Budy P. Resosudarmo

The Indian Ocean Tsunami: Economic Impact, Disaster Management and Lessons

This paper documents and analyzes the immediate economic impact of the Indian Ocean tsunami generated by the Sumatra-Andaman earthquake of 26 December 2004, with a focus on Indonesia (Aceh province) and Sri Lanka, and assesses the disaster management process. The preliminary findings point to the importance of educating the public about simple precautions in the event of a disaster and enforcing coastal environmental regulations. The findings also argue for designing policies and programs, as an integral part of national development strategies, for mitigating the impact of natural disasters on the poor and highlight the need for combining international aid commitments with solutions to the limited aid-absorptive capacity in disaster-affected countries.

Indonesia’s Changing Economic Geography

Abstract Indonesias regional socio-economic data base extends over 30 years, so it is now possible to draw conclusions about regional development dynamics since the 1970s. We examine economic growth, inequality, convergence, structural change, demographic dynamics and social indicators over this period. There continues to be great diversity in economic and social outcomes, but growth and social progress have been remarkably even: the poorest regions, located mainly in Eastern Indonesia, have generally performed about as well as the national average. The better performing regions include those that are the most ‘connected’ to the global economy. In this respect, Jakarta stands out, growing richer than the rest of the country over time. As expected, conflict is harmful to economic development. There is no clear natural resource story: the performance of the resource-rich provinces has varied considerably.

The impact of environmental policies on household incomes for different socio-economic classes: The case of air pollutants in Indonesia

Abstract With outdoor air pollutants in Indonesia as a case study, this paper expands a Social Accounting Matrix to include the link from the economy to the environment, as well as the link from the environment to the economy. This paper explores the relationship between production activities, pollution, and human health problems. It utilizes the Constrained Fixed Price Multipliers method to analyze the impact of policies designed to reduce the amount of pollutants in the air on household incomes for different socio-economic classes in Indonesia. The results show that if policies designed to reduce the amount of pollutants in the air do not decrease the output of production sectors, then the policies also improve income distribution.

Training and Visit (T&V) Extension vs. Farmer Field School: The Indonesian Experience

For several decades the effective and efficient dissemination of new agricultural knowledge among farmers in developing countries has been problematic. Two major programs were implemented in Indonesia, namely The Training and Visit (T&V) Extension Program or The Massive Guidance (BIMAS) Program, from the mid 1960s until the end of the1980s, and the Farmer Field School (FFS) Program, during the 1990s. The main difference between these two programs is that, while farmers were instructed what to do under the T&V program, the FFS program encouraged and stimulated farmers to make their own decisions. This paper aims to discuss and compare the effectiveness of these two programs with reference to rice production in Indonesia. The findings suggest that, for regions where the level of development is still very low, implementing a T&V program instructing farmers what to do is probably more appropriate than an FFS. As for regions where agriculture is relatively developed, an effective FFS program seems more appropriate.

The Political Economy of Indonesian Economic Reforms: 1983-2000

This paper investigates the political economy behind the three economic reforms in Indonesia, in 1983–91, 1994–97 and the reform under the IMF umbrella immediately after the 1997–98 economic crisis. The prevailing belief is that the Indonesian political economy scenario during those periods closely matched that of Weberian patrimonialism, in which the patron–client system was managed personally by Soeharto. Our findings indicate that, whereas economic reform was possible within the patron–client system in the initial stages of economic reform, this was not the case in later stages.

Computable General Equilibrium Model on Air Pollution Abatement Policies with Indonesia as a Case Study

This paper is to develop an economic model that is appropriate to analyse the expected impact of air pollution policies on national economic performance and on household incomes for various socio-economic groups. The model includes the impact of economic activities on air quality in urban areas as well as the impact of urban air quality on the economy. Application of this model in Indonesia suggests that an implementation of policies to improve urban air quality might also induce a higher GDP and increase the income of poor households in the country.

River water pollution in Indonesia: An input-output analysis

Data from global environmental monitoring activities have shown alarming environmental conditions in many developing countries. Environmental policies that could improve the environment significantly, while at the same time maintaining the growth of economic activities are needed. Using an input-output analysis, this paper researches such policies with a view to applying them to Indonesias river water pollution. Firstly, this paper reviews river water quality and current policies in Indonesia. Secondly, it develops future policies to control such pollution.

A Bayesian belief network model for community-based coastal resource management in the Kei Islands, Indonesia

Understanding the specific relationships between ecological and socioeconomic conditions and marine tenure is likely to contribute to successful functioning of self-governance institutions for common-pool resources. Complex interrelationships of factors influencing fishing activities of coastal communities and implementation of customary marine tenure over their waters can be represented in a Bayesian belief network model. We developed a Bayesian belief network model that includes the links between factors for fishing communities in the Kei Islands in Indonesia, based on indepth local surveys. Our results showed that the cumulative impacts of multiple factors on key social, economic, and environmental outcomes can be much larger than the impact from a single source, which implies that management or policy intervention could be more effective when addressing multiple factors simultaneously. The local communitys perception of fish stock abundance trends was the single most important factor influencing social, economic, and environmental outcomes of their community-based management system. The frequency of which outsiders were sighted in territorial waters was strongly (negatively) linked to weak or strong implementation of a customary tenure (Sasi) and the occurrence of intervillage and intravillage conflict. Ecological variables also drive these conflicts, which illustrates the close connection between ecological and social outcomes, and the importance of considering social-ecological systems as a whole.

Is the Log Export Ban an Efficient Instrument for Economic Development and Environmental Protection? The Case of Indonesia

The effectiveness of a log export ban policy in achieving the twin goals of conservation and economic development has been vigorously debated by many researchers and policymakers for the last two decades or so. Despite the abundance of work focusing on this issue that demonstrates the perversity of such policies, many countries around the world still implement them. This paper will first review the economic and political arguments in regard to the pros and cons of this policy. Second, it will review the Indonesian experience in implementing a log export ban policy in the 1980s and 2000s. Third, using a computable general equilibrium model, this paper will predict the anticipated impact of implementing a log export ban policy on the national economy and on household incomes for various socioeconomic groups.

Energy Security in Indonesia

The issue of energy security has been a subject of discussions in Indonesia for a long time. However, until the end of the 1990s, it had never been at the centre of the countrys policy debates. The sharp depreciation of Rupiah during the 1997/98 Asian financial crisis and increase in the price of crude oil in the early 2000s made it very expensive to control domestic prices of fuel and electricity through subsidies. With approximately 43 percent of the countrys energy sources derived from crude oil, the amount of government spending on energy subsidies increased from almost nothing in 1996 to approximately 21 percent of total government expenditure in 2005. Whether the government could guarantee Indonesias energy needs at an affordable price, and how to achieve it, has therefore become one of the hottest policy issues. This paper probes reasoning behind the current energy security policies and discusses some of the main policy challenges, paying special attention to the emerging interest on climate change issues.