00074918.2014.938402

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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, 50:2, 155-156, DOI: 10.1080/00074918.2014.938402

To link to this article: http://dx.doi.org/10.1080/00074918.2014.938402

Published online: 30 Jul 2014.

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Bulletin of Indonesian Economic Studies, Vol. 50, No. 2, 2014: 155–56

IN THIS ISSUE

Notes from the Editor

In their ‘Survey of Recent Developments’, Stephen Howes and Robin Davies take stock of the achievements of outgoing president Susilo Bambang Yudhoyono. They conclude that his government’s record is credible but incomplete. This issue of BIES

went to print as Indonesia was electing its next president, and the survey could not predict the winner. But it does predict some of the key economic policy issues that

the next president will face, and iscal policy will loom large. Relecting on the policy

commitments made by parliament and the president in recent years, Howes and Davies suggest that the next government will have to make space in the budget for new expenditure obligations. They also suggest that the next government will need a strong resolve to reprioritise and cut expenditure items, particularly fuel subsidies,

as well as to increase revenue in order to keep the deicit within the mandatory cap

of 3% of GDP.

Howes and Davies draw attention to the reasons for slowing economic growth and analyse the protectionist stance of several economic laws passed in recent years by parliament and the president. They note, too, that in the lead-up to the elections both presidential candidates were nationalistic in calling for Indonesia to assert its

sovereignty and increase its self-suficiency. Nevertheless, further regulations are

required to implement the stance of the legislation, and it remains to be seen whether and how the next government will live up to this nationalistic tenet.

Since the early 1980s, the availability of National Socio-economic Survey (Suse-nas) microdata on household expenditure has inspired an accumulation of studies of inequality and poverty in Indonesia. Many of these have been published in BIES. The journal continues to receive many submissions based on econometric scrutiny of these data, even though most aspects of these topics have by now been analysed. To clear the deck, this issue gathers some of the best of these submissions. Together they offer a comprehensive overview of current scholarship on these topics. It would be relevant if further work examined how Indonesia is placed in the Thomas Piketty–inspired international discussion about the increasing global inequality of income and wealth.

Jan Priebe opens with a thoughtful review of the Susenas data used by Badan Pusat Statistik (BPS), Indonesia’s central statistics agency, and scholars to analyse trends and patterns in poverty rates and income distribution. The article explains

the methodologies underlying the collection of Susenas data, as well as the deini -tions used in the survey, the inconsistencies across the years for which these data are available, and the changes in the methodology by which BPS has estimated poverty rates since 1984. Priebe alerts readers to the problems that the inconsistencies can

cause for those assessing oficial poverty estimates over time, at least until 2007. Andy Sumner and Peter Edward analyse poverty trends in Indonesia since 1984 by using poverty lines that differ from those used by BPS. Their international

pov-erty lines of $1.25, $2.00, and $10.00 per person per day conirm that Indonesia has

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156 In This Issue: Notes from the Editor

made drastic progress in raising average incomes and reducing poverty, but that

such poverty lines yield signiicantly higher poverty estimates than those of the oficial poverty lines. Careful extrapolations of current trends lead the authors to

conclude that Indonesia has the potential to end $1.25 and $2.00 poverty by 2025, although a large part of the population would remain vulnerable to poverty.

Indunil De Silva and Sudarno Sumarto present a close analysis of the nexus of poverty, inequality, and economic growth between the benchmarked years 2002 and 2012. They decompose changes in poverty into the impacts of growth and

redistri-bution, to determine whether economic growth between both years beneited the

poor. Their analysis substantiates that economic growth caused a ‘trickle down’

effect, but that the poor received proportionately fewer beneits than the non-poor.

Heeding some of Priebe’s cautions about inconsistencies in Susenas data over time, Arief Anshory Yusuf, Andy Sumner, and Irlan Adiyatma Rum survey and analyse annual trends in inequality in Indonesia over the past 20 years. Their

esti-mates of inequality conirm the indings of De Silva and Sumarto but also reveal

that the recent upturn in inequality actually started not in 2009, as unadjusted Suse-nas data suggest, but, arguably, in 2001. They note that Indonesia experienced a divergence of incomes across its population but a convergence of incomes across its regions.

Eric D. Ramstetter and Dionisius Narjoko draw our attention to a very different

issue: the energy eficiency of Indonesia’s manufacturing plants. Identifying three

categories of manufacturing enterprises (foreign-owned, state-owned, and locally owned), and using data for 1996 and 2006 to assess any change over time, their

article inds little difference in energy eficiency across these categories, regardless

of whether the enterprises relied on electricity, gas, or coal. Ramstetter and Narjoko

conclude that any intra-industry energy-intensity spillovers are not very signii

-cant. In other words, policies fostering energy eficiency in Indonesia will have to be based on irm characteristics other than ownership.

This issue marks the passing of long-time BIES board member and contributor Thee Kian Wie. Hal Hill, Siwage Dharma Negara, and Maria Monica Wihardja

offer an endearing assessment of Kian Wie’s remarkable life as an economist, histo-rian, and public intellectual in Indonesia, as well as a cosmopolitan and a friend of many colleagues in Indonesia and around the world.

Our collection of thesis abstracts includes examinations of economic decolonisa-tion and reconstrucdecolonisa-tion in Indonesia and Vietnam since the Second World War, and of the rise of the managerial state in the early years of Indonesia’s independence.

It also includes studies of whether the clustering of similar irms in one location increases irm-level eficiency and productivity growth, whether modern food-retail

developments hurt or help actors in the retail value chain in West Java, and how a

hypothetical bilateral trade liberalisation between Indonesia and China would affect

the welfare of Indonesian society and the competitiveness of Indonesia’s exports. Our book reviews respond to a Harvard Kennedy School study of Indonesia’s

growth prospects; a comprehensive examination of recent communal conlict in Poso, Central Sulawesi; a comparison of the development performance of Indone -sia and Nigeria; and a collection of articles about how ineffectual land reform and poor agriculture policy in Indonesia have hindered economic development. Selamat membaca!

Pierre van der Eng