Almost a year later…

March 15, 2015 § Leave a comment

Woah. I’ve forgotten about this blog. Will resume soon.


March 25, 2014 § Leave a comment

On why we should not rush to translating economic terms (in Bahasa Indonesia), here (might be gated). Excerpt:

Ilmu ekonomi, seperti disiplin lain, seharusnya bersifat lintas bahasa. Disampaikan dalam bahasa apa pun seharusnya ia bermakna sama. Namun ternyata ia tak luput dari bias terjemahan. Istilah ekonomi banyak yang mengalami pergeseran makna setelah melalui transformasi bahasa. Contoh yang paling sering muncul adalah opportunity cost dan economies of scale.

New Article: Building a More Productive Indonesia

March 11, 2014 § Leave a comment

At the beginning of 2013 Indonesia’s economy looked to be in good shape. Growth was still over 6 per cent; inflation was manageable at below 5 per cent. Then on 22 May 2013 came a signal from the US Federal Reserve that it would begin to scale back its quantitative-easing program. In Indonesia, in an attempt to reduce budgetary burdens, the government reduced the subsidy (thereby increasing the fuel price) on 22 June. These two events, combined with increases in the minimum wage and food prices, as well as the continued slowdown in many advanced countries, have contributed to a rather different picture of the Indonesian economy in the second half of 2013.


The article is here.

New Article: Australian Trade with Indonesia

November 29, 2013 § Leave a comment

Indonesia has a population ten times as big as that of Australia, but its per capita income is only one-tenth of Australia’s, so what’s really at risk if the trade relationship between the two countries breaks down?

The article is here.

New Paper: The Political Economy of Environmental Policy in Indonesia

November 29, 2013 § Leave a comment

In Indonesia, there is a widespread awareness of climate change and environmental problems, at least in academia, policymaking, civil society organizations, and NGOs. However, the ways climate change and the environment affect poverty are not so well understood. Indonesia, like many other countries, is preoccupied with achieving economic growth in a business-as-usual manner. The government emphasizes social protection rather than reducing vulnerabilities and improving livelihoods of the poor through a green economy. In this essay, we review the current discussion on the economics of environmental protection in Indonesia, especially with regards to the climate change, and propose ways to fill in the certain gaps between discourse and policy. We also discuss the poverty situation of Indonesia and highlight its relationship with the environment. Finally, we discuss the policy possibility of using the environment-climate connection as a way to accelerate poverty reduction. In particular, we argue that policies that take into account climate change and its effect on poverty should be applied at three different levels: micro, macro (national), and global (international).

The book is here.

Inflation trend

September 4, 2013 § Leave a comment

A friend, in response to the post right below, asked what about inflation, growth, currency, etc. One at a time, here’s inflation. What the chart below tells us is the following. First, our overall inflation (black, solid line) is driven mostly by food prices (red). Recently what drives food price index up is, well, beef (represented by meat and meat products, purple – see also the previous post on beef prices). Now, people say that recent inflation hike is due to fuel price adjustment, new education term, and Lebaran festive. Maybe. Lebaran (ied day) festive should be captured by the food line. Education is the orange line: yes, it is slightly above the overall inflation, but below food. As for fuel, we have housing electricity, gas, and fuel line (green) and transportation (blue) to capture it. They both are below the overall inflation line. This can mean two things: either 1) fuel price adjustment is not a significant factor in driving up the inflation rate, or 2) the full impact has not been realised. I tend to believe it’s the second one. But, even if it is true, past experiences tells us that the inflationary effect from fuel price hike will die out after 3-4 months. Look at the blue line after May 2008. There was a significant jump due, perhaps mostly due to the fuel price hike on May 24. Then it started to level off by July 2008 and by January 2009 it got back to its trend line. I don’t have the October 2005 data here, but if I remember correctly, the pattern was quite similar. Based on these, we can expect that the impact of the June 22, 2013 fuel price increase will vanish by early next year.


Trade data are out: July 2013

September 3, 2013 § 2 Comments

And it doesn’t sound great. According to the Office of Statistics, July 2013 saw a record high trade deficit at USD 2.3 billion (first chart). It seems that export has slowed down again, while import increased (chart two) – bearing in mind that most imports are still important. There are two factors here, I think: bad luck and bad policy. Bad luck because China and India are weak, so export to them dropped quite significantly (chart three). Bad policy is due to heavy reliance on import of oil (both crude and refined) – which in turn is a consequence of the long time subsidy regime (yes there was recently an adjustment, but the share of subsidy in the budget is still very high) (chart four and five).

Trade July 2013.TradeBalanceTrade July 2013.XMgTrade July 2013.XCITrade July 2013.CrudeTrade July 2013.Refined