Kamis, 25 Oktober 2012

Energy Endurance and Economy of Indonesia

Indonesia is the largest economy in Southeast Asia and is one of the emerging markets economies of the world. The country is also a member of G-20 major economics. It has a market economy in which the government plays a significant role by owning more than 164 enterprises and administers prices on several basic goods, including fuel, rice, and electricity. It means that Indonesia is a country with an unlimited resources. A long ago, before Indonesia ruled by Netherlands and people haven't absorded the energy from our land, Indonesia is a really wealthy and prosperous country. For example, we didn't plant anything to eat but we weren't lacking of food because it was already there in our land. As we are now, being global and modern, Indonesia still has an unlimited resources, especially in energy. It has a big role in economy because it can raise the growth of economy or lower it. Now, Indonesia is doing one of economic event that we called the export and import of energy.
            The condition in Indonesia is the country's commodities exporters are being hit by the global slowdown. Indonesia's exports—which are dominated by natural resources such as coal, palm oil and tin—have been sliding as commodity prices slip and demand from places like China and India have slowed. Indonesia announced last week that it recorded its worst-ever trade gap in June as strong domestic demand boosted imports even as its exports fell.
            But the economic itself in Indonesia is now growing. Eventhought our economic development index is raising up till 6%, Indonesia's economy expanded a higher-than-expected 6.4% in the second quarter as robust domestic demand offset a decline in the international appetite for its exports.
            In the three months ended June 30, Southeast Asia's largest economy continued to rack up some of the strongest economic growth in the world, as the archipelago's growing consumer class was relatively unaffected by global debt problems and slowdowns that are dousing demand in many developed countries.
            The Central Statistics Agency said Indonesia's gross domestic product climbed 6.4% from a year earlier and 2.8% from the previous quarter. The 6.4% figure for the quarter beat analyst forecasts, with most expecting growth for the three months to be around 6.1%.
            A burgeoning appetite for imports as varied as wheat, iPads and luxury cars, in a country that mostly exports raw commodities like coal and crude palm oil, created a $1.3 billion trade deficit in June — a deficit economists see continuing to keep pressure on the rupiah until the end of this year.
            Transportation and communications was the fastest-growing sector in the first half of the year, up 10.1 percent in the second quarter from the same period a year earlier. Luxury-car sales are booming as growing wealth leads drivers to upgrade from Toyotas to BMWs, while young consumers are snapping up smartphones.                                                    
  The trade, hotel and restaurant sector grew faster in the second quarter, with the world’s fourth-largest population increasingly flying on new airline routes to stay at branded budget hotels. In Jakarta, trendy new eateries open regularly, while convenience stores are spreading across the country.                     
  Indonesia itself, consumed 47% of oil, 24% of gas, other 24% of coal, and only 5% for alternative energy. It shows that Indonesia still concentrate on oil instead of the other energy. By looking at our condition where Indonesia's oil already decrease and a lot of scarcity of oil in some city in Indonesia, it means that Indonesia has a lot of energy but has low energy endurance. We should maximize the use of our energy by using the other energy, not only concentrate on oil. It could conserve the energy in our land.                                  
   Seeing Indonesia with its abundant energy, we could said that it is our strength. But unfortunately, Indonesia is lacking of people with big prospect. People today's mindset is  to be a worker, not to be a creator. Being just a worker is like having a dull day everyday, we don't make a big impact. People now choose to go abroad and serve the other country, not Indonesia. Why is this happening? Because the low mentality of Indonesian people, they seeks for prosperous and good living for theirself. The sensitivity of the sorrounding is still low.                                                                                                                                        
 President Susilo Bambang Yudhoyono said that Energy Endurance in Indonesia can be reached in 2018 and after that, Indonesia will have strong energy endurance. This is become one of government policy. In the last affairs, Indonesia being an underdog. As a country that has the oil, the royalty that we get is not equal with the oil that we import abroad. The president vision is the energy could fulfill Indonesia's needs. And if there's an extension of Freeport contract with US, it should profitable for Indonesia. The orientation is to prosper Indonesia then making an international affairs.                                                        
     We can say that this step is an advantage and become one of our strength, but actually we should be careful on the realization. Because the energy is not eternal, eventually it will gone and there will be a disjunction of economy.                                                  
 The government made economic advances under the first administration of President Yudhoyono introducing significant reforms in the financial sector, including tax and customs reforms, the use of Treasury bills, and capital market development and supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth in 2009. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25%, a small current account surplus, a fiscal deficit below 2%, and historically low rates of inflation. Fitch and Moody's upgraded Indonesia's credit rating to investment grade in December 2011.
 Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government in 2012 faces the ongoing challenge of improving Indonesia's insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of rising oil prices.                                                                                                   
               Knowing Indonesia's ups and downs, there are some steps that society could make. The society should use the energy when it's necessary and use it efficiently. For example, people could use public transportation instead of car. This action is to save the gasoline. We actually should start to use the alternative energy. We know that Indonesian people usually go abroad to studies. Its a good thing if after we take the knowledge, we come back to Indonesia and aplicate the studies here. Indonesia needs the idea and the mentality of creator and enterpreneurship. We also need to socialize this problems to the students in university as Indonesia's condition in general.                                                 
 From government point of view, they should support what Indonesian individual needs to apply their idea, because if President try to do some development in a big scale, the risk to fail is big. And for the record, smart people in Indonesia often went abroad to work because Indonesia doesn't has the ability and work field for their idea. Government should listen and support what the enterpreneurship and local firms wants to do. The enterpreneurship and creator often making a work field that can reduce the unemployment.
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The Relation of Oil and Gas with the Economy of Indonesia


                Indonesia started their exploration for oil since 1871 and began their first commercial production in 1885 with the Sumatra and Borneo islands and some offshore oil and gas fields as their main oil source. Since Indonesia is proven to hold 4 million barrels of oil, they rank 21st among world oil producers and contributes approximately 1.2% of world’s oil production. Indonesia joins the OPEC (Organization of Petroleum Exporting Countries) as the only Asian member in 1962 for its’ large oil production, which is second to China in the Asia Pacific region. Throughout the years Indonesia had reached their peak oil production up to 1.6 million barrels per day in 1977 but since 1995 the production decrease down to less than one million barrels per day. At the year 2004 Indonesia experiences a high increase in oil consumption alongside with continuously declining oil production which results to government decision that made Indonesia from being a net oil exporter to becoming a net oil importer late that year, and that situation leads to their withdrawal from OPEC. The latest data from Kompas stated during January to April 2011 Indonesia produce 977.187 barrels of oil every day.
Not only the massive amount of oil resources, Indonesia also have vast amount of natural gas resources mostly located at the north part of Sumatra and Eastern Borneo. They ranked 8th in world gas production with 108 trillion cubic feet reserve in the year 2010. It puts Indonesia as 11th largest gas reserve owner in the world and largest in Asia Pacific region.  In the year 2008 the annual production reached up to 8.3 billion cubic feet per day and keep on increasing. In 2010 Indonesia supplied 2.6% of the world’s natural gas products. Indonesia used to be the world’s largest exporter of LNG in 2005, but dropped to be 2nd in 2010 caused by the government’s policy to serve the domestic needs.
From those production, the data from the Indonesian ministry of monetary stated that the state income from oil and gas in 2012, exclude taxes, reaches up to 198.3 trillion rupiah while 19.8 trillion rupiah is used from subvention.

Strengths, Weaknesses and Their Effect to Indonesia Economy

                From the facts I have stated above, we can see that Indonesia has abundant natural resources, especially oil and gas. We can also see that those resources (more specifically oil and gas) contribute so much to Indonesia, both as export factors and for domestic consumption. Despite all of the advantages that Indonesia gains from being one of the largest oil producers in the world, in fact we still cannot find the efficient way to process the resources that we have. This results to Indonesia being an importer of processed oil which the crude oil comes from the export of our country’s own oil production.
Other than producing and exporting oil, Indonesia gains much of its’ state income from producing and exporting natural gas. Most of the exported natural gas is in the form of LNG and LPG. Exporting LPG and LNG helps the country to afford the cost of importing processed oil from other countries. Other than being exported, Indonesia’s productions of natural gas also fulfill the nation’s domestic needs. But lately both global and domestic consumption of gas decrease and it affects Indonesia’s income, which eventually affects the nation’s economy.
Both from the export of oil and gas, and the domestic consumption Indonesia gains great profit that can actually improve Indonesia economic condition and can be used for the nation’s development, but instead of going to all that, most of the profit are used for subvention and to import processed oil. So in the end the state income isn’t left that much to be able to improve the nation’s economy nor to be used for development. 

Society and Government Role

                As I stated above, the high state income should be able to improve the nation’s economy and be used for development, but, in fact, it actually goes to subvention and import. To overcome this issue, the people and the government of Indonesia should act.
Both the people and the government of Indonesia have the capability to actually do something and help improve the nation’s economy. For example the people can convert from using kerosene to using LPG for everyday use, such as for cooking; the people can also reduce using the subsidized petrol, mostly known as premium in Pertamina owned gas stations; or even better, the people can reduce the use of oil based fuel by using public transportation more or use alternative ways of transportation such as riding bicycles or walking. This way, hopefully as the use of subsidized petrol decrease, government’s expense for subvention will also decrease; and as the domestic demand for petroleum decrease, the amount of petroleum Indonesia should import also decrease which in the end leads to less expense the nation has to give out.

Not only the people who have to make some changes, the government of Indonesia also have to make some changes too if they want to improve the economy of the country.  If the people are expected to take public transportation more, then the government should improve the quality of public transportation itself. As we all can see, most of public transportation in Indonesia are not feasible, so the people end up not wanting to take them unless they have no other alternative. The government should also facilitate the needs of the people such as providing sidewalks, etc. Other than providing decent facilities for the people, the government should also make regulations regarding the standard for oil and gas, partly to gain the people’s trust and to keep the people safe; regulations for the use and standardized price for oil and gas (especially oil because Indonesia’s subsidized petrol price is far lower than the price of petrol in most countries) so that Indonesia can gain more profit.
Another thing that both the government and the people can cooperate to do is improving the education so that in the future Indonesian people will have the knowledge and skills needed to manage, process, and handle their resources. Hopefully by this attempt, in the future Indonesia will not have to depend to other countries to process the raw materials that they have (in this case crude oil) so that they don’t have to import the processed goods and gain more profit for themselves, moreover to produce and process the goods (crude oil and petroleum) and use them to fulfill domestic needs and to be exported to other countries which eventually adds the state income.


                Indonesia is a country which has a very good potency in terms of oil and gas production. Those resources if used properly could actually improve the nation’s economy and wellbeing, but currently they still depend on other countries to process them. This condition results to inefficiency in terms of handling the resources that is supposed to be a great source income but instead become a great expense. Hopefully in the future Indonesia will have the needed knowledge and skills to manage their resources (oil and gas) so that the nation can gain much from them.

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Fishery of Indonesia

           The world we call earth where we live is a place that has many recources for us to take. One of the most simple resources that can be used for the continuation of human’s life is food. People at first collected food from the nature. As ages passed by, people found their own way to produce food by numerous method (e.g. farming). Fishery is some of the oldest way human use to acquire food. People make their living by collecting natural recources from waters like oceans, seas, rivers and lakes.
           Fishery is  defined in terms of the "people involved, species or type of fish, area of water or seabed, method of fishing, class of boats, purpose of the activities or a combination of the foregoing features". The definition often includes a combination of fish and fishers in a region, the latter fishing for similar species with similar gear types. (Food and Agriculture Organization of the United Nations, 2010)
          The term fishery includes both saltwater fishery and freshwater fishery. In this context, fishery is defined as collective term acknowledged to include mollusks (shells, squids), crustaceans (crabs), and any saltwater or freshwater animal which are harvested for their value. In Indonesia, eighty five percent of fishery catches comes from the oceans and seas, which exceeds the number of catches coming from in land waters, since the number of nutrients in saltwater environment surpass those in freshwater. The method commonly used in fishery in order to obtain the natural recources is wild fishery. Indonesia is heavily reliant on wild fishery method, which is basically done by capturing fishes that are in an uncontrolled environment and someways, extraction of fishes deployed to obtain its value. The other method used in fishery is farmed fishery, which is done by creating farms in inland areas, such as lakes, ponds (e.g. catfish farms), and some in coastal area (e.g. oyster farm).  Nowadays, the specified number of farmed fishery in Indonesia increases yearly. (Kompasiana – Agrobisnis, 2012).
            Indonesia is a state with rich natural resources in great abundance. Most of its natural resources lies beneath its waves. For instance, Indonesia has a vast area of marine waters lying between many islands in the archipelago which extends from Sumatra in the west to Irian Jaya in the east, from Miangas in the north to Rote in the south. The total area of maritime zone alone covers for around 3.544 million km2, with a total coast line of 104,000 kilometers long (Bakokorsunal, 2006), making Indonesia ranked second in terms of coast line total length, after Canada.  

In the fishery sector, Indonesia has great potential. The potention of raw fishery resource of wild fishery, as well as both farmed fishery, and other common waters are estimated to reach USD 82 million (Kompasiana – Agrobisnis, 2012). These potention does not include the potention coming from ready to consume-fishery product. Such fact reinstate the state’s given strength for its economy.
Although the fisheries sector has only contributed 1.7% of the total GDP, (compare to oil which contributed 70 % of the total GDP), the number of people involved in the fisheries sector reached 5.53 million. The number does not include those engaged in the processing plant. The number alone consist of two million two hundred and thirty thousand high seas fisherman, four hundred and seventy thousand shoreline fisherman, and two million six and hundred thousand people working in fish farming.
Another of the advantage for fishery comes from the technology applied by most fishermen in Indonesia. High number of fishermen uses state of the art workhorse to carry on their work, the motorized boats. Nowadays, fishermen uses faster and bigger boats to operate in larger area. Most of motorized boats uses diesel engine, which is highly durable
Statistics shows that Indonesia has great potention in fishery, it is unquestionable that Indonesia also has the ability to have prosperous future. But the fact that Indonesia has great potention in fishery is rather far from completion, for some contradictory with the fact that the state’s exeperience lacknesses in some fishery sector. One of the most concerned weakness of Indonesian fishery is the state’s components contribution. Some questions may be raised for the government’s and people’s will to synergize in order to exploit this natural resources for the good of many. Since resources are worthless if it is not handled properly, even if it is not concerned all. The matter of able or unable to manage fishery with high potention is totally depend on who is determinded to manage fishery itself. Such fact has a major impact for the economy of Indonesia.
            The most common topic in fishery exploitation is that most of fishers and planters (who works at farmed fishery) works on a small scale fishery. The majority of them from small scale fishery, and has sixty percent share in number of the total fishermen and planters.
Fishermen and planters who come from small scale fishery still use traditional gears, equipment and boats for their operations. Meanwhile their operation are still on a daily basis. This cause low amount of production from their own, which generates relatively low income for them.  
Increasing amount of fish catches also has been a major problem. The continuously rising amount of fish catches causes overfishing. Overfishing causes problem both for environment and the economy. The decreasing amount of fish will break the balance in the ecosystem. For the economy, the decreasing amount of fish will utterly posses threat to the life of fishermen, and then to the people.  
Illegal fishing contributed some of negative effect to the fishery. The country lose its own resources to foreign country. And so, the people of Indonesia has the potential to lose food. This problem has been let unpunished for a number of years and proven fatal to the economy.      
People of Indonesia must concern about the status of the state’s fishery. People can put their investation on fishery, so that fishery have the fund for they to govern. When sufficient fund is ready tobe developed for the fishery, and as well as its management, fishery may become one of the most promising field for woorkers and investors. And so people can enjoy their investation as well as fisherman.
Concern about fishery must be apprehended through fishery management. The integrated process conducted by the government of information gathering, analysis, planning, consultation, decision-making, allocation of resources and formulation and implementation, with enforcement as necessary, of regulations or rules which govern fisheries activities in order to ensure the continued productivity of the resources and the accomplishment of other fisheries objectives. The government then should increase the power of maritime patrol. The navy should conduct patrol operations around Indonesian waters, so that illegal fishing attempt can be reduced.
Based on numerous potentions, Indonesian fishery and the opportunity given from nature that can be achieved, it is likely that the government must focus on the development of fishery for the prosperity of the nation. It is hopefully form the development on progressive basis will be able to boost national economy and help eleminate poverty in the society. And so synergy between government and the people can rise the wealth of our nation

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