CHAPTER 5 SOCIO-ECONOMICAL FEATURES

Transcription

1 CHAPTER 5 SOCIO-ECONOMICAL FEATURES OF TARGETED THREE PROVINCES

2 CHAPTER 5 SOCIO-ECONOMIC FEATURES OF TARGETED THREE PROVINCES 5.1 GENERAL Population The Government of Indonesia adopts a fiscal year ending on March 31. Therefore, years indicated in this study are those beginning from April 1 unless otherwise stated Currency Indonesia s currency is Rupiah, and abbreviated as Rp POPULATION AND LABOR FORCE Population According to the last population census in Indonesia, the total population of Indonesia has become 203,000 thousand as of 2000, with an annual average population growth rate of 1.85 % since 1971 as summarized in Table hereunder. Total number of households in the nation was 51,500 thousand HHs with an average family size of 3.94 persons per HH. Table Population and Number of Households (1,000) Population Number of Family projection households size ,490 30, ,379 39, ,755 45, ,115 51, Source: - Statistical Year Book of Indonesia 1999, Central Statistic Organization. - Penduduk Indonesia - Hasil Sensus Penduduk , Seri: RBL1.2, Central Statistic Organization. Table shows a population by Provinces as of 2000 with number of households and their family sizes. 5-1

3 Table Population by Provinces and Their Number of Households in 2000 Province Population HHs Family size Daerah Istimewah Aceh 4, North sumatra 11,469 2, West Sumatra 4,228 1, Riau 4,724 1, Jambi 2, South Sumatra 7,756 1, Bengkulu 1, Lampung 6,644 1, Daerah Khusu Ibukota Jakarta 8,356 2, West Jawa 43,547 11, Central Jawa 30,851 7, Daerah Istimewah Yogyakarta 3, East Jawa 34,508 9, Bali 3, West Nusa Tenggala 3, East Nusa Tenggala 3, East Timor (To be continued) Province Population HHs Family size West Kalimantan 3, Central Kalimantan 1, South Kalimantan 2, East Kalimantan 2, North Sulawesi 2, Central Sulawesi 2, South Sulawesi 7,778 1, Sulawesi Tenggala 1, Maluku 1, Irian Jaya 2, Whole Indonesia 203,115 51, Source: Penduduk Indonesia, Hasil Sensus Penduduk 2000, In this Project, the targeted provinces are North Sulawesi Province, West Nusa Tenggara Province and East Nusa Tenggara Province. Table shows population of these 3 provinces by Kabupatens of them. According to this table, family sizes of the targeted 3 provinces are 4.42 persons/hh, 4.90 persons/hh, and 3.87 persons/hh in South Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province respectively which they are rather high than the average one in the nation except West Nusa Tenggara Province. 5-2

4 Table Population and Number of Households of Targeted Provinces in 2000 A. South Sulawesi Province Area Population Households Family size (km 2 ) (persons) (HHs) (psns/hh) Kabupaten 62,087 6,587,723 1,480, Selayar ,473 26, Bulukumba 1, ,606 82, Bantaeng ,636 36, Jeneponto ,481 73, Takalar ,381 51, Gowa 1, , , sinjai ,565 42, Maros 1, ,792 59, Pangkajene Kepulauan 1, ,785 57, Barru 1, ,247 35, Bone 4, , , Soppeng 1, ,283 53, Wajo 2, ,983 82, Sidenreng Rappang 1, ,606 55, Pinrang 1, ,876 69, Enrekang 1, ,361 34, Luwu 17, ,556 84, Tana Toraja 3, ,870 84, Polewali Mamasa 4, ,586 99, (To be continued) 5-3

5 Area Population Households Family size (km 2 ) (persons) (HHs) (psns/hh) Majene ,272 26, Mamuju 11, ,229 67, Luwu Utara - 435,043 96, Kotamadya 275 1,199, , Makassar 176 1,091, , Pare Pare ,933 23, Total 62,362 7,787,299 1,760, B. East Nusa Tenggala Province Area Population Households Family size (km 2 ) (persons) (HHs) (psns/hh) Kabupaten 47,190 3,889, , Sumba Barat 4, ,743 61, Sumba Timur 7, ,569 36, Kupang 7, ,546 89, Timor Tengah Selatan 3, ,814 88, Timor Tengah Utara 2, ,033 44, Belu 2, ,384 59, Alor 2, ,237 35, Lembata - 89,736 21, Flores Timur 3, ,153 41, Sikka 1, ,643 53, Ende 2, ,222 48, Ngada 3, ,222 43, Manggarai 7, , , Kotamadya 160 * 52,321 * Kupang 160 * 52,321 * Total 47,350 3,889, , (Remark) Population of Kotamadya Kupang is included in that of Kabupaten Kupang. C. West Nusa Tenggala Province Area Population Households Family size (km 2 ) (persons) (HHs) (psns/hh) Kabupaten 20,097 3,821, , Lombok Barat 1, , , Lombok Tengah 1, , , Lombok Timur 1, , , Sumbawa 8, , , Dompu 2, ,474 41, Bima 4, , , Kotamadya 56 * 80,417 * Mataram 56 * 80,417 * Total 20,153 3,821, , (Remark) Population of Kotamadya Mataram is included in that of Kabupaten Lombok Barat. Sources: 1. Penduduk Indonesia, Hasil Sensus Penduduk 2000, Central Statistic Organization. 2. Sulawesi Selatan Dama Angka 1999, Statistic Office of Sulawesi Selatan Province. 3. Nusa Tenggala Timur Dalam Angka 1999, Statistic Office of Nusa Tenggala Balat Province. 4. Nusa Tenggala Barat Dalam Angka 1999, Statistic Officed Nusa Tenggala Barat Province. Note: - Lack of data. 5-4

6 5.2.2 Labor Force Table shows the economic active population (the labor force) as of According to this table, unemployment rates of 3 provinces are 6.48 %, 2.93 % and 1.44 % in North Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province respectively which they are rather low than the average one in the nation except North Sulawesi Province. The unemployment rates of the latter 2 provinces seem to be too low compared with the other provinces in Indonesia. It may say that these low unemployment rates are reflecting high infant mortality rate. This means that the latter 2 provinces are in high poverty level compared with the other provinces. Table Population Aged 15 Years and Over by Province and by Type of Activity (As of 1999) Province Economic active population Non-economic active population Economic Active Total Looking for work Unemployment rate Others Total Total Workable Population to Attending Housekeeping Population Workable Working Ever Never Sub-total Sub-total School Worked Worked Population Daerah Istimewah Aceh 1,530,094 27,630 97, ,122 1,655, % 272, , ,964 1,029,250 2,684, % North sumatra 4,668, , , ,686 5,056, % 820,539 1,046, ,356 2,272,455 7,328, % West Sumatra 1,823,061 23,000 90, ,948 1,937, % 296, , ,036 1,051,068 2,988, % Riau 1,583,940 39,831 90, ,736 1,714, % 243, , ,785 1,075,662 2,790, % Jambi 1,103,640 9,272 30,452 39,724 1,143, % 114, , , ,484 1,735, % South Sumatra 3,296,447 61, , ,559 3,471, % 327, , ,103 1,499,190 4,970, % Bengkulu 733,329 7,499 18,266 25, , % 87, ,929 43, ,164 1,024, % Lampung 3,041,148 29, , ,931 3,187, % 352, , ,892 1,468,539 4,655, % Daerah Khusu Ibukota Jakarta 3,785, , , ,322 4,453, % 835,923 1,560, ,607 2,944,989 7,398, % West Jawa 16,181, ,154 1,176,230 1,764,384 17,945, % 2,273,346 6,473,917 2,292,492 11,039,755 28,985, % Central Jawa 14,621, , , ,921 15,286, % 1,456,063 3,083,223 1,359,235 5,898,521 21,184, % Daerah Istimewah Yogyakarta 1,524,870 22,566 36,670 59,236 1,584, % 306, ,707 94, ,514 2,275, % East Jawa 16,982, , , ,478 17,865, % 1,578,840 4,629,507 1,540,282 7,748,629 25,614, % Bali 1,711,968 16,189 27,510 43,699 1,755, % 160, , , ,781 2,299, % West Nusa Tenggala 1,715,734 6,128 18,964 25,092 1,740, % 153, , , ,638 2,415, % East Nusa Tenggala 1,689,199 9,233 41,674 50,907 1,740, % 120, , , ,469 2,369, % East Timor West Kalimantan 1,695,002 5,500 29,427 34,927 1,729, % 178, , , ,399 2,486, % Central Kalimantan 789,521 7,019 23,025 30, , % 85, ,172 61, ,309 1,167, % South Kalimantan 1,545,621 12,639 24,825 37,464 1,583, % 120, , , ,601 2,167, % East Kalimantan 1,039,086 53,614 74, ,265 1,167, % 147, ,816 91, ,599 1,797, % North Sulawesi 1,161,616 20,922 76,650 97,572 1,259, % 164, , , ,918 2,064, % Central Sulawesi 968,538 12,086 32,438 44,524 1,013, % 102, ,253 70, ,359 1,439, % South Sulawesi 3,077,630 44, , ,185 3,290, % 402,823 1,294, ,472 2,174,626 5,465, % Sulawesi Tenggala 703,876 4,456 27,602 32, , % 95, ,466 47, ,068 1,068, % Maluku 919,123 9,909 35,396 45, , % 147, ,428 87, ,154 1,432, % Irian Jaya 925,123 16,471 46,994 63, , % 88, ,412 48, ,098 1,286, % Whole In donesia 88,816,859 2,051,032 3,979,287 6,030,319 94,847, % 10,934,731 25,857,621 9,456,887 46,249, ,096, % Source: Statistical Year Book of Indonesia 2000, Central Statistic Organization. Distribution of employed population in Indonesia as of 1999 is illustrated in Figure As shown in this figure, most of employed population has been engaged in the industrial group of agriculture, forestry, hunting and fishery with a share rate of 43.5 %. 5-5

7 Agriculture, forestry, hunting & fishery 43.46% 0.82% Mining & quarrying Public services 13.84% Transportation, storage 0.72% and communication 4.76% Financing, insurance, real estate & business services 19.28% Wholesale, trade, retail trade, restaurant & hotel 13.04% Manufacturing 0.21% Electricity, gas & water 3.87% Construction Source: Statistical Year Book of Indonesia 1999, Central Statistic Organization. Figure Share of Working Population in Indonesia in 1999 Following figures shows share rates of working population in 3 targeted provinces. As shown in the figures below, almost half populations of the provinces are engaged in agriculture reflecting their development status. In the nation, the share rate of population engaging in the working category of Electricity, Gas and Water was 0.21 % in 1999, while in South Sulawesi Province, it was rather high as 0.28 % but the other 2 provinces show quite low share rates as less than 0.1 % in the same year. A. South Sulawesi province Agriculture, forestry, hunting & fishery 54.71% Public services 15.06% Financing, insurance, real 0.32% estate & business services 3.96% Transportation, storage and communication 17.17% Wholesale, trade, retail trade, restaurant & hotel 0.28% Mining & quarrying 5.39% Manufacturing 0.28% Electricity, gas & water 2.83% Construction B. East Nusa Tenggara province Agriculture, forestry, hunting & fishery 68.49% Public services 9.93% Financing, insurance, real 0.54% estate & business services 1.44% Transportation, storage and communication 6.18% Wholesale, trade, retail trade, restaurant & hotel 0.10% Mining & quarrying 10.55% Manufacturing 0.09% Electricity, gas & water 2.67% Construction 5-6

8 C. West Nusa Tenggara province Agriculture, forestry, hunting & fishery 47.41% 3.83% Mining & quarrying Public services 1.31% Financing, insurance, real 0.31% estate & business services 4.27% Transportation, storage and communication 17.23% Wholesale, trade, retail trade, restaurant & hotel Manufacturing 0.06% Electricity, gas & water 4.30% Construction Source: Statistical Year Book of Indonesia 1999, Central Statistic Organization. Fig Share of Working Population of 3 Targeted Provinces in 1999 Also according to the above figures, it seems that 2 provinces of South Sulawesi and West Nusa Tenggara have abundant tourist resources comparing with East Nusa Tenggara Province. 5.3 GROSS DOMESTIC PRODUCT (GDP) AND GROSS REGIONAL DOMESTIC PRODUCT (GRDP) Following table shows the Gross Domestic Product (GDP) in Indonesia in current prices and in 1985/86 constant price. Table Gross Domestic Product in Indonesia (billion Rupiah) Industrial origin Current price Constant 1993 market price Annual average growth rate Agriculture, livestock, forestry & fisheries 88, , , ,879 63,828 64,468 64,988 65, % Mining & quarrying 46,088 55, , ,646 37,739 38,538 37,353 37, % Manufacturing industry 136, , , , , ,630 94,848 96, % Electricity, gas & water supply 6,893 7,832 11,149 13,160 4,877 5,480 5,582 5, % Construction 42,025 46,679 55,591 66,360 32,924 35,346 21,035 21, % Trade, hotels & restaurants 87,137 99, , ,818 69,475 73,524 60,253 59, % Transportation and communication 34,926 38,531 51,937 66,077 29,701 31,783 26,975 26, % Financial, ownerships & business services 43,982 54,360 70,007 70,432 36,384 38,543 28,279 25, % Services 46,299 55,962 82,472 98,406 36,610 37,935 36,739 37, % Gross Domestic Product (GDP) 532, ,695 1,002,333 1,107, , , , , % Mid-year population (1,000) 196, , , , , , , ,915 - Per-Capita GDP (Rupia) 2,706,957 3,141,037 4,940,692 5,377,419 2,102,557 2,167,997 1,853,631 1,830, % Source: Statistical Year Book of Indonesia 1999, Central Statistic Organization. According to the above table, GDP of whole Indonesia has increased in current amount, but has actually decreased since 1997 with an annual average rate of 3.1 % when turned up the Rupiah Crisis. As of 1999, major economical activities were the industrial origin of agriculture, livestock, forestry & fisheries, manufacturing industry, and trade, hotels & restaurants as indicated in Figure

9 Financing, insurance, real estate & business services 6.36% 8.89% Public services 19.41% Agriculture, forestry, hunting & fishery Transportation, storage and communication 5.97% 9.90% Mining & quarrying Wholesale, trade, retail trade, restaurant & hotel 16.51% 5.99% Construction 1.19% Electricity, gas & water 25.78% Manufacturing Figure Share of GDP in Indonesia by Industrial Origin as of 1999 While, the GRDP in target provinces are as shown in Table Table Gross Regional Domestic Product in Target Provinces A. South Sulawesi Province (billion Rupiah) Current price Constant 1993 market price Annual average growth rate Agriculture, livestock, forestry & fisheries 4,561 5,294 10,049 10,089 3,448 3,429 3,427 3, % Mining & quarrying ,325 1, % Manufacturing industry 1,350 1,610 2,466 2,625 1,128 1,247 1,175 1, % Electricity, gas & water supply % Construction , % Trade, hotels & restaurants 1,745 1,981 2,906 3,554 1,515 1,622 1,576 1, % Transportation and communication ,281 1, % Financial, ownerships & business services % Services 1,358 1,537 1,896 2,304 1,135 1,190 1,096 1, % Gross Regional Domestic Product (GRDP) 11,833 13,538 21,951 24,065 9,486 9,893 9,366 9, % Per-Capita GDP (Rupia) 1,548,429 1,742,421 2,779,422 2,998,404 1,241,280 1,273,342 1,185,959 1,199, % B. East Nusa Tenggala Province (billion Rupiah) Current price Constant 1993 market price Annual average growth rate Agriculture, livestock, forestry & fisheries 1,297 1,750 2,040 2,465 1,022 1,106 1,064 1, % Mining & quarrying % Manufacturing industry % Electricity, gas & water supply % Construction % Trade, hotels & restaurants % Transportation and communication % Financial, ownerships & business services % Services % Gross Regional Domestic Product (GRDP) 3,333 4,083 4,868 5,597 2,686 2,836 2,759 2, % Per-Capita GDP (Rupia) 920,459 1,107,737 1,297,482 1,466, , , , , % (To be continued) 5-8

10 C. West Nusa Tenggala Province (billion Rupiah) Current price Constant 1993 market price Annual average growth rate Agriculture, livestock, forestry & fisheries 1,461 1,630 3,392 3,328 1,160 1,180 1,180 1, % Mining & quarrying % Manufacturing industry % Electricity, gas & water supply % Construction % Trade, hotels & restaurants ,359 1, % Transportation and communication % Financial, ownerships & business services % Services , % Gross Regional Domestic Product (GRDP) 3,986 4,534 7,751 8,234 3,195 3,363 3,239 3, % Per-Capita GDP (Rupia) 1,081,036 1,208,115 2,029,319 2,118, , , , , % Source: Gross Regional Domestic Product of Provinces in Indonesxia by Industrial Origin , Central Statistic Organization. 5.4 FINANCIAL SITUATION OF THE NATION AND THE PROVINCES Finance in the Nation Government finances of Indonesia has been growing from Rp.99,530 billion in 1996/97 to Rp.215,130 billion in 1998/99 with an average annual growth rate of 47 % in revenue. However, the expenditure has also grown from the Rp.98,513 billion to Rp.215,586 billion during the same period with an average annual growth rate of 48 % as shown in the following Table Therefore, the Government of Indonesia has registered a deficit at a sum of Rp.456 billion as of 1998/99 fiscal year. 5-9

11 I t e m Table Actual Revenue and Expenditure of Indonesia 1996/ / /99 (Billion Rp.) Annual avaerage growth ratio REVENUE 99, , , % Routine Revenue 87, , , % Oil & gas revenue 20,137 35,357 41, % Non oil & gas revenue 67,493 72, , % Income tax 27,062 28,458 49, % Tgoods & services/tax on sales of luxury goods 20,351 24,501 28, % Import duties 2,579 2,990 2, % Excise duties 4,263 4,807 7, % Export tax , % Other taxes % Land tax/taxes on land & building 2,413 2,655 3, % Non tax revenues 10,153 8,761 15, % Other oil revenues Development Revenue 11,900 23,817 62, % Programs aid ,403 Projects aid 11,900 23,817 25, % Routine Expenditure 98, , , % Personal expenditures 14,454 19,174 24, % Material expenditures 8,109 9,032 11, % Subsidies to autonomous region 9,358 9,873 14, % Interest & debts repayment 27,491 29,697 55, % Other 3,149 16,830 42, % Development Expenditure 35,952 47,200 67, % Development - institutions 12,159 11,576 13, % Development subsidies to villages % Development subsidies to regencies 2,941 3,465 3, % Development subsidies to provinces 1,394 1,662 1, % Government capital participation , % Fertilizer subsidy , % Construction of primary schools % Retribution for regional development (IPEDA) 2,396 2,416 2, % Sanitary facilities/public health centers % Presidential subsidies to village development (INPRES) % Others 2,008 1,116 14, % Projects aid 11,900 23,817 25, % Surplus/Deficit 1, Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization. Among the development expenditures, development subsidies to desas (villages), Kabupatens (regencies) and provinces of whole Indonesia have been grown with a rates of 2.05 % (from Rp.458 billion to Rp.477 billion), % (from Rp.2,941 billion to Rp.3,730 billion) and % (from Rp.1,394 billion to Rp.1,741 billion) respectively Finance in the Targeted Provinces On the other hand, the financing situations of the targeted provinces are shown in the following Table

12 Table Local Autonomous Financial Situation of the Targeted Provinces in 1998/99 (Miilion Rp.) South Sulawesi Province East Nusa Tenggara Province West Nusa Tenggara Province Amount Share Share Share Amount Amount rate(%) rate(%) rate(%) REVENUE 262, % 132, % 139, % Balance at the beginning of the year 35, % 7, % 16, % Internal revenue 67, % 17, % 24, % Local tax 52,499 13,328 Local retribution 5,158 4,646 Income from establishment 1, Income from services 0 0 Other income 8,413 5,638 Quotient Tax/Non Tax Revenue 47, % 8, % 7, % Quotient tax revenue 16,621 4,380 Quotient non tax revenue 31,163 3,400 Contribution and Subsidies 46, % 98, % 87, % Contribution 0 22,239 Subsidies 46,974 65,576 Development Receipts 64, % % % Local loans 64,389 0 Local Establishment loans 0 0 Cash Affairs and Account Receipts % % 3, % EXPENDITURE 218, % 122, % 107, % Routine Expenditure 99, % 50, % 47, % Personal expenditures 45, % 20, % 22, % Orderstand - other current expenditure % % 1, % Material expenditures 25, % 12, % 8, % Care cost - repair & maintenance 5, % 1, % 1, % Official transportation cost - inspection 6, % 3, % 1, % Debt repayment and interest % % % Current transfer for lower regions 10, % 3, % 4, % Other unpredictable current expenditure % 4, % % Others 6, % 4, % 8, % Development Expenditure 119, % 72, % 56, % Agriculture and forestry 17, % 2, % 8, % Industry % % % Mining & energy % % % Transportation, communication & tourism 25, % 38, % 30, % Trade, business & cooperatives 5, % 1, % 5, % Man power & resettlement % % % Water resources and irrigation 12, % 2, % 2, % Regional development 3, % 8, % 1, % Religeous affairs % % % Environmental & space order 7, % 6, % Educational, youth, culture, etc. 3, % 1, % % Health, social welfare & family planning 5, % 2, % 1, % People dwelling 5, % 1, % 1, % Security & order % % % Political information and communication % % 1, % Government apparature & controlling 7, % 4, % Science, technology and research 1, % % % Law % % % Development subsidies to lower region 21, % % % Civil servants 10, % Otrher development expenditures 1, % Cash Affairs and Account on Current Expenditure 3, % Surplus/Deficit 44,393 9,536 31,979 Reference: Population as of ,886,549 3,706,536 3,875,311 Sources: - Sulawesi Selatan Dalam Angka 1999, BPS Selsel Office. - Nusa Tenggara Timur Dalam Angka 1999, BPS NTT office. - Nusa Tenggarfa Bazrat Dalam Angka 1999, BPS NTB Office. 5-11

13 According to the above table, revenues of each province per capita were almost same amounts as Rp.33,300 in South Sulawesi Province, Rp.35,700 in East Nusa Tenggara Province and Rp.36,000 in West Nusa Tenggara Province. However, internal revenue mainly consisting of income taxes and fees and revenue from commercial activities itemized as quotient tax/non tax in South Sulawesi Province was quite high comparing with other 2 provinces. The internal revenue amounted at Rp.67,958 million in South Sulawesi Province had reached by almost 4 times of that in East Nusa Tenggara Province and 3 times of that in West Nusa Tenggara Province, and the amount quotient tax/non tax in South Sulawesi Province was Rp.47,785 million, and this amount was around 5.5 times and 6.1 times of those in other 2 provinces respectively. Share rates of these 2 revenue items to the total revenue were 44.1 % in South Sulawesi Province, 19.9 % in East Nusa Tenggara Province and 22.9 % in West Nusa Tenggara Province. On the other hand, the amounts of contribution and subsidies in South Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province were Rp.46,974 million (17.9 % of the total revenue), Rp.98,629 million (74.5 %) and Rp.87,814 million (62.9 %) respectively. As is witnessed by the above mentioned fact that South Sulawesi Province has considerable high economic activities, and the other 2 provinces may not be kept going financially without contribution and subsidies. From this viewpoint, it may say that South Sulawesi Province is a suitable province for construction of pilot plant at the first setout because they have an adequate financial room to subsidize to lower regions if necessary. A Situation of expenditures can also bear out the above. In Indonesia, there are 2 kinds of subsidies as current transfer to lower regions and development subsidy to lower region. In South Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province, disbursed amounts of total subsidies to their lower regions consisting of both the 2 items above were Rp.31,842 million, Rp.4,826 million and Rp.4,558 million respectively. From the viewpoint of per capita expenditure for these subsidies of each province, they may be expressed as Rp.4,040, Rp.1,300 and Rp.1,180 respectively. As indicated, it is quite apparent that South Sulawesi Province has a high affordability to subsidize to their people Tax Collection System in Indonesia A main source of both the central and local Government is tax revenue as indicated in Tables and In former time, taxes belong to the Government were collected by local branches of the central taxation offices under the control of the Government, and all of these tax revenues had been sent directly to the National Treasury. After that, the Government allots these tax revenues to local autonomies uniformly taking only a little specialty of the regions into consideration named as contributions and/or national subsidies. Therefore, local autonomies being in poor level had kept almost the same scale of their budgets with the local autonomies being in rich level in compliance with, for example, population as mentioned in clause. On the occasion that the decentralization has become effective on January 2001, the tax 5-12

14 collection system in Indonesia is changed. Such national taxes as income tax, taxes on goods and services on sales of luxury goods, and export and import duties and/or customs are still belong to the Government, but these taxes has become to collect by the local autonomies as provinces and regencies (Kabupatens) on their own hands, and they send some amount of tax revenues to the Government with certain rate in proportion of the scale of such revenues. Therefore, the local autonomies being in rich level with plentiful natural resources and being in the high level of economic activities will be richer, while the new tax collection system may compels the local autonomies being in poor level at present to redouble their exertions for development of economic activities to get more revenues. South Sulawesi Province is in not so much poor level, but in not so much high level. They have decent resources for development of economic activities, and they have a potentiality to become richer only in case of doing the right way. 5.5 GENERAL STATUS OF WHOLE NATION The Indonesian economic crisis that started in July 1997 had created pressure on the local currency of Rupiah with its rapid devaluation picking up it s pace towards the end of It also led to the end of the Soeharto regime in May The overall impacts were very severe, with a GDP decrease of 13% in 1998 and virtually zero percent in economic growth rate in In fiscal year 1996/97, domestic inflation rate was less than 8%, while in the following three fiscal years it has been as 20%, 45% and 15%. The national debt stands at over US$ 143 billion, and it is almost the same amount of GDP (Government foreign debt: US$ 75 billion, debt in private sector: US$ 68 billion. In addition to this, there is a Government domestic debt at a sum of US$ 72 billion). GDP in 2000 is expected to achieve at around 4.00 % due to oil price appreciation, and to forecast a slightly higher one for 2001 than for However, foreign investors are far fewer than those before the crisis expressing an interest in the country. It is, however, estimated that an economic growth rate of at least double. This would be firstly required to create sufficient employment opportunities for those who are currently un- or under-employed and those who will be seeking work over the short to medium term. It is estimated, based on the current growth rates of working population, that new job opportunities may be created for the existing job seekers of 1.6 millions, while approximately 2 millions of newcomers enter into the job market annually. Although such growth rates are indicating quite high growth, when they applied to countries of the world being in more high and stable developed economies to compare, such growth rate in Indonesia does not represent strong economic growth in the nation s context. 5.6 INDUSTRIAL PERSPECTIVES OF TARGETED THREE PROVINCES As indicated in Figure 5.3-1, the industrial group of manufacturing shows the highest share rate to GDP in Indonesia as around 26 %, agriculture, livestock, forestry and fisheries is the second as around 19 %, and trade, hotels and restaurants is the third as 17 %. And, per capita GDP in Indonesia has decreased with a rate of 4.52 % per 5-13

15 annum in average during the period since 1996 to 1999 when the people has underwent the above mentioned Rupiah crisis. While in targeted 3 provinces, agriculture, livestock, forestry and fisheries shows the highest share rates as 42 %, 44 % and 40 in South Sulawesi, East Nusa Tenggara and West Nusa Tenggara respectively, and their second ones are construction reflecting their local situation. It means that their main economic activities are agriculture as mentioned in clause. Furthermore, their per capita GRDPs have not so much decreased as Indonesia, namely decreasing rates of these provinces were 1.12 %, 0 % and 0.49 % respectively during the same time as shown in Table Following Table shows agricultural production of these 3 provinces. Table Main Agricultural Production of Targeted 3 Provinces in 1998 Province of: South Sulawesi East Nusa Tenggara West Nusa Tenggara Crops Harvested Harvested Harvested Production Production Production area area area (ha) (ton) (ha) (ton) (ha) (ton) Main Food crops Wetland paddy 872,545 3,803, , , ,820 1,278,050 Dryland paddy 29,741 67,349 65, ,669 29,506 66,667 Maize 269, , , ,535 39,971 77,412 Cassava 47, ,426 81, ,326 10, ,933 Main Cash crops Tall coconut 152, , ,019 44,119 Hybrid coconut 30,304 28, Coffee (robsta) 45,019 21,827 59,706 12,617 * 9,344 2,291 * Coffee (arabica) 42,041 15,583 Clove 49,303 9,451 10, , Cacao 228, ,941 30,160 3,119 3, Cashew nut 73,971 22, ,735 13,357 45,427 4,098 (Note) - : Lack of data (not reported in statistics). * : mix of robsta and arabica). Resources: Sulawesi Sulatan Dalam Angka 1999, BPS South Sulawesi Provincial Office. Nusa Tenggara Timur Dalam Angka 1999, BPS East Nusa Tenggara Provincial Office. Nusa Tenggara Barat Dalam Angka 1999, BPS West Nusa Tenggara Provincial Office. In South Sulawesi Province, Polewari Mamasa Regency (locally called as Kabupaten Polewari Mamasa) is a main cacao producing district. But Tana Toraja Regency (Kabpaten Tana Toraja) and its neighboring district named as Luwu Regency (Kabpaten Luwu) are the main coffee producing districts. People living in these areas are getting higher cash incomes compared with people living in the other mountainous area. The Government of Indonesia has conducted an Economic Census in 1996 (1996 Economic Census). Following Table shows a result of the 1996 Economic Census. 5-14

16 Table Number of Establishments and Employees in Indonesia and Targeted Provinces Number of establishment, emplyees and their share rate by province Agriculture Mining & quarrying Manufacturing According to the above table, the main economic activities are agriculture and a commercial sector consisting of whole sale and retail trade, restaurants and accommodation services in targeted provinces. Among targeted 3 provinces, share rate of agriculture in East Nusa Tenggara Province is rather higher than the other 2 provinces both in number of establishments and number of employees, but that of whole sale and retail trade, restaurants and accommodation services is lower than the others. Electricity, gas & water Constructio n Whole sale & retail trade, restaurants & accomodation services Numbar of Establishment (in 1,000) Indonesia 22, , ,462 1, ,981 38,962 Share rate (%) South Sulawesi Province ,570 Share rate (%) East Nusa Tenggara Province Share rate (%) West Nusa Tenggara Province Share rate (%) Number of Emplyees (in 1,000) Indonesia 32, , ,040 15,206 2, ,098 66,313 Share rate (%) South Sulawesi Province 1, ,408 Share rate (%) East Nusa Tenggara Province 1, ,385 Share rate (%) West Nusa Tenggara Province ,342 Share rate (%) Sources: Economic Census Complete Count Result, Indonesia, Central Statistic Organization Economic Census Complete Count Result, Sulawesi Sulatan, Central Statistic Organization Economic Census Complete Count Result, Nusa Tenggara Timur, Central Statistic Organization Economic Census Complete Count Result, Nusa Tenggara Barat, Central Statistic Organization. Transportation, storage & communication Financial institution Real estate, rental services & other services Total 5.7 INTERNATIONAL TRADE AND BALANCE OF PAYMENT International trade of Indonesia has been increased from US$25,675 million in 1990 to US$48,665 in 1999 in export with an average annual increasing rate of 7.36 % during these 9 years, and from 21,837 million in 1990 to 24,003 million in 1999 in import with the increasing rate of 1.06 % per annum during the same period as shown in the following Table

17 Table International Trade of Indonesia (Million US$) Year Exports Imports Balance ,675 21,837 3, ,142 25,869 3, ,967 27,280 6, ,823 28,328 8, ,053 31,984 8, ,418 40,629 4, ,815 42,929 6, ,444 41,680 11, ,848 27,337 21, ,665 24,003 24,662 Average annual increasing ratio (%) 7.36% 1.06% Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization. As shown in the above table, the amounts of both the export and import have decreased in 1998 and in 1999 compared with the year. Especially, decreased rate of the amount of import was greater than that of export. Balance of payment of Indonesia vividly reflects the Rupiah crisis in 1997, especially in the current account and capital transactions as shown in the following Table Table Balance of Payment in Indonesia (Million US$) Description Current account -6,760-7,801-5,001 4,097 2,329 Merchandise 6,533 5,948 10,074 18,429 8,491 Export 47,454 50,188 56,297 50,371 23,213 Non oil and gas 36,969 38,021 44,576 42,951 19,226 Oil and gas 10,485 12,167 11,721 7,420 3,987 Import -40,921-44,240-46,223-31,942-14,722 Non oil and gas -37,065-39,870-41,447-29,087-13,237 Oil and gas -3,856-4,370-4,776-2,855-1,485 Services -13,293-13,749-15,075-14,332-6,162 Non oil and gas -10,207-10,249-10,525-11,420-4,806 Oil and gas -3,086-3,500-4,550-2,912-1,356 Capital transactions 10,589 10,989 2,532-3, Official capital ,880 9,971 4,719 Inflows 5,785 5,693 7,594 13,736 6,676 Debt repayment -5,449-6,215-4,714-3,765-1,957 Private capital 10,253 11, ,846-4,844 Direct investment 4,346 6,194 4, ,122 Other 5,907 5,317-5,015-13,490-3,722 Total 3,829 3,188-2, ,204 Errors and Omissions -2,313 1,264-1,651 2, Monetary movement 1,516 4,452-4,120 2,344 2,746 Official reservation position 14,674 19,125 17, Foreign asstes 18,787 25,529 21,418 23,762 26,508 Source: Statistical Yearbook of Indon esia 1999, Central Statistic Organization. Both of export and import both in merchandise and services have rapidly decreased after the year Therefore, finally, monetary movements are almost half after 1997 compared with before the years till

18 Commodity group Table Export of Indonesia by Commodity Group amoun t) amoun t) amoun t) amoun t) IN VOLUME (Thousand Metric ton) Foodstuffs and live animals 4,177-4, , , , Beverage and tobacco Raw materials 112,350-79, , , , Mineral fuels, lubricants and related materials 111, , , , , Animal and vegetable oils and fats 2,312-2, , , , Chemicals 2,776-3, , , , Manufactured goods classified chiefly by materials 11,018-12, , , , Machinery and transport equipment Miscellaneous manufactured articles 976-1, , Commodities and transactions not further specified ,007-14, , Total 246, , , , , IN VALUE (US$ million) Foodstuffs and live animals 3,584-3, , , , Beverage and tobacco Raw materials 5,034-5, , , , Mineral fuels, lubricants and related materials 11,509-12, , , , Animal and vegetable oils and fats 1,384-1, , , , Chemicals 1,525-1, , , , Manufactured goods classified chiefly by materials 10,438-10, , , , Machinery and transport equipment 3,830-4, , , , Miscellaneous manufactured articles 7,874-8, , , , Commodities and transactions not further specified ,719-8, , Total 45,419-49, , , , Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization amoun t) Commodity group Table Import of Indonesia by Commodity Group Amount) Amount) Amount) Amount) Amount) IN VOLUME (Thousand metric ton) Consumption Goods Food and beverage mainly for household 2,347-3, , , , Processed fuel and lubricants , Transport equipment not for industry Consumtion goods Raw Materials and Auxiliary Goods Food and beverage mainly for industry 5,650-6, , , , Raw materials for in dustry 27,252 27, , , , Fuel and lubricants 17,331-18, , , , Spareparts and accessaries 799-1, , Capital Goods Capital goods excluding transport equipment , Pasenger cars Transport equipmant for industry Total 55,041-58, , , , (To be continued) 5-17

19 Commodity group Amount) Amount) Amount) Amount) Amount) IN VALUE (US$ million) Consumption Goods Food and beverage mainly for household 1,135-1, , , Processed fuel and lubricants Transport equipment not for industry Consumtion goods Raw Materials and Auxiliary Goods Food and beverage mainly for industry 1,672-2, , , , Raw materials for in dustry 17,227 16, , , , Fuel and lubricants 2,861-3, , , , Spareparts and accessaries 7,826-8, , , , Capital Goods Capital goods excluding transport equipment 7,886-8, , , , Pasenger cars Transport equipmant for industry Total 40,417-42, , , , Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization. 5.8 ELECTRICITY SECTOR Central Statistic Organization has published a statistic data book on electricity supplied by Indonesian state owned electricity company, PLN entitled as PLN Electricity Statistics. Following Table shows a summary of the PLN Electricity Statistics. Table Electricity Supplied by PLN Description Unit Average annual increasing ratio Total insatalled capacity MW 14,981 15,321 17,042 20,374 20, % Electricity produced in total Million MWh % Number of workers Persons 51,074 55,998 50,424 48,707 48, % Number of customers Million customer % Electgricity sold in total Million MWh % Input cost Million Rp. 3,354,192 4,271,514 9,534,324 7,732,324 15,463, % Output value Million Rp. 8,203,634 9,568,309 12,766,519 17,959,128 17,675, % Source: PLN Electricity Statistics, Central Statistic Organization. According to the said statistics, the input cost mentioned in the above table means the variable cost in total mainly consisting of fuel cost, and not including the fixed cost mainly represented by the capital cost. The input cost has rapidly increased by more than 2 times in 1997 that is quite high rate of increase compared with increasing rate of electricity produced. From the above table, the actual average electricity price can be calculated at Rp /kWh as of But this price covers only variable costs. Share rate of variable cost of this price is 87.5 %, and this rate is quite high compared with that in 1996 being estimated at 44.6 %. On the other hand, total cost of electricity including fixed cost may be at around Rp.650/kWh in Difference between these figures is deficit in PLN s finance, and subsidized by the Government. 5-18

20 5.9 PRICE AND EXCHANGE RATE Consumer Price Index Consumer price index in Indonesia is shown in the following Table Table Consumer Price Index in Indonesia (Base: 1989 = 100) Food stuff Food Prepared food, beverage & tobacco product Non food stuff Housing Clothing Health Education, recreation & sport Transportation & communication General Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization. According to the above table, almost of indexes were decreased in 1998 except the food and clothing. It seems that Rupiah crisis in 1997 has an impact on prices of daily articles too. This is to say that, prices of daily articles have apparently been decreased due to foreign exchange rate had rapidly been fallen down in 1997 compared with the year before. For reference, a detail consumer indexes for housing is shown hereunder. Table Consumer Price Index of Housing in Indonesia (Base: 1989 = 100) Cost for housing Fuel, electricity & water Household equipment Household operation Housing Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization. Among the 4 items of housing, 2 items as cost for housing itself and fuel, electricity and water show a quite high rate of decreasing Foreign Exchange Foreign exchange rate of Rupiah US Dollar was around Rp.2,500 per US$1.00 in But at the time of Rupiah crisis started on July 1997, the rate had been fallen down day by day, and it had reached at Rp.16,000 per US$1.00 at the end of January The Government once decided the rate at Rp.8,000 per UD$1.00 as the official exchange rate at that time, but it had been forced to modify again at the rate of Rp.8,500 per US$1.00 immediately after that. The rate is around Rp.9,500 per US$1.00 to Rp.11,000 per US$1.00 or more from February 2001 to July HOUSEHOLD ECONOMY Table shows a status on per capita household expenditures in whole Indonesia 5-19

21 and in targeted 3 provinces. Table Per Capita Expenditure for Consumption in Indonesia and Targeted Provinces (Rpiah/person) Indonesia South Sulawesi Province East Nusa Tenngara Province West Nusa Tenggara Province Average Average Average Average Expenditure item annual annual annual annual increasing increasing increasing increasing ratio (%) ratio (%) ratio (%) ratio (%) Food 24,772 38,725 86, % 21,784 34,172 86, % 19,349 27,620 58, % 20,610 30,969 77, % Non food 18,792 31,252 50, % 13,624 24,127 47, % 9,426 13,822 24, % 11,149 16,292 32, % Housing and household facility 7,834 13,574 21, % 5,230 9,132 16, % 4,197 6,213 9, % 4,626 6,481 13, % Goods and services 5,086 7,926 14, % 3,369 6,079 12, % 1,770 2,828 6, % 2,509 3,667 7, % Clothing, footwear and headgear 2,637 3,725 7, % 2,068 3,302 6, % 1,700 2,210 4, % 1,943 2,345 5, % Durable goods 1,569 3,628 3, % 1,294 3,167 5, % 732 1,419 2, % 1,203 2,450 4, % Taxes and insurances 597 1,014 1, % , % % % Paties and ceremonies 1,070 1,385 1, % 1,229 1,809 4, % , % , % Total 43,565 69, , % 35,408 58, , % 28,775 41,442 83, % 31,759 47, , % Sorces: Expenditure for Consumption of Indonesia 1999, Central Statistic Organization. Expenditure for Consumption of Indonesia and the Provinces 1999, Central Statistic Organization. The amount of their expenditure has been increased with almost more than 20 % per annum. It may be estimated that their household income level in total in 1999 in Indonesia, South Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province were Rp.541,560/HH, Rp.593,710/HH, Rp.410,000/HH and Rp.424,060/HH respectively. 5-20