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.

                 

  Resources :

http://en.wikipedia.org/wiki/Economy_of_Indonesia

http://online.wsj.com/article/SB10000872396390443792604577572152026260404.html

http://www.mediaindonesia.com/read/2012/08/07/339086/4/2/Presiden-Ketahanan-Energi-Tercapai-pada-2018

http://www.theindonesianinstitute.com/index.php/pendidikan-publik/wacana/556-ketahanan-energi-indonesia

Writer :
Name : Iva Innaya
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