic funds. In addition, a substantial nonoil
taxation effort would be required to ensure a noninflationary expansion of
development expenditures. Accordingly, our budget projections assume that
nonoil taxes will be more than doubled from an estimated Rp 2.3 trillion in
1979/80 to Rp 4.7 trillion in 1983/84 (Table 5.2 line 4). This implies a
modest 1.2 "buoyancy" of nonoil taxes to current GDP; by 1983/84 nonoil taxes
would still amount to only 8% of GDP (Appendix, Table 9). As was discussed in
last year's report there is considerable scope for raising effective tax rates
by improving administration and collection, particularly for taxes on income,
wealth (including land) and consumption./3 Further, it is likely that the
reduced tariff rates on international trade (see para. 4.14) will be at least
partially offset by an expansion in the volume of trade. Overall Government
resources /4 during Repelita III would then represent about 25% of GDP which
is above the actual ratio of 21% achieved during Repelita II.
A1 In the case of additional domestic refining capacity.
/2 The present level of consumption already exceeds the combined total of
Pertamina production and pro-rata crude by a wide margin.
/3 Detailed recommendations along these lines are provided in the IMF's
report "Nonoil taxation in Indonesia," July 1979.
A4 Defined as oil and LNG revenues (net of subsidies) plus nonoil revenues
plus net external inflows (see Table 5.2).
- 36 -
Table 5.2: BUDGET REVENUES, 1979-83
(Rp trillion)
1979/80 Budget
Est./a 1980/81 1981/82 1982/83 1983/84
------- Projected -------
1. Oil and LNG revenues /b 4.8 6.4 7.7 8.8 10.0
(Oil) (4.7) (6.0) (7.1) (8.2) (9.3)
2. Oil budget subsidies 0.6 0.8 0.8 0.8 0.8
3. Oil and LNG revenues,
net of oil subsidies
(1 - 2) 4.2 5.6 6.9 8.0 9.1
4. Nonoil revenues 2.3 2.6 3.4 4.0 4.7
5. Total revenues, net of
oil subsidies (3 + 4) 6.5 8.2 10.3 12.0 13.8
6. Aid and loan disbursements 1.4 1.5 1.6 1.9 2.1
7. Government debt service 0.7 0.7 0.7 0.9 1.1
8. Net external inflows (6 - 7) 0.7 0.8 0.9 1.0 1.0
9. Total resources (5 + 8) 7.2 9.0 11.2 13.0 14.8
Total resources, US$ billion,
current prices 11.5 14.4 17.9 20.9 23.8
Total resources, US$ billion,
constant 1979 prices 11.5 13.1 14.9 16.1 17.1
Total resources as % of GDP 22.5 23.6 25.6 26.1 25.8
/a World Bank estimate. Actual revenues may be lower due to lags in oil
payments
/b LNG revenues equal to net LNG export value minus LNG public debt service.
Source: Analysis and Projections Appendix, Tables 9 and 10.
- 37 -
Balance of Payments Projections. 1980-85
5.05 Because 1979 combined extremely favorable export commodity price
developments and depressed post devaluation import levels, it is to be
expected that the positive resource balance (export revenues minus import
bill) of US$3.2 billion in that year will rapidly decline and become negative
between 1980 and 1985. In the following paragraphs, two alternative projec-
tions are presented based on plausible ranges of import and export levels.
5.06 Imports. As noted in para. 2.05, the increase in resources result-
ing from the rise in oil prices should enable Indonesia to exceed the 6.5%
real GDP growth rate projected in Repelita III. The projections developed
here assume a 7.5% growth rate and an increase in the ratio of gross domestic
investment to GDP to 24% by 1983/84. These assumptions are reflected in a
rapid increase in the rate and the capital and import intensity of public
investment. In addition, private investment activity is expected to respond
to the devaluation assuming appropriate monetary and industrial policies
(Chapter 4). In the base projection, the volume of capital goods imports is
therefore assumed to rise rapidly (by an average of 20% a year from 1980 to
1982 and by 10% a year thereafter up to 1985). Although the volume of inter-
mediate goods imports (other than oil products) has not increased during
1976-79 because of past investments in input-producing industries (fertilizer,
cement), it is to be expected that a successful industrial strategy would in
the mid-term result in a high rate of growth (about 12.5% a year on average
during 1979-85) of intermediate imports. Projections of consumer goods
imports other than rice assume an average rate of growth in volume of 15%
during 1980-82 and about 10% thereafter up to 1985, while plausible demand and
supply scenarios suggest that rice imports may rise from about 2.5 million
tons in 1980 (compared with 2.7 million tons in 1979) to 3.0 million tons by
1985. The resulting high overall income elasticity of imports of 2.0 during
1980-82 is projected to decline rapidly to about 1.0 by 1985. Such a pattern
is likely as the economy adjusts first to the current surplus of foreign
exchange and then to the re-emerging resource constraint. The alternative
import projections assume a less successful import-substituting strategy
beyond 1982 and consequently a less rapid decline in the income elasticity of
imports between 1982 and 1985.
5.07 Nonoil Exports. Last year's basic economic report projected average
volume growth rates of agricultural and nonoil mineral exports of around 3%
and 10% respectively up to 1985; there seems no reason to revise this
forecast. The report considered a real growth rate of 20% in manufacturing
exports between 1976 and 1990 both feasible and necessary for the overall
balance of payments situation to remain manageable. Between 1976 and 1979 the
volume of manufacturing exports is estimated to have increased on average by
about 40% a year. In 1979, as a result of the combined effect of past
investment in cement and fertilizers and the response to the devaluation in a
number of industries - for example, garments where idle capacity existed - the
- 38 -
volume of manufactured exports is estimated to have doubled albeit from a
small base./1 The base projections assume a volume growth rate of 20% a year
(from the higher base in 1979) up to 1985, whereas the alternative projections
assume a more conservative average growth rate for the same period of 15% a
year. In the base projections, manufactured exports would reach about US$3.7
billion in current prices by 1985 while total nonoil exports would grow at 7%
a year in real terms between 1979 and 1985 /2 and increase from $6 billion in
current prices in 1979 to $14.1 billion in 1985. In the alternative
projections, manufactured and total nonoil exports would reach about $2.9
billion and $13.3 billion respectively by 1985 and the overall real growth
rate of nonoil exports would be only 6% a year.
5.08 Oil and LNG Exports. Prospects for oil and LNG exports were
discussed in para. 5.02. Both projections assume that the combined net value
of oil and LNG earnings in constant 1979 prices would reach the levels implied
by these prospects, and essentially show no growth between 1979 and 1985.
Because of favorable price forecasts,/3 the current value of net oil and LNG
earnings is expected to more than double between 1979 and 1985 from $7.1 to
$16.7 billion. Total exports are projected to grow by 2.4-3.0% a year in
constant 1979 prices between 1979 and 1985./4 Net oil and LNG exports would
throughout the projection period account for over half of export earnings.
The Resource Gap
5.09 The positive resource balance (exports minus imports including net
NFS) of $3.2 billion in 1979 is projected to decline by about $0.8 billion
in 1980 (Table 5.3). The decline may be even steeper if OECD growth is
lower and world inflation higher than presently expected. Although
/1 Based on Bank Indonesia current value data for "miscellaneous" and "other"
exports, deflated by the index of international dollar inflation.
/2 Compared to a growth rate of 4.1% during 1973-79 and of 7.1% during
1974-79.
/3 The forecast barrel price for 1980/81 is US$32, 41% above the average
1979/80 price. Beyond 1980, crude oil prices are assumed to increase by
about 3% a year in real terms.
/4 Compared to a growth rate of 7% during 1973-79 and of 3.8%
during 1974-79.
- 39.-
Indonesia's terms of trade are expected to improve by about 3.4% a year during
1980-85 /1 (Appendix, Table 5), it is not surprising that given the projected
overall volume growth rates of imports and exports of 12.7-13.3% and 2.4-
3.0% /2 a year respectively, the positive balance disappears by 1982; beyond
1982 the resource gap is projected to gradually increase to $2-4 billion by
1985. It would appear possible to prevent the gap from reaching the magnitude
implied in the alternative projection if import growth beyond 1982 can be
moderated through, inter alia, a successfull food strategy and industrial
import substitution, and if exports can be increased as assumed in the base
projection; this latter could be realized through a successful manufacturing
export strategy, intensified rehabilitation and expansion of tree crop
production, and realistic oil pricing and substitution policies to further
decelerate domestic oil consumption growth and prevent a rapid decline in the
exportable oil surplus. Moreover, continued concessional assistance and a
prudent borrowing strategy as discussed in paras. 5.16 and 5.17 are likely to
keep the overall balance of payments situation tenable beyond 1985 (see para.
5.19).
5.10 Details underlying the projected level of net resource transfers up
to 1985 are discussed in paras. 5.15 to 5.17; the same assumption is used in
both scenarios. The overall balance-of-payments surplus is projected to reach
$3.4 billion during 1980/81. In the base projection, the surplus gradually
declines to about $1 billion by 1985. Reserves decline from eight months of
imports and net NFS in 1980/81 to six months by 1985. In the alternative
projection the surplus turns into deficit by 1985 and reserves drop more
rapidly to about four and half month's worth of imports and net NFS by 1985.
Although still above critical levels, the disparity between the growth rates
of imports and exports signals the prospect of a rapidly deteriorating
balance-of-payments situation.
5.11 Although projections beyond 1985 become increasingly uncertain,
their inclusion here is warranted because of their significance for antici-
patory policy action in the early 1980s especially with respect to export
development and borrowing strategy. Clearly, future prospects depend cru-
cially on projections of oil export revenues. The assumptions used here
(see Table 5.3) imply that a low growth rate of oil production - 1.5% a
year - in conjunction with a moderate growth rate of domestic consumption -
8.5% a year - cause the exportable surplus to decline at a rate of about 3% a
year from 1985. The precise year in which the downturn occurs is subject to
a considerable margin of error; that the downtown will occur in the mid 1980s
seems assured. Although real oil price increases - assumed to be 3% a year -
/1 Nonoil terms of trade are expected to worsen by 0.3% a year during the
same period.
/2 The real growth rate of exports (in terms of import capacity, i.e., volume
growth rate plus terms of trade effect) is 6.0-6.5% a year.
- 40 -
Table 5.3: PROJECTED RESOURCE GAP AND SUMMARY BALANCE OF PAYMENTS, 1979-85
(US$ billion, current prices)
1979
(est.
actual) 1980 1981 1982 1983 1984 1985 1990
Base Projections
1. Total Exports 13.1 15.3 17.6 20.3 23.2 26.8 30.9 50.3
a. Oil and LNG (net) 7.1 8.9 10.1 11.4 12.8 14.6 16.8 22.5
b. Nonoil 6.0 6.4 7.5 8.9 10.4 12.2 14.1 27.8
2. Imports (incl. net NFS) 9.9 12.9 16.7 20.6 24.1 28.1 32.8 56.4
3. Resource gap (2 - 1) (3.2) (2.4) (0.9) 0.3 0.9 1.3 1.9 6.1
4. Net Resource Transfers (0.8) 1.0 1.4 2.0 2.3 2.6 3.0
a. Public sector /a 0.6 0.7 0.9 1.3 1.4 1.4 1.5
b. Other /b (1.4)/c 0.3 0.5 0.7 0.9 1.2 1.5
5. Increase in official
reserves 2.4 3.4 2.3 1.7 1.4 1.3 1.1
6. Official reserves - months
of imports (incl. NFS)/d 6.4 8.0 7.9 7.4 7.0 6.5 6.0
Alternative Projections 1981 1982 1983 1984 1985
1. Total Exports 17.5 20.1 22.9 26.2 30.0
a. Oil and LNG (net) 10.1 11.4 12.8 14.6 16.8
b. Nonoil 7.4 8.7 10.1 11.6 13.3
2. Imports (incl. net NFS) 16.7 20.6 24.4 28.5 33.8
3. Resource gap (2 - 1) (0.8) 0.5 1.5 2.3 3.8
4. Net resource transfers 1.4 2.0 2.3 2.6 3.0
5. Increase in official reserves 2.2 1.5 0.8 0.3 (0.8)
6. Official reserves - months
of imports (incl. NFS) 7.8 7.2 6.5 5.7 4.5
/a Gross disbursements on account of public sector medium- and long-term
loans minus debt service, plus grants. See also Table 5.4.
/b Includes: private sector net resource transfers, earnings on reserves,
and assumed decrease in foreign assets held by State Banks during
1980-85.
/c Includes about $0.8 billion increase in State Banks' foreign assets.
/d End-of-year reserves in months of imports (including net NFS) in
preceding 12-month period.
Sources: Analysis and Projections Appendix, Tables 3 and 4.
- 41 -
will partially offset the decline in volume, net foreign exchange earnings
are, nevertheless, expected to decrease in real terms by about 1% a year
through 1990. This portrayal of future oil developments underscores the
importance of stimulating nonoil exports in the immediate future. Even if the
volume growth rate of nonoil exports can be increased to 8% a year during the
period 1985 to 1990, the overall real growth rate for exports would be only 4%
a year. It follows that even with a reduced GDP real growth rate of 6.5% and
an import elasticity of 0.8,/i Indonesia would still have to finance a growing
resource gap. On the basis of these assumptions, even with a substantial
effort to develop nonoil exports throughout the 1980s, Indonesia may face a
resource gap of almost US$6 billion a year by 1990. Unless the export
strategy associated with the second set of projections is consistently
pursued, Indonesia's long-run growth rate will be further depressed by its
limited capacity to purchase necessary imports.
5.12 The present reserve level of over six months of imports plus NFS,
although not excessive, is above safe limits. Because of fluctuations in
exchange rates and uncertainty regarding export prospects and international
inflation related to the possibility of OECD recession, a relatively high
level may well be justified in the short term. At times of foreign exchange
constraint, excess levels of reserves would be very costly in terms of
foregone investment opportunities because the real rate of return on
reserves is generally no more than 1-2% (i.e., the difference between interest
earned and inflation rates). This is likely to be the case for Indonesia
beyond the next few years. In the short term, an alternative to be explored
may be the prepayment of outstanding commercial debt at hard terms./2 After
the reconsolidation of a part of total commercial debts (para. 5.13), an
estimated US$750-$1,000 million carrying an interest rate of more than 1% over
LIBOR is still outstanding. Under the assumption that marginal reserves earn,
at most, LIBOR rates, prepayment of this debt may be preferable to holding
reserves in excess of 6 months. This would further improve the overall debt
structure and increase the potential borrowing capacity for later years.
External Assistance, Borrowing and Debt 1980-85
5.13 Preliminary estimates indicate that in 1979, ODA commitments reached
the level of $1,925 million recommended in our last report. The shortfall of
about $150 million in commitments by bilateral IGGI members and nonIGGI
sources was offset by multilateral members. Nonconcessional borrowing by the
/1 Other combinations of GDP growth rate and import elasticity could also
be considered. Given the build-up of imports of capital goods in the
early 1980s, however, it seems plausible to assume that a reasonably
high growth rate could be maintained with a relatively low import
elasticity.
/2 This alternative has not been reflected in the projections of balance of
payments and reserves discussed above.
- 42 -
public sector exceeded the recommended level of $850 million. About $1.3 bil-
lion of new commitments /1 were signed during the year, including about $450
million for the Krakatau steel project. Following successful bond issues in
1978 in Japan and Germany, the Government placed two bond issues
in Kuwait and the Netherlands in 1979. In addition, the Government negotiated
a $425 million consolidation loan at 5/8-3/4% over LIBOR, for 10 years
including 5 of grace, which was used to repay debt on harder terms.
5.14 The unexpected increase in oil revenues should enable Indonesia to
increase the investment rate in the mid term. In the short term, the level of
investment will be constrained, not by a lack of capital, but by institutional
factors including, in the public sector, administrative capacity. Beyond the
next two years there will be a growing external resource gap (para. 5.09)
which, despite efforts to mobilize domestic resources, will probably result in
a decline in investment and growth rates by the mid-1980s unless by that time
there is an increase in the net flow of external resources.
5.15 Our projections assume that during Repelita III, ODA commitments
would reach the average level of $2.3 billion agreed at last year's meeting.
Assuming a gradual progression over the years, ODA commitments would in
nominal terms rise from $1.9 billion in 1979 to $2.7 billion by 1983 and $3.2
billion ($2.1 billion constant 1979 dollars) by 1985 (Table 5.4) and result in
rising ODA disbursements at the time of growing resource gaps. At the pro-
jected level (Appendix Table 6), ODA loan-plus-grant commitments by bilateral
IGGI members during Repelita III would in real terms be about 15% lower than
actual commitments during Repelita II.
5.16 Actual experience in 1974-76 and 1979 suggests that following the
increase in oil prices, Indonesia would be in a position to obtain large
amounts of commercial loans on fairly competitive terms. However, in the
short-run, public sector commercial borrowing in excess of the level assumed
in this report may lead to investments with relatively low rates of return.
Alternatively commercial funds could be used to add to foreign exchange
reserve accumulation but, since the return to this use of resources would be
less than the cost of borrowing on competitive terms, it is hardly justifiable
on economic grounds./2 Finally, now that the Government is likely to have
increased access to commercial funds there may be a tendency to regard such
/1 Excluding the $425 million consolidation loan.
/2 If future international capital market conditions are expected to be
less favorable, a stronger case could be made for reserve accumulation.
Even if the spread above LIBOR increases from 0.75% to 1.25% over the
next three years, however, it can be demonstrated that, on reasonable
assumptions, reserve accumulation would not be economically justifiable.
(The assumptions are a 10-year loan, an international rate of inflation
of 10% a year and a discount rate or opportunty cost of capital of 10%).
- 43 -
borrowing as a substitute for ODA borrowing. While this argument may well be
valid at some time in the future, it is particularly important that ODA
lending be continued at present since the technical and administrative
assistance that is usually associated with such borrowing could make a
significant contribution in overcoming Indonesia's absorptive constraint
resulting from institutional factors. These arguments suggest that the
appropriate way to finance the resource gap anticipated in the mid-1980s
involves limiting commercial borrowing by the public sector in the short run
in order to maintain a debt structure that will allow an expansion in
borrowing at the time of greatest need (para. 5.18). This analysis applies
only to borrowing on commercial terms; it should not be interpreted as
necessarily precluding project specific loans that often involve financing on
favorable terms, technical assistance and guaranteed markets. The economic
justification of such loans can only be assessed on a case-by-case basis; in
particular, it is important to consider the net foreign exchange flows of
these projects especially during the second half of the 1980s.
5.17 It is suggested that commercial borrowing by the public sector be
limited to about $1.5 billion in 1980 and increased thereafter to a level of
around $2.0 billion by the beginning of Repelita IV (Table 5.4). Somewhat
higher amounts could be prudently contracted, if, in the coming year or two,
reserve levels are lowered and the debt structure improved by prepayment of
existing hard term commercial debt (para. 5.11). The projected level of total
public sector borrowing would result in a doubling of gross disbursements from
$2.5 billion in 1979 to $5.1 billion in 1985 (Table 5.4); most of the increase
would occur in the second half of the projection period. Total public sector
net resource transfers (on account of mid- and long-term concessional and
commercial loans plus grants) would more than double from $0.6 billion in 1979
to $1.3 billion by 1982 and increase to $1.5 billion in 1985. The total
amount of net resource transfers during Repelita III ($4.9 billion in current
dollars) would, in real terms, amount to only half the actual amount of net
resource transfers during Repelita II, illustrating Indonesia's decreased
reliance on external capital.
5.18 Based on export projections and borrowing assumptions described
above, the public debt service ratio (as a percentage of exports including
oil and LNG on a net basis) is expected to drop to about 12% in 1980 and
remain around that level through 1985. At that level the ratio is quite
comfortable by any standards, even if one considers that private debt service
may account for an estimated additional 3-5% of export earnings. The
possibility of debt prepayment as suggested in para. 5.11 is not reflected in
projections of the various ratios. Such action would obviously further
improve the public debt structure.
5.19 The merit of the borrowing strategy proposed here is only fully
revealed during the second half of the 1980s when the downturn in the
exportable surplus of oil is expected to constrain Indonesia's import capa-
city. Pursuit of the borrowing strategy outlined in paras. 5.15 and 5.16
- 44 -
Table 5.4: PROJECTED PUBLIC SECTOR BORROWING, DISBURSEMENTS,
DEBT SERVICE, 1980-85
(US$ billion)
1979
(est.
actual) 1980 1981 1982 1983 1984 1985
1. Concessional and Semi-
concessional Commitments 1.9 2.1 2.3 2.5 2.7 3.0 3.2
a. Loans 1.8 2.0 2.2 2.4 2.6 2.9 3.1
b. Grants 0.1 0.1 0.1 0.1 0.1 0.1 0.1
2. Commercial borrowing /a 1.3 1.5 1.7 1.8 1.9 2.0 2.0
3. Total borrowing (la + 2) 3.1 3.5 3.9 4.2 4.5 4.9 5.1
4. Gross disbursements Ab 2.5 2.6 3.0 3.7 4.1 4.6 5.1
6. Net disbursements /b 1.3 1.5 1.7 2.2 2.3 2.5 2.6
8. Net resource transfers /b 0.6 0.7 0.9 1.3 1.4 1.4 1.5
9. Total public debt service
(4 - 8) 1.9 1.9 2.1 2.4 2.7 3.2 3.6
10. Debt service ratio /c 14.9 12.3 12.1 12.0 11.8 12.1 11.8
11. Debt service ratio /d 12.2 12.2 12.0 12.4 12.1
12. Public sector resource
transfers in constant
1979 dollars 0.6 0.7 0.7 1.0 1.0 0.9 0.9
12. Index of international
inflation (1979 = 100) 100 110 120 130 139 149 158
/a Private banks, suppliers' credits, bonds; excludes short-term borrowing.
The actual phasing of commercial borrowing during 1980-85 depends on the
state of project preparation.
/b Includes grant disbursements equal to amount of grant commitments
(line lb).
/c Public debt service payments as % of total exports (base projection),
including oil and gas on a net basis.
/d Public debt service ratio for alternative projection.
Source: Analysis and Projections Appendix, Table 7.
- 45 -
should enable Indonesia to finance its resource gap through 1990 without
jeopardizing its debt servicing capacity or the adequacy of foreign exchange
reserves. Although projections through 1990 (see Table 5.3) can only be
considered indicative, they highlight the interaction between a sudden inflow
of foreign exchange and the role of international borrowing: access to the
international capital market allows Indonesia to minimize fluctuations in real
oil revenues (see para. 1.02). As a result, the oil windfall can be assimi-
lated over a longer period, during which time it is reasonable to expect that
nonoil exports can be built up to fill the gap left by declining oil revenues.
5.20 Although direct foreign private investment and private capital
inflows are expected to increase in the coming years in response to the
devaluation and efforts to improve investment procedures, private sector net
resource transfers are likely to be negligible because of service payments,
including profit remittances, on foreign equity and private debt.1I Accurate
estimates of existing private debt are not available but it is believed to be
not insignificant as foreign and joint venture enterprises have been primarily
externally financed. As discussed in Chapter 4, for the purpose of short term
monetary stabilization, it may be advisable to relax present regulations
prohibiting State Bank investment lending to these enterprises. This would
have the dual advantage of limiting the increase in foreign assets in the
short term and reducing the level of outflows in later years.
5.21 Private financing of public sector investments could in the mid term
augment the inflow of foreign capital, and the utilization of related foreign
management and know-how may remove some of the short term constraints on
public investment. However, to the extent that arrangements for project
financing involve public sector guarantees or obligations of other types, they
would be similar in nature to direct public sector borrowing and should
therefore be guided by similar criteria concerning debt repayment and economic
justification. It is therefore assumed in our balance of payments projections
that only a selected number of the large capital intensive projects presently
under consideration will be implemented in the course of Repelita III.
Aid Recommendation
5.22 At last year's meeting, IGGI agreed to our recommendation that in
order to maintain reasonable growth of disbursements and net resource trans-
fers during Repelita III and beyond, Official Development Assistance should
reach, on average, at least $2.3 billion a year during 1979-83. That
assessment was reached as a result of an analysis of Indonesia's long-run
requirements relative to its debt management capacity. Although the
increased flow of oil revenues has provided a temporary foreign exchange
/1 The projected resource transfers shown in Table 5.3 (line 4b) primarily
reflect earnings on foreign exchange and a decrease of assets held
abroad by State banks.
- - 46 -
surplus, it is not sufficient to fulfill Indonesia's considerable develop-
ment needs, as indicated by the extent of poverty, the lack of adequate
social services for a large majority of the population and other criteria of
social well-being. Moreover, the re-emergence of a resource gap in the
mid-1980s, higher-than-expected rates of international inflation, and,
providing Indonesia pursues a prudent borrowing policy in the short run, the
maintenance of an acceptable debt service ratio, reconfirm the argument for
ensuring that on average the annual level of external assistance through
Repelita III should at least reach the level recommended last year.
Considering actual international price developments in 1978 and 1979 and the
rate of international inflation as.presently projected, the real value of the
recommended ODA amounts would be about 15-20% lower than anticipated one year
ago. For 1980, we recommend a level of about $2.1 billion, which would
represent no increase in real terms over the recommended and actual amount of
ODA for 1979. Multilateral financial institutions and sources outside IGGI
are expected to provide over half of this amount, or about $1.1 billion. It
is recommended that bilateral IGGI members aim at providing about $1.0 billion
in concessional loans and grants during 1980.
- 47 -
Analysis and Projections Appendix to Chapter 5
Table 1 Exports, 1973-85 (Base Projections)
Table 2 Imports, 1973-85 (Base Projections)
Table 3 Balance of Payments, 1973-85 (Base Projections)
Table 4 Alternative Projections - Exports, Imports, Balance of
Payments, 1980-85
Table 5 Terms of Trade Index
Table 6 Borrowing Assumptions
Table 7 Summary: Public Sector Loan Commitments, Disbursements,
Net Resource Transfer, Debt Service
Table 8 Projected External Debt Outstanding, 1973-85
Table 9 Government Finance, 1974/75 - 1983/84 (Rp billion)
Table 10 Government Finance, 1974/75 - 1983/84 (as % of GDP)
Analysis and
_ 48 - Projections
Appendix
Table I
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Exports, 1973-85
(US$ million)
Actual Eat. Projected
1973 1974 1975 1976 1977 1978 1979 1980 1981 1992 1983 1985
A. Current Prices
1. Timber 720 615 527 885 943 1,130 2,000 1,935 2,245 2,630 3,110 4,325
2. Rubber 483 425 381 577 608 774 1,050 1,070 1,165 1,340 1,45n 1,715
3. Palm oil 89 184 142 147 202 221 240 230 295 370 380 415
4. Coffee 79 92 112 330 626 508 625 605 565 575 640 805
5. Tea 31 50 50 64 120 98 90 95 105 115 120 145
6. Tobacco 46 36 40 41 59 58 60 75 85 95 105 125
7. Pepper 31 22 25 55 62 66 70 75 80 95 105 130
8. Other agriculture 174 199 195 248 278 344 485 525 575 665 735 905
9. Subtotal agriculture (1-8) 1,653 1,623 1,472 2,347 2,898 3,199 4,620 4,610 5,115 5,885 6,645 8,565
10. Tin 98 166 158 181 253 324 370 405 435 475 520 625
11. Copper 56 102 74 95 74 64 70 100 115 140 155 195
12. Bauxite, alumina, aluminum 21 28 25 44 36 49 90 20 80 210 355 435
13. Nickel 245 365 410 450 550
14. Subtotal minerals (10-13) 175 296 257 320 363 437 530 770 995 1,235 1,480 1,805
15. Manufactures 77 114 144 196 245 343 800 1,055 1,380 1,795 2,300 3,770
16. Total nonoil exports (9+14+15) 1,905 2,033 1,873 2,863 3,507 3,979 5,950 6,435 7,470 8,915 10,425 14,140
17. Oil (net) 641 2,638 3,138 3,710 4,352 3,785 6,500 7,990 8,810 9,920 10,990 13,090
18. LNG (net) - - - - 93 225 600 935 1,290 1,430 1,810 2,660
19. Subtotal oil and LNG (17+18) 641 2,638 3,138 3,710 4,445 4,010 7,100 8,925 10,100 11,350 12,800 16,750
20. Total exports (16+19) 2,546 4,671 5,011 6,573 7,952 7,989 13,050 15,360 17,570 20,265 23,225 30,890
B. Price Indices (1979 - 100)
1. Timber 34 36 34 41 44 51 100 93 104 117 133 171
2. Rubber 47 45 40 57 62 75 100 101 109 124 133 154
3. Palm oil 51 101 57 59 77 90 100 93 113 137 137 136
4. Coffee 30 31 27 81 124 78 100 95 87 87 95 114
5. Tea 41 74 63 77 152 111 100 103 110 118 126 142
6. Tobacco 65 68 87 95 107 104 100 125 139 156 167 193
7. Pepper 65 85 80 89 107 92 100 107 112 126 135 156
8. Other agriculture 58 81 65 77 100 90 100 107 112 126 135 156
9. Subtotal agriculture (1-8) 41 46 41 54 66 67 100 97 105 117 129 156
10. Tin 31 49 50 47 71 88 100 101 107 115 124 145
11. Copper 102 104 89 94 91 88 100 101 117 139 156 196
12. Bauxite, alumina, aluminum 1 37 46 57 79 76 80 100 119 135 154 167 198
13. Nickel 100 117 130 147 162 197
14. Subtotal minerals (10-13) 41 59 58 59 75 87 100 106 117 133 146 175
15. Manufactures 48 60 69 71 76 88 100 110 120 130 139 158
16. Total nonoil exports (9+14+15) 41 48 44 56 68 71 100 100 108 121 133 159
17. Oil (net) 16 40 53 57 60 60 100 141 161 180 198 238
18. LNG (net) - - - - 60 60 100 141 161 180 198 238
19. Subtotal oil and LNG (17+18) 18 44 58 63 60 60 100 141 161 180 198 238
20. Total exports (16+19) 29 43 49 56 63 65 100 120 134 149 162 198
C. Constant 1979 Prices
1. Timber 2,118 1,708 1,550 2,159 2,143 2,216 2,000 2,080 2,160 2,250 2,340 2,530
2. Rubber 1,028 944 953 1,012 981 1,032 1,050 1,060 1,070 1,080 1,090 1,115
3. Palm oil 175 182 249 249 262 246 240 250 260 270 280 305
4. Coffee 263 297 415 407 505 651 625 637 650 663 675 705
5. Tea 76 68 79 83 79 88 90 92 94 96 97 101
6. Tobacco 71 53 46 43 55 56 60 61 61 62 62 64
7. Pepper 48 26 31 62 58 72 70 72 74 76 79 84
8. Other agriculture 300 246 300 322 278 382 485 500 515 530 545 580
9. Subtotal agriculture (1-8) 4,079 3,534 3,623 4,337 4,361 4,743 4,620 4,752 4,884 5,027 5,168 5,484
10. Tin 316 339 316 385 356 368 370 400 407 414 420 430
11. Copper 55 98 83 101 81 73 70 100 100 100 100 100
12. Bauxite, alumina, aluminum 57 61 44 56 47 61 90 209 280 280 2804 280
13. Nickel20 28 28 20 20
14. Subtotal minerals (10-13) 428 498 443 542 484 502 530 725 848 932 1,014 1,030
15. Manufactures 160 190 209 276 322 390 800 960 1,153 1,381 1,658 2,386
16. Total nonoil exports (9+14+15) 4,667 4,212 4,275 5,155 5,167 5,635 5,950 6,437 6,885 7,340 7,840 8,900
17. Oil (net) 4,006 6,595 5,921 6,509 7,253 6,308 6,500 5,670 5,470 5,500 5,550 5,500
18. LNG (net) - - - - 155 375 600 660 800 800 925 1,125
19. Subtotal oil and LNG (17+18) 4,006 6,595 5,921 6,509 7,408 6,683 7,100 6,330 6,270 6,300 6,475 6,675
20. Total exports (16+19) 8,673 10,807 10,196 11,664 12,575 12,318 13,050 12,767 13,155 13,640 14,315 15,575
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Imports, 1973-85
(US$ million)
Actual Est. Projected
1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1985
A. Current Prices
1. Rice 389 493 275 333 650 341 900 1,160 1,320 1,585 1,790 2,290
2. Other consumption goods 610 457 631 1,024 1,326 1,572 1,600 2,090 2,625 3,220 3,795 5,120
3. Intermediate goods 1,163 2,162 1,771 1,603 1,721 2,085 2,575 3,370 4,225 5,190 6,115 8,250
4. Capital goods 776 1,229 2,413 3,207 3,544 3,545 4,050 5,345 7,290 9,080 10,680 14,690
5. Total nonoil imports 2,938 4,341 5,090 6,167 7,241 7,543 9,125 11,965 15,460 19,075 22,380 30,350
6. Nonfactor services (net) 194 263 345 490 536 586 750 980 1,230 1,510 1,780 2,400
7. Imports + NFS 3,132 4,604 5,435 6,657 7,777 8,129 9,875 12,945 16,690 20,585 24,160 32,750
B. Price Index (1979 = 100)
1. Rice 107 165 110 77 82 111 100 140 154 178 t94' 231
2. Other goods 48 60 69 71 76 88 100 110 120 130 - 30 158
3. Total nonoil imports 52 65 70 71 77 89 100 112 122 133 142 162
4. NFS 48 60 69 71 76 88 100 110 120 130 139 158
5. Imports + NFS 52 64 70 71 77 89 100 112 122 133 142 162
C. Constant 1979 Prices
1. Rice 364 299 250 432 793 307 900 828 859 890 923 993
2. Other consumption goods 1,271 762 914 1,442 1,745 1,786 1,600 1,900 2,185 2,478 2,731 3,243
3. Intermediate goods 2,423 3,603 2,567 2,258 2,264 2,369 2,575 3,060 3,520 3,991 4,398 5,222
4. Capital goods 1,617 2,048 3,497 4,517 4,663 4,028 4,050 4,860 6,075 6,986 7,685 9,298
5. Total nonoil imports 5,675 6,712 7,228 8,649 9,465 8,490 9,125 10,648 12,639 14,345 15,737 18,756
6. Nonfactor services (net) 404 438 500 690 705 666 750 890 1,025 1,162 1,281 1,520
7. Imports + NFS 6,079 7,150 7,778 9,319 10,170 9,156 9,875 11,538 13,664 15,507 17,018 20,276
0
; $4 r H
P o
INDONES IA
COUNTRY ECONOMIC MEMORANDUM
Balance of Payments (1973-1985)
(US$ million)
Actual Est. Projected
1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
Summary of Balance of Payments
1. Exports: 2,546 4,671 5,011 6,573 7,952 7,989 13,050 15,360 17,570 20,265 23,225 26,785 30,890
(a) Oil and LNG (net) 641 2,638 3,138 3,710 4,445 4,010 7,100 8,925 10,100 11,350 12,800 14,645 16,750
(b) Nonoil 1,905 2,033 1,873 2,863 3,507 3,979 5,950 6,435 7,470 8,915 10,425 12,140 14,140
2. Imports (incl. net NFS) -3,177 -4,604 -5,435 -6,657 -7,777 -8,129 -9,875 -12,945 -16,690 -20,505 -24,160 -28,130 -32,750
(a) Imports -2,983 -4,341 -5,090 -6,167 -7,241 -7,543 -9,125 -11,965 -15,460 -19,075 -22,380 -26,060 -30,350
(b) NFS (net) -194 -263 -345 -490 -536 586 -750 -980 -1,230 -1,510 -1,780 -2,070 -2,400
3. Resource balance -631 67 -424 -84 175 -140 3,175 2,415 880 -320 -935 -1,345 -1,860 O
4. Factor services -170 -205 -430 -718 -865 -1,015 -1,175 -935 -825 -790 -895 -1,000 -1,130
(a) Interest public debt /a -62 -80 -165 -314 -436 -499 -750 -785 -825 -890 -945 -1,050 -1,130
(b) Other (net) -108 -125 -265 -404 -429 -516 -425 -150 0 100 50 50 0
5. Balance on current account -756 -138 -854 -802 -690 -1,155 2,000 1,480 55 -1,110 -1,730 -2,345 -2,990
6. Direct foreign investment 331 538 454 287 285 271 250 350 400 425 475 525 600
7. Capital grants 50 75 75 100 100 100 100 100 100 100 100 125 125
8. Public M & LT loan /a
(a) Disbursement 909 1,101 2,143 2,334 1,955 1,627 2,400 2,500 2,900 3,650 4,000 4,500 5,000
(b) Amortization -149 -212 -352 -457 -825 -969 -1,200 -1,100 -1,300 -1,550 -1,800 -2,200 -2,500
(c) Net disbursements 760 889 1,791 1,897 1,130 658 1,200 1,400 1,600 2,100 2,200 2,300 2,500
9. Other capital (net) -25 -1,373 -1,830 -481 -174 814 -1,200 100 125 175 400 650 900
1 0. Change in reserves
(- increase) -360 9 364 -1,001 -651 -708 -2,350 -3,430 -2,280 -1,690 -1,445 -1,255 -1,135
11. Net official reserves 929 920 556 1,557 2,208 2,916 5,265 8,695 10,975 12,665 14,110 15,365 16,500
Reserves in months of imports + NFS 3.5 2.4 1.2 2.8 3.4 4.3 6.4 8.0 7.9 7.4 7.0 6.5 6.0
Public debt service as % of exports 8.3 6.3 10.3 11.7 15.9 18.4 14.9 12.3 12.1 12.0 11.8 12.1 11.8
/a Based on IBRD external debt data. j
m 81r
- 51 - Analysis and
Projections
Appendix
Table 4
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Alternative Projections - Exports, Imports, Balance of Payments, 1980-85
(US$ million)
1980 1981 1982 1983 1984 1985
Constant 1979 Prices
Total exports 12,727 13,060 13,476 14,056 15,039
Oil and LNG (net) 6,330 6,270 6,300 6,475 6,675
Nonoil exports 6,397 6,790 7,176 7,581 8,364
Imports + NFS (net) 11,538 13,664 15,507 17,188 20,890
Current Prices
Balance of Payments
Exports 15,315 17,460 20,050 22,870 26,215 30,045
(a) Oil and LNG (net) 8,925 10,100 11,350 12,800 14,645 16,750
(b) Nonoil 6,390 7,360 8,700 10,070 11,570 13,295
Imports + NFS (net) 12,945 16,690 20,585 24,410 28,575 33,840
Resource balance 2,370 770 -535 -1,540 -2,360 -3,795
Change in reserves /a
(- = increase) -3,385 -2,190 -1,475 -840 -340 800
Reserves - months of imports + NFS 8.0 7.8 7.2 6.5 5.7 4.5
Public debt services as % of exports 12.3 12.2 12.2 12.0 12.4 12.1
/a Alternative balance of payments projections assume combined total of factor
services and capital account is equal to total in base projections.
- 52 - Analysis and
Projections
Appendix
Table 5
INDONES IA
COUNTRY ECONOMIC MEMORANDUM
Terms of Trade Index /a
(1979 = 100)
Nonoil exports: Total exports: /b
imports (incl. NFS) imports (incl. NFS)
1973 79 56
1974 75 67
1975 63 70
1976 79 79
1977 88 82
1978 80 73
1979 100 100
1980 89 107
1981 89 110
1982 91 112
1983 94 114
1985 98 122
/a Based on price indices of non-oil exports (Table 1) and imports, including
net NFS (Table 2).
/b Based on price indices of total exports, including oil and LNG on net basis
(Table 1) and imports, including net NFS (Table 2).
Analysis and
- 53 - Projections
Appendix
Table 6
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
BorrowinR Assumptions
(US$ million)
Est. Projected
1979 1980 1981 1982 1983 1984 1985
Total Multilateral 1,025 1,035 1.150 1.250 1,400 1,550 1.700
Bilateral Loans
IGGI 775 900 950 1,025 1,125 1,225 1,325
Non-IGGI 25 50 50 75 75 75 75
Total Bilateral Loans 800 950 1,000 1,100 1,200 1,300 1,400
Total Concessional/
Semiconcessional Loans 1,825 1,985 2,150 2,350 2,600 2,850 3.100
Grants 100 100 100 100 100 125 125
Commercial loans 1,300 1,500 1,700 1,800 1,900 2,000 2,000
Total Loans 3,125 3,485 3,850 4,150 4,500 4,850 5,700
Total Loans + Grants 3.225 3,585 3.950 4.250 4.600 4,975 5,225
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Summary: Public Sector Loan Commitments, Disbursements, Net Resource Transfers, Debt Service
(In US$ billion)
Debt Principal
Principal service as % of
as Z of as % of total
Commitments /a Gross Net Net total gross gross Debt
Calendar Total (of which disburse- disburse- resource Debt debt disburse- disburse- service
year commercial) ments /a ments /a transfers /a service service ments ments ratio /b
1973 1.5 (0.7) 0.9 0.8 0.7 0.2 71 23 16 8.3
1974 2.3 (1.5) 1.1 0.9 0.8 0.3 73 27 19 6.3
1975 3.3 (2.1) 2.1 1.8 1.6 0.5 68 24 16 10.3
1976 3.1 (1-4) 2.3 1.9 1.5 0.8 58 32 19 11.7
1977 1.7 (0.4) 2.0 1.1 0.7 1.3 65 65 42 15.9 1
1978 2.7 (1.2) 1.6 0.7 0.2 1.5 66 90 59 18.4 Lfl
1979 (est.) 3.1 (1-3) 2.4 1.2 0.5 1.9 63 79 50 14.9
Projected
1980 3.5 (1-5) 2.5 1.4 0.6 1.9 58 75 44 12.3
1981 3.9 (1-7) 2.9 1.6 0.8 2.1 61 73 45 12.1/12.2
1982 4.2 (1.8) 3.7 2.1. 1.2 2.4 63 67 42 12.0/12.2
1983 4.5 (1.9) 4.0 2.2 1.4 2.7 66 69 45 11.8/12.0
1984 4.9 (2.0) 4.5 2.3 1.3 3.2 68 72 49 12.1/12.4
1985 5.1 (2.0) 5.0 2.5 1.4 3.6 69 73 50 11.8/12.1
/a Figures exclude grants; grant commitments and disbursements during 1973-83 estimated/projected at: $50 million
p.a. (1973); $75 million p.a. (1974/75); $100 million p.a. (1976-85); and $125 million p.a. (1984/85).
/b Public debt service payments as % of exports, including oil and LNG on net basis.
rt tD O Pz
a.11 0 1m
0.
- 55 - Analysis and
Projections
Appendix
Table 8
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Projected External Debt Outstanding, 1973-85 /a
(US$ billion)
Ratio -
Debt outstanding:
End of
exports
period Disbursed Undisbursed Total Disbursed Total
1973 5.3 -1.4 6.7 2.1 2.6
1974 6.3 2.7 9.0 1.4 1.9
1975 8.0 3.7 11.7 1.6 2.3
1976 10.0 4.6 14.6 1.5 2.2
1977 11.6 4.5 16.1 1.5 2.0
1978 13.1 5.6 18.9 1.6 2.4
Projected
1979 14.3 6.5 20.8 1.1 1.6
1980 15.7 7.5 23.2 1.1 1.6
1981 17.3 8.5 25.8 1.0 1.5
1982 19.4 9.0 28.4 1.0 1.4
1983 21.6 9.5 31.1 0.9 1.3
1984 23.9 9.8 33.7 0.9 1.3
1985 26.5 9.8 36.3 0.9 1.2
La At December 1978 exchange rates. Based on actual transactions through
1978 and estimated/projected transactions during 1979-85. For details
see Tables 6 and 7.
INDONESIA
COUNTRY ECONOM4IC MEMORANDUM
Government Finance, 1974/75 - 1983/84
(Rp billion)
Actual Budget Budget Pr o j ed
1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 198283 1983/84
1. Oil and LNG revenues /a 973/b 1,205 1,593 1,949 2,309 3,345 6,425 7,700 8,800 9,950
(Oil)
(3,220) (6,050) (7,100) (8,175) (9,250)
2. Oil subsidies (net) - - - 65 197 220 825 800 800 800
3. Oil and LNG revenues, net of
subsidies (1 - 2) 973 1,205 1,593 1,884 2,112 3,125 5,600 6,900 8,000 9,150
4. Nonoil revenues 785 996 1,285 1,562 1,957 2,095 2,625 3,450 4.050 4,700
(a) Taxes on income 261 353 436 569 688
(b) Taxes on consumption 161 234 323 376 491
(c) Taxes on international trade 301 310 422 483 587
(d) Nontax revenues 62 99 104 133 191
5. Total revenues, net of subsidies
(3 + 4) 1,758 2.201 2.878 3,446 4,069 5,220 8,225 10,350 12,050 13,850
6. Current expenditures, excl. oil
subsidies and external debt
service 937 1,182 1,441 1,835/c 2,021 2,630 3,950 - - -
7. Budget savings before debt
service (5 - 6) 821 1,019 1.437 1,611 2,048 2,590 4,275 - -
8. Aid and loan disbursements /d 234 492 784 773 1,036 1,500 1,500 1,600 1,900 2,100
9. External debt service /e 64 65 169 221 526 600 750 750 900 1,100
10. Net external inflows (8 - 9) 170 427 615 552 510 900 750 850 1,000 1,000
11. Total revenues plus net inflows
(5 + 10) 1,928 2,628 3,493 4,998 4,579 6,120 8,975 11,200 13,050 14,850
12. Budget savings plus net inflows
(7 + 10) 991 1,446 2,052 2,163 2,558 3,490 5,025
13. Development expenditures 966 1,425 2,044 2,158 2,557 3,490 5,025
(of which: fertilizer subsidies) (255) (134) (105) (32) (83) (n.a.) (n.a.)
14. Accounting surplus (12 - 13) /f 25 21 8 4 1
15. Monetary surplus (deficit) _/ (48) (3) 343 351 255
/a LNG revenues equal to LNG net export value minus LNG public debt service.
/b Excludes withholding of about Rp 340 billion of revenues by Pertamina.
/c Includes transfer of Rp 86 billion to Pertamina for debt service.
/d Program aid and project aid and loans.
/e On account of Government debt only.
/f Based on Ministry of Finance budget data shown in Lines 1-13.
jg Derived from Bank Indonesia monetary data.
!II1
IF
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Government Finance, 1974/75 - 1983/84
(As % of GDP) /a
Actual Budget/b Budget/b Projected
1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84
1. Oil and LNG revenues, net of
subsidies 9.1 9.5 10.3 10.1 9.7 9.8 14.7 15.8 16.0 15.9
2. Nonoil revenues 7.3 7.9 8.3 8.5 9.0 6.5 6.9 7.9 8.1 8.2
3. Total revenues (net of oil
subsidies (1 + 2) 16.4 17.4 18.6 18.6 18.7 16.3 21-6 23.7 24.1 24.1
4. Current expenditures, excl.
oil subsidies and external
debt service 8.7 9.3 9.3 10.0 9.3 8.2 10.4
5. Budget savings before debt
service (3 - 4) 7.7 8.1 9.3 8.6 9.4 8.1 11.2
6. Aid and loan disbursements
minus debt service 1.6 3.4 4.0 2.9 2.3 2.8 2.0 1.9 2.0 1.7
7. Total revenues plus net
inflows (3 + 6) 18.0 20.8 22.6 21.5 21.0 19.1 23.6 25.6 26.1 25.8
8. Budget savings plus net
inflows (5 + 6) 9.3 11.4 13.3 11.5 11.7 10.9 13.2
Monetary surplus (deficit) (0.4) - 2.2 1.9 1.2
GDP (Rp trillion) /c 10.71 12.64 15.47 18.71 21.79 32.0 37.8 43.7 50.1 57.6
/a For details of rupiah amounts, see Table 9. GDP figures are on calendar year basis.
7T Since budget was prepared on basis of different GDP assumption, the ratios shown are not fully comparable to those for
other years.
/c 1979-83 GDP figures represent World Bank estimate and projections.
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- 59 -
Statistical Annex - List of Tables
CEM
Population and Employment
1.1 Population 1930, 1961, 1971, 1976: Average Annual Growth Rates, 1930-76
and Population Density, by Region and Province
1.2 Distribution of Population by Age Group and Sex
1.3 Population, Labor Force and Employment, 1961, 1971. 1976
National Income Accounts
2.1 Gross Domestic Product by Industrial Origin at Current Market Prices,
1967-78
2.2 Percentage Distribution of GDP at Current Market Prices, 1971-78
2.3 Gross Domestic Product by Industrial Origin at Constant 1973 Market
Prices, 1971-78
2.4 Percentage Distribution of GDP at Constant 1973 Market Prices, 1971-78
2.5 Expenditures on GDP at Current Market Prices, 1971-78
2.6 Expenditures on GDP at Constant 1973 Market Prices, 1971-78
2.7 Estimate of the Terms of Trade Effects, 1971-78
2.8 Average Growth Rates and Selected Economic Indicators, 1973-78
International Trade and Balance of Payments
3.1 Balance of Payments, 1971/72 - 1978/79
3.2 Nonoil Exports, 1971/72 - 1978/79
3.3 Export Values by Country of Destination
3.4 Import Values by Country of Origin
External Debt
4.1 External Public Debt Outstanding Including Undisbursed as of December 31,
1978
4.2 Service Payments, Commitments, Disbursements and Outstanding Amounts of
External Public Debt
4.3 External Public Debt by Country and Type of Creditor as of December 31,
1978
4.4 External Public Debt as of December 31, 1978, by Major Currencies and
Countries
4.5 Loan Commitments by Country (1973-78)
4.6 IGGI and Non-IGGI Disbursements and Net Resource Transfers, 1973-78
4.7 Summary External Debt Data, 1973-78
4.8 Selected Debt Indicators, 1973-78
Public Finance
5.1 Central Government Budget Summary, 1972/73 - 1979/80
5.2 Central Government Receipts, 1972/73 - 1979180
5.3 Central Government Expenditures, 1972/73 - 1979/80
- 60 -
5.4 Development Expenditures, 1972/73 - 1979/80
5.5 Development Expenditures by Sector, 1974/75 - 1978/79
5.6 Project Aid by Sector, 1974/75 - 1978/79
Monetary Statistics
6.1 Money Supply, 1971-79
6.2 Changes in Factors Affecting Money Supply, 1972/79
6.3 Consolidated Balance Sheet of Monetary System, 1973-79
6.4 Consolidated Balance Sheet of Monetary Authorities, 1974-79
6.5 Banking System Credits by Economic Sector, 1973-79
6.6 Banking System Credits by Economic Sector, 1973/79
6.7 Small-Scale Investment Credits and Permanent Working Capital Credits,
1974-79
6.8 Medium-Term Investment Credits by Economic Sector, 1973-79
6.9 Time Deposits With State Banks, 1971-79
Agricultural Statistics
7.1 Principal Agriculture Products by Subsectors, 1969-78
7.2 Agricultural Production of Major Crops by Type of Product, 1969-77
7.3 Rice - Area Harvested, Production and Yield, 1968-78
7.4 Rice Production, Imports, Procurement and Consumption, 1960-78
7.5 Area Covered Under Rice Intensification Programs, 1967-78
Other Sectors
8.1 Production of Selected Industrial Goods, 1969/70 - 1978/79
8.2 Production, Imports and Estimated Consumption of Cement, 1967-78
8.3 Production of Minerals, 1973-79
8.4 Crude Oil Production, 1973-79
8.5 Petroleum Products - Supply and Demand, 1969-78
8.6 Domestic Sales of Petroleum Products, 1971-78
Prices
9.1 Cost of Living Index in Jakarta, 1970-79
9.2 Consumer Price Index - Jakarta and Indonesia, 1979
9.3 Wholesale Price Indices in Indonesia, 1971-78
9.4 Domestic Price of Petroleum Products, 1972-79
Investment
10.1 Approved Foreign Investment by Sector, 1967-79
10.2 Implementation of Foreign Investment by Sector, 1967-79
10.3 Approved Domestic Investment by Sector, 1967-79
INDONESIA
Populationi 1930, 1961, 1971, 1976: Average Annaual Growth Rates, 1930-76
anid Population Density, by Region and Province
( '000)
Census Census /a Census /a Survey /b Growth Rate (2) Density (Persons/ sq ki)
Region * 1930 1961 1971 1976 1930/61 1961/71 1971/76 1971 1976
Java 41,718 62,993 76 103 82,107 1.3 1.9 1.7 576 621
D.C.I. Jakarta 811 2,907 4,576 5,367 4.2 4.6 3.8 7,756 9,097
West Java 10,586 17,615 21,633 23,454 1.7 2.1 1.8 467 507
Cenitral Java 13,706 18,407 21,877 23,558 1.0 1.7 1.7 640 689
0.1. Jogjakarta 1,559 2,241 2,490 2,625 1.2 1.1 1.2 786 828
East Java 15,056 21,823 * 25,527 27,103 1.2 1.6 1.4 533 566
S_umatra 81255 15,743 20,813 23,510 2.1 2.8 2.8 44 50
Lampung 361 1,668 2,777 3,439 5.1 5.2 4.9 83 103
Bengkulu 323 406 519 567 0.7 2.5 2.0 25 27
South Sumatra 1,378 2,773 3,444 3,871 2.3 2.2 2.7 33 37
Riau 493 1,235 1,642 1,843 3.0 2.9 2.6 17 19
Jambi 245 744 1,006 1,103 3.6 3.1 2.1 22 25
West Sumatra 1,910 2,319 2,793 2,994 0.6 1.9 1.6 56 60
North Sumatra 2,541 4,969 6,623 7,467 2.2 2.9 2.7 94 105
Aceh 1,003 1,629 2,009 2,226 1.6 2.1 2.3 36 40
Xalimantan 2,169 4,102 5.153 5,866 2.1 2.3 3.0 10 11-I
West Kalimantan 802 1,581 2,020 2,281 2.2 2.5 2.7 14 16 0'
Central Kalimantan 203 497 700 812 2.9 3.5 3.3 5 5 F'
South Kalimantan 836 1,473 1,699 1,846 1.8 1.4 1.9 45 49
East Kalimantan 329 551 734 927 1.7 2.9 5.4 4 5
Sulawesi 4,232 7,079 8,535 9,379 1.9 1.9 2.1 45 50
Central Sulawesi 390 652 914 1,014 1.7 3.4 2.4 13 15
North Sulawesi 748 1,351 1,718 1,899 1.9 2.4 2.3 90 100
South Sulawesi 2,657 4,517 5,189 5,681 1.7 1.4 2.1 71 78
Southeast Sulawesi 436 559 714 785 0.8 2.5 2.1 26 28
Bali 1,101 1,783 2,120 2,293 1.6 1.8 1.8 381 412
West Nusa Teuiggara 1,016 1,808 2,202 2,401 1.9 2.0 1.9 109 119
East Nusa Tenggara 1,343 1,967 2,295 , 2,462 1.2 1.6 1.6 48 51
Maluku 579 790 1,089 1,258/c 1.0 3.3 3.3 15 17
Irian Jaya 179 758 923 1,008 4.8 2.0 2.0 2 2
Total Indonesia 60,593 97,0L9 19,233 130,284/c 1.5 2.1 2.0 63 68
n.a. - not available >
/a Includes adjustment for the exclusion of Mtiral-Irian Jaya. 0'
lb Includes adjustment for the exclusioLi of Mural Irian Jaya, Maluku and East Nusa 1enggara.
/c In an earlier draft, an error was made in estimating the 1976 population) of Maluku. Tne earlier estimate was 1,215
and the total population 130,241. Population anid projection figures in tihe remaining sectiuons of this report do not
incorporate this minor error.
Sources: Population Census Reports, 1961 and 1971, Intercensal Population Survey, 1976; and Statistical Year book, 1975.
- 62 -
ANNEX
Table 1.2
INDONESIA
Distribution of Population by Age Group and Sex
('000)
1961
1971
1976
Age Group Males Females Total Males Females Total Males Females Total
0-4 8,524 8,644 17,168 9,716 9,571 19,287 9,939 9,618 19,557
5-9 7,741 7,696 15,437 9,641 9,357 18,998 9,621 9,287 18,908
10-14 4,345 3,888 8,237 7,374 6,946 14,320 8,371 8,007 16,378
15-19 3,861 3,901 7,762 5,678 5,784 11,462 6,801 7,157 13,958
20-24 3,476 4,369 7,845 3,577 4,433 8,010 4,918 5,272 10,189
25-34 7,386 8,604 15,991 7,747 9,300 16,047 7,741 8,753 16,493
35-44 5,762 5,403 11,164 7,069 7,134 14,203 7,268 7,632 14,900
45-54 3,586 3,509 7,095 4,315 4,223 8,538 5,123 5,068 10,191
55-64 1,912 1,864 3,776 2,122 2,265 4,387 3,866 3,007 5,873
65+ 1,182 1,245 2,427 1,415 1,557 2,971 1,729 2,019 3,749
Unknown 60 57 118 4 4 8 29 15 44
Total 47,838 49,181 97,019 58,658 60,575 119,233 64,406 65,835 130,341
---------- -- -- - --- Percentage distribution ----- -------------
0-4 17.8 17.6 17.7 16.6 15.8 16.2 15.4 14.6 15.0
5-9 16.2 15.6 15.9 16.4 15.4 15.9 14.9 14.1 14.5
10-14 9.1 7.9 8.5 12.6 11.5 12.0 13.0 12.2 12.6
15-19 8.1 7.9 8.0 9.7 9.5 9.6 10.6 10.9 10.7
20-24 7.3 8.9 8.1 6.1 7.3 6.7 7.6 8.0 7.8
25-34 15.4 17.5 16.5 13.2 15.4 14.3 12.0 13.3 12.7
35-44 12.0 11.0 11.5 12.1 11.8 11.9 11.3 11.6 11.4
45-54 7.5 7.1 7.3 7.4 7.0 7.2 8.0 7.7 7.8
55-64 4.0 3.8 3.9 3.6 3.7 3.7 4.4 4.6 4.5
65+ 2.5 2.5 2.5 2.4 2.6 2.5 2.7 3.1 2.9
Unknown 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Employment and Income Distribution in Indonesia, Appendix Tables A-1, A-2 and A-3.
- 63 - ANNEX
Table 1. 3
INDONESIA
Population, Labor Force anOd EmpIoymetnt, 1961 1971, 1976
September 1961 September 1911 March 1976 October 19743
Males Females Total Males Females Total Males Females Total males Females Total
Java
Urban
Total population 4,863 4,944 9,807 6,764 6,964 13,728 7,343 7,549 14,892 7,424 7,631 15,0,55
Population aged 10., 3,399 3,503 6,902 4,749 5,031 9,780 5,284 5,560 10,8M 5,342 5,621 13,963
Population aged 15-v 2,941 3,055 5,996 3,921 4,194 8,115 ... ......
Employment 2,251 847 3,098 2,781 1,202 3,983 3,220 1,455 4,675 3,113 1,440 4,555
UnemploymenLt 174 107 282 153 Si 204 .. .. 277 223 62 .135
labor force 2,425 955 3,380 2,934 1,253 4,187 .. 4,952 3,338 1,502 4,340
Rural
Total population 25,938 27,248 53,186 30,40-7 31,967 62,375 33,038 34,172 67,211 33,371 34,515 67,886
Population aged l0o+ 17,093 18,270 35,363 20,418 22,116 42,534 23,242 24,587 47,829 23,475 24,834 48,309
Population aged 15'+ 14.820 16,314 31,134 16,582 18,540 35.122 ....... .
Employment 13,324 5,033 18,358 14,229 7,546 21,775 18,53'1 13,096~ 31,627' 1,7,91 10,0'2'3 Z7 ,998
Unemployment 632 337 989 278 122 400 ... .. 368 285 96 381
LAbor force 13,976 5,371 19,347 14,507 7,668 22,175 ... ... 31,996 18,260 10,119 Z8,379
Total
Total population 30,801 32,192 62,993 37,172 38,931 76,102 40,381 41,722 82,103 40,793 42,148 32.941
PopulationL aged l0+ 20,491 21,773 42,264 25.167 27,147 52,314 28,326 30,147 58,673 28,8-17 30,455 59,Z22
Populacion aged 15+ 17,761 19,370 37,130. 20,503 22,734 43,237 ... ..... .-
Employmenlt 15,575 5.881 21,456 17,010 8,747 25,757 21,75'1 14,551i 36,3'0'2 21,090 11,462 32,352
UnemploymenLt 826 445 1,271 431 174 605 393 253 646 508 159 667
Labor force 16,401 6,325 22,727 17,441 8,921 26,362 22,144 14,804 36,949 21,598 11,621 33.219
Other slaclada
Urban
Total population 2,320 2,232 4,351 3,619 3,418 7,037 6,247 4,190 8,438 4,353 4,293 8,646
Population aged l04+ 1,572 1,507 3,079 2,497 2,341 4,837 2,976 2,978 5,954 3,049 3,052 6.101
Population aged 15+ 1,330 1,271 2,601 2,034 1,899 3,933 ... ... ... ...
50ployment 997 203 1,200 1,436 378 1,813 1,87'4 669 I 2,543 1,822 623 2,445
Unemployment 86 34 119 67 24 91 ... ., 147 141 48 189
Labor force 1,386 236 1,319 1,502 402 1,904 .. .. 2,690 1,963 671 2,634
Rural
Total population 14,718 14,756 29,474 17,868 18,225 36,093 19,778 19,923 39,700 20,031 20,179 40.210
Populationl aged 104- 9,508 9,561 19,070 11,637 12,159 23,796 13,345 13,804 27,149 13,517 13,981 27 .498
population aged 15+ 8.133 8,313 16,446 9,389 10,068 19,457 . .. ..
Fmployment 7,409 2,887 10,295 7,912 3,991 11,903 10,288 6,17;6 16,4'64 9,7'27 5,11?' 14,8'4'4
Unemployment 299 193 432 154 46 200 ... ... 280 249 67 316
Labor force 7,708 3,079 10,787 8,066 4,037 12,103 ... .. 16,743 9,976 5,184 15,160
Total
Total population 17,038 16,988 34,026 21,486 21,644 43,130 24,025 24,113 48,138 24,384 24,472 48,856
Population aged 10+ 11,382 11,068 22,150 14,133 14,500 28,633 16,320 16,783 33,103 16,566 17,033 33,599
Population aged 15-, 9.463 9,583 19,047 11,423 11,967 23,390 ... ... ... ..
Employment 8,406 3,089 11,495 9,348 4,370 13,717 12,162 6,845 19,007 11,549 5,740 17,2899
Unaemployment 385 226 611 221 69 290 255 17 1 426 390 116 506
Labor force 5,792 3,316 12,107 9,568 4,439 14,007 12,417 7,016 19,432 11,939 3,856 17,795
Urban
Total population 7.183 7,176 14,358 10,383 10,382 20,765 11,590 11,730 23,330 11,777 11,925 23,702
Population aged 10+ ~ ,971 5,010 9,981 7,246 7,372 14,617 8,260 8,538 16,798 8.392 8,672 17,064
Population aged 15+ 4,271 4,326 8,597 5,955 6,093 12,048 6,774 7,033 13,806.. .. ..
Employment 3,248 1,050 4,298 4,217 1,580 5,796 5,093 2.125 7,218 4,937 2,063 7,000
Unemployment 260 141 401 220 75 295 290 134 424 364 ill 475
,,abor force 3,509 1,191 4,699 4,436 1,655 6,091 5,383 2,258 7,642 5,301 2,174 7,475
Rural
total population 40,656 42,004 82,660 48,275 50,192 98,468 52,816 54,095 106,911 53,401 54,694 108,095
Population aged 10+ 26,601 27,831 54,433 32,055 34,275 66,330 36,587 38,391 74,978 36,992 38,815 75,807
Population aged 15-. 22,953 24,627 47,580 25,971 28,608 54,579 29,701 31,890 61,592..
Employment ~~~~~20,733 790 28,653 22,141 11,537 33,678 28,819 19,272 48,091 27.702 15,140 4.4
Unemployment 951 530 1,481 432 168 600 359 289 648 533 164 697
Labor force 21,684 8,450 30,134 22,573 11,705 34,278 B ,178 19,561 48,739 28,235 15,304 43,539
Total
Total population 47,839 49,180 97,019 58,658 60,575 119,232 64,406 65,835 130,241 65,178 66,619 131,797
Population aged 10+ 31,573 32,841 64,414 39,300 41,647 80,947 44,846 46,930 91,776 45,383 47,487 92,870
Population aged 15+ 27,224 28,953 56,177 31,926 34,701 66,627 36,475 38,923 75,398 .
Employment 23,981 8,970 32,951 26,358 13,117 39,474 33,912 21,397 55,309 32,439 17,203 49,842
Unemployment 1,211 671 1,882 652 243 895 649 423 1,272 898 274 1,172
Labor force 25,193 9,641 34,334 27,009 13,360 40,369 34,561 21,820 56,381 33,537 17,417 31,014
..Not available.
Source: Employment and Income distribution in Indonesia. Appendix Table A-4 and A-S.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Gross Domestic Product by Industrial Origin at Current Market Prices, 1967-78
(Rp billion)
1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978
Agriculture 457 1,069 1,339 1,575 1,646 1,837 2,710 3,497 4,003 4,812 5,789 6,781
Farm food crops 301 726 823 962 961 1,071 1,573 2,096 2,555 3,044 3,605 4,221
Farm nonfood crops 46 133 199 214 196 226 323 386 358 481 669 749
Estate crops 19 47 69 83 107 118 152 191 184 213 295 338
Livestock products 33 53 89 103 124 135 173 223 303 346 305 463
Forestry 6 35 59 102 142 173 355 423 413 513 584 658
Fishery 54 75 101 112 116 114 134 179 191 215 332 353
Mining & quarrying 23 87 129 173 294 491 831 2,374 2,485 2,930 3,600 3,869
Manufacturing 62 179 251 312 307 448 650 890 1,124 1,453 1,612 2,034
Electricity, gas & water 3 9 13 15 18 20 30 52 70 98 106 116
Construction 14 45 75 100 128 174 262 406 590 813 962 1,130
Commerce, hotels, etc. 149 356 476 619 592 769 1,118 1,775 2,104 2,552 3,163 3,747
Transport & communications 19 57 77 96 162 182 257 442 521 663 829 1,023
Banking, etc. 4 12 22 33 45 53 83 113 151 207 196 240
Ownership of dwelling 17 41 53 66 85 103 143 194 258 319 418 489
Public administration & defense 41 116 136 183 214 290 405 585 864 1,074 1,417 1,678
Other services 59 125 147 169 181 197 264 380 473 547 615 682
Gross Domestic Product 848 2,097 2,718 3,340 3,672 4,564 6,753 10,708 12,643 15,467 18,706 21,788
Note: Totals do not add due to rounding.
Source: BPS.
PN)
ANNEX
- 65 -
Table 2.2
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Percentage Distribution of GDP at Current Market Prices, 1971-78
1971 1972 1973 1974 1975-, 1976 1977 1978
Economic Sectors
Agriculture, forestry,
fishery
44.8 40.3 40.1 32.7 31.7 31.1 31.0 31.1
Mining
8.0 10.8 12.3 22.2 19.6 18.9 19.2 17.8
Manufacturing
8.4 9.8 9.6 8.3 8.9 9.4 8.6 9.3
Electricity, gas & water 0.5 0.4 0.5 0.5 0.6 0.6 0.6 0.5
Construction
3.5 3.8 3.9 3.8 4.7 5.3 5.1 5.2
Transport & communications 4.4 4.0 3.8 4.1 4.1 4.3 4.4 4.7
Other services
30.4 30.9 29.8 28.4 30.4 30.4 31.1 31.4
Gross domesitc product 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Expenditure Categories
Private consumption 77.1 74.5 70.9 67.8 69.2 67.7 65.8 66.7
Government consumption 9.3 9.1 10.6 7.8 9.9 10.3 10.8 10.7
Gross domestic investment 15.8 18.8 17.9 16.8 20.3 20.7 19.9 20.3
Exports, net -2.2 -2.4 0.6 7.6 0.6 1.3 3.5 2.3
Gross domestic product 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Based on BPS data (Tables 2.1 and 2.5).
- 66 - ANNEX
Table 2.3
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Gross Domestic Product by Industrial Origin
at Constant 1973 Market Prices, 1971-78
(Rp billion)
1971 1972 1973 1974 1975 1976 1977 1978
Agriculture 2,441 2,479 2,710 2,811 2,811 2,944 2,990 3,204
Farm food crops 1,436 1,415 1,573 1,681 1,696 1,756 1,735 1,901
Farm nonfood crops 302 329 323 307 312 325 385 401
Estate crops 154 160 152 174 183 188 201 214
Livestock products 160 169 173 186 202 216 177 184
Forestry 258 276 355 325 274 310 335 339
Fishery 131 130 134 138 144 150 157 165
Mining & quarrying 551 674 831 859 .828 952 1,070 1,040
Manufacturing 490 564 650 755 848 930 1,010 1,159
Electricity, gas & water 25 26 30 37 41 46 49 53
Construction 171 222 262 320 365 385 457 494
Commerce, hotels, etc. 924 1,028 1,118 1,224 1,294 1,351 1,446 1,563
Transport & communications 210 229 257 288 303 343 404 451
Banking, etc. 64 75 83 88 102 117 95 107
Ownership of dwelling 93 121 143 174 198 209 249 268
Public administration & defense 326 393 405 443 564 596 701 756
Other services 250 256 264 270 277 284 290 297
Gross Domestic Product 5,545 6,067 6,753 7,269 7,631 8,156 8,761 9,392
Note: Totals do not add due to rounding.
Source: BPS.
- 67 -
ANNEX
Table 2.4
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Percentage Distribution of GDP at Constant 1973 Market Prices, 1971-78
(Z)
1971 1972 1973 1974 1975 1976 1977 1978
Economic Sectors
Agriculture, forestry,
fishery 44.0 40.8 40.1 38.7 36.8 36.1 34.1 34.1
Mining
9.9 11.1 12.3 11.8 10.9 11.7 12.2 11.1
Manufacturing
8.8 9.3 9.6 10.4 11.1 11.4 11.5 12.3
Electricity, gas & water 0.4 0.4 0.5 0.5 0.5 0.6 0.6 0.6
Construction
3.0 3.7 3.9 4.4 4.8 4.7 5.2 5.3
Transport & communications 3.8 3.8 3.8 4.0 4.0 4.2 4.6 4.8
Other services 30.1 30.9 29.8 30.2 31.9 31.3 31.8 31.8
Gross domesite product 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Expenditure Categories
Private consumption 72.1 70.5 70.9 75.0 74.4 74.0 72.7 71.9
Government consumption 9.4 9.2 10.6 8.8 11.0 11.0 11.6 11.3
Gross domestic in\restment 15.6 17.0 17.9 19.8 21.6 21.4 22.9 24.2
Exports, net 2.9 3.3 0.6 -3.6 -7.0 -6.4 -7.2 -7.4
Gross domestic product 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Based on BPS data (Tables 2.3 and 2.6).
- 68 - ANNEX
Table 2.5
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Expenditures on GDP at Current Market Prices, 1971-78
(Rp billion)
1971 1972 1973 1974 1975 1976 1977 1978
Private consumption /a 2,833 3,402 4,791 7,259 8,744 10,464 12,312 14,535
Government consumption 341 414 716 1,147 1,254 1,591 2,019 2,332
Gross domestic investment 580 857 1,208 1,797 2,572 3,205 3,726 4,422
Export of goods & nonfactor
services 529 754 1,354 3,105 2,851 3,430 4,466 4,535
Less import of goods &
nonfactor services 611 863 1,316 2,294 2,778 3,222 3,817 4,035
Gross Domestic Product 3,672 4,564 6.753 10,700 12,643 15,467 18,706 21,788
Net factor income abroad -67 -159 -245 -507 -556 -432 -679 -847
GNP 3,605 4,405 6,508 10,201 12,087 15,035 18,027 20,942
GDS 498 748 1,246 2,608 2,645 3,412 4,375 4,921
GNS 431 589 739 2,101 2,089 2,980 3,696 4,074
GDI/GDP (%) 15.8 18.8 17.9 16.7 20.3 20.7 19.9 20.3
GDS/GDP (X) 13.6 16.4 18.5 24.2 20.9 22.1 23.4 22.6
GNS/GNP (x) 12.0 13.4 16.4 20.5 17.3 19.8 20.5 19.5
/a Residual.
Note: Totals do not add due to rounding.
Source: BPS.
- 69 -
ANNEX
Table 2.6
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Expenditures on GDP at Constant 1973 Market Prices, 1971-78
(Rp billion)
1971 1972 1973 1974 1975 1976 1977 1978
Private consumption /a 3,998 4,276 4,791 5,454 5,679 6,032 6,372 6,755
Government consumption 518 561 716 641 836 897 1,014 1,065
Gross domestic investment 867 1,032 1,208 1,440 1,650 1,749 2,010 2,272
Export of goods & nonfactor
services
891 1,123 1,354 1,403 1,267 1,425 1,744 1,619
Less import of goods &
nonfactor services 730 925 1,316 1,669 1,801 1,946 2,378 2,318
Gross Domestic Product 5,545 6,067 6,753 7,269 7,631 8,156 8,761 9,392
Terms of trade effect -260 -312 0 863 584 641 1,030 987
GDY
5,285 5,755 6,753 8,132 8,215 8,797 9,791 10,379
GNP
5,465 5,896 6,508 6,900 7,271 7,790 8,338 8,906
GNY
5,205 5,584 6,508 7,763 7,855 8,431 9,368 9,893
GDS
769 918 1,246 2,037 1,700 1,868 2,405 2,559
GNS
689 747 1,000 1,668 1,340 1,501 1,982 2,073
GDI/GDP (%) 15.6 17.0 17.9 19.8 21.6 21.4 22.9 24.2
GDS/GDY (%)
14.6 16.0 18.5 25.0 20.7 21.2 24.6 24.7
GNS/GNY (%)
13.2 13.4 15.4 21.5 17.1 17.8 21.2 21.0
/a Residual.
Note: Totals do not add due to rounding.
Source: BPS.
- 70 -
ANNEX
Table 2.7
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Estimate of the Terms of Trade Effects, 1971-78
(Rp billion)
1971 1972 1973 1974 1975 1976 1977 1978
Exports in current prices 530 754 1,354 3,105 2,851 3,430 4,466 4,535
Exports in 1973 prices 891 1,123 1,354 1,403 1,267 1,425 1,744 1,619
Exports price Index 59 67 100 221 225 241 256 280
Imports in current prices 611 862 1,316 2,294 2,778 3,222 3,817 4,035
Imports in 1973 prices 730 925 1,316 1,669 1,801 1,946 2,378 2,318
Imports price index 84 93 100 137 154 166 161 174
Exports (imports capacity) 631 811 1,354 2,266 1,851 2,066 2,774 2,606
Terms of trade effect -260 -312 0 863 584 641 1,030 987
Net factor income from
abroad in current prices -67 -159 -246 -507 -556 -432 -679 -847
Net factor income from
abroad in 1973 prices -80 -171 -246 -369 -360 -367 -423 -486
Net foreign inflows
(1973 prices) -179 -285 -208 228 -310 -247 -27 -198
Net foreign inflows
(Current prices) -148 -267 -208 304 -483 -224 -30 -347
Note: Totals do not add due to rounding.
Source: Based on BPS data (Tables 2.5 and 2.6).
-71 -
ANNEX
Table 2.8
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Average Growth Rates and Selecte1 * onomic Indicators, 1973-78
Compound
Rrowth rate 1973-78
(% p.a.)
Agriculture
3.4
Industry
9.1
Mining
4.6
Manufactur rig
12.3
Electricity, gas, water
12.1
Construction
13.5
Services
8.7
GDP
6.8
Private consumption
7.1
Government consumption
8.3
Total consumption
7.3
GDI
13.5
Exports
3.6
Imports
12.0
GDY
9.0
Factor payments
14.6
GNP
6.5
GNY
8.7
GDS
15.5
GNS
15.7
Economic indicators
Constant prices Current prices
ICOR /a
3.05
GDI/GDP 1974-78
22.1% 19.8%
Average domestic savings rate 1974-78 23.3% 22.6%
Marginal domestic savings rate /b 36.2% 24.4%
Average national savings rate 1974-78 19.8% 19.6%
Marginal national savings rate /b 31.7% 23.1%
Imports/GDP 1974-78
24.5% 20.3%
Exports/GDP 1974-78
18.1% 23.2%
Resource balance/GDP 1974-78 3.6% /c 2.9%
Import elasticity /b 1.76 0.95
/a GDI 1973-77: A GDP 1973-78.
/b Between 1973 and 1978.
Jc [Exports (Imports capacity) - Imports] GDP.
Source: Based on BPS data, Table 2.1 - 2.7.
- 72 -
ANNEX
Table 3.1
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Balance of Payments, 1971/72 - 1978/79
(US$ million)
1971/72 1972/73 1973/74 1974/75 L975/76 1976/77 1977/78 1978/79
------------------------------- Actual -------------------------------
1. Net oil /a 204 399 641 2,638 3,138 3,710 4,352 3,785
2. Net LNG /a - - _ - - - 93 225
3. Nonoil (net) -699 -956 -1,397 -2,776 -3,992 -4,512 -5,135 -5,165
(a) Exports, f.o.b. 784 974 1,905 2,033 1,873 2,863 3,507 3,979
(b) Imports, c.& f. -1,155 -1,661 -2,938 -4,341 -5,090 -6,167 -7,241 -7,543
(c) Service (nonfreight) -298 -269 -364 -468 -755 -1,208 -1,401 -1,6(1
4. Current account (1+2+3) -465 -577 -756 -138 -854 -802 -690 -I,155
5. SDRs - - - - - - - 64
6. Official transfer & capital 420 481 643 660 1,995 1,823 2,106 2,101
(a) IGGI 420 481 556 513 945 1,596 1,694 1,625
(i) Program aid 306 336 281 180 74 147 157 94
(ii) Project aid 114 145 275 333 871 1,449 1,537 1,531
- ODA - (145) (275) (333) (482) (513) (661) (814)
- Non-ODA - (-) (-) (-) (389) (936) (876) (717)
(b) Non-IGGI - _ 87 147 1 227 412 476
(c) Cash loan - - - - 1,049 - - -
7. Debt repayment (principal) -107 -66 -81 -89 -77 -166 -761 -632
8. 1fiscel]aneous capital 190 480 549 -131 -1,075 38 176 392
(a) Direct investment 186 254 331 538 454 287 285 271
(b) Trade credits 4 11 18 13 14 -32 -50 -
(c) Others - 215 200 -682 -1,543 -217 -59 121
9. Total (4 through 8) 38 338 355 302 -11 893 831 770
10. Errors & omissions -13 87 5 -311 -353 108 -180 -62
11. Monetary movements -25 -425 -360 9 364 -1,00 -65 -708
/a Gross export value minus (i) oil sector imports and other foreign exchange cost of production, refin-
ing and marketing of oil; and (ii) factor payments to foreign companies. In the foregoing definition
"foreign exchange cost" are exclusive of service payments on account of Pertamina's debts, but
include payments resulting from tanker deals. Net LNG is defined similarly.
Source: Bank Indonesia.
- 73 -
ANNEX
Table 3.2
INDONESIA
COUNTRY ECONOMIC MEKCRANDUM
Nonoil Exports. 1971/72 - 1978/79
1971/72 1972/73 1973/74 1974175 1975/76 1976/77 1977/78 1978/79
Timber
Value 170 275 720 615 527 885 943 1,130
Volume 8,840 12,701 15,704 12,434 11,335 15,770 15,651 16,050
Price 19 22 46 49 46 56 60 70
Rubber
Value 215 211 483 425 381 577 608 774
Volume 809 826 902 842 846 892 873 920
Price 266 255 535 505 450 647 697 841
Palm Oil
Value 45 42 89 184 142 147 202 221
Volume 212 245 279 303 417 415 438 413
Price 212 171 319 607 341 354 461 535
Coffee
Value 54 83 79 92 112 330 626 508
Volume 72 111 96 105 142 143 179 231
Price 750 748 823 876 789 2,308 3,496 2,200
Tea
Value 31 31 31 50 50 64 120 98
Volume 46 46 46 51 61 64 60 67
Price 674 674 674 980 820 996 2,007 1,469
Tobacco
Value 20 32 46 36 40 41 59 58
Volume .19 27 35 26 23 21 27 27
Price 1,053 1,185 1,314 1,385 1,756 1,954 2,194 2,130
Pepper
Value 21 21 31 22 25 55 62 66
Volume 24 24 25 14 17 33 31 38
Price 875 875 1,240 1,571 1,454 1,668 2,012 1,729
Palm Kernel
Value 5 4 6 8 4 4 5 5
Volume 59 51 37 30 41 30 25 n.a.
Price 85 78 162 267 98 140 218 n.a.
Copra
Value 8 6 3 - - - - -
Volume 67 61 21 - - - - -
Price 119 98 143 - - - - -
Copra Cake
Value 12 14 19 22 29 36 33 34
Volume 236 303 224 236 363 375 301 323
Price 51 46 85 93 80 96 111 105
Tapioca
Value 14 12 7 30 17 10 13 28
Volume 434 304 117 455 234 133 184 433
Price 32 39 60 66 73 75 68 65
Other Food Stuff
Value 28 26 49 47 37 52 48 65
Animal & Product
Value 23 42 90 92 105 146 179 212
Tin
Value 64 70 98 166 158 181 253 324
Volume 20 21 22 24 22 27 25 26
Price 3,200 3,333 4,455 6,917 7,541 6,707 10,110 12,454
Copper
Value - 13 56 102 74 95 74 64
Volume - 28 126 222 189 230 188 168
Price - 464 444 459 392 413 395 382
Other Minerals
Value 18 19 21 28 25 44 36 49
Miscellaneous
Value 56 76 77 114 144 196 246 343
Total Value 784 977 1,905 2.033 1.873 2,863 3.507 3.979
Value: In millions of US$
Volume: In thousands of tone
Price: US$/ton
Source: Bank Indonesia.
- 74 -
ANNEX
Table 3.3
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Export Values by Country of Destination
(%)
1971 1972 1973 1974 1975 1976 1977 1978
Japan 44.6 50.7 53.2 53.5 44.1 41.7 40.2 39.2
ASEAN 17.7 9.7 11.7 8.6 10.3 8.9 10.6 12.7
Malaysia 2.5 1.7 1.0 1.0 0.9 0.3 0.2 0.2
Philippines 2.1 0.5 - - 0.5 1.1 1.2 1.7
Singapore 13.0 7.5 10.6 7.5 8.9 7.5 9.2 10.7
Thailand - - - 0.1 - - - 0.1
Other Asia 3.6 4.7 5.4 3.8 4.3 4.3 5.8 5.8
USA 15.6 14.9 14.5 21.3 26.3 28.7 27.8 25.4
Other America 0.5 4.2 2.1 6.0 8.3 7.6 5.3 6.9
EEC 13.6 11.9 8.8 4.9 5.6 7.2 8.5 7.5
France 0.6 0.6 0.5 0.3 0.2 0.4 0.6 0.5
West Germany 5.0 3.7 3.7 2.2 1.9 2.4 2.2 1.9
Netherlands 5.8 4.4 3.1 1.9 2.5 2.7 3.4 3.0
United Kingdom 1.0 1.3 1.0 0.3 0.4 0.5 0.6 0.5
Other EEC 1.2 1.9 0.5 0.1 0.6 1.2 1.7 1.6
Other Europe 2.3 2.7 2.4 1.4 0.7 1.0 1.0 1.2
Australia 2.0 0.8 1.7 0.3 0.3 0.4 0.5 0.9
Other Oceania - 0.1 - - - - - 0.1
Africa 0.1 0.3 0.2 0.2 0.1 0.2 0.3 0.3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Indikator Ekonomi (BPS).
-75 -
ANNEX
Table 3.4
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Import Values by Country of Origin
(%)
1971 1972 1973 1974 1975 1976 1977 1978
Japan 32.8 34.0 29.3 29.4 30.9 26.2 27.1 30.1
ASEAN
7.7 9.3 8.7 9.3 8.6 14.0 14.3 9.7
Malaysia 0.4 0.5 0.5 0.3 0.4 0.4 0.3 0.3
Philippines 0.2 0.3 0.5 0.3 0.3 0.3 0.3 1.1
Singapore 6.3 6.5 4.9 6.5 7.2 9.7 8.6 6.8
Thailand 0.8 2.0 2.8 2.2 0.7 3.6 5.1 1.5
Other Asia 11.7 11.8 17.3 16.5 14.3 12.8 16.9 17.0
USA 15.8 15.6 18.8 15.9 14.1 17.4 12.4 12.4
Other America 0.5 0.7 0.9 1.4 1.8 1.2 2.3 2.4
EEC 20.3 17.8 16.5 17.7 18.6 21.2 20.8 19.0
France 1.5 1.3 1.7 1.9 1.9 3.5 3.0 2.5
West Germany 9.5 7.5 7.2 8.2 7.6 8.6 7.8 8.9
Netherlands
4.6 4.3 3.3 2.7 2.8 3.0 4.2 2.2
United Kingdom 4.2 4.1 3.8 3.8 3.5 3.1 3.8 3.1
Other EEC 0.5 0.6 0.5 1.1 2.8 3.0 2.0 2.3
Other Europe 5.3 3.7 3.2 5.4 5.8 2.4 2.2 4.5
Australia
2.9 3.3 3.5 3.4 3.3 3.4 3.0 3.3
Other Oceania 0.1 0.3 0.2 0.4 0.3 0.4 0.5 0.6
Africa
2.9 3.5 1.6 0.6 2.3 1.0 0.5 1.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Indikator Ekonomi (BPS).
- 76-
ANNEX
Table 4.1
Page 1
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Riternal Public Debt Outstanding Including Undisbursed as of December 31, 1978
Debt Repayable in Foreign Currency and Goods
(In US$'000)
Type of creditor
Debt outstanding
In arrears
Creditor country Disbursed Undisbursed Total Principal Interest
Suppliers' Credits
Australia
6,001 175 6,176 -
France
46 - 46 -
Germany, Fed. Rep. of 1,014 - 1,014 -
Japan
1,491,071 44,103 1,535,174 -
Korea, Rep. of
- 45,740 45,740 -
Netherlands
25,844 - 25,844 -
Switzerland
1,006 - 1,006 -
Tanzania
647 - 647 -
United States
1,043 - 1,043 -
Total Suppliers' Credits 1,526,672 90,018 1.616,690 -
Financial Institutions
Belgium
136,596 11,200 147,796 -
Canada
- 350,000 350,000 -
France
388,349 285,909 674,258 -
Germany, Fed. Rep. of 302,470 137,707 440,177 -
Hong Kong
85,589 2,592 88,181 -
Italy
7,041 81 7,122 -
Japan
193,606 51,390 244,996 -
Netherlands
319,263 62,203 381,466 -
Norway
79,195 18,764 97,959 -
Singapore
69,135 92,331 161,466 -
Sweden
- 48,309 48,309 -
United Kingdom
149,597 38,508 188,105 -
United States
1,081,780 271,191 1,352,971 -
Total Financial Institutions 2,812,621 1,370,185 4.182.806 -
Bonds
Germany, Fed. Rep. of 54,705 - 54,705 -
Japan
51,390 - 51,390 -
Total Bonds
106,095 _ 106.095 -
Nationalization
Netherlands
229,152 - 229,152 -
Total Nationalization
229,152 - 229.152
77
ANNEX
Table 4.1
Page 2
Type of creditor
Debt outstanding
In arrears
Creditor country
Disbursed Undisbursed Total Principal Interest
Multilateral Loans
Asian Development Bank 130,129 560,577 690,706 - -
IBRD
563,476 1,276,499 1,839,975 - -
IDA
495,908 195,531 691,439 - -
Total Multilateral Loans 1.189.513 2,032.607 3,222,120 - -
Bilateral Loans
Abu Dhabi
- 14,851 14,851 - -
Australia
5,976 223 6,199 - -
Austria
732 16 748 - -
Belgium
76,691 - 76,691 - -
Bulgaria
1,990 - 1,990 - -
Canada
171,255 98,860 270,115 - -
China, Rep. of
11,670 - 11,670 - -
China, P. R. of
57,505 - 57,505 - -
Czechoslovakia
66,346 - 66,346 - -
Denmark
63,233 15,038 78,271 - -
Egypt, Arab Rep. of
3,185 - 3,185 - -
France
217,263 138,198 355,461 - -
German Dem. Rep.
54,563 - 54,563 - -
Gemany, Fed. Rep. of 739,107 228,131 967,238 - -
Hungary
16,549 - 16,549 - -
India
11,156 222 11,378 - -
Iran
147,098 31,849 178,947 - -
Italy
77,213 - 77,213 - -
Japan
2,148,991 900,345 3,049,336 - -
Kuwait
- 32,377 32,377 - -
Netherlands
300,633 179,627 480,260 - -
New Zealand
3,188 534 3,722 - -
Pakistan
12,056 - 12,056 - -
Poland
93,191 - 93,191 - -
Romania
13,362 - 13,362 - -
Suadi Arabia
58,344 69,439 127,783 - -
Switzerland
1,522 - 1,522 - -
United Kingdom
86,992 4,979 91,971 - -
United States
1,790,856 453,070 2,243,926 - -
USSR
739,154 2,256 741,410 - -
Yugoslavia
149,184 130,733 279,917 - -
Total Bilateral Loans 7,119.005 2,300,748 9,419,753 - _
Total External Public Debt 12,983,058 5,793.558 18.776.616 - -
Notes: (1) Only debts with an original or extended maturity of over one year are included
in this table.
(2) Debt outstanding includes principal in arrears, but excludes interest in arrears.
INDONESIA
COUNTRY ECONOMIC MEMORANDIM
SERVICE PAYMENTS, COMMITMENTS. DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT
PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31, 1978
DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS
(IN THOUSANDS OF U.S. DOLLARS)
TOTAL
YEAR DEBT OUTSTANDING Ar T R A N S A C T I 0 N S D U R I N G P E R I 0 D OTHER CHANGES
BEGINNING OF PERIOD
_ _ _ _ _ _ _ _- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - _ - _ _ _ _- _- _ _ _ __- _ _ _ _ _ __- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _- _ _ _ _- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
DISBURSED : INCLUDING COMMIT- DISBURSE- S E R V I C E P A Y M E N T 5 CANCEL- ADJUST-
ONLY :UNDISBURSED: MENTS MENTS ----------------------- :-----------: LATIONS : MENT -
PRINCIPAL INTEREST : TOTAL
(1) (2) (3) : (4) (51 : (61 (7) (a) (9)
1974 5,250.146 6,692,254 2,335,437 1,101,161 212,070 80,170 292.240 786 202,444
1975 6,340,411 9.017.279 3,277,024 2,143,338 351,981 164,929 516,910 2,132 -223,943
1976 7,989,4t8 11,716,247 3,133,306 2,333,684 437.387 314,262 751.649 9.797 147,888
1977 9.993,228 14,550,257 1.715.610 1,954.785 824.696 435.815 1,260.511 14.766 714,327
1978 11,638,673 16.140.732 2,652,232 1,626.621 968,644 498.786 1,467,430 44.233 1.114,740
1979 13.083,070 18,894.827
* * * * * THE FOLLOWING FIGURES ARE PROJECTED * -
1979 13,083,070 18,894.827 - 2,006,573 1,055.540 727,333 1.782,873 - -75.103
1980 13.959,013 17,764,184 - 1,309,839 1,011,457 771,183 1,782.640 - 12
1981 14,257,401 16,752,739 - 975,660 1.121,088 760,192 1,881.280 - 8
1982 14,111.989 15.631.659 - 667,532 1.216.859 722,383 1,939,242 - 7
1983 13,562,662 14,414.807 - 422,167 1,253,849 659,538 1,913,387 - -
1984 12,730,977 13,160,958 - 246.908 1,301,117 587,784 1,888,901 - 4
1985 11,676,773 11,859.845 - 101,617 1.140.408 516.725 1,657.133 - 6
1986 10,637,987 10.719.443 - 51,879 1.007.331 440,896 1.448,227 - -3
1987 9,682,532 9,712,109 - 23.395 907,832 380,527 1,288,359 - -23
1988 8,798,073 8,804.254 - 5,210 869,116 327,878 1,196,994 - -2
1989 7,934,165 7,935,136 - 900 684,354 280,876 965,230 - a
1990 7,250,719 7,250,790 - 71 617,451 252,186 869,637 - -2
1991 6,633,337 6,633.337 - - 561,502 227,495 788,997 - -2
1992 6,071,833 6,071,833 - - 557.842 216,790 774,632 - 3
1993 5,513,994 5,513,994 - - 550.257 196.061 746,318 - -3
1994 4,963,734 4.963.734 - - 543.528 175,463 718,991 -1
1995 4,420,207 4,420.207 - - 521:773 155.715 677.488 - 6
1996 3,898,440 3,898.440 - - 509,331 137,099 646,430 - 8
1997 3,389.117 3,389.117 - - 470.241 119.321 589.562 - 6
1998 2.918.882 2,918.882 - - 430.542 104.028 534,570 - -9
THIS COLUMN SHOWS THE AMOUNT OF ARITHMETIC IMEALANCE IN THE AMOUNT OIJTSTANDING INCLUDING UNDISBURSED FROM ONE
YEAR TO THE NEXT. THE MOST COMMON CAUSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFER OF DEBTS 4
FROM ONE CATEGORY TO ANOTHER IN THE TABLE.
- 79 - ANNEX
Table 4.3
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
External Public Debt by CountrY and TyD. of Creditor as of December 31. 1978
(US$ million)
Bilateral/
multilateral -Other /a Total
Dis- Incl. Dis- Incl. MDe- Incl.
bursed undis- bursed undie- bursed undis-
only bursed only bursed only bursed
Australia
6 6 6 6 12 12
Austria
1 1 - - 1 1
Belgium
77 77 137 148 214 225
Canada
171 270 - 350 171 620
Denmark
63 78 - - 63 78
France
217 355 388 674 605 1,029
Germany
739 967 358 496 1,097 1,463
Italy
77 77 7 7 84 84
Japan
2,149 3,049 1,736 1,832 3,885 4,881
Netherlands
53O0b 710/b 345 407 875 1,055
New Zealand
3 4 - - 3 4
Switzerland /c 2 2 1 1 3 3
United Kingdom
87/d 92/d 150 188 237 280
United States 1,791 2,244 1,083 1,354 2,874 3,598
Total Bilateral IGGI 5,913 7,932 4,211 5,463 10,124 13,395
Asian Development Bank 130 691 - - 130 691
IBRD/IDA
1,059 2,531 - - 1,058 2,531
Total Multilateral IGGI 1,189 3,222 - - 1,189 3,222
Total IGGI 7,102 11,154 4,211 5,463 11,313 16,617
Non-IGGI
1,435 1,717 234 443 1,669 2,160
Total
8,537 12,871 4,445 5,906 12,983 18,777
/a Suppliers, financial institutions, bonds.
/b Includes nationalization debt.
/c Bilateral debts amounting to about $15 milllon were cancelled in 1978.
/d Cancelled in 1979.
Note: Data in this table refer to public sector and medium-term debt with an
original maturity of one year or more. Figures rounded to nearest
million. Totals may not add due to rounding.
Source: IBRD External Debt Reporting System based on data provided by Bank
Indonesia.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
External Public Debt as of December 31, 1978, by Major Currencies and Countries
Amount
Amount
($ billion) Share %)_ ($ billion) Share (x)
Currency Disbursed Total Disbursed Total Country Disbursed Total Disbursed Total
US dollar 5.76 7.66 44 41 Japan 3.89 4.88 30 26
Yen 2.40 3.40 18 18 USA 2.87 3.60 22 19
DM 1.14 1.50 9 8 West Germany 1.10 1.46 8 8
DFL 0.85 1.09 7 6 Netherlands 0.88 1.06 7 6
00
Ruble 0.74 0.74 6 4 France 0.61 1.03 5 5
Fr. franc 0.56 0.99 4 5 USSR 0.74 0.74 6 4
Other 0.86 1.22 7 6 Other countries 1.72 2.79 13 15
Multiple 0.69 2.29 5 12 Multilateral
organizations 1.19 3.22 9 17
Total 13.00 18.89 100 100 Total 13.00 18.78 100 100
Source: IBRD External Debt Reporting System based on data provided by Bank Indonesia.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Loan Commitments by Country (1973-78)
(USS million)
Bilateral/multilateral /a Other /b Total
1973 1974 1975 1976 1977 1978 1973 1974 1975 1976 1977 1978 1973 1974 1975 1976 1977 1978
Australia - - - - - 6 - 6 - - 6 - - 6 - - 6 6
Austria - 1 - - - - - - - - - - - 1 - - - -
Belgium 8 8 9 8 9 - - - 126 - - - 8 8 135 8 9 -
Canada 69 - 14 223 5 3 - - - - - 350 69 - 14 223 5 353
Denmark 5 - - 57 - - - - - - - - 5 - - 57 - -
France 27 35 16 - 26 77 59 35 331 88 101 132 86 70 347 88 127 209
Germany 22 51 126 13 76 86 - - 3 470 - 77 22 51 129 483 76 162
Italy - - - - - - - 9 - - - - - 9 - - - -
Japan 262 376 173 132 425 187 70 1,181 213 335 79 127 332 1,557 386 467 504 380
Netherlands 27 47 - 89 41 - - 38 310 1 - 9 27 85 310 90 41 9
New Zealand 1 - 1 1 - - - - - - - - 1 - 1 1 - -
Switzerland 9 - - - - - - - - - - - 9 - - - - -
United Kingdom 29 - - - - - 96 - 143 50 - 42 119 - 143 50 - 42
United States 170 59 143 430 66 341 124 216 905 250 238 225 294 275 1,048 680 304 566
Total Bilateral
IGGI 631 577 482 953 648 700 343 1,485 2,CL31 1,194 424 962 974 2.062 2,513 2.147 1,072 1,662
Asian Development Bank 41 78 78 109 136 199 - - - - - - 41 78 78 109 136 199
IBRDtIDA 171 195 311 564 406 551 - - - - - _ 171 195 311 564 406 551
Total Multilateral
IGGI 212 273 389 673 542 750 - - - - - - 212 273 389 673 542 750
Total IGGI 843 850 871 1,626 1,190 1,450 543 1,
4
85 2,031 1,194 424 962 1,186 2,335 2,902 2,820 1,61 2,412
Non-IGGI - - 283 113 103 48 - - 92 202 - 193 - 150 375 315 104 240
Total 843 850 1,154 1,739 1,293 1,498 343 1,485 2j,13 1,396 424 1,155 1,186 2,335 3,277 3.133 1JJJ. 2,652
/a Specific loan and/or project agreements signed. Amounts may therefore differ from donor's pledge or budget allocation, general agreements,
frame-agreements, exchange of notes and other forms of bilateral commitment preceding specific commitments. Grants are excluded.
/b Suppliers, financial institutions, bonds.
Note: Data in this table refer to public sector medium- and long-term loans with a maturity of one year or more. Figures rounded to nearest
million. Totals may not add due to rounding.
Source: IBRD External Debt Reporting System based on data provided by Bank Indonesia.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
IGGI and Non-IGGI Disbursements and Net Resource Transfers, 1973-78
(US$ million)
Bilateral/multilateral /a Other /b ______Total
1973 1974 1975 1976 1977 1978 1973 1974 1975 1976 1977 1978 1973 1974 1975 1976 1977 1978
Gross Disbursements
Bilateral IGGI 446 380 385 617 515 660 389 633 1,550 1,316 976 581 835 1,013 1,935 1,933 1,491 1,241
Multilateral IGGI 75 88 184 291 268 216 - - - - 75 88 184 291 268 216
Total IGGI 520 468 569 908 783 876 389 633 1,550 1,316 976 581 909 1,101 2,119 2,224 9 1,457
Non-IGGI - - - 17 97 103 - - 24 93 99 67 - - 24 110 196 170
Total Gross
Disbursements 520 468 569 925 880 979 389 633 1,574 1,409 1,075 648 909 1,101 2,143 2,334 1 1,627
Net Disbursements /c
Bilateral IGGI 411 340 341 544 421 518 301 502 1,333 1,079 303 (133) 712 842 1,674 1,623 724 385
Multilateral IGGI 75 88 184 290 266 208 - - - - - - 75 88 184 290 266 208
Total IGGI 486 428 525 834 687 726 301 502 1333 1,079 303 (133) 787 930 1,85
8
1,913 990 593
ao
Non-IGGI (27) (41) (31) (16) 64 34 - - (36) (1) 76 31 (27) (41) (67) (17) 140 65 9
Total Net
Disbursements 459 387 494 818 751 760 301 502 1,297 1,078 379 (102) 760 889 1,791 1,896 1,13O 658
Net Resource Transfers /d
Bilateral IGGI 371 288 273 456 310 300 280 478 1,242 894 56 (288) 651 766 1,515 1,350 366 12
Multilateral IGGI 74 86 180 283 232 152 - - - - - - 74 86 180 283 232 152
Total IGGI 445 374 453 739 542 452 280 478 1,242 894 56 (288) 725 852 1,695 1,633 598 164
Non-IGGI (28) (43) (32) (18) 55 18 - - (37) (33) 41 (23) (28) (43) (69) (51) 96 (5)
Total Net Resource
Transfers 417 331 421 721 597 470 280 478 1,205 861 97 (311) 697 809 1,626 1,582 694 159
/a Excluding grants.
/b Suppliers, financial institutions, bonds.
/c Equals gross disbursements minus amortization.
/d Equals gross disbursements minus debt service.
Note: Data in this table refer to disbursements and resource transfers of public sector medium- and long-term debt with a maturity of one year or
more. Figures rounded to nearest million. Totals may not add due to rounding.
|n Z
Source: IBRD External Debt Reporting System based on data provided by Bank Indonesia.
X_
- 83 - ANNEX
Table 4.7
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
/a
Summary External Debt Data, 1973-78
1973 1974 1975 1976 1977 1978
US$ Million
Disbursed and Outstanding Debt (DOD) /b 5.250 6,340 7.989 9,993 11.630 13,083
Bilateral/multilateral 4,238 4,823 5,178 6,094 7,267 8,638
Other /c - 1,012 1,517 2,811 3,899 4,372 4,445
Total Debt Outstanding, Incl. Undisbused (TDO) /b 6,693 9.017 11.716 14,550 16.141 18,895
Bilateral/multilateral 5,524 6,489 7,398 9,155 10,873 12,989
Other /c 1,169 2,528 4,318 5,395 5,268 5,906
Commitments 1.530 2,335 3.277 3,133 1.716 2,652
Bilateral/multilateral 843 850 1,154 1,739 1,293 1,498
Other 687 1,485 2,123 1,396 424 1,155
Gross Disbursements 909 1.101 2,143 2,334 1,955 1,627
Bilateral/multilateral 520 468 569 925 880 979
Other /c 389 633 1,574 1,409 1,075 648
Net Disbursements 760 889 1,791 1,896 1.130 658
Bilateral/multilateral 459 387 494 818 751 760
Other /c 301 502 1,297 1,078 379 (102)
Net Resource Transfers 697 809 1,626 1,582 694 159
Bilateral/multilateral 417 331 421 721 597 470
Other Ic 280 478 1,205 861 97 (311)
Public Debt Service 211 292 517 752 1,261 1,467
Amortization 149 212 352 438 825 968
Interest 62 80 165 314 436 499
Public Debt Service 211 292 517 752 1,261 1.467
Bilateral/multilateral 103 137 148 204 283 509
Other /c 108 155 369 548 978 958
Disbursement Indicators
Undisbursed Debt/TDO (%) /b 22 30 32 31 28 31
Bilateral/multi lateral 23 26 30 33 33 33
Other Xc 13 40 35 28 17 25
Gross Disbursements/Commitments (%) /d 59 47 65 74 114 61
Bilateral/multi lateral 62 55 49 53 68 65
Other /c 57 43 74 101 254 56
Gross Disbursements/Undisb. Debt + Commitments (%) e 29 36 34 31 23
Bilateral/multilateral 22 20 23 20 19
Other 39 50 49 56 32
Net Disb./Gross Disb. (Z) 84 81 84 81 58 40
Bilateral/multi lateral 88 83 87 88 85 78
Other /c 77 79 81 77 35 -
Net Resource Transfers/Gross Disb. (7) 77 73 76 68 35 10
Bilateral/multi lateral 80 71 74 78 68 48
Other /c 72 76 77 61 9 -
Ia Data in this table refer to public sector medium- and long-term loans. Loans with a maturity of less
than one year and grants are not included.
/b End of year.
/c Suppliers, financial institutions, bonds.
/d Gross disbursements as Y of commitments.
/e Gross disbursements as % of undisbursed debt (TDO-DOD) at beginning of year plus commitments during
the year.
Source: IBRD External Debt Reporting System based on data provided by Bank Indonesia.
- 84 - ANNEX
Table 4.8
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Selected Debt Indicators, 1973-78
1973 1974 1975 1976 1977 1978
Ratio DOD/exports (net) 2.06 1.36 1.59 1.52 1.46 1.64
Ratio DOD/GDP 0.32 0.24 0.26 0.27 0.26 0.26
Ratio TDO/exports (net) 2.63 1.93 2.34 2.21 2.03 2.36
Ratio TDO/GDP 0.41 0.35 0.38 0.39 0.36 0.38
Debt service/exports (net) (%) 8.3 6.3 10.3 11.4 15.9 18.4
Debt service/GDP (%) 1.3 1.1 1.7 2.0 2.8 3.0
Debt service/Government revenues (%) 9.0 6.9 9.8 10.9 14.8 17.0
Interest on DOD/average DOD /a (%) 1.3 1.4 2.3 3.5 4.0 4.0
Total debt service/average DOD /a (%) 4.5 5.0 7.2 8.4 11.7 11.9
Amortization/average TDO /a (%) 2.5 2.7 3.4 3.3 5.4 5.5
Total debt service/gross disbursements
(%) 23 27 24 32 65 90
Gross disbursements/imports (incl. NFS)
(%) 29 24 39 35 25 20
Net disbursements/imports (incl. NFS)
(%) 24 19 33 28 15 8
Net resource transfers/imports (incl.
NFS) (%) 22 17 30 24 9 2
DOD = disbursed and outstanding debt
TDO = total debt outstanding, incl.
undisbursed
p.m.
In US$ Billion
GDP 16.3 25.9 30.5 37.3 45.1 49.4/c
Exports (net) /b 2.55 4.67 5.01 6.57 7.95 7.99
Imports + net NFS /b 3.14 4.64 5.44 6.66 7.78 8.13
Government revenues /b 2.35 4.24 5.30 6.93 8.52 8.64/d
/a Average of debt outstanding at beginning and end of year.
/b GOI fiscal year.
/c Converted at average 1978 exchange rate of US$1 = RP 441.
/d Converted at average 1978/79 exchange rate of US$1 = Rp 494.
Source: Debt data from Table 4.1; GDP from Table 2.1; Exports and Imports
from Table 3.1; Government revenues from Table 5.1.
INDONESIA
COUNTRY ECONOMIC MEMORANDU]M
Central Government Budget Summary, 1972/73 - 1979/80
(Rp billion)
1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81
--------------------------- Actual --------------------------- -Budget- -Budget-
1. Domestic revenues 585.1 977.1 1,759.2 2,200.8 2,877.0 3,508.2 4,266.1 5,440.5 9,055.3
2. Routine expenditures /a 444.3 704.1 1,000.5 1,246.8 1,610.3 2,120.5 2,743.7 3,445.9 5,529.2
3. Government saving (1-2) 140.8 273.0 758.7 954.0 1,266.7 1,387.7 1,522.4 1,994.6 3,526.1
4. Development expenditures 290.7 473.7 966.4 1,425.2 2,043.5 2,157.6 2,555.6 3,488.1 5,027.7 X
5. Balance (3-4) -149.9 -200.7 -207.7 -471.2 -776.8 -769.9 -1,033.2 -1,493.5 -1,501.6
Financed by:
6. Counterpart funds /b 87.2 93.6 37.6 20.5 10.2 35.8 48.2 64.7 65.2
7. Project aid 62.3 114.1 195.9 471.4 773.6 737.6 987.3 1,428.8 1,436.4
8. Change in balances 0.4 -7.0 -25.8 -20.7 -7.0 -3.5 -2.3 - -
(- = increase)
/a Includes debt service payments.
/b Program aid.
Source: Ministry of Finance. M4
ANMTFX
Table 5.2
- 86 -
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Central Government ReceiPts, 1972/73 - 1979/80
(Rp billion)
1972/73 1973/74 1974/75 1975/76 1976/77 1Q77/78 1078/7q 1970/80 100R/R1
----------------------------
Actual -----------------------------
Budget Buddget
Taxes on Income
301.1 511.1 1,234.5 1.558.3 2,029.2 2,515.9 2,996.3 4,113.1 7,429.7
Income tax
25.9 33.3 43.4 65.3 87.4 103.n 122.2 144.6 174.1
Corporate tax
30.4 49.3 100.0 131.3 132.1 176.5 226.5 228.? 359.A4
Corporate tax on oil 197.9 346.9 973.3/a 1,205.2 1,593.4 1,946.5 2,308.7 3,344.8 6,43n.1
Withholding tax 31.8 56.5 78.4 97.0 147.0 202.3 232.5 289.0 324.1
IPEDA
15.1 19.5 29.0 '5.8 42.6 53.3 63.1 64.1 7S.9
Other
- 5.2 10.4 23.7 26.7 34.3 43.3 41.5 66.1
Taxes on Domestic Consumption 125.9 168.0 161.0 234.4 32?.1 376.2 401.4 593.9 6'4.1
Sales tax
36.2 55.6 86.3 122.4 164.6 183.8 221.1 277.4 '51.R
Excises
46.8 62.4 76.2 98.5 131.7 180.4 252.9 298.5 350.Q
Other oil revenues 31.6 37.8 -16.0 -1.3 16.6 - /b - /b - / - /b
Miscellaneous levies 11.3 12.2 15.4 14.8 9.2 12.n 17.4 18.n 21.4
Taxes on International Trade 141.4 253.6 300.7 309.5 421.5 482.7 587.0 566.? 828.7
Import duties
76.8 132.4 160.9 175.1 256.0 286.9 295.3 280.6 343.7
Sales tax on imports 29.9 51.5 69.1 73.4 102.0 115.5 125.5 112.8 145.9
Export tax
34.7 69.7 70.7 61.0 63.5 70.1 166.2 172.8 33Q.1
Nontax Receipt
16.7 44.4 62.1 08.6 1n4.2 133.4 191.4 167.3 172.8
Domestic Revenue 585.1 977.1 1,759.2 2,200.8 2,877.0 3,508.2 4,266.1 5,44n.5 9,055.3
Development Funds 149.5 207.7 233.5 491.9 783.8 773.4 1,035.5 1,493.5 1,501.6
Counterpart funds /c 87.2 93.6 37.6 20.5 I1.2 35.8 48.2 64.7 65.2
Project aid /d 62.3 114.1 195.9 471.4 773.6 737.6 087.3 1,42'.8 1,436.4
Total Revenues 734.6 1,184.8 1,992.7 2,692.7 3,660.8 4,281.6 5,301.6 6,034.n 10,556.0
/a Excludes underpayment of revenues, estimated at about Rp 340 billion, dup to the Glovernment by Pertamin a.
lb Oil subsidies shown as Government expendituires (see Table 9.3).
/c Program aid.
/d Includes commercial bank and suppliers credits for development programs/projects.
Source: Ministry of Finance.
ANNEX
- 87 - Table 5.3
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Central Government Expenditures, 1972/73 - 1979/80
(Rp billion)
1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81
------------------------------- Actual -------------------------------- Budget BudRet
Personnel Expenditures 197.4 258.9 408.0 565.0 639.4 880.8 1,001.6 1,361.3 2,055.5
Wages and salaries 125.6 166.5 292.8 386.4 420.6
Rice allowance 32.2 50.7 60.2 116.5 129.4
Food allowance 13.3 16.2 26.5 33.1 49.7
Other 19.4 18.2 17.9 17.5 26.2
External 6.9 7.3 10.6 11.5 13.5
Material Expenditures 92.1 109.1 167.0 292.3 390.1 356.5 419.5 519.4 683.6
Domestic 82.5 99.5 155.2 280.1 380.7
External 9.6 9.6 11.8 12.2 9.4
Subsidies to Regions 94.6 113.1 206.9 256.6 311.0 469.9 522.3 649.4 985.8
West Irian 10.6 8.2 13.2 13.4 18.6
Other regions 84.0 104.9 - 193.7 243.2 292.4
Debt Service Payment- 49.4 73.7 69.2 67.9 180.3 227.6 534.5 606.7 770.3
Internal 5.3 11.1 5.2 2.8 11.3
External 44.1 62.6 64.0 65.1 169.0
Other Expenditures 10.8 149.3 149.4/a 65.0/b 89.5/c 185.9/d 265.8/e 309.1/f L,
0 3 4
.0/g
Routine Expenditures 444.3 704.1 1,000.5 1,246.8 1,610.3 2,120.5 2,743.7 3,449.9 5,520.2
Development Expenditures /g 290.7 473.7 966.4 1,425.2 2,043.9 2,157.6 2,556.6 3,488.1 5,027.7
Total Expenditures 735.0 1,117.8 1,966.9 2,672.0 3,653.8 4,278.1 5,299.3 6,934.0 10,556.9
/a Includes food subsidy (Rp 144 billion), others (Rp 5.4 billion).
/b Includes food subsidy (Rp 50 billion), other (Rp 15 billion).
/c Includes food subsidy (Rp 39.1 billion), others (Rp 50.4 billion).
Id Includes oil subsidy (Rp 65.1 billion), debt service transfer to Pertamina (Rp 86.4 billion), and others
(Rp 20.7 billion).
/e Includes oil subsidy (Rp 197.0 billion), food subsidy (Rp 43.5 billion), others (Rp 25.3 billion).
/f Includes oil subsidy (Rp 219.6 billion), food subsidy (Rp 82.0 billion), others (Rp 7.5 billion).
/R For details, see Tables 5.4 and 5.5.
Source: Ministry of Finance.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Development Expenditures. 1972/73 - 1979/80
(Rp billion)
1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81
-------------------------- Actual --------------------------- Budget Budget
General /a
Departments 126.8 171.4 226.2 403.5 568.5 744.5 851.0 1,359.2 2,133.5
Subsidies to villages 7.1 5.7 11.4 14.4 19.8 23.2 24.0 31.0 50.7
Subsidies to kabupatens 16.3 19.2 42.7 55.8 62.1 69.1 70.9 87.0 119.6
Irian Jaya 1.6 3.3 4.2 6.0 5.1 5.5 5.5 5.5 n.a.
Subsidies on commercial
import of fertilizer - 33.5 224.7 133.5 105.4 31.8 82.6 38.0 212.5 1
Investment through the
x
banking system 36.4 57.1 98.0 125.7 226.7 166.9 128.5 28.0 210.3 X
Primary schools - 16.4 19.7 48.2 57.7 85.0 111.8 135.5 250.8
Others /b 4.4 12.4 67.0 83.5 122.3 165.3 144.1 210.3 368.4
Subtotal 192.6 319.0 693.9 870.6 1.116.6 1,291.3 1,418.4 1,894.5 3.345.8
Subsidies to provinces 20.7 20.7 47.6 47.4 59.7 75.4 86.8 100.7 166.7
IPEDA 15.1 19.9 29.0 35.8 42.6 52.5 63.1 64.1 78.9
Total (excl. project 228.4 359.6 770.5 953.8 1,269.9 1,419.2 1,568.3 2,059.3 3,591.3
aid)
Project aid 62.3 114.1 195.9 471.4 773.6 737.6 987.3 1,428.8 1,436.4
Total (incl. project 290.7 473.7 966.4 1,425.2 2,043.5 2,156.8 2,555.6 3,488.1 5,027.7
aid)
X X
LIf
/a Excluding project aid.
/b Including Inpres.
Source: Ministry of Finance.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Development Expenditures by Sector, 1974/75 - 1978/79
(Rp billion)
Actual
Total
1974/75 1975/76 1976/77 1977/78 1978/79 Repelita II
Sector Amount share Amount share Amount share Amount share Amount share Amount share
Agriculture & irrigation 299 31.0 270 19.0 364 17.8 380 17.6 450 17.6 1,763 19.3
(of which fertilizer subaidy) (225) (23.3) (134) (9.4) (105) (5.1) (32) (1.5) (83) (3.2) (609) (6.7)
Industry & mining 70 7.3 120 8.4 201 9.8 139 6.4 205 8.0 734 8.0
Electric power 78 8.1 123 8.6 224 11.0 223 10.3 272 10.6 920 10.1
Transportation & tourism 125 12.9 326 22.9 408 20.0 355 16.5 413 16.2 1,627 17.8
Manpower and transmigration 3 0.3 10 0.7 27 1.3 61 2.8 95 3.7 196 2.1
Regional development 138 14.3 165 11.6 190 9.3 251 11.6 275 10.8 1,019 11.1
Education
51 5.3 114 8.0 136 6.7 211 9.8 251 9.8 763 8.3
Health
22 2.3 38 2.7 45 2.2 71 3.3 79 3.1 255 2.8 X
Housing & water supply 6 0.6 14 1.0 27 1.3 90 4.2 56 2.2 192 2.1
General public services /a 52 5.4 74 5.2 110 5.4 123 5.7 224 8.8 583 6.4
Government capital participation 105 10.9 132 9.3 234 11.5 190 8.8 162 6.3 823 9.0
Others a 18 1.9 39 2.7 79 3.9 65 3.0 73 2.9 274 3.0
Total Development Expenditures 966 100.0 1,425 100.0 2.044 100.0 2,157 100.0 2,556 100.0 9,148 100.0
Total (excl. fertilizer
subsidies) 741 1,291 1,939 2.125 2.473 8.540
In US$ billion
Total
2.33 3.43 4.93 5.20 5.17/c 21.06
(of which project aid) (0.47) (1.13) (1.87) (1.78) (2.00)/c (7.25)
Total (excl. fertilizer
subsidies 1.79 3.11 4.67 5.12 5.01/c 19.70
/a Law and order, defense and security, government apparatus.
/b Trade and cooperatives, religion, information and science.
c At time-weighted average exchange rate for FY78/79 of US$1 Rp 494.
Source: Ministry of Finance.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Project Aid by Sector, 1974/75 - 1978/79
(Rp billion)
Actual
Total
1974/75 1975/76 1976/77 1977/78 1978/79 Repelita II
Sector Amt. share Amt. share Amt. share Amt. share Amt. share Amt. share
Agriculture & irrigation 26 13 43 9 116 15 145 20 135 14 465 15
[ndustry & mining 64 33 76 16 143 18 95 13 199 20 577 18
Electric power 39 20 90 19 171 22 164 22 208 21 672 21
Transportation & tourism 42 21 227 48 283 37 213 29 250 25 1,014 32
Manpower and transmigration . 1 . 1 10 1 12 1 24 1 1
Regional development . 2 8 1 8 1 18 1 %
Education
8 4 7 1 5 1 29 4 35 4 84 3
Health
7 4 7 1 6 1 15 2 22 2 57 2
Housing & water supply 1 3 1 3 28 4 18 2 53 2
General public servlces - - - - - - - - 54 5 54 2
Government capital
participation
7 4 7 1 7 1 8 1 33 3 62 2
Others
1 . 11 2 37 5 23 3 13 1 86 3
Total Prolect Aid /a 196 100 471 100 774 100 738 100 987 100 3,166 100
/a Includes commercial credits for development programs/projects.
\ote: . = less than 1
Totals may not add due to rounding.
Soirce: Ministrv of Finance.
tm
(Dl
a'
- 91 - ANNEX
Table 6.1
INDONES IA
COUNTRY ECONOMIC MEMORANDUM
Money Supply. 1971-79
(Rp billion)
End of Currency Demand deposits
period Total Change (Z) Position (%) Position (%)
1971 320.8 +70.5 +28.2 199.4 62 121.4 38
1972 474.6 +153.8 +48.0 271.8 57 202.8 43
1973 669.0 +194.4 +41.0 375.0 56 294.0 44
1974 937.5 +268.5 +40.1 494.2 53 443.3 47
1975 1,250.1 +312.6 +33.3 625.3 50 624.8 50
1976 1,603.0 +407.9 +32.6 781.0 49 822.0 51
1977 +403.4 +25.2
Qtr I 1,815.4 +212.4 +12.3 853.4 47 962.0 53
Qtr II 1,960.8 +145.4 +8.0 924.4 47 1,036.4 53
Qtr III 2,014.3 453.5 +2.7 970.9 48 1,043.4 52
Otr IV 2,006.4 -/.Q -0.4 979.1 49 1,027.3 51
1978 +481.9 +24.0
Qtr I 2,110.9 +104.5 +5.2 1,035.8 49 1,075.1 51
Qtr II 2,240.5 +129.7 +6.1 1,110.1 50 1,130.4 50
Qtr III 2,370.7 +130.2 +5.8 1,155.9 49 1,214.8 51
Qtr IV 2,488.3 +117.6 +5.0 1,239.9 50 1,248.4 50
1979
Qtr 1 2,799.9 +311.6 +12.5 1,368.7 49 1,431.2 51
Qtr II 3,020.7 +220.8 +7.9 1,508.7 50 1,512.0 50
Qtr III 3,180.0 +159.3 +5.3 1,499.7 47 1,680.3 53
Source: Bank Indonesia.
- 92 -
ANNEX
Table 6.2
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Changes in Factors Affecting Money Supply, 1972-79
(Rp billion)
Claims
on official
Net Net claims entities Claims on Time Net
End of foreign on central & public Blocked business & & savings other
period assets government enterprises account individuals deposits /a items
1972 212.3 -50.8 -3.0 - 183.4 -72.2 -115.9
1973 75.3 -33.4 -57.8 - 407.6 -98.1 -214.8
1974 364.0 -131.9 294.7 - 146.9 -196.3 -208.9
1975 -588.5 162.0 926.4 -415.0 298.4 -213.3 142.6
1976 345.0 -333.4 449.8 -51.4 356.8 -300.3 -113.7
1977 568.5 -275.0 34.8 67.3 284.2 -96.5 -179.9
Qtr I 135.5 5.0 74.4 - 75.0 -1.1 -76.2
Qtr II 215.1 -138.8 30.3 29.3 87.7 -35.7 -42.7
Qtr III 165.2 -116.7 16.4 -16.3 68.0 -43.6 -19.6
Qtr IV 52.7 -24.5 -86.3 54.2 53.5 -16.1 -41.4
1978 718.3 -264.8 973.2 -76.9 587.4 -195.6 -1,259.7
Qtr I 8.1 -12.9 -18.0 81.7 156.0 -39.7 -70.7
Qtr II -40.4 -99.4 189.9 6.7 115.4 -76.6 34.1
Qtr III 134.4 -88.7 134.5 -12.2 82.3 -26.9 -93.3
Qtr IV /b 616.2 -63.8 666.8 -153.1 233.7 -52.4 -1,129.8
1979
Qtr 1 245.9 -39.5 55.3 4.1 201.1 -34.8 -120.5
Qtr II 340.0 -208.2 87.5 8.8 202.4 -116.3 -93.5
Qtr III 341.3 -290.9 53.9 42.0 275.6 -234.2 -28.4
/a Includes foreign currencies deposits held by residents.
Includes foreign exchange valuation adjustment.
urce: Bank Indonesia.
- 93 - ANNEX
Table 6.3
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Consolidated Balance Sheet of Monetary System, 1973-79
(Rp billion)
1973 1974 1975 1976 1977 1978/a 1979jb
Assets
Foreign Assets (net) 289 653 148 525 1,061 1,844 (650) 2,661
Domestic Credit 1,085 1.395 2.366 2.789 2.900 4.119 (547) 4,511
Claims on Public Sector 154 317 991 1,057 883 1,514 (506) 1,227
Central Government -35 -167 -5 -338 -613 -878 (46) -1,417
Official entities and
public enterprises 189 484 1,411 1,861 1,895 2,868 (624) 3,065
Government-blocked
account - - -415 -466 -399 -476 (-164) -421
Claims on Private Sector 931 1.078 1,376 1,732 2,017 2,605 (41) 3.284
Loans 808 1,032 1,321 1,655 1,939 2,494 (34) 3,134
Other claims 123 46 55 77 78 111 (7) 150
Total Assets/
Liabilities 1.374 2,048 2,514 3.314 3.961 5.963 (1.197) 7,172
Liabilities
Import deposits 116 283 79 88 146 174 (58) 177
Other items (net) 271 313 457 595 683 1,980 (1,056) 2,109
Money and Quasi Money 987 1.452 1,978 2,631 3.131 3.809 (83) 4.886
Money 669 937 1,250 1,603 2.006 2488 (-) 3,180
Currency 375 494 625 781 979 1,240 (-) 1,500
Demand deposits 294 443 625 822 1,027 1,248 (-) 1,680
Quasi money 318 515 728 1,028 1,125 1.319 (83) 1.706
/a Includes revaluation of foreign exchange on account of November 15, 1978
devaluation. Amount of adjustments is shown in brackets.
/b As of September.
Source: Bank Indonesia.
- 94 - ANNEX
Table 6.4
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Consolidated Balance Sheet of Monetary Authorities, 1974-79
(Rp billion)
End of period 1974 1975 1976 1977 1978/a 1979/b
Assets
Foreign assets 611 246 620 1,049 1,648 (561) 2,085
Claims on Public Sector 349 1,254 1,448 1,537 2,434 (543) 2,695
Central Government 122 368 239 312 509 (62) 626
Official entities and public
sector enterprises 227 886 1,209 1,225 1,925 (481) 2,069
Claims on deposit money banks 294 565 640 682 846 (-) 1,034
Other assets 46 80 84 33 74 (2) 377
Total Assets/Liabilities 1,230 2,145 2,802 3,301 5,002 (1,106) 6,191
Liabilities
Reserve Money 773 1,038 1,333 1,670 1,847 (9 2,288
Currency outside banks and
government 494 625 781 979 1,240 (-) 1,500
Currency and deposits of banks 250 382 423 623 532 (-) 677
Other deposits 29 31 29 68 56 (-) 111
Government deposits 242 704 950 1,154 1,646 (180) 2,095
Other liabilities 215 403 519 477 1,509 (926) 1,808
/a Includes revaluation of foreign exchange on account of November 15, 1978
devaluation. Amount of adjustments is shown in brackets.
/b As of September.
Source: Bank Indonesia.
- 95 -
ANNEX
Table 6.5
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Banking System Credits by Economic Sector, 1973-79 /a
(Rp billion)
1973 1974 1975 1976 1977 1978 /b 1979 /c
Sectors
Sep.
Agriculture /d 87.0 116.4 220.2 265.6 270.0 344.8 400.8
In rupiah 87.0 116.4 211.9 255.4 264.4 344.3 395.2
In foreign exchange - - 8.3 10.2 5.6 0.5 5.6
Mining 8.1 10.7 741.3 1.035.9 1,061.7 1.699.4 1.838.9
In rupiah 8.1 10.7 88.4 175.6 197.2 230.3 -
In foreign exchange |e - - 652.9 860.3 864.5 1,469.1 1,838.9
Manufacturing Industry /d 277.6 358.9 718.8 990.4 1,156.2 1.697.3 2,068.0
In rupiah 277.6 358.9 508.1 739.4 904.3 1,337.8 1,682.7
In foreign exchange - - 210.7 251.0 251.7 359.5 385.3
Trade /f 428.3 626.8 766.3 858.1 911.2 1.113.8 1,377.5
In rupiah 391.0 604.5 741.1 836.7 897.7 1,105.3 1,360.4
In foreign exchange 37.3 22.3 25.2 21.4 13.5 8.5 17.1
Service Rendering Industry 78.9 121.7 171.7 260.5 319.1 388.6 420.4
In rupiah 78.9 121.7 166.2 253.4 310.9 384.9 415.5
In foreign exchange - - 5.5 7.1 8.2 3.7 4.9
Others 178.5 338.2 132.2 156.0 218.3 223.3 226.2
In rupiah 126.5 173.5 127.3 154.3 217.8 220.4 221.9
In foreign exchange 52.0_/R 164.7/& 4.9 1.7 0.5 2.9 4.3
Total 1,058.4 1,572.7 2,750.5 3,566.5 3,936.5 5,467.2 6,331.8
In rupiah |h 969.1 1,385.7 1,843.0 2,414.8 2,792.5 3,623.0 5,914.6
In foreign exchange 89.3 187.0 907.5 1,151.7 1,144.0 1,844.2 417.2
/a Credits outstanding end of period. Includes unpaid interest. Excludes interbank
credits, credits to Government and to nonresidents, special liquidity credits, special
credit and foreign exchange component of project aid.
/b Includes foreign exchange revaluation (Rp 681.8 billion).
Ic Includes foreign exchange revaluaion (Rp 698.0 billion).
/d Processing of agricultural products is classified into manufacturing industry
according to International Standard Industrial Classification (ISIC) 1968.
/e Includes credits to Pertamina for repayment of foreign borrowing. Since Ma rch 1979
credit in foreign exchange to Pertmina has been converted to credits in Rup iah.
/f Includes credits for food procurement and hotel projects.
IR Includes credits in foreign exchange for all sectors.
/h Includes investment crdits, small-scale investment credits (KIK) and permanent working
capital credits (KMKP).
Source: Bank Indonesia.
-96 - ANNEX
Table 6.6
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Banking System Credits by Economic Sector, 1973-79 /a
(Rp billion)
1974 1975 1976 1977 1978 /b 1979/b
Sectors
Sept.
Bank Indonesia (Direct
Credits) /d 230.7 893.6 1.211.6 1,229.3 1,934.9 2,081.8
In rupiah 230.7 244.8 351.3 364.8 465.8 2,081.8
In foreign exchange /e - 648.9 860.3 864.5 1,469.1 -
State Commercial Banks /f 1,135.8 1,601.9 2,007.5 2,266.7 2,904.9 3,435.0
In rupiah 1,003.8 1,397.2 1,774.7 2,058.2 2,621.6 3,124.3
In foreign exchange 132.0 204.7 232.8 208.5 283.3 310.7
National Private Banks 89.1 132.7 197.4 257.0 365.4 474.9
In rupiah 88.9 131.2 195.8 254.1 359.9 449.9
In foreign exchange 0.2 1.5 1.6 2.9 5.5 25.0
Foreign Banks 117.1 122.3 150.0 183.5 262.0 340.1
In rupiah 62.3 69.8 93.0 115.4 175.7 258.6
In foreign exchange 54.8 52.5 57.0 68.1 86.3 81.5
Total 1,572.7 2,750.5 3,566.5 3,936.5 5,467.3 6,331.8
In rupiah /g 1,385.7 1,843.0 2,214.8 2,792.5 3,623.0 5,914.6
In foreign exchange 187.0 907.5 1,151.7 1,144.0 1,844.2 417.2
/a Credits outstanding end of period. Includes unpaid interest. Excludes
interbank credits, credits to Government and to nonresidents, special
liquidity credits, special credit and foreign exchange component of project
aid.
/b Includes foreign exchange revaluation (Rp 681.8 billion).
Ic Includes foreign exchange revaluaion (Rp 698.0 billion).
Id Excludes Bank Indonesia credits to banks.
Ie Includes credits to Pertamina for repayment of foreign borrowing. Since
March 1979 credit in foreign exchange to Pertamina has been converted to
credits in Rupiah.
/f Includes BAPINDO.
/g Includes investment credits, small investment credits (KIK) and permanent
working capital credits. (KMKP).
Source: Bank Indonesia.
- 97 - ANNEX
Table 6.7
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Small-Scale Investment Credits and Permanent Working Capital Credits, 1974-79
(Rp million)
Small-scale Permanent working
investment credits /a capital credits /a
Number of Approved Out- Number of Approved Out-
End of applications value standing applications value standing
quarter approved --- Rp million --- approved --- Rp million ---
1974
Qtr I 4,611 5,667 3,966 3,303 4,488 2,913
Qtr II 7,759 11,573 9,756 8,811 11,069 9,021
Qtr III 8,750 13,368 11,421 10,550 13,072 11,006
Qtr IV 9,554 15,253 13,039 14,524 15,502 12,513
1975
Qtr I 11,324 18,768 15,533 15,769 17,914 13,578
Qtr II 12,836 21,657 17,294 17,626 20,693 14,681
Qtr III 14,734 24,186 18,716 21,355 24,702 17,001
Qtr IV 16,646 28,091 21,644 24,141 28,689 19,233
1976
Qtr I 19,804 34,090 25,553 83,281 40,756 26,671
Qtr II 22,697 39,025 29,310 102,193 49,210 31,786
Qtr III 25,026 43,889 32,564 148,896 57,993 37,277
Qtr IV 27,827 49,602 36,086 166,149 67,080 41,446
1977
Qtr I 30,741 55,269 39,605 183,877 74,786 46,342
Qtr II 33,573 61,453 43,425 217,927 88,935 52,624
Qtr III 36,347 67,797 46,600 282,775 101,771 59,047
Qtr IV 39,737 74,186 50,462 322,391 114,990 61,839
1978
Qtr I 42,163 79,249 52,704 335,366 124,496 65,415
Qtr II 47,180 86,375 56,435 365,776 135,547 70,703
Qtr III 50,895 97,701 61,923 406,518 158,369 81,204
Qtr IV 54,970 105,801 64,711 420,495 177,239 83,748
1979
Qtr I 57,378 112,809 67,951 438,027 188,289 93,157
Qtr II 60,176 122,302 73,979 511,684 214,094 108,656
Qtr III 65,801 139,705 85,568 610,881 262,522 129,570
Qtr IV 70,969 158,958 97,504 636,560 298,129 148,690
/a Cumulative as of end of period.
Source: Bank Indonesia.
- 98 - ANNEX
Table 6.8
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Medium-Term Investment Credits by Economic Sector, 1973-79 /a
(Rp million)
1973 1974 1975 1976 1977 1978/c 1979/c
Sep.
Credit Approved /b 162,329 196,617 255,066 320,002 352,324 428,353 540,243
Agriculture 16,291 19,739 34,354 44,434 61,824 76,971 95,049
Manufacturing industry 80,952 96,637 108,658 130,264 143,782 167,815 214,923
Mining 495 221 154 5,296 5,296 5,296 10,511
Communication & tourism 56,812 67,312 96,763 125,465 125,920 156,752 192,690
Others 7,779 12,708 15,137 14,543 15,502 21,519 27,070
Credit Outstanding 111,083 136,997 177,788 246,156 278,180 329,252 378,995
Agriculture 8,044 12,644 26,857 38,922 52,072 61,878 7n,716
Manufacturing industry 59,640 69,331 78,306 94,066 105,754 115,594 135,674
Mining 161 147 143 4,278 3,277 3,276 3,27f
Communication & tourism 38,501 45,758 62,222 99,985 106,556 132,574 151,176
Others 4,737 9,117 10,260 8,905 10,521 15,930 18,153
/a Excludes small-scale investment credits and permanent working capital credits.
/b Cumulative as of end of period. Excludes repayments.
/c Preliminary figures.
Source: Bank Indonesia.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Time Deposits With State Banks, 1971-79
(Rp million)
Of which
24 18 12 6 3 Less than Interbank Nonresident
End of: months months months months months 3 months Total /a time deposits time deposits
1971 - - 75,514 15,552 12,598 993 104,627 14,843 9,308
1972 - - 107,576 28,699 8,819 731 145,825 23,898 20,050
1973 - - 129,382 14,162 4,000 1,371 142,915 8,998 7,385
1974 179,934 8,090 37,226 8,298 3,708 1,385 238,641 6,983 82
1975 335,476 10,281 27,372 9,212 3,630 341 386,312 5,065 -
1976 517,568 3,987 48,500 25,082 14,031 2,544 611,712
1977
Qtr I 543,283 3,596 48,540 24,433 9,144 1,534 630,530
Qtr II 554,612 2,645 42,123 31,588 11,785 1,002 643,755
Qtr III 577,807 2,349 33,933 43,486 8,490 592 666,657 ..
Qtr IV 604,825 1,896 33,559 40,967 10,041 828 691,846
1978
Qtr I 615,913 599 34,621 34,308 1,425 52 686,918
Qtr II 622,049 45 39,000 44,632 1,849 16 707,591
Qtr III 623,876 - 39,491 55,700 2,187 39 721,293
Qtr IV 608,971 - 42,115 51,718 3,756 52 706,612
1979
Qtr I 608,194 - 36,259 58,304 5,056 65 707,878
Qtr II 616,609 - 30,191 55,489 5,720 91 708,101
Qtr III 615,288 - 28,939 64,927 2)737 31 711,922
Not available. X
/a Includes interbank time deposits and nonresident time deposits.
Source: Bank Indonesia.
- 100 -
ANNEX
Table 7. 1
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Principal Agriculture Products by Subsectors. 1969-78
('000 tons)
Product 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978/a
Food Crops
Rice 11,667 12,249 13,140 13,724 13,183 14,607 15,276 15,185 15,845 15,876 17,598
Corn
3,166 2,292 2,825- 2,606 2,254 3,690 3,011 2,909 2,572 3,143 3,855
Cassava 11,356 10,917 10,478 10,690 10,385 1,186 13,031 12,546 12,191 12,488 12,961
Sweet potato 2,364 2,260 2,175 2,211 2,066 2,387 2,469 2,433 2,381 2,460 2,235
Soya beans (shelled) 420 389 498 516 518 541 589 590 522 523 571
Groundnuts (shelled) 287 267 281 284 282 290 307 380 341 414 439
Fishery
Saltwater fish 723 785 807 820 836 889 949 997 1,082 1,154 1,225
Freshwater fish 423 429 421 424 433 389 388 393 401 414 430
Meat and Dairy
Meat 305 309 314 332 366 379 403 435 449 468 477
Eggs 51 58 59 68 78 81 98 112 116 131 146
Milk (in million liters) 29 29 29 36 38 35 57 51 57 61 62
Cash Crops
Rubber 735 777 802 804 804 844 817 782 857 837 844
Palm oil 181 189 217 248 269 290 348' 397 431 483 519
Coconut/copra 1,133 1,221 1,208 1,149 1,311 1,237 1,341 1,375 1,532 1,518 1,467
Coffee
150 175 186 196 214 150 149 160 193 198 187
Tea
73 62 64 71 51 67 64 69 73 77 84
Cloves
17 11 15 14 15 22 15 15 20 39 22
Pepper 47 17 17 26 18 29 27 23 37 43 44
Tobacco
54 84 78 76 79 80 79 82 89 85 99
Cane sugar 752 922 873 1,041 1,133 1,009 1,237 1,227 1,321 1,438 1,553
Cotton
- 3 3 2 1 1 3 2 1 ..
Forestry
Teakwood ('000 cu m) 468 520 568 770 597 676 620 595 480 573 475
Other timber ('000 cu m) 4,783 7,587 11,856
1
1,Q6A 17,120 25,124 22,660 15,701 20,947 22,366 30,619
= Not available.
/a. Preliminary figures.
Source: Supplement to the President's Report to Parliament, August 1974 and 1979.
- 101 - ANNEX
Table 7.2
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Agricultural Production of Major Crops by Type of Product, 1969-77
('000 tons)
Product 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978/a
Smallholders
Rubber 558 571 572 559 599 571 536 610 584 572
Coconut/copra 1,220 1,198 1,147 1,308 1,233 1,335 1,370 1,527 1,513 1,461
Coffee 162 170 178 196 140 132 144 178 181 171
Cloves 11 15 14 13 22 15 15 17 37 22
Tea 22 21 24 7 14 15 14 13 14 14
Sugar 220 196 211 247 199 250 223 267 352 245
Tobacco 75 69 69 74 69 69 74 76 72 86
Pepper 17 17 24 18 29 27 23 37 43 44
Cotton 2 3 2 2 3 3 2 3 2 2
Palm oil - - - - - - - - - -
Palm kernel - - - - - - - - - -
Private Estates
Rubber 110 113 114 128 109 108 109 104 107 110
Coconut/copra 1 2 2 3 4 6 5 5 6 6
Coffee 5 6 7 6 4 7 6 6 6 6
Cloves 1 . . .. .. .. 3 2 1
Tea 9 9 10 7 10 11 10 11 11 12
Sugar 72 74 122 130 118 127 126 152 162 171
Tobacco - - - - - - - -
Pepper - - - - - - - - - -
Cotton - - _ _ _ _ _ _
Palm oil 60 70 79 81 82 104 126 145 147 150
Palm kernel 13 15 18 17 18 21 24 27 29 30
Government Estates
Rubber 110 118 118 121 137 138 137 142 147 162
Coconut/copra - - - - _ - - - - -
Coffee 8 9 11 12 6 10 10 10 10 10
Cloves - - - - - - - - - -
Tea 31 34 37 37 43 40 46 49 51 59
Sugar 630 603 708 756 693 860 878 902 924 1,137
Tobacco 9 9 7 5 11 8 8 11 12 13
Pepper - - - - - - - - - -
Cotton - - - - - - - - - -
Palm oil 129 147 170 189 207 244 271 286 338 369
Palm kernel 28 33 39 42 46 52 57 56 64 73
TOTAL
Rubber 778 802 804 808 845 818 782 856 838 844
Coconut/copra 1,221 1,200 1,149 1,311 1,237 1,341 1,375 1,532 1,518 1,467
Coffee 175 185 196 214 150 149 160 194 197 187
Cloves 12 15 14 13 22 15 15 20 39 23
Tea 62 64 71 51 67 65 70 73 76 85
Sugar 922 873 1,041 1,133 1,009 1,237 1,227 1,321 1,438 1,553
Tobacco 84 78 76 79 80 77 82 87 84 99
Pepper 17 17 24 18 29 27 23 37 43 44
Cotton 2 3 2 2 3 3 2 3 2 2
Palm oil 189 217 249 270 289 348 397 431 483 519
Palm kernel 41 48 57 59 64 73 81 83 93 103
= Not available.
/a Preliminary figures.
Source: Department of Agriculture.
ANNEX
- 102 - Table 7.3
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Rice - Area Harvested, Production and Yield, 1968-78
Area Average Paddy ta Rice
harvested yield output output
Year ('000 ha) (tons/ha) ('000 tons) ('000 tons)
1968 8,021 2.80 22,435 11,667
1969 8,014 2.94 23,556 12,249
1970 8,135 3.11 25,269 13,140
1971 8,324 3.17 26,392 13,724
1972 7,987 3.17 25,351 13,183
1973 8,403 3.34 28,091 14,607
1974 8,509 3.45 29,376 15,276
1975 8,495 3.44 29,202 15,185
1976 8,368 3.64 30,470 15,845
1977 8,360 3.65 30,531 15,876
1978/b 8,893 3.81 33,843 17,598
/a Dry stalk paddy.
/b Preliminary figures.
Source: Supplement to the President's Report to Parliament, August 1974 and
1979.
ANNEX
- 103 - Table 7.4
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Rice Production, Imports, Procurement and Consumption, 1960-78
Per
Less seed, Total capita
Produc- feed and Procure- BULOG avail- Popu- avail-
Year tion losses /a Imports ment stocks able lation ability
------------------ (Million tons) -------------------- (Mlns) (kg)
1960 10.17 0.92 0.89 0.28 - 10.14 94.79 107
1961 9.58 0.86 1.01 0.26 -0.03 9.70 97.02 100
1962 10.28 0.93 1.01 0.52 0.02 10.34 99.05 104
1963 9.16 0.82 1.07 0.44 -0.12 9.29 101.04 92
1964 9.61 0.86 1.02 0.34 0.00 9.77 103.16 95
1965 10.24 0.92 0.14 0.32 0.10 9.56 105.33 91
1966 10.75 0.97 0.24 0.64 -0.10 9.92 107.54 92
1967 10.40 0.94 0.35 0.52 0.03 9.84 109.80 90
1968 11.67 1.05 0.63 0.60 -0.35 10.90 112.10 97
1969 12.25 1.10 0.60 0.20 0.30 12.05 114.46 105
1970 13.14 1.18 0.96 0.49 -0.28 12.64 116.86 108
1971 13.72 1.23 0.49 0.62 0.00 12.99 119.23 109
1972 13.18 1.19 0.74 0.16 0.36 13.09 121.61 108
1973 14.61 1.32 1.66 0.26 -0.42 14.53 124.05 117
1974 15.28 1.38 1.07 0.53 -0.29 14.68 126.53 116
1975 15.18 1.37 0.68 0.54 0.10 14.59 129.06 113
1976 15.84 1.42 1.28 0.39 0.20 15.90 131.33 121
1977 15.88 1.43 1.96 0.42 0.08 16.49 133.96 123
1978 17.60 1.58 1.84 0.88 - 17.86 136.63 131
/a Assumes seed (1.5%), feed (1.5%) and losses (6.0%).
Sources: Production: Department of Agriculture and BPS
Imports, stocks and procurement: BULOG
Population: BPS.
- 104 -
ANNEX
Table 7.5
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Area Covered Under Rice Intensification Programs, 1967-78
('000 ha)
Year Bimas Inmas Total
1969 1,309
821 2,130
1970 1,248 845 2,093
1971 1,396 1,393 2,789
1972 1,203
1,966 3,169
1973 1,832
2,156 3,988
1974 2,676 1,048 3,724
1975 2,683 1,957 3,640
1976 2,424 1,189 3,613
1977 2,059 2,181 4,240
1978 /a 1,957 2,877
4,834
/a Preliminary figures.
Source: Supplement to the President's Report to Parliament, August 1974 and
1979.
- 105 -
ANNEX
INDONESIA Table 8.1
COUNTRY ECONOMIC MEMORANDUM
Production of Selected Industrial Goods. 1969/70 - 1978/79
Product Unit 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79
/a
Vegetable oil '000 tons 290 284 287 293 293 294 299 309 308 357
Cigarettes bln pieces 30 34 36 41 51 52 57 61 64 69
Textile yarn '000 bales 182 217 239 262 316 364 445 623 678 900
Fabrics mln meters 450 598 732 852 927 974 1,017 1,247 1,333 1,400
Paper '000 tons 17 22 30 40 47 43 47 54 84 166
Urea '000 tons 85 103 108 120 116 209 387 406 990 1,434
Salt '000 tons 153 58 41 183 86 70 147/b 560/b 786/b 165
Caustic soda '000 tons 1 1 2 3 3 4 9 9 10 9
Al-sulphate '000 tons - 3 7 12 17 14 14 15 19 19
Sulphuric acid '000 tons - 4 9 11 18 9 15 19 20 38
Oxygen mln cu m 2 3 4 4 5 5 5 6 7 7
Acetylene '000 cu m - - - 12 99 124 241 289 305 335
Matches mln boxes 269 322 349 475 556 707 780 772 506 504
Soap '000 tons 133 132 132 132 131 149 165 176 195 235
Toothpaste mln tubes 15 25 26 30 32 46 108 104 104 119
Car tires '000 pieces 366 401 507 858 1,361 1,704 1,796 1,883 2,339 2,641
Bicycle tires '000 pieces 2,205 2,164 1,850 2,632 5,880 6,279 7,129 7,297 7,382 -
Glass sheets sq ft - - - - 50 60 62 69 78 -
Glass bottles '000 tons 12 11 7 17 37 35 32 36 60 -
Reinforcing iron '000 tons 5 10 74 75 120 115 202 296 240 300
Zinc plates '000 tons 9 34 67 70 70 70 145 156 185 185
Steel pipes '000 tons 2 3 6 34 80 94 97 107 120 118
Steel cables '000 tons - - - 15 30 30 43 85 98 112
Car batteries '000 pieces 32 56 262 130 140 180 220 480 575 800
Dry-cell batteries mln pieces 54 55 72 72 132 144 240 420 443 420
Radio sets '000 pieces 364 393 416 700 900 1,000 1,101 1,100 1,000 1,128
Television sets '000 pieces 5 5 65 60 60 135 166 213 482 611
Sewing machines '000 pieces 14 14 262 340 500 400 520 400 484 501
Automobiles '000 units 5 3 16 23 37 66 79 75 84 99
Motorcycles '000 units 21 31 50 100 150 251 300 268 272 320
Cement '000 tons 530 562 536 628 740 829 1,241 1,979 2,879 3,640
/a Preliminary figures.
tb Includes smallacale industry production.
Source: Supplement to the President's Report to Parliament, August 1974 and 1979.
- 106 - ANNEX
Table 8.2
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Production, Imports and Estimated Consumption of Cement, 1967-78
Consumption /a
Year Production Imports Total Per capita
--------------- ('000 tons) ----- _-__________ -- (kg) --
1967 322.0 197.1 519.1 4.7
1968 410.0 249.8 659.8 5.9
1969 477.1 477.1 954.2 8.3
1970 515.0 639.1 1,154.1 9.8
1971 486.6 898.6 1,385.2 11.5
1972 595.8 1,200.4 1,796.2 14.6
1973 740.4 1,496.8 2,237.2 17.7
1974 830.9 1,737.8 2,568.7 19.9
1975 1,077.2 1,609.2 2,686.4 20.3
1976 1,809.7 1,433.5 3,243.2 24.7
1977 2,548.5 589.8 3,138.3 23.4
1978 3,648.9 420.0 4,032.4 29.5
/a Consumption Production + Imports - Exports.
Source: BPS.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Production of Minerals, 1973-79
Tin Copper ore Nickel Iron sand Natural
Year Petroleum concentrate concentrate ore Bauxite Coal concentrate Gold Silver gas
(mln bbls) ------------------------ ('000 tons) ----------------------- (kg) (kg) (mcf)
1973 489 22.6 125.9 867.3 1,229.4 148.8 280.9 352.1 9,371.9 186.1
1974 502 25.7 212.6 878.9 1,290.1 156.2 365.2 265.3 6,464.6 202.2
1975 477 25.3 201.3 801.0 992.6 206.4 353.0 330.7 4,754.7 222.2
1976 550 23.4 223.3 1,124.3 940.3 182.9 292.3 355.2 3,397.5 312.1
1977 615 25.9 189.1 1,302.5 1,301.4 230.6 311.5 255.9 2,831.9 542.8
1978 597 27.4 180.9 1,206.7 1,007.7 264.2 190.5 254.0 2,506.4 820.1
1979 /a 583 29.8 189.7 1,551.9 1,051.9 277.9 84.4 157.7 1,609.7 999.8
/a Preliminary figures.
Source: Department of Mines and Energy.
'-
INDONESIA
COIJNTRY ECONOMIC MEMORANDUM
Crude Oil Production, 1973-79
(In '000 bbl)
1977 1978 1979
1973 1974 1975 1976 Qtr I Qtr II Qtr III Qtr IV Total Qtr I Qtr II Qtr ITI Qtr TV Total Qtr I Qtr II Qtr 1i1
onshore
Pertamioa 37,687 40,143 32,590 31,332 7,340 7,561 7,893 7,927 30,721 7,668 8,104 7,854 7,858 31,484 7,446 7,786 7,593
Lemigas 431 362 306 269 73 75 68 69 285 63 51 39 43 196 51 5() 50
Caltex /a 351,528 329,907 300,879 307,616 73,855 74,586 73,670 70,839 292,950 70,763 69,838 67,066 67,724 275,539 67,335 66,537 67,289
C 6 T /a 1,035 1,959 1,944 1,804 448 685 642 684 2,460 654 610 553 466 2,283 520 470 452
Stanvac Ia 22,768 16,626 13,888 12,786 2,740 2,825 3,205 3,203 11,973 3,050 2,962 2,973 2,869 11,854 2,790 2,695 2,594
PT S.l. (Corr. Block) /b 594 412 306 244 38 37 72 38 185 32 34 41 58 !65 49 198 179
Asameora 6,470 7,047 6,115 4,771 968 868 735 678 3,249 639 667 750 722 2,778 671 608 514
Tesoro 554 2,572 3,091 4,857 1,119 1,072 1,008 943 4,142 907 873 802 813 3,400 799 772 766
A.A.R. 468 518 428 426 98 92 92 84 360 81 93 95 88 357 84 83 80
Petromer Trend 3,425 11,089 23,017 27,710 8,264 7,41)5 6,600 6,387 28,656 6,401 6,584 6,763 6,362 26,110 5,841 5,720 5,567
C . T /c - - 464 796 1,457 2,088 2,558 2,693 8,796 2,594 2,611 2,612 2,441 10,258 2,571 2,803 2,767
Phillips - - 27 - - - - 2,278 2,278 4,383 4,103 2,849 1,654 12,989 855 744 690
Roy H.ffco - 916 3,874 4,799 1,074 1,228 1,671 1,752 5,725 2,041 2,061 2,318 1,932 8,352 1,949 1,928 1,958
A.R.C.O. (E. Kalimantan) - - - - - 57 885 894 1,836 788 713 624 554 2,679 531 511 503
Mobil Oil - - - - - - 484 1,282 1,766 1,606 2,101 2,025 3,873 9,605 4,793 5,052 5,449
Total Onshore 424,961 411,55
1
386,929 394,410 97474 98_579 99,554 99,7 6 lOI,67793 1,4 4 93,90 9,5 96,9sa 96,4
Offshore
PT I.A.P.C.O. 13,649 19,785 15,254 34,402 10,958 10,933 9,855 9,725 41,471 8,680 7,295 7,168 7,588 30,739 8,854 8,565 8,036v
A.R.C.O. (Java Sea) 233357 32,661 28,582 44,432 11,445 11,161 tO,633 10,610 43,849 9,436 9,659 10,128 10,329 39,552 9,873 9,265 9,584
Union Oil 13 ,292 18,508 20,942 27,989 7 ,222 7,209 7,340 7,658 29,429 7,306 7 ,1 52 6, 797 6,640 27,895 6,105 6,006 5,998
Japex /d 13,292 18,508 18,128 19,425 4,869 8,538 15,836 16,104 45,347 15,426 15,318 14,829 14,661 60,234 14,303 14,368 14,431
Total Indonesia - 825 6 909 28,784 19,485 18,017 10,702 10,675 58,879 10(,311 10,274 9,920 5,789 40,294 9,609 9,808 9,750
Cities Service - - ill 914 214 201 195 179 789 164 154 173 - 491 - -
Conoco - - - - - - - - - - - - - - 485 1,294 2,085
Total Offshore 63,590 90_287 89,92 155,946 54,193 54,61 54,951 219,764 51,331 49,852 49,015 49,007 199,205 49,229 40_306 49,824
Crude (Oil Production 488,551 501,838 476,855 550,356 151,667 154,638 154,145 154,702 615.152 153,003 151,257 146,379 146,471 597,10
8
145,53 145,35 146,335
Percentage 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.()
Pertamina/Lemigas 7.8 8.1 6.9 5.7 5.0 5.3 5.4 5.2
Contracts of work 76.8 69.4 66.4 58.5 50.0 48.5 48.0 48.1
Production sharing 23.2 22.5 26.7 35.8 45.0 46.2 46.6 46.7
Average daily production 1,338 _,375 1,306 1,508 _ 1,699 1,675 1,682 18L 1,700 1,662 1,591 ,592 1,617 1,596 1j)9H
/a Contracts of work.
/b Since January 1977: Redco; since (lay 1978: Asamera (S. Sunatera).
Ic Since January 1979: two fields.
Id Since June 1977: Inpex (includes 500 of Total Indonesia production).
Source: Ministry of Mines and Energy.
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Petroleum Products - Supply and Demand, 1969-78
(In million bbl)
1969 1970 1971 1972 1973 1974 1975 1976 1977 1978
Production of crude 270.9 311.6 325.6 395.6 488.5 501.8 476.9 550.3 615.1 596.8
Crude imports 0.2 0.8 2.8 2.7 1.9 2.7 2.6 7.7 25.5 24.1
Subtotal 271.1 312.4 328.4 398.3 490.4 504.5 479.5 558.0 640.6 620.9
Crude exports 195.7 228.1 239.6 299.1 369.5 378.9 363.1 449.1 484.2 461.9
Crude available for refineries 75.4 84.3 88.8 96.2 120.9 125.6 116.4 108.9 156.4 159.0
Changes in crude stocks
(decrease = -) -0.7 0.6 -1.2 -4.3 1.6 0.7 2.9 -4.8 3.1 -2.4
Refinery Inputs 76.1 83.7 90.0 100.5 119.3 124.9 113.4 113.7 153.3 161.4
Refinery consumption 3.7 4.9 7.6 7.7 8.1 5.8 4.3 3.9 3.7 3.1
Refinery Output 72.4 78.8 82.4 92.8 111.2 119.1 109.1 109.8 149.6 158.3
Export of Refined Products 19.0 25.3 34.0 41.2 58.3 67.4 62.2 60.6 66.1 97.4
Processing deals - - - - 3.4 26.4 29.7 28.9 12.1 56.0
Waxy residues 17.0 23.8 32.5 39.7 53.4 39.3 30.7 29.7 51.4 38.6
Bunker fuel, avtur, etc. 1.5 1.5 1.5 1.5 1.5 1.7 1.8 2.0 2.6 2.8
Available for Domestic Consumption 53.4 53.5 48.4 51.6 52.9 51.7 46.9 49.2 83.5 60.9
Total Supply 56.4 55.6 52.6 60.2 65.7 64.3 61.9 75.6 102.5 84.9
Domestic Consumption 36.9 39.3 43.9 50.1 60.3 69.6 78.8 88.9 101.6 112.3
Changes in refined stocks 19.5 16.3 8.7 10.1 5.4 -5.3 -16.9 -13.3 0.9 -27.4 X x
S.:M
Source: Migas.
ANNEX
Table 8.6
- 110 -
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Domestic Sales of Petroleum Products, 1971-78
(In '000 bbl)
1971 1972 1973 1974 1975 1976 1977 1978
Aviation gas 144 118 123 139 139 143 128 127
Aviation turbo 961 1,200 1,658 2,150 2,579 2,758 2,913 2,528
Premium gasoline 100 201 359 496 661 706 710 728
Regular gasoline 10,409 10,779 11,757 12,787 14,284 15,606 17,356 19,606
Kerosene 18,927 20,697 23,146 26,769 30,623 33,259 36,880 41,714
Motor diesel 6,895 9,027 11,838 14,524 18,023 22,749 27,041 31,646
Industrial diesel 2,364 2,676 3,488 4,022 4,673 5,429 6,239 6,509
Fuel oil 4,095 5,379 7,924 8,755 7,844 8,222 10,296 9,433
Total 43,895 50,077 60,293 69,642 78,826 88,872 101,563 112,291
Source: Department of Mines and Energy.
- 111 - ANNEX
Table 9.1
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Cost of Living Index in Jakarta, 1970-79
(Index: April 1977/March 1978 = 100)
Period average
End of Food- Change Hous- Cloth- Other Gene- Change General Change
period stuffs (%) ing ing ral (%) index (%)
1970 26.2 +1.3 38.5 43.3 38.5 30.8 +8.9 30.1 +12.3
1971 26.8 +2.2 38.9 44.4 39.9 31.6 +2.6 31.4 +4.4
1972 38.7 +44.6 39.4 44.2 41.3 39.7 +25.7 33.4 +6.4
1973 49.7 +28.4 45.3 58.3 52.4 50.6 +27.4 43.8 +31.0
1974 65.7 +32.2 55.6 77.7 74.0 67.4 +33.3 61.6 +40.6
1975 81.1 +23.4 73.6 84.9 80.1 80.6 +19.7 73.4 +19.1
1976 91.8 +13.2 90.9 94.9 92.3 92.1 +14.2 87.9 +19.8
1977 +12.4 +11.8 97.6 +11.0
Qtr I 94.1 +2.5 94.8 95.9 93.7 94.2 +2.3
Qtr II 96.3 +2.3 96.4 97.4 97.0 96.5 +2.4
Qtr III 100.2 +4.0 99.3 101.3 100.5 100.3 +3.9
Qtr IV 103.2 +3.0 102.8 101.8 102.6 103.0 +2.7
1978 +4.4 +6.7 105.5 +8.1
Qtr I 104.1 +0.8 104.1 102.1 103.0 103.7 +0.7
Qtr II 103.5 -0.6 105.3 103.3 104.0 103.7 -
Qtr III 104.3 +0.8 105.3 105.2 109.7 105.4 +1.7
Qtr IV 107.8 +3.4 105.7 110.4 118.8 109.9 +0.7
1979 +27.1 +24.6 127.0 +20.4
Qtr I 114.7 +6.4 107.3 118.4 123.2 116.0 +5.6
Qtr II /a 127.2 +10.9 122.2 125.9 131.3 127.8 +10.2
Qtr III 137.8 +8.3 124.8 140.4 137.8 135.7 +6.2
Qtr IV 137.0 -0.6 125.1 147.0 139.1 136.9 +0.9
/a As of April 1979 the Cost of Living Index was replaced by the Jakarta
Consumer Price Index (Table 9.2).
ANNEX
- 112 - Table 9.2
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Consumer Price Index - Jarkarta and Indonesia. 1979
(Index: April 1977/March 1978 100)
Index % change
Food Housing Clothing Other General Food Housing Clothing Other General
Jakarta
Weight (40) (28) (10) (22) (100)
March 114.8 118.5 135.7 117.0 118.4
April 117.3 122.5 136.7 122.6 121.9 2.1 3.4 0.7 4.8 2.9
May 122.4 134.1 139.9 123.0 127.6 4.3 9.4 2.3 0.4 4.7
June 127.3 135.0 144.3 124.7 130.6 4.0 0.6 3.2 1.4 2.4
July 130.0 134.8 151.2 127.7 133.0 2.1 (0.1) 4.8 2.4 1.8
August 137.6 135.1 155.9 129.5 136.9 5.8 0.3 3.1 1.4 3.0
September 137.9 137.8 160.9 130.9 138.6 0.2 2.0 3.2 1.1 1.2
October 136.4 138.3 164.0 131.5 138.6 (2.4) 0.4 1.9 0.5 -
November 136.7 138.6 163.0 132.1 138.8 0.2 0.2 (0.6) 0.4 0.1
December 137.2 138.1 168.5 132.1 139.9 0.4 (0.3) 3.4 0.7 0.7
Indonesia
(17 cities)
Weight /a (46) (24) (11) (19) (100)
21arch 120.5 120.9 134.7 119.1 121.8
April 122.5 125.0 137.4 126.1 125.5 1.7 3.4 2.0 5.9 3.0
May 126.4 131.6 140.0 126.7 129.3 3.2 5.3 1.9 0.5 3.0
June 130.7 133.4 144.6 127.9 132.3 3.4 1.4 3.3 0.9 2.3
July 134.2 134.5 150.4 132.2 135.6 2.7 0.8 4.0 3.4 2.5
August 139.1 135.7 155.1 134.2 138.8 3.6 0.9 3.1 1.5 2.3
September 138.9 137.4 159.1 135.3 139.8 (0.1) 1.1 2.6 0.9 0.7
October 138.5 139.9 163.4 137.0 141.0 (0.3) 1.8 2.7 1.2 0.9
November 139.9 140.2 163.5 137.6 141.8 1.0 0.2 - 0.4 0.6
December 141.1 140.9 168.2 137.7 143.1 0.9 0.5 2.9 0.1 0.9
/a Arithmetic average of weight for 17 cities.
ANNEX
Table 9.3
- 113 -
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Wholesale Price Indices in Indonesia, 1971-78 /a
(1971 100)
1971 1972 1973 1974 1975 1976 1977 1978
Agriculture 100 118 159 218 256 321 392 430
Food crops 100 126 162 194 230 296 343 368
Commercial crops 100 91 148 225 182 265 411 451
Livestock 100 118 156 218 255 293 349 394
Mining & quarrying 100 113 125 164 195 210 237 262
Manufacturing 100 110 154 189 202 238 265 294
Imports 100 110 140 184 200 215 225 244
Exports 100 119 179 377 368 393 447 488
Nonoil exports 100 105 166 219 182 226 290 329
General index excluding
exports 100 112 151 196 217 256 292 320
General index 100 114 157 232 247 283 323 354
/a Average index for each year.
Source: Indikator Ekonomi (BPS).
ANNEX
Table 9.4
- 114 -
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Domestic Price of Petroleum Products, 1972-79
(Rp/liter)
1972 1973 1974 1975 1976 1977 1978 1979
Aviation gas 35 40 50 62 70 70 70 100
Aviation turbo 30 40 50 62 70 70 70 100
Premium gasoline 40 45 55 67 90 90 90 140
Regular gasoline 35 41 46 57 70 70 70 100
Kerosene 10 11.50 13 16 18 18 18 25
Motor diesel 14 16 19 22 25 25 25 35
Industrial diesel 8.50 9 13 19 22 22 22 30
Fuel oil 6.50 7.50 12 19 22 22 22 30
Source: Migas.
ANNEX
- 115 - Table 10.1
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Approved Foreign Investment /a by Sector. 1967-79
(US$ million)
/b Total
Sector 1967-73 1974 1975 1976 1977 1978 1979 1967-79
Agriculture 99.7 2.6 1.0 8.2 41.1 2.2 15.4 170.2
Forestry 429.8 54.8 12.3 34.1 33.5 35.6 7.3 607.4
Fishery 28.0 16.8 13.7 5.8 4.9 21.1 35.5 125.8
Mining & quarrying 477.5 69.0 507.2 3.6 200.0 44.9 150.0 1,452.2
Manufacturing 1,139.8 832.0 1,159.2 357.1 361.9 299.0 559.0 4,708.0
Food 92.0 31.6 19.8 74.9 7.7 16.1 48.0 290.1
Textiles & leather 539.8 351.3 29.2 24.2 72.6 119.2 65.7 1,202.0
Wood & wood products 7.7 8.8 21.9 5.5 - 1.0 - 44.9
Paper & paper products 14.6 1.3 18.2 66.2 9.7 0.5 5.5 116.0
Chemical & rubber 179.1 68.0 66.6 36.2 78.0 22.9 36.94 820.0
Nonmetallic minerals 118.5 129.5 99.6 72.0 99.0 18.4 29.0 566.0
Ferrous metals 54.7 179.5 875.6 11.9 18.4 10.0 - 1,150.1
Metal products 130.4 59.4 28.3 66.1 76.5 104.0 41.4 506.0
Others 3.0 2.6 - 0.2 - 6.9 - 12.7
Construction 44.1 14.4 8.6 1.2 3.4 5.2 0.5 77.4
Trade & Hotels 120.8 13.0 21.3 14.2 0.6 9.7 3.0 182.6
Wholesale trade 10.9 - - 0.7 - - - 11.6
Hotels 109.9 13.0 21.3 13.5 0.6 9.7 3.0 171.0
Transport & Communication 30.1 2.4 20.3 4.0 5.0 36.5 - 98.3
Transport 24.0 2.4 16.9 4.0 - - - 47.3
Communication 6.1 - 3.4 - 5.0 36.5 - 51.0
Real estate & business services 98.7 81.4 9.5 27.3 6.0 22.7 45.8 291.4
Other services 16.1 - - - - 2.0 - 18.1
Total 2,484.6 1,086.4 1,753.1 455.5 656.4 478.9 816.5 7,731.4
/a Intended capital investment. Amounts represent original approval plus approved expansion
minus cancellation.
/b Up to November.
Source: Investment Board.
ANNEX
- 116 - Table 10.2
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Implementation of Foreign Investment by Sector, 1967-79
(US$ million)
Total
Sector 1967-72 1973 1974 1975 1976 1977 1978 1967-78
Agriculture 16.6 7.9 4.5 3.2 8.0 12.5 10.1 62.8
Forestry 112.0 40.9 50.3 34.4 22.7 22.1 15.0 297.4
Fishery 19.6 6.5 21.9 11.3 8.5 2.8 13.5 84.1
Mining & quarrying 165.5 6.6 44.3 40.4 42.4 20.1 57.3 376.6
Manufacturing 357.8 306.7 368.5 392.4 301.2 186.2 267.0 2,179.8
Food 55.2 34.8 21.7 13.9 10.8 11.9 14.9 163.2
Textiles & leather 136.1 149.5 157.7 181.8 91.8 27.9 31.4 776.2
Wood & wood products 3.4 0.3 1.8 10.6 4.6 1.4 0.4 22.5
Paper & paper products 7.3 5.1 1.5 0.7 3.3 9.6 11.8 39.3
Chemical & rubber 58.4 37.1 50.8 45.9 45.7 28.0 71.7 337.6
Nonmetallic minerals 11.8 29.3 44.2 54.2 71.3 42.9 9.0 262.7
Ferrous metals 9.1 11.0 17.7 43.3 30.7 27.8 37.8 177.4
Metal products 70.0 37.7 72.2 41.1 42.4 35.4 89.9 388.7
Others 6.5 1.9 0.9 0.9 0.6 1.3 0.1 12.2
Construction 4.0 1.5 16.6 7.9 4.5 3.0 1.4 38.9
Trade & Hotels 16.5 17.9 19.6 8.2 17.6 6.2 17.2 103.2
Wholesale trade 1.4 8.4 0.1 0.2 - 0.7 10.8
Hotels 15.1 9.5 19.6 8.1 17.4 6.2 16.5 92.4
Transport & Communication 7.7 0.9 1.1 2.2 4.4 2.0 4.7 23.0
Transport 3.0 0.6 0.7 1.2 4.2 1.8 1.3 12.8
Communication 4.7 0.3 0.4 1.0 0.2 0.2 3.4 10.2
Real estate & business
services 10.7 4.9 24.9 23.7 12.3 3.8 14.0 94.3
Others - - 82.2 23.4 3.9 0.1 5.0 114.6
Total 710.4 393.8 633.9 547.1 425.5 258.8 405.2 3,374.7
Source: Bank Indonesia.
ANNEX
- 117 -
Table 10.3
INDONESIA
COUNTRY ECONOMIC MEMORANDUM
Approved Domestic Investment /a by Sector, 1967-79
(Rp billion)
/b Total
Sector 1967-73 1974 1975 1976 1977 1978 1979 1967-79
Agriculture,
fisheries &
livestock
61.8 8.6 18.0 43.5 50.0 100.4 36.4 318.7
Forestry
139.3 32.1 6.1 6.3 64.0 58.5 78.0 384.3
Mining
47.6 2.4 - - - 18.3 32.9 101.3
ManufacturinR
755.5 170.4 186.0 192.8 396.6 531.2 493.8 2,726.3
Textile
301.5 65.3 38.8 43.1 74.5 167.6 40.3 731.0
Chemicals
106.4 21.0 38.0 14.0 95.9 103.0 140.2 518.5
Electric manu-
facturing
19.9 2.1 2.2 - - - - 24.2
Other manufac-
turing
327.7 82.0 107.0 135.7 226.2 260.6 313.3 1,452.5
Construction
14.2 - - 1.2 - 2.6 2.1 17.7
Hotel
76.1 2.3 1.4 6.8 4.1 11.6 12.4 114.6
Real estate
77.2 - 15.2 37.6 38.8 15.1 3.8 187.7
Others
88.9 14.5 8.3 7.4 19.9 24.2 16.4 179.6
Total 1,260.6 230.3 235.0 293.2 573.4 761.9 675.8 4,030.2
/a Intended capital investment. Figures represent original approvals plus
approved expansions minus cancellations.
/b Up to November.
Source: Investment Coordinating Board.