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Bulletin of Indonesian Economic Studies

ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20

In this issue

Ross H. McLeod

To cite this article: Ross H. McLeod (2009) In this issue, Bulletin of Indonesian Economic Studies, 45:3, 285-286, DOI: 10.1080/00074910903301621

To link to this article: http://dx.doi.org/10.1080/00074910903301621

Published online: 16 Nov 2009.

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Bulletin of Indonesian Economic Studies, Vol. 45, No. 3, 2009: 285–6

IN THIS ISSUE

Notes from the editor

The latest ‘Survey of recent developments’, contributed by Budy Resosudarmo and Arief Yusuf, shows that the Indonesian economy has continued to perform well in the face of the global ﬁ_{nancial crisis (GFC) – to the extent that signs of}

incipient recovery are now evident. In addition, the economy has shrugged off the impact of two signiﬁ_{cant shocks, one man-made, the other an act of nature.}

In July the mindless scourge of religiously motivated terrorism re-appeared with the twin bombings of two luxury hotels in Jakarta. And in September yet another earthquake caused death and injury on a large scale – on this occasion severely damaging Padang, the capital of West Sumatra province. During the ﬁ_{rst half of}

2009 the political scene was dominated by elections for the national parliament and the presidency. The authors draw attention to heavy campaign spending by the candidates and their political parties, and by the government itself in sup-port of the ballot process. They argue that this provided a signiﬁ_{cant stimulus}

to aggregate demand, which helped counteract the effects of declining demand for Indonesian exports and the postponement of new investment as a result of heightened caution on the part of the business community.

Various policies introduced in response to the GFC, including the re-introduction of cash transfers to the poor, also appear to have had a beneﬁ_{cial effect,}

notwith-standing signiﬁ_{cant sectoral and regional variation in growth performance.}

Accordingly, the rate of unemployment continued to decline moderately through February 2009, as did the level of poverty. The second Yudhoyono administra-tion, like the ﬁ_{rst, has committed to some rather ambitious economic}

perform-ance targets, but has given little indication as to how it plans to achieve them. It is relying on a questionable strategy of trying to achieve some ‘quick wins’ dur-ing its ﬁ_{rst 100 days in of}ﬁ_{ce in the hope that this will generate momentum for}

the remainder of its ﬁ_{ve-year term. The authors draw attention to the need for a}

signiﬁ_{cant acceleration in the provision of infrastructure. On the one hand, they}

note the promisingly rapid increase in private sector participation in transport, energy and telecommunications from 2005 through 2007. On the other hand, they observe that it has proven difﬁ_{cult for the government to accelerate spending on}

infrastructure in line with its recent ﬁ_{scal stimulus package. Finally, in the context}

of the December UN climate change conference in Copenhagen, the authors argue that Indonesia should be placing much greater emphasis on adaptation to climate change, rather than focusing mainly on mitigation.

Rizal Sukma contributes this year’s discussion of recent political events, based on his Indonesia Update conference presentation at the Australian National University in October. As with economics, so with politics. Despite poor manage-ment of the 2009 elections by the Elections Commission, resulting in contested outcomes and post-election political bickering, Indonesia has demonstrated

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286 In this issue: notes from the editor

considerable democratic resilience. The results of the April legislative election saw continued decline in support for the Islamic political parties, while the secular– nationalist parties have proved increasingly attuned to the pragmatic imperative of adopting a policy stance acceptable to the Muslim majority. Meanwhile the July presidential election highlighted a degree of continuity through the re-election of the incumbent. Although democracy will continue to face a host of challenges, there are reasons to believe that Indonesia will display a remarkable degree of resilience in confronting them.

In this issue we introduce what we envisage will be an occasional series of Policy Dialogues, in which we invite two experts to present their differing views on a topical aspect of policy. This ﬁ_rst_Dialogue_{, between}_{Larry Diamond}_and

Stephen Sherlock, is concerned with the newly re-elected president strategy of once again forming a grand coalition of almost all parties represented in the par-liament. Is this inclusiveness to be lauded? Or is it fundamentally anti-democratic, and likely to limit the government’s ability to carry out major reforms? Readers who would like to comment on this Dialogue, or on any of the articles we pub-lish, can do so through the BIES Interactive Forum at <http://blogs.informa. com/cbiejournalforum/>.

Pierre van der Eng’s paper is concerned with the lack of a reliable data series on Indonesia’s capital stock. Such a series is needed to allow researchers to dis-cern the extent to which capital formation has contributed to economic growth. The author discusses recent attempts by both the national statistics agency and the central bank to create such series, drawing attention to a number of shortcom-ings. He constructs his own consistent estimates of gross ﬁ_{xed capital formation for}

the period 1951–2008, disaggregated by category of productive assets. He explains how these data are then combined with approximations of probable average asset lives to estimate Indonesia’s gross ﬁ_{xed capital stock for 1950–2008, disaggregated}

by productive asset category.

Jessica Grace Perdew and Gerald Shively examine pest control and produc-tion management methods used by farmers in Sulawesi to improve cocoa bean quality and increase their income from cocoa. Using production data from 600 cocoa farms, they identify factors correlated with the adoption of each type of treatment and, controlling for treatment, isolate factors that inﬂ_{uence cocoa yields.}

To study the conditional proﬁ_{tability of input allocation they compare observed}

factor shares with proﬁ_{t-maximising input levels and derive lessons for extension}

efforts. Their main conclusions are that the average increase in private returns arising from more intensive management appears sufﬁ_{cient to compensate for}

higher production costs, but that observed extension efforts have not been cor-related with higher proﬁ_{ts among the farmers in their sample.}

We also present in this issue a new set of six abstracts of recently completed PhD dissertations on the Indonesian economy.

The book reviews deal with works on the role of foundations in corruption in Indonesia; forest governance in Kalimantan; and rural livelihood strategies in regional Indonesia. These reviews are followed by discussions of three edited vol-umes on Southeast Asia: a study of sustainable ﬁ_{sheries and poverty reduction; a}

work on population ageing; and a collection on the region’s tourism industry.

Selamat membaca!

Ross H. McLeod