00074918.2014.896234

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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: Notes from the Editor

Pierre van der Eng

To cite this article: Pierre van der Eng (2014) In This Issue: Notes from the Editor, Bulletin of Indonesian Economic Studies, 50:1, 1-2, DOI: 10.1080/00074918.2014.896234

To link to this article: http://dx.doi.org/10.1080/00074918.2014.896234

Published online: 24 Mar 2014.

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Bulletin of Indonesian Economic Studies, Vol. 50, No. 1, 2014: 1–2

IN THIS ISSUE

Notes from the Editor

While Indonesia prepares for its parliamentary and presidential elections in April and July 2014, respectively, its economic growth has started to slow. Our latest ‘Sur-vey of Recent Developments’, by Shiro Armstrong and Sjamsu Rahardja, relates this slowdown to global trends: the end of the commodities boom, which is now

depress-ing Indonesia’s exports and increasdepress-ing its current account deicit, and a return to

more normal monetary policy in the United States, which is making foreign portfolio investors reluctant to invest in Indonesia. Exchange-rate depreciation has eased the consequences of this development somewhat by reducing more expensive imports in rupiah terms. The authors note that Indonesia’s ban on unprocessed mineral exports

from January 2014 may soon exacerbate lagging exports, which could put further

pressure on the currency.

Armstrong and Rahardja argue that the depreciation has created opportunities to produce non-commodity exports, but that structural supply-side rigidities are likely to restrict the pace at which producers will be able to take advantage of these opportunities. And this at a time when policy initiatives to resolve such issues, lift productivity, and improve the competitiveness of Indonesia’s manufactured exports are not likely to be taken soon, pending the outcome of the elections and the forma-tion of a new cabinet later this year. The ‘Survey’ focuses on accumulating regulatory uncertainties and infrastructure bottlenecks in explaining that, compared with neigh-bouring countries, Indonesia continues to miss out on manufacturing opportunities offered by regional production networks. Indonesia may be attracting record levels of foreign direct investment—at least it did in 2013—but this may be more of a market-seeking than of a resource-market-seeking nature. The authors note that there are few indica-tions that the country’s investment environment or competitiveness are improving enough to increase Indonesia’s involvement in global supply chains.

The ‘Survey’ also discusses the dificulties of improving the country’s physical

infrastructure, particularly the involvement of private investors in infrastructure pro-jects. Nevertheless, Armstrong and Rahardja express cautious optimism about the effects of Indonesia’s chairing and hosting of APEC throughout 2013, and of the WTO

Ministerial Conference in December 2013. For the irst, the Indonesian government

nominated regional cooperation in infrastructure improvements across the region as a central theme, and the outcomes of Indonesia’s APEC year may help the country to make progress in this respect. The second kept in train the process of global co-operation in liberalising trade, and built momentum for better regional coco-operation in the Regional Comprehensive Economic Partnership and the ASEAN Economic Community.

Peter McDonald focuses on Indonesia’s demography in this year’s instalment of our Indonesia in Comparative Perspective series. His article takes stock of the out-comes of the 2010 Population Census, scans trends during the past 40 years, and compares some of these trends with those of other Asian countries. McDonald con-tends that Indonesia has reached a new demographic crossroad: its fertility rate has

decreased signiicantly but is still high enough to add substantial numbers to Indo -nesia’s population in the near future. The article argues against views that a lower rate of population growth and a lower fertility rate would be preferable, and points to countries like Thailand and Japan, which are struggling to come to terms with the

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2 In This Issue: Notes from the Editor

consequences of having very low fertility rates, such as the ageing of their popu-lations. This issue of BIES also contains a short note by McDonald on Indonesia’s recently released population projections for 2010–35. They see Indonesia’s popula-tion growing to 306 million in 2035, which is very likely to make Indonesia one of the

ive largest countries in the world. The note focuses on the methods and assumptions

that underlie these projections, because the projections publication itself had only limited information.

This issue also contains three regular articles. Rasyad Parinduri analyses the

vul-nerability to calamities of very small irms in Indonesia that employ, on average, two to three workers. His close study of 4,400 irm-level data from the Indonesia Fam -ily Life Survey from 1995 to 2000 reveals that the deaths of fam-ily members reduce

the assets of such irms and have long-lasting adverse effects for the development of the assets of these irms. Parinduri inds no evidence, however, that the sickness of family members, crop losses, or natural disasters reduce irms’ assets. Given the predominance of such irms in Indonesia, this evidence leads the author to discuss

possible public-policy responses.

Danny Cassimon, Dennis Essers, and Achmad Fauzi discuss the bilateral debt-for-development swaps that the Indonesian government has concluded in recent years with several of its foreign creditors. They analyse 11 swaps in the context of

the government’s debt-relief policy and development inance strategy, and ind that

their performance against four key criteria, such as whether a swap is aligned with government policy, was relatively erratic. The authors conclude that the Indonesian government could take a more proactive stance in negotiating terms. Ensuring that the details and outcomes of future swaps are more consistent with the expectations of foreign creditors may increase the effectiveness of the swaps as well as the interest of their creditors.

Aloysius Brata, Henri de Groot, and Piet Rietveld assess the impacts of three shocks caused by two natural disasters—the 2004 Indian Ocean tsunami and the 2005 Nias earthquake—on the spatial distribution of the population in Northern Sumatra. The deaths and destruction caused by the two events, the extensive international and domestic effort to support the recovery process, and the 2005 peace deal between the government of Indonesia and the Free Aceh Movement could have potentially

changed the population distribution in this region. The article inds that this was

indeed the case immediately after the events, but that by 2010 such changes were

no longer visible. In publishing this article, Brata and De Groot pay tribute to their

co-author Piet Rietveld, who passed away in November 2013. Piet was also a valued member of the BIES editorial board during 1990–2007 and is sorely missed.

This issue of BIES also notes with sadness the passing of our colleague, mentor, and friend Thee Kian Wie. Kian Wie was a member of the BIES editorial board for almost 30 years, during 1985–2014. The next issue of BIES will contain a full obituary. One of Kian Wie’s many contributions to the journal involved locating and editing abstracts of relevant PhD theses, which BIES has published since 2003. Several of them were written by PhD students whom Kian Wie hosted and mentored during

their ieldwork in Indonesia. We will continue to publish thesis abstracts, in his hon-our, and in this issue we include two—one on the effects of industrial concentration in Indonesia’s food and beverages industry, and the other on the role of Kadin (the Indonesian Chamber of Commerce and Industry) in state–business relations during 1998–2003.

Our book reviews section also pays tribute to Thee Kian Wie, with a review of his 2012 book Indonesia’s Economy since Independence. Other reviews discuss political

con-lict and institutional engineering, Java’s sugar industry in the high colonial period, the state of the education sector, labour migration and human traficking, urbanisa -tion, water scarcity, inspirational Chinese Indonesian women, and a Japanese study of Indonesia’s economic potential. Selamat membaca!

Pierre van der Eng