CHAPTER 5

SOCIO-ECONOMICAL FEATURES OF

TARGETED THREE PROVINCES

5-1

CHAPTER 5 SOCIO-ECONOMIC FEATURES OF TARGETED THREE PROVINCES

5.1 GENERAL The Government of Indonesia adopts a fiscal year ending on March 31. Therefore, years indicated in this study are those beginning from April 1 unless otherwise stated. Indonesia’s currency is Rupiah, and abbreviated as “Rp.”.

5.2 POPULATION AND LABOR FORCE

5.2.1 Population According to the last population census in Indonesia, the total population of Indonesia has become 203,000 thousand as of 2000, with an annual average population growth rate of 1.85 % since 1971 as summarized in Table 5.2-1 hereunder. Total number of households in the nation was 51,500 thousand HHs with an average family size of 3.94 persons per HH.

Table 5.2-1 Population and Number of Households

Table 5.2-2 shows a population by Provinces as of 2000 with number of households and their family sizes.

Table 5.2-2 Population by Provinces and Their Number of Households in 2000

HHs Family sizeDaerah Istimewah Aceh 4,000 936 4.27North sumatra 11,469 2,566 4.47West Sumatra 4,228 1,023 4.13Riau 4,724 1,154 4.09Jambi 2,394 593 4.04South Sumatra 7,756 1,675 4.63Bengkulu 1,401 345 4.06Lampung 6,644 1,615 4.11Daerah Khusu Ibukota Jakarta 8,356 2,248 3.72West Jawa 43,547 11,519 3.78Central Jawa 30,851 7,849 3.93Daerah Istimewah Yogyakarta 3,108 924 3.36East Jawa 34,508 9,520 3.62Bali 3,124 802 3.90West Nusa Tenggala 3,821 987 3.87East Nusa Tenggala 3,890 794 4.90East Timor - - -

Province Population

(1,000)Population Number of Familyprojection households size

1980 147,490 30,373 4.861990 179,379 39,695 4.521995 194,755 45,652 4.272000 203,115 51,513 3.94

Source: -

-

Statistical Year Book of Indonesia1999, Central Statistic Organization.Penduduk Indonesia - Hasil SensusPenduduk 2000 -, Seri: RBL1.2,Central Statistic Organization.

(To be continued)

5-2

HHs Family size

West Kalimantan 3,722 845 4.40Central Kalimantan 1,800 470 3.83South Kalimantan 2,969 787 3.77East Kalimantan 2,433 614 3.96North Sulawesi 2,808 758 3.71Central Sulawesi 2,024 471 4.30South Sulawesi 7,778 1,761 4.42Sulawesi Tenggala 1,771 401 4.42Maluku 1,883 379 4.97

Irian Jaya 2,106 478 4.41

Whole Indonesia 203,115 51,5133.94

Source: Penduduk Indonesia, Hasil Sensus Penduduk 2000,

Province Population

As shown in the above Table, East Timor Province was excluded since the time that 2000 population census was conducted. And, since this time, Maluku Province was divided into 2 provinces as Maluku Province and North Maluku Province, but they are grouped into one as the former way this time for convenience.

In this Project, the targeted provinces are North Sulawesi Province, West Nusa Tenggara Province and East Nusa Tenggara Province. Table 5.2-3 shows population of these 3 provinces by Kabupatens of them. According to this table, family sizes of the targeted 3 provinces are 4.42 persons/HH, 4.90 persons/HH, and 3.87 persons/HH in South Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province respectively which they are rather high than the average one in the nation except West Nusa Tenggara Province.

Table 5.2-3 Population and Number of Households of Targeted Provinces in 2000

A. South Sulawesi ProvinceArea Population Households Family size

(km2) (persons) (HHs) (psns/HH)Kabupaten 62,087 6,587,723 1,480,589 4.45

Selayar 903 103,473 26,424 3.92Bulukumba 1,155 352,606 82,508 4.27Bantaeng 396 157,636 36,178 4.36Jeneponto 738 317,481 73,470 4.32Takalar 567 229,381 51,146 4.48Gowa 1,883 513,777 118,542 4.33sinjai 820 204,565 42,150 4.85Maros 1,619 270,792 59,873 4.52Pangkajene Kepulauan 1,112 263,785 57,954 4.55Barru 1,175 151,247 35,457 4.27Bone 4,559 648,315 143,132 4.53Soppeng 1,359 218,283 53,508 4.08Wajo 2,506 356,983 82,657 4.32Sidenreng Rappang 1,883 237,606 55,030 4.32Pinrang 1,962 309,876 69,336 4.47Enrekang 1,786 166,361 34,808 4.78Luwu 17,695 396,556 84,202 4.71Tana Toraja 3,206 391,870 84,359 4.65Polewali Mamasa 4,782 445,586 99,351 4.48

(To be continued)

5-3

Area Population Households Family size(km2) (persons) (HHs) (psns/HH)

Majene 948 120,272 26,023 4.62Mamuju 11,033 296,229 67,892 4.36Luwu Utara - 435,043 96,589 4.50

Kotamadya 275 1,199,576 279,952 4.28Makassar 176 1,091,643 256,414 4.26Pare Pare 99 107,933 23,538 4.59

Total 62,362 7,787,299 1,760,541 4.42

B. East Nusa Tenggala ProvinceArea Population Households Family size

(km2) (persons) (HHs) (psns/HH)Kabupaten 47,190 3,889,650 742,038 5.24

Sumba Barat 4,052 353,743 61,298 5.77Sumba Timur 7,001 184,569 36,841 5.01Kupang 7,178 631,546 89,826 7.03Timor Tengah Selatan 3,947 385,814 88,106 4.38Timor Tengah Utara 2,670 193,033 44,105 4.38Belu 2,446 275,384 59,811 4.60Alor 2,865 164,237 35,595 4.61Lembata - 89,736 21,180 4.24Flores Timur 3,079 287,153 41,271 6.96Sikka 1,732 262,643 53,055 4.95Ende 2,047 231,222 48,260 4.79Ngada 3,038 223,222 43,173 5.17Manggarai 7,136 607,348 119,517 5.08

Kotamadya 160 * 52,321 *Kupang 160 * 52,321 *

Total 47,350 3,889,650 794,359 4.90(Remark)

Population of Kotamadya Kupang is included in that ofKabupaten Kupang.

C. West Nusa Tenggala ProvinceArea Population Households Family size

(km2) (persons) (HHs) (psns/HH)Kabupaten 20,097 3,821,134 906,643 4.21

Lombok Barat 1,649 978,021 172,037 5.68Lombok Tengah 1,428 745,417 203,223 3.67Lombok Timur 1,606 971,210 261,296 3.72Sumbawa 8,493 441,170 110,072 4.01Dompu 2,325 180,474 41,903 4.31Bima 4,597 504,842 118,112 4.27

Kotamadya 56 * 80,417 *Mataram 56 * 80,417 *

Total 20,153 3,821,134 987,060 3.87(Remark)

Population of Kotamadya Mataram is included inthat of Kabupaten Lombok Barat.

Sources:1.

2.

3.

4.

Note: - Lack of data.

Nusa Tenggala Barat Dalam Angka 1999, Statistic Officed Nusa TenggalaBarat Province.

Penduduk Indonesia, Hasil Sensus Penduduk 2000, Central StatisticOrganization.Sulawesi Selatan Dama Angka 1999, Statistic Office of Sulawesi SelatanProvince.Nusa Tenggala Timur Dalam Angka 1999, Statistic Office of NusaTenggala Balat Province.

5-4

5.2.2 Labor Force Table 5.2-4 shows the economic active population (the labor force) as of 1999. According to this table, unemployment rate was 6.36 % to the total economic active population of Indonesia in 1999. This unemployment rate is rather high.

Also as shown in this table, unemployment rates of 3 provinces are 6.48 %, 2.93 % and 1.44 % in North Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province respectively which they are rather low than the average one in the nation except North Sulawesi Province. The unemployment rates of the latter 2 provinces seem to be too low compared with the other provinces in Indonesia. It may say that these low unemployment rates are reflecting high infant mortality rate. This means that the latter 2 provinces are in high poverty level compared with the other provinces.

Table 5.2-4 Population Aged 15 Years and Over by Province and by Type of Activity

(As of 1999)

EverWorked

NeverWorked Sub-total

Daerah Istimewah Aceh 1,530,094 27,630 97,492 125,122 1,655,216 7.56% 272,810 535,476 220,964 1,029,250 2,684,466 61.66%North sumatra 4,668,817 103,416 284,270 387,686 5,056,503 7.67% 820,539 1,046,560 405,356 2,272,455 7,328,958 68.99%West Sumatra 1,823,061 23,000 90,948 113,948 1,937,009 5.88% 296,618 498,414 256,036 1,051,068 2,988,077 64.82%Riau 1,583,940 39,831 90,905 130,736 1,714,676 7.62% 243,931 684,946 146,785 1,075,662 2,790,338 61.45%Jambi 1,103,640 9,272 30,452 39,724 1,143,364 3.47% 114,224 348,532 129,728 592,484 1,735,848 65.87%South Sumatra 3,296,447 61,754 112,805 174,559 3,471,006 5.03% 327,019 838,068 334,103 1,499,190 4,970,196 69.84%Bengkulu 733,329 7,499 18,266 25,765 759,094 3.39% 87,812 133,929 43,423 265,164 1,024,258 74.11%Lampung 3,041,148 29,385 116,546 145,931 3,187,079 4.58% 352,946 825,701 289,892 1,468,539 4,655,618 68.46%Daerah Khusu Ibukota Jakarta 3,785,076 321,669 346,653 668,322 4,453,398 15.01% 835,923 1,560,459 548,607 2,944,989 7,398,387 60.19%West Jawa 16,181,026 588,154 1,176,230 1,764,384 17,945,410 9.83% 2,273,346 6,473,917 2,292,492 11,039,755 28,985,165 61.91%Central Jawa 14,621,149 255,076 409,845 664,921 15,286,070 4.35% 1,456,063 3,083,223 1,359,235 5,898,521 21,184,591 72.16%Daerah Istimewah Yogyakarta 1,524,870 22,566 36,670 59,236 1,584,106 3.74% 306,669 290,707 94,138 691,514 2,275,620 69.61%East Jawa 16,982,225 342,933 540,545 883,478 17,865,703 4.95% 1,578,840 4,629,507 1,540,282 7,748,629 25,614,332 69.75%Bali 1,711,968 16,189 27,510 43,699 1,755,667 2.49% 160,226 210,849 172,706 543,781 2,299,448 76.35%West Nusa Tenggala 1,715,734 6,128 18,964 25,092 1,740,826 1.44% 153,630 380,378 140,630 674,638 2,415,464 72.07%East Nusa Tenggala 1,689,199 9,233 41,674 50,907 1,740,106 2.93% 120,520 360,028 148,921 629,469 2,369,575 73.44%East Timor - - - - - - - - - - -West Kalimantan 1,695,002 5,500 29,427 34,927 1,729,929 2.02% 178,361 405,407 172,631 756,399 2,486,328 69.58%Central Kalimantan 789,521 7,019 23,025 30,044 819,565 3.67% 85,333 201,172 61,804 348,309 1,167,874 70.18%South Kalimantan 1,545,621 12,639 24,825 37,464 1,583,085 2.37% 120,084 334,506 130,011 584,601 2,167,686 73.03%East Kalimantan 1,039,086 53,614 74,651 128,265 1,167,351 10.99% 147,560 391,816 91,223 630,599 1,797,950 64.93%North Sulawesi 1,161,616 20,922 76,650 97,572 1,259,188 7.75% 164,960 494,136 145,822 804,918 2,064,106 61.00%Central Sulawesi 968,538 12,086 32,438 44,524 1,013,062 4.39% 102,012 254,253 70,094 426,359 1,439,421 70.38%South Sulawesi 3,077,630 44,681 168,504 213,185 3,290,815 6.48% 402,823 1,294,331 477,472 2,174,626 5,465,441 60.21%Sulawesi Tenggala 703,876 4,456 27,602 32,058 735,934 4.36% 95,748 188,466 47,854 332,068 1,068,002 68.91%Maluku 919,123 9,909 35,396 45,305 964,428 4.70% 147,876 232,428 87,850 468,154 1,432,582 67.32%Irian Jaya 925,123 16,471 46,994 63,465 988,588 6.42% 88,858 160,412 48,828 298,098 1,286,686 76.83%Whole In donesia 88,816,859 2,051,032 3,979,287 6,030,319 94,847,178 6.36% 10,934,731 25,857,621 9,456,887 46,249,239 141,096,417 67.22%Source: Statistical Year Book of Indonesia 2000, Central Statistic Organization.

AttendingSchool

House-keeping Others Total

Looking for workWorking Sub-total

Unemploy-ment rate

Economic active population Non-economic active population TotalWorkablePopulation

Economic ActivePopulation Rate to

Total WorkablePopulation

Province

Distribution of employed population in Indonesia as of 1999 is illustrated in Figure 5.2-1. As shown in this figure, most of employed population has been engaged in the industrial group of “agriculture, forestry, hunting and fishery” with a share rate of 43.5 %.

5-5

43.46%

0.82%

13.04%

0.21%

3.87%19.28%4.76%

0.72%

13.84%

Figure 5.2-1 Share Rate of Working Population in Indonesia in 1999

Following figures shows share rates of working population in 3 targeted provinces. As shown in the figures below, almost half populations of the provinces are engaged in agriculture reflecting their development status. Among them, East Nusa Tenggara Province indicates the highest share rate of agriculture as 68.5 %.

In the nation, the share rate of population engaging in the working category of “Electricity, Gas and Water” was 0.21 % in 1999, while in South Sulawesi Province, it was rather high as 0.28 % but the other 2 provinces show quite low share rates as less than 0.1 % in the same year.

54.71%

0.28%

5.39%

0.28%

2.83%

17.17%

3.96%

0.32%

15.06%

68.49%

6.18%9.93%

0.10%10.55%

0.09%0.54%2.67%1.44%

Agriculture, forestry, hunting & fishery

Mining & quarrying

Manufacturing

Electricity, gas & water

Construction Wholesale, trade, retail trade, restaurant & hotel

Transportation, storage and communication

Financing, insurance, realestate & business services

Public services

Source: Statistical Year Book of Indonesia 1999, Central Statistic Organization.

B. East Nusa Tenggara province

A. South Sulawesi province

Transportation, storage and communication

Financing, insurance, realestate & business services

Public services

Wholesale, trade, retail trade, restaurant & hotel Construction

Electricity, gas & water

Manufacturing

Mining & quarrying

Agriculture, forestry, hunting & fishery

Agriculture, forestry, hunting & fishery

Mining & quarrying Manufacturing

Electricity, gas & water Construction

Wholesale, trade, retail

trade, restaurant &

hotel

Transportation, storage and communication

Financing, insurance, real estate & business services

Public services

5-6

47.41%

3.83%

11.29

0.06%

4.30%17.23%4.27%

0.31%

1.31%

Fig 5.2-2 Share Rate of Working Population of 3 Targeted Provinces in 1999

Also according to the above figures, it seems that 2 provinces of South Sulawesi and West Nusa Tenggara have abundant tourist resources comparing with East Nusa Tenggara Province.

5.3 GROSS DOMESTIC PRODUCT (GDP) AND GROSS REGIONAL DOMESTIC PRODUCT (GRDP) Following table shows the Gross Domestic Product (GDP) in Indonesia in current prices and in 1985/86 constant price.

Table 5.3-1 Gross Domestic Product in Indonesia

According to the above table, GDP of whole Indonesia has increased in current amount, but has actually decreased since 1997 with an annual average rate of 3.1 % when turned up the Rupiah Crisis.

As of 1999, major economical activities were the industrial origin of “agriculture, livestock, forestry & fisheries”, “manufacturing industry”, and “trade, hotels & restaurants” as indicated in Figure 5.3-1. Among them, “manufacturing industry” was the top with 26 % of its share rate in the whole economic activities. The industrial

C. West Nusa Tenggara province

Source: Statistical Year Book of Indonesia 1999, Central Statistic Organization.

(billion Rupiah)

1996 1997 1998 1999 1996 1997 1998 1999Agriculture, livestock, forestry & fisheries 88,972 101,009 181,021 214,879 63,828 64,468 64,988 65,424 0.83%Mining & quarrying 46,088 55,562 137,629 109,646 37,739 38,538 37,353 37,312 -0.38%Manufacturing industry 136,426 168,178 245,411 285,513 102,260 107,630 94,848 96,928 -1.77%Electricity, gas & water supply 6,893 7,832 11,149 13,160 4,877 5,480 5,582 5,987 7.07%Construction 42,025 46,679 55,591 66,360 32,924 35,346 21,035 21,277 -13.54%Trade, hotels & restaurants 87,137 99,582 167,117 182,818 69,475 73,524 60,253 59,592 -4.99%Transportation and communication 34,926 38,531 51,937 66,077 29,701 31,783 26,975 26,782 -3.39%Financial, ownerships & business services 43,982 54,360 70,007 70,432 36,384 38,543 28,279 25,826 -10.80%Services 46,299 55,962 82,472 98,406 36,610 37,935 36,739 37,776 1.05%Gross Domestic Product (GDP) 532,748 627,695 1,002,333 1,107,291 413,798 433,246 376,052 376,903 -3.07%Mid-year population (1,000) 196,807 199,837 202,873 205,915 196,807 199,837 202,873 205,915 -Per-Capita GDP (Rupia) 2,706,957 3,141,037 4,940,692 5,377,419 2,102,557 2,167,997 1,853,631 1,830,380 -4.52%Source: Statistical Year Book of Indonesia 1999, Central Statistic Organization.

Current price Constant 1993 market price Annual averagegrowth rate

Industrial origin

Agriculture, forestry, hunting & fishery

Public services Financing, insurance, real estate & business services

Transportation, storage and communication

Wholesale, trade, retail trade, restaurant & hotel

Construction

Electricity, gas & water Manufacturing

Mining & quarrying

5-7

origin of “agriculture, livestock, forestry & fisheries” shares only 19 %.

19.41%

9.90%

25.78%1.19%

5.99%

16.51%

5.97%

6.36%

8.89%

While, the highest shares of GRDP in target provinces were “agriculture, forestry, hunting and fishery” as around 40 % or more as shown in Table 5.3-2 and Figure 5.3-2 as of the same year. The second one was “trade, hotels & restaurants” ranging from 15 % to 18 % of the share rates depending on status of the provinces, and the third one was “public services” with the share rates ranging from 10 % to 14 % of the share rates also depending on their status.

Table 5.3-2 Gross Regional Domestic Product in Target Provinces

A. South Sulawesi Province (billion Rupiah)

1996 1997 1998 1999 1996 1997 1998 1999Agriculture, livestock, forestry & fisheries 4,561 5,294 10,049 10,089 3,448 3,429 3,427 3,516 0.65%Mining & quarrying 531 483 1,325 1,949 349 321 352 419 6.30%Manufacturing industry 1,350 1,610 2,466 2,625 1,128 1,247 1,175 1,215 2.49%Electricity, gas & water supply 122 129 203 234 109 113 130 135 7.49%Construction 742 872 967 1,008 564 617 449 449 -7.30%Trade, hotels & restaurants 1,745 1,981 2,906 3,554 1,515 1,622 1,576 1,618 2.21%Transportation and communication 709 811 1,281 1,425 632 705 710 746 5.70%Financial, ownerships & business services 714 820 858 878 606 650 452 430 -10.79%Services 1,358 1,537 1,896 2,304 1,135 1,190 1,096 1,103 -0.95%Gross Regional Domestic Product (GRDP) 11,833 13,538 21,951 24,065 9,486 9,893 9,366 9,631 0.51%Per-Capita GDP (Rupia) 1,548,429 1,742,421 2,779,422 2,998,404 1,241,280 1,273,342 1,185,959 1,199,999 -1.12%

B. East Nusa Tenggala Province (billion Rupiah)

1996 1997 1998 1999 1996 1997 1998 1999Agriculture, livestock, forestry & fisheries 1,297 1,750 2,040 2,465 1,022 1,106 1,064 1,084 1.98%Mining & quarrying 55 56 73 86 46 44 36 37 -7.16%Manufacturing industry 77 83 94 105 66 66 68 68 1.12%Electricity, gas & water supply 24 31 35 41 20 22 26 31 15.96%Construction 287 295 380 435 240 232 184 191 -7.38%Trade, hotels & restaurants 465 591 833 984 356 386 383 402 4.12%Transportation and communication 326 369 399 433 279 293 295 304 2.90%Financial, ownerships & business services 153 184 190 195 124 133 126 123 -0.38%Services 650 725 824 853 532 553 576 594 3.76%Gross Regional Domestic Product (GRDP) 3,333 4,083 4,868 5,597 2,686 2,836 2,759 2,834 1.81%Per-Capita GDP (Rupia) 920,459 1,107,737 1,297,482 1,466,161 741,686 769,435 735,365 742,543 0.04%

growth rate

growth rateCurrent price

Current price Constant 1993 market price Annual average

Constant 1993 market price Annual average

Figure 5.3-1 Share Rate of GDP in Indonesia by Industrial Origin as of 1999

Agriculture, forestry, hunting & fishery

Mining & quarrying

Manufacturing

Electricity, gas & water

Construction

Wholesale, trade, retail trade, restaurant & hotel

Transportation, storage and communication

Financing, insurance, real estate & business services

Public services

(To be continued)

5-8

C. West Nusa Tenggala Province (billion Rupiah)

1996 1997 1998 1999 1996 1997 1998 1999Agriculture, livestock, forestry & fisheries 1,461 1,630 3,392 3,328 1,160 1,180 1,180 1,197 1.05%

Mining & quarrying 125 141 186 296 99 106 86 127 8.42%

Manufacturing industry 194 225 433 450 153 164 154 157 0.85%

Electricity, gas & water supply 17 19 22 25 15 17 17 18 6.12%Construction 346 405 572 645 271 294 234 241 -3.83%Trade, hotels & restaurants 673 797 1,359 1,399 523 568 529 535 0.74%Transportation and communication 401 454 738 807 342 373 387 401 5.43%Financial, ownerships & business services 127 146 169 163 101 108 90 80 -7.45%Services 643 718 882 1,121 530 554 561 563 2.03%Gross Regional Domestic Product (GRDP) 3,986 4,534 7,751 8,234 3,195 3,363 3,239 3,319 1.27%Per-Capita GDP (Rupia) 1,081,036 1,208,115 2,029,319 2,118,117 866,486 896,147 847,912 853,757 -0.49%Source: Gross Regional Domestic Product of Provinces in Indonesxia by Industrial Origin 1996-1999, Central Statistic Organization.

growth rateCurrent price Constant 1993 market price Annual average

Electricity, gas & water supply Transportation and communicationMining & quarrying Construction Financial, ownerships & business servicesManufacturing industry Trade, hotels & restaurants Services

Agriculture, forestry, hunting & fishery

41.93%

8.10%

10.91%

0.97%4.19%14.77%

5.92%

3.65%

9.57%

44.05%

1.53%1.88%0.73%

7.77%

17.58%7.73%3.48%

15.25%

40.42%

3.60%

5.46%0.31%

7.83%

17.00%9.80%

1.98%

13.61%

Figure 5.3-2 Share Rates of GRDP in Targeted Three Provinces by Industrial Origin as of 1999

5.4 FINANCIAL SITUATION OF THE NATION AND THE PROVINCES

5.4.1 Finance in the Nation Government finances of Indonesia has been growing from Rp.99,530 billion in 1996/97 to Rp.215,130 billion in 1998/99 with an average annual growth rate of 47 % in revenue. However, the expenditure has also grown from the Rp.98,513 billion to Rp.215,586 billion during the same period with an average annual growth rate of 48 % as shown in the following Table 5.4-1. Therefore, the Government of Indonesia has registered a deficit at a sum of Rp.456 billion as of 1998/99 fiscal year.

South Sulawesi Province East Nusa Tenggara Province West Nusa Tenggara Province

5-9

Table 5.4-1 Actual Revenue and Expenditure of Indonesia

(Billion Rp.)

1996/97 1997/98 1998/99Annual

avaeragegrowth ratio

REVENUE 99,530 132,001 215,130 47.02%Routine Revenue 87,630 108,184 152,810 32.05%

Oil & gas revenue 20,137 35,357 41,254 43.13%Non oil & gas revenue 67,493 72,827 111,556 28.56%

Income tax 27,062 28,458 49,714 35.54%Tgoods & services/tax on sales of luxury goods 20,351 24,501 28,386 18.10%Import duties 2,579 2,990 2,218 -7.26%Excise duties 4,263 4,807 7,974 36.77%Export tax 81 125 4,582 652.12%Other taxes 591 530 463 -11.49%Land tax/taxes on land & building 2,413 2,655 3,163 14.49%Non tax revenues 10,153 8,761 15,056 21.77%Other oil revenues 0 0 0

Development Revenue 11,900 23,817 62,320 128.84%Programs aid 0 0 36,403Projects aid 11,900 23,817 25,917 47.58%

Routine Expenditure 98,513 131,806 215,586 47.93%Personal expenditures 14,454 19,174 24,480 30.14%Material expenditures 8,109 9,032 11,058 16.78%Subsidies to autonomous region 9,358 9,873 14,194 23.16%Interest & debts repayment 27,491 29,697 55,798 42.47%Other 3,149 16,830 42,187 266.02%

Development Expenditure 35,952 47,200 67,869 37.40%Development - institutions 12,159 11,576 13,404 4.99%Development subsidies to villages 458 469 477 2.05%Development subsidies to regencies 2,941 3,465 3,730 12.62%Development subsidies to provinces 1,394 1,662 1,741 11.76%Government capital participation 830 119 1,962 53.75%Fertilizer subsidy 186 547 2,125 238.00%Construction of primary schools 592 663 586 -0.51%Retribution for regional development (IPEDA) 2,396 2,416 2,847 9.01%Sanitary facilities/public health centers 564 870 827 21.09%Presidential subsidies to village development (INPRES) 524 480 205 -37.45%Others 2,008 1,116 14,048 164.50%Projects aid 11,900 23,817 25,917 47.58%

Surplus/Deficit 1,017 195 -456Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization.

I t e m

Among the development expenditures, development subsidies to desas (villages), Kabupatens (regencies) and provinces of whole Indonesia have been grown with a rates of 2.05 % (from Rp.458 billion to Rp.477 billion), 12.62 % (from Rp.2,941 billion to Rp.3,730 billion) and 11.76 % (from Rp.1,394 billion to Rp.1,741 billion) respectively.

5.4.2 Finance in the Targeted Provinces On the other hand, the financing situations of the targeted provinces are shown in the following Table 5.4-2.

5-10

Table 5.4-2 Local Autonomous Financial Situation of the Targeted Provinces in 1998/99

(Miilion Rp.)

Amount Sharerate(%) Amount Share

rate(%) Amount Sharerate(%)

REVENUE 262,714 100.00% 132,438 100.00% 139,624 100.00%Balance at the beginning of the year 35,608 13.55% 7,511 5.67% 16,186 11.59%Internal revenue 67,958 25.87% 17,607 13.29% 24,097 17.26%

Local tax 52,499 13,328Local retribution 5,158 4,646Income from establishment 1,889 485Income from services 0 0Other income 8,413 5,638

Quotient Tax/Non Tax Revenue 47,785 18.19% 8,691 6.56% 7,780 5.57%Quotient tax revenue 16,621 4,380Quotient non tax revenue 31,163 3,400

Contribution and Subsidies 46,974 17.88% 98,629 74.47% 87,814 62.89%Contribution 0 22,239Subsidies 46,974 65,576

Development Receipts 64,389 24.51% 0 0.00% 0 0.00%Local loans 64,389 0Local Establishment loans 0 0

Cash Affairs and Account Receipts 0 0.00% 0 0.00% 3,747 2.68%EXPENDITURE 218,321 100.00% 122,902 100.00% 107,646 100.00%

Routine Expenditure 99,140 45.41% 50,464 41.06% 47,639 44.26%Personal expenditures 45,051 20.64% 20,261 16.49% 22,264 20.68%Orderstand - other current expenditure 0 0.00% 0 0.00% 1,250 1.16%Material expenditures 25,599 11.73% 12,088 9.84% 8,393 7.80%Care cost - repair & maintenance 5,244 2.40% 1,746 1.42% 1,256 1.17%Official transportation cost - inspection 6,025 2.76% 3,150 2.56% 1,620 1.50%Debt repayment and interest 729 0.33% 42 0.03% 0 0.00%Current transfer for lower regions 10,341 4.74% 3,948 3.21% 4,558 4.23%Other unpredictable current expenditure 1 0.00% 4,703 3.83% 26 0.02%Others 6,151 2.82% 4,526 3.68% 8,272 7.68%

Development Expenditure 119,181 54.59% 72,438 58.94% 56,259 52.26%Agriculture and forestry 17,358 7.95% 2,141 1.74% 8,905 8.27%Industry 618 0.28% 137 0.11% 350 0.32%Mining & energy 436 0.20% 364 0.30% 149 0.14%Transportation, communication & tourism 25,433 11.65% 38,582 31.39% 30,125 27.99%Trade, business & cooperatives 5,290 2.42% 1,554 1.26% 5,572 5.18%Man power & resettlement 593 0.27% 92 0.08% 109 0.10%Water resources and irrigation 12,181 5.58% 2,299 1.87% 2,633 2.45%Regional development 3,061 1.40% 8,207 6.68% 1,105 1.03%Religeous affairs 467 0.21% 260 0.21% 251 0.23%Environmental & space order 7,386 3.38% 6,232 5.07%Educational, youth, culture, etc. 3,207 1.47% 1,711 1.39% 668 0.62%Health, social welfare & family planning 5,637 2.58% 2,801 2.28% 1,751 1.63%People dwelling 5,421 2.48% 1,040 0.85% 1,438 1.34%Security & order 306 0.14% 247 0.20% 167 0.16%Political information and communication 983 0.45% 421 0.34% 1,953 1.81%Government apparature & controlling 7,773 3.56% 4,415 3.59%Science, technology and research 1,308 0.60% 864 0.70% 978 0.91%Law 220 0.10% 192 0.16% 105 0.10%Development subsidies to lower region 21,501 9.85% 878 0.71% 0 0.00%Civil servants 10,056 9.34%Otrher development expenditures 1,912 1.78%

Cash Affairs and Account on Current Expenditure 3,747 3.48%Surplus/Deficit 44,393 9,536 31,979Reference: Population as of 1999 7,886,549 3,706,536 3,875,311Sources:- Sulawesi Selatan Dalam Angka 1999, BPS Selsel Office.- Nusa Tenggara Timur Dalam Angka 1999, BPS NTT office.- Nusa Tenggarfa Bazrat Dalam Angka 1999, BPS NTB Office.

South SulawesiProvince

East Nusa TenggaraProvince

West Nusa TenggaraProvince

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According to the above table, revenues of each province per capita were almost same amounts as Rp.33,300 in South Sulawesi Province, Rp.35,700 in East Nusa Tenggara Province and Rp.36,000 in West Nusa Tenggara Province. However, “internal revenue” mainly consisting of income taxes and fees and revenue from commercial activities itemized as “quotient tax/non tax” in South Sulawesi Province was quite high comparing with other 2 provinces.

The internal revenue amounted at Rp.67,958 million in South Sulawesi Province had reached by almost 4 times of that in East Nusa Tenggara Province and 3 times of that in West Nusa Tenggara Province, and the amount quotient tax/non tax in South Sulawesi Province was Rp.47,785 million, and this amount was around 5.5 times and 6.1 times of those in other 2 provinces respectively. Share rates of these 2 revenue items to the total revenue were 44.1 % in South Sulawesi Province, 19.9 % in East Nusa Tenggara Province and 22.9 % in West Nusa Tenggara Province.

On the other hand, the amounts of “contribution and subsidies” in South Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province were Rp.46,974 million (17.9 % of the total revenue), Rp.98,629 million (74.5 %) and Rp.87,814 million (62.9 %) respectively.

As is witnessed by the above mentioned fact that South Sulawesi Province has considerable high economic activities, and the other 2 provinces may not be kept going financially without contribution and subsidies. From this viewpoint, it may say that South Sulawesi Province is a suitable province for construction of pilot plant at the first setout because they have an adequate financial room to subsidize to lower regions if necessary.

A Situation of expenditures can also bear out the above. In Indonesia, there are 2 kinds of subsidies as “current transfer to lower regions” and “development subsidy to lower region”. In South Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province, disbursed amounts of total subsidies to their lower regions consisting of both the 2 items above were Rp.31,842 million, Rp.4,826 million and Rp.4,558 million respectively. From the viewpoint of per capita expenditure for these subsidies of each province, they may be expressed as Rp.4,040, Rp.1,300 and Rp.1,180 respectively. As indicated, it is quite apparent that South Sulawesi Province has a high affordability to subsidize to their people.

5.4.3 Tax Collection System in Indonesia A main source of both the central and local Government is tax revenue as indicated in Tables 5.4-1.and 5.4-2. In former time, taxes belong to the Government were collected by local branches of the central taxation offices under the control of the Government, and all of these tax revenues had been sent directly to the National Treasury. After that, the Government allots these tax revenues to local autonomies uniformly taking only a little specialty of the regions into consideration named as “contributions” and/or “national subsidies”. Therefore, local autonomies being in poor level had kept almost the same scale of their budgets with the local autonomies being in rich level in compliance with, for example, population as mentioned in previous clause.

On the occasion that the decentralization has become effective on January 2001, the tax

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collection system in Indonesia is changed. Such national taxes as income tax, taxes on goods and services on sales of luxury goods, and export and import duties and/or customs are still belong to the Government, but these taxes has become to collect by the local autonomies as provinces and regencies (Kabupatens) on their own hands, and they send some amount of tax revenues to the Government with certain rate in proportion of the scale of such revenues.

Therefore, the local autonomies being in rich level with plentiful natural resources and being in the high level of economic activities will be richer, while the new tax collection system may compels the local autonomies being in poor level at present to redouble their exertions for development of economic activities to get more revenues.

South Sulawesi Province is in not so much poor level, but in not so much high level. They have decent resources for development of economic activities as mentioned hereunder, and they have a potentiality to become richer only in case of doing the right way. From this viewpoint, South Sulawesi Province is a suitable province as a location of the pilot plant than the other 2 provinces.

5.5 GENERAL STATUS OF WHOLE NATION The Indonesian economic crisis that started in July 1997 had created pressure on the local currency of Rupiah with its rapid devaluation picking up it’s pace towards the end of 1997. It also led to the end of the Soeharto regime in May 1998. Following this, there was an interim Government under President B.J. Habibie, who was replaced by the present Government following the general election in June 1999. The current president took office in October 1999.

The overall impacts were very severe, with a GDP decrease of 13% in 1998 and virtually zero percent in economic growth rate in 1999. The scale of the impact has varied quite markedly from an economic sector to the other sectors, and from an area to another area. In contrast to the pre-crisis period when inflation rates were quite reasonable and exchange rates very stable, the situation deteriorated rapidly from mid 1997. In fiscal year 1996/97, domestic inflation rate was less than 8%, while in the following three fiscal years it has been as 20%, 45% and 15%.

Originally, the economic crisis was region-wide and affected to the others. Most of the other countries affected have managed to recover much faster and to appear to be well on the way to recovery as achieving double digit GDP growth rates as Singapore: 9% and Malaysia: 5.8% apart from the Philippines. In these countries, the main problems were economic one, but not political and sociological ones. Therefore, confidence has begun to return to these countries. Whilst, it poses a problem for Indonesia that investors who might have favored Indonesia’s cheap labor in the past, abundant resources and large domestic market, are now more concerned about stability and sound financial institutions and tend to look elsewhere.

The economy has yet to stabilize and it is still too early to predict in which direction it will develop or to conjecture what will happen in any particular sector. The Rupiah remains highly volatile and the investment climate is still considered to be in a critical condition. The national debt stands at over US$ 143 billion, and it is almost the same amount of GDP (Government foreign debt: US$ 75 billion, debt in private sector:

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US$ 68 billion. In addition to this, there is a Government domestic debt at a sum of US$ 72 billion). Direct foreign investment has risen rapidly during the 1990s reaching over US$ 6 billion during 1996. But this is dried up immediately after the Rupiah crisis.

GDP in 2000 is expected to achieve at around 4.00 % due to oil price appreciation, and to forecast a slightly higher one for 2001 than for 2000. However, foreign investors are far fewer than those before the crisis expressing an interest in the country. It is, however, estimated that an economic growth rate of at least double. This would be firstly required to create sufficient employment opportunities for those who are currently un- or under-employed and those who will be seeking work over the short to medium term. It is estimated, based on the current growth rates of working population, that new job opportunities may be created for the existing job seekers of 1.6 millions, while approximately 2 millions of newcomers enter into the job market annually. Although such growth rates are indicating quite high growth, when they applied to countries of the world being in more high and stable developed economies to compare, such growth rate in Indonesia does not represent strong economic growth in the nation’s context.

5.6 INDUSTRIAL PERSPECTIVES OF TARGETED THREE PROVINCES As indicated in Figure 5.3-1, the industrial group of “manufacturing” shows the highest share rate to GDP in Indonesia as around 26 %, “agriculture, livestock, forestry and fisheries” is the second as around 19 %, and “trade, hotels and restaurants” is the third as 17 %. And, per capita GDP in Indonesia has decreased with a rate of 4.52 % per annum in average during the period since 1996 to 1999 when the people has underwent the above mentioned Rupiah crisis. While in targeted 3 provinces, “agriculture, livestock, forestry and fisheries” shows the highest share rates as 42 %, 44 % and 40 in South Sulawesi, East Nusa Tenggara and West Nusa Tenggara respectively, and their second ones are “construction” reflecting their local situation. It means that their main economic activities are agriculture as mentioned in previous clause. Furthermore, their per capita GRDPs have not so much decreased as Indonesia, namely decreasing rates of these provinces were 1.12 %, 0 % and 0.49 % respectively during the same time as shown in Table 5.3-2. Following Table 5.6-1 shows agricultural production of these 3 provinces.

Table 5.6-1 Main Agricultural Production of Targeted 3 Provinces in 1998

Harvestedarea Production Harvested

area Production Harvestedarea Production

(ha) (ton) (ha) (ton) (ha) (ton)Main Food crops

Wetland paddy 872,545 3,803,493 106,604 341,331 287,820 1,278,050Dryland paddy 29,741 67,349 65,796 131,669 29,506 66,667Maize 269,885 989,658 237,383 493,535 39,971 77,412Cassava 47,402 823,426 81,296 822,326 10,214 113,933

Main Cash cropsTall coconut 152,271 138,602 - - 64,019 44,119Hybrid coconut 30,304 28,738 - - - -Coffee (robsta) 45,019 21,827 59,706 12,617 * 9,344 2,291 *Coffee (arabica) 42,041 15,583Clove 49,303 9,451 10,148 616 1,595 379Cacao 228,312 189,941 30,160 3,119 3,745 387Cashew nut 73,971 22,628 129,735 13,357 45,427 4,098

(Note) - : Lack of data (not reported in statistics).* : mix of robsta and arabica).

Resources: Sulawesi Sulatan Dalam Angka 1999, BPS South Sulawesi Provincial Office.Nusa Tenggara Timur Dalam Angka 1999, BPS East Nusa Tenggara Provincial Office.Nusa Tenggara Barat Dalam Angka 1999, BPS West Nusa Tenggara Provincial Office.

CropsSouth Sulawesi East Nusa Tenggara West Nusa Tenggara

Province of:

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As indicated in Figure 5.2-2, around of 55 % (1,684,000 persons) of local population of South Sulawesi Province are economic active population in agriculture sector, 68 % (1,157,000 persons) in East Nusa Tenggara Province, and 47 % (814,000 persons) in West Nusa Tenggara Province.

In South Sulawesi Province, Polewari Mamasa Regency (locally called as Kabupaten Polewari Mamasa) is a main cacao producing district. But Tana Toraja Regency (Kabpaten Tana Toraja) and its neighboring district named as Luwu Regency (Kabpaten Luwu) are the main coffee producing districts. The coffee produced in these areas is quite famous called as “Toraja Coffee” in the world. The area is quite mountainous area, but people living in these areas are getting higher cash incomes compared with people living in the other mountainous area.

The Government of Indonesia has conducted an Economic Census in 1996 (1996 Economic Census). Following Table 5.6-2 shows a result of the 1996 Economic Census.

Table 5.6-2 Number of Establishments and Employees in Indonesia and Targeted Provinces

According to the above table, the main economic activities are “agriculture” and a commercial sector consisting of “whole sale and retail trade, restaurants and accommodation services” in targeted provinces. Among targeted 3 provinces, share rate of agriculture in East Nusa Tenggara Province is rather higher than the other 2 provinces both in number of establishments and number of employees, but that of “whole sale and retail trade, restaurants and accommodation services” is lower than the

Number of establishment,emplyees and their share rate by

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Numbar of Establishment (in 1,000)Indonesia 22,536 193 2,759 14 211 9,462 1,733 73 1,981 38,962Share rate (%) 57.84 0.49 7.08 0.03 0.54 24.29 4.45 0.19 5.08 100.00South Sulawesi Province 980 2 104 1 8 361 67 2 46 1,570Share rate (%) 62.42 0.12 6.63 0.04 0.52 23.01 4.24 0.13 2.90 100.00East Nusa Tenggara Province 583 2 75 0 4 74 4 1 12 755Share rate (%) 77.19 0.27 9.97 0.05 0.50 9.78 0.50 0.12 1.62 100.00West Nusa Tenggara Province 473 7 73 0 7 169 34 2 22 787Share rate (%) 60.07 0.89 9.34 0.01 0.88 21.49 4.33 0.19 2.80 100.00

Number of Emplyees (in 1,000)Indonesia 32,183 447 10,040 140 1,040 15,206 2,499 661 4,098 66,313Share rate (%) 48.53 0.67 15.14 0.21 1.57 22.93 3.77 1.00 6.18 100.00South Sulawesi Province 1,364 7 225 7 47 552 90 18 97 2,408Share rate (%) 56.62 0.28 9.36 0.29 1.96 22.93 3.75 0.76 4.05 100.00East Nusa Tenggara Province 1,034 4 127 2 35 129 15 7 32 1,385Share rate (%) 74.64 0.32 9.13 0.17 2.50 9.28 1.09 0.53 2.34 100.00West Nusa Tenggara Province 788 12 150 2 32 252 47 12 48 1,342Share rate (%) 58.73 0.93 11.15 0.12 2.41 18.77 3.49 0.86 3.55 100.00

Sources:- 1996 Economic Census Complete Count Result, Indonesia, Central Statistic Organization.- 1996 Economic Census Complete Count Result, Sulawesi Sulatan, Central Statistic Organization.- 1996 Economic Census Complete Count Result, Nusa Tenggara Timur, Central Statistic Organization.- 1996 Economic Census Complete Count Result, Nusa Tenggara Barat, Central Statistic Organization.

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others. It seems that East Nusa Tenggara Province is in still lower level on economic activities in commercial sector than in others.

5.7 INTERNATIONAL TRADE AND BALANCE OF PAYMENT International trade of Indonesia has been increased from US$25,675 million in 1990 to US$48,665 in 1999 in export with an average annual increasing rate of 7.36 % during these 9 years, and from 21,837 million in 1990 to 24,003 million in 1999 in import with the increasing rate of 1.06 % per annum during the same period as shown in the following Table 5.7-1.

Table 5.7-1 International Trade of Indonesia

(Million US$)Year Exports Imports Balance1990 25,675 21,837 3,8381991 29,142 25,869 3,2741992 33,967 27,280 6,6871993 36,823 28,328 8,4951994 40,053 31,984 8,0701995 45,418 40,629 4,7891996 49,815 42,929 6,8861997 53,444 41,680 11,7641998 48,848 27,337 21,5111999 48,665 24,003 24,662

Average annual increasing ratio (%) 7.36% 1.06%Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization.

As shown in the above table, the amounts of both the export and import have decreased in 1998 and in 1999 compared with the previous year. Especially, decreased rate of the amount of import was greater than that of export. This means that many investors to Indonesia have eased up on their investment to Indonesia after the Rupiah crisis in 1997.

Balance of payment of Indonesia vividly reflects the Rupiah crisis in 1997, especially in the current account and capital transactions as shown in the following Table 5.7-2.

Table 5.7-2 Balance of Payment in Indonesia (Million US$)

1995 1996 1997 1998 1999Current account -6,760 -7,801 -5,001 4,097 2,329

Merchandise 6,533 5,948 10,074 18,429 8,491Export 47,454 50,188 56,297 50,371 23,213

Non oil and gas 36,969 38,021 44,576 42,951 19,226Oil and gas 10,485 12,167 11,721 7,420 3,987

Import -40,921 -44,240 -46,223 -31,942 -14,722Non oil and gas -37,065 -39,870 -41,447 -29,087 -13,237Oil and gas -3,856 -4,370 -4,776 -2,855 -1,485

Services -13,293 -13,749 -15,075 -14,332 -6,162Non oil and gas -10,207 -10,249 -10,525 -11,420 -4,806Oil and gas -3,086 -3,500 -4,550 -2,912 -1,356

Capital transactions 10,589 10,989 2,532 -3,875 -125Official capital 336 -522 2,880 9,971 4,719

Inflows 5,785 5,693 7,594 13,736 6,676Debt repayment -5,449 -6,215 -4,714 -3,765 -1,957

Private capital 10,253 11,511 -348 -13,846 -4,844Direct investment 4,346 6,194 4,667 -356 -1,122Other 5,907 5,317 -5,015 -13,490 -3,722

Total 3,829 3,188 -2,469 222 2,204Errors and Omissions -2,313 1,264 -1,651 2,122 542Monetary movement 1,516 4,452 -4,120 2,344 2,746Official reservation position 14,674 19,125 17,427 0 0Foreign asstes 18,787 25,529 21,418 23,762 26,508Source: Statistical Yearbook of Indon esia 1999, Central Statistic Organization.

Description

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According to the above table, both of export and import both in merchandise and services have rapidly decreased after the year 1997. Therefore, finally, monetary movements are almost half after 1997 compared with before the years till 1996. And, they have no official reservation after 1997. In this case, negative figures indicate increase, and positive figures indicate decrease in monetary movement for reference. Following 2 tables show main export and import commodities for making clear an actual situation.

Table 5.7-3 Export of Indonesia by Commodity Group

Table 5.7-4 Import of Indonesia by Commodity Group

IN VOLUME (Thousand metric ton)Consumption GoodsFood and beverage mainly for household 2,347 － 3,378 43.93 1,408 -58.31 3,416 142.60 5,549 62.45Processed fuel and lubricants 542 － 637 17.47 635 -0.35 593 -6.54 1,558 162.74Transport equipment not for industry 2 － 3 45.00 3 -10.34 0 -84.62 3 600.00Consumtion goods 187 － 190 1.44 276 45.13 142 -48.66 210 48.62Raw Materials and Auxiliary GoodsFood and beverage mainly for industry 5,650 － 6,128 8.45 5,810 -5.18 5,086 -12.46 6,932 36.30Raw materials for in dustry 27,252 27,254 0.01 28,098 3.10 19,920 -29.10 24,499 22.99Fuel and lubricants 17,331 － 18,896 9.03 20,446 8.20 20,950 2.47 22,302 6.45Spareparts and accessaries 799 － 1,063 33.16 1,057 -0.62 499 -52.75 442 -11.48Capital GoodsCapital goods excluding transport equipment 787 － 857 8.89 1,026 19.82 574 -44.06 554 -3.54Pasenger cars 9 － 13 54.02 15 12.69 4 -74.83 1 -73.68Transport equipmant for industry 136 － 283 － 358 － 69 -80.74 186 169.71Total 55,041 － 58,702 6.65 59,131 0.73 51,254 -13.32 62,237 21.43

1995 1996 1997 1998 1999

(Volume/Amount)

IncreaseRate

againstpreviousyear (%)

(Volume/Amount)

Commodity group

IncreaseRate

againstpreviousyear (%)

(Volume/Amount)

IncreaseRate

againstpreviousyear (%)

IncreaseRate

againstpreviousyear (%)

(Volume/Amount)

IncreaseRate

againstpreviousyear (%)

(Volume/Amount)

(Volume/amoun t)

IN VOLUME (Thousand Metric ton)Foodstuffs and live animals 4,177 － 4,353 4.22 4,084 -6.18 4,606 12.78 4,660 1.18Beverage and tobacco 77 － 119 55.06 137 14.41 85 -38.14 110 30.53Raw materials 112,350 － 79,238 -29.47 101,005 27.47 75,560 -25.19 61,739 -18.29Mineral fuels, lubricants and related materials 111,981 － 110,405 -1.41 120,725 9.35 124,055 2.76 130,097 4.87Animal and vegetable oils and fats 2,312 － 2,900 25.42 4,376 50.86 2,909 -33.53 4,681 60.94Chemicals 2,776 － 3,258 17.38 4,467 37.09 5,362 20.03 6,309 17.67Manufactured goods classified chiefly by materials 11,018 － 12,324 11.85 10,894 -11.60 16,411 50.64 22,476 36.96Machinery and transport equipment 442 － 556 25.70 742 33.56 532 -28.33 748 40.61Miscellaneous manufactured articles 976 － 1,031 5.60 975 -5.41 793 -18.66 1,511 90.50Commodities and transactions not further specified 0 － 0 － 7,007 － 14,713 109.97 2,635 -82.09Total 246,109 － 214,184 -12.97 254,412 18.78 245,025 -3.69 234,966 -4.11IN VALUE (US$ million)Foodstuffs and live animals 3,584 － 3,768 5.14 3,533 -6.25 3,718 5.23 3,647 -1.91Beverage and tobacco 195 － 229 17.40 252 9.85 258 2.46 227 -12.08Raw materials 5,034 － 5,082 0.96 4,358 -14.25 3,720 -14.65 3,397 -8.68Mineral fuels, lubricants and related materials 11,509 － 12,861 11.75 13,154 2.28 9,429 -28.32 11,191 18.68Animal and vegetable oils and fats 1,384 － 1,577 13.97 2,283 44.79 1,521 -33.40 1,826 20.07Chemicals 1,525 － 1,726 13.19 1,876 8.66 2,092 11.50 2,381 13.84Manufactured goods classified chiefly by materials 10,438 － 10,795 3.42 9,702 -10.13 8,773 -9.58 11,030 25.72Machinery and transport equipment 3,830 － 4,999 30.54 4,624 -7.50 4,656 0.69 5,293 13.66Miscellaneous manufactured articles 7,874 － 8,689 10.34 6,942 -20.10 6,659 -4.08 8,223 23.49Commodities and transactions not further specified 45 － 88 － 6,719 － 8,023 19.40 1,452 -81.90Total 45,419 － 49,815 9.68 53,444 7.28 48,848 -8.60 48,665 -0.37Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization.

1999

Commodity group (Volume/amoun t)

(Volume/amoun t)

(Volume/amoun t)

(Volume/amoun t)

IncreaseRate

againstpreviousyear (%)

IncreaseRate

againstpreviousyear (%)

IncreaseRate

againstpreviousyear (%)

1995 1996 1997 1998

IncreaseRate

againstpreviousyear (%)

IncreaseRate

againstpreviousyear (%)

(To be continued)

5-17

IN VALUE (US$ million)Consumption GoodsFood and beverage mainly for household 1,135 － 1,593 40.28 843 -47.08 1,167 38.51 1,625 39.16Processed fuel and lubricants 111 － 159 42.72 139 -12.29 95 -31.75 293 208.42Transport equipment not for industry 15 － 12 -19.48 17 34.68 3 -79.64 7 91.18Consumtion goods 877 － 847 -3.42 950 12.22 494 -48.07 465 -5.78Raw Materials and Auxiliary GoodsFood and beverage mainly for industry 1,672 － 2,117 26.57 1,860 -12.13 1,295 -30.38 1,639 26.53Raw materials for in dustry 17,227 16,758 -2.72 16,155 -3.60 11,243 -30.40 10,507 -6.54Fuel and lubricants 2,861 － 3,475 21.46 3,827 10.12 2,603 -31.97 3,412 31.08Spareparts and accessaries 7,826 － 8,119 3.75 8,388 3.31 4,471 -46.70 2,917 -34.76Capital GoodsCapital goods excluding transport equipment 7,886 － 8,906 12.94 8,617 -3.24 5,428 -37.01 2,736 -49.60Pasenger cars 80 － 114 42.43 127 11.25 28 -77.65 10 -64.66Transport equipmant for industry 726 － 633 － 540 － 351 -34.94 314 -10.56Total 40,417 － 42,733 5.73 41,463 -2.97 27,179 -34.45 23,924 -11.97Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization.

(Volume/Amount)

IncreaseRate

againstpreviousyear (%)

1998 1999

(Volume/Amount)

IncreaseRate

againstpreviousyear (%)

(Volume/Amount)

IncreaseRate

againstpreviousyear (%)

(Volume/Amount)

IncreaseRate

againstpreviousyear (%)

(Volume/Amount)

IncreaseRate

againstpreviousyear (%)

Commodity group

1995 1996 1997

5.8 ELECTRICITY SECTOR Central Statistic Organization has published a statistic data book on electricity supplied by Indonesian state owned electricity company, PLN entitled as “PLN Electricity Statistics”. Following Table 5.8-1 shows a summary of the PLN Electricity Statistics.

Table 5.8-1 Electricity Supplied by PLN

According to the said statistics, the input cost mentioned in the above table means the variable cost in total mainly consisting of fuel cost, and not including the fixed cost mainly represented by the capital cost. And, as shown in the table, the input cost has rapidly increased by more than 2 times in 1997 that is quite high rate of increase compared with increasing rate of electricity produced.

From the above table, the actual average electricity price can be calculated at Rp.246.52/kWh as of 1999. But this price covers only variable costs. Share rate of variable cost of this price is 87.5 %, and this rate is quite high compared with that in 1996 being estimated at 44.6 %.

On the other hand, total cost of electricity including fixed cost may be at around Rp.650/kWh in 1999. It might be higher as of 2001. Generally speaking, it should be more than Rp.700/kWh (equivalent to 7 cents/kWh in US Dollar) at present. Difference between these figures is deficit in PLN’s finance, and subsidized by the Government.

Unit 1995 1996 1997 1998 1999

Averageannual

increasingratio

Total insatalled capacity MW 14,981 15,321 17,042 20,374 20,596 8.28%Electricity produced in total Million MWh 55 66 70 75 85 11.57%Number of workers Persons 51,074 55,998 50,424 48,707 48,816 -1.12%Number of customers Million customer 19 22 25 26 28 9.07%Electgricity sold in total Million MWh 50 57 64 65 72 9.65%Input cost Million Rp. 3,354,192 4,271,514 9,534,324 7,732,324 15,463,742 46.53%Output value Million Rp. 8,203,634 9,568,309 12,766,519 17,959,128 17,675,836 21.16%Source: PLN Electricity Statistics, Central Statistic Organization.

Description

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5.9 PRICE AND EXCHANGE RATE

5.9.1 Consumer Price Index Consumer price index in Indonesia is shown in the following Table 5.9-1.

Table 5.9-1 Consumer Price Index in Indonesia

According to the above table, almost of indexes were decreased in 1998 except the food and clothing. It seems that Rupiah crisis in 1997 has an impact on prices of daily articles too. This is to say that, prices of daily articles have apparently been decreased due to foreign exchange rate had rapidly been fallen down in 1997 compared with the year before. For reference, a detail consumer indexes for housing is shown hereunder.

Table 5.9-2 Consumer Price Index of Housing in Indonesia

Among the 4 items of housing, 2 items as “cost for housing” itself and “fuel, electricity and water” show a quite high rate of decreasing.

5.9.2 Foreign Exchange Rate Foreign exchange rate of Rupiah against US Dollar was around Rp.2,500 per US$1.00 in 1996. But at the time of Rupiah crisis started on July 1997, the rate had been fallen down day by day, and it had reached at Rp.16,000 per US$1.00 at the end of January 1998. The Government once decided the rate at Rp.8,000 per UD$1.00 as the official exchange rate at that time, but it had been forced to modify again at the rate of Rp.8,500 per US$1.00 immediately after that.

Following table shows a fluctuation pattern of exchange rates for last 10 years in each end of the year.

Table 5.9-3 Exchange Rate During Past 10 Years (Rp./US$1.00)

Year Dec. 1993 Dec. 1994 Dec. 1995 Dec. 1996 Dec. 1997 Dec. 1998 Dec. 1999 Dec. 2000 Dec. 2001 Dec. 2002Rate 2,118 2,205 2,305 2,385 5,700 8,100 7,161 9,385 10,450 8,929Source: Monthly Statistical Bulletin "Economic Indicators", Mat 2003, Badan Pusat Statistik.

(Base: 1989 = 100)1996 1997 1998 1999

Food stuffFood 187.38 203.94 209.23 261.72Prepared food, beverage & tobacco product 182.01 188.82 173.94 215.94

Non food stuffHousing 194.81 203.06 142.02 164.20Clothing 164.04 172.14 191.70 229.98Health 184.60 197.51 179.50 217.76Education, recreation & sport 182.99 197.52 147.03 165.36Transportation & communication 182.64 190.23 145.14 169.43

General 185.92 198.22 168.32 202.63Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization.

(Base: 1989 = 100)1996 1997 1998 1999

Cost for housing 220.75 231.08 136.81 158.29Fuel, electricity & water 175.01 178.14 120.38 128.77Household equipment 148.17 155.35 197.58 252.94Household operation 154.86 164.33 177.65 207.68Housing 194.81 203.06 142.02 164.20Source: Statistical Yearbook of Indonesia 1999, Central Statistic Organization.

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Since the end of January 2003 to the end of May of the same year, the exchange rates have been changed as shown in the following table.

Table 5.9-4 Exchange Rate Since the End of January to the End of May 2003 (Rp./US$1.00)

Month Januaryweek 5th week 1st week 2nd week 3rd week 4th week 1st week 2nd week 3rd week 4th weekRate 8,877 8,893 8,927 8,910 8,917 8,888 8,913 9,068 8,957

Monthweek 1st week 2nd week 3rd week 4th week 5th week 1st week 2nd week 3rd week 4th weekRate 8,930 8,908 8,874 8,806 8,711 8,626 8,488 8,401 8,274Source: Monthly Statistical Bulletin "Economic Indicators", Mat 2003, Badan Pusat Statistik.

February March

April May

And following figure illustrates its pattern.

7,800

8,000

8,200

8,400

8,600

8,800

9,000

9,200

5th

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eek

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wee

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wee

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wee

k

Week/Month

Rp.

/US$

1.00

Average: 8,798 Rp./US$1.00

Figure 5.9-1 Exchange Rate from the End of January to the End of May 2003

It seems that the value of Rupiah may go up after the end of May. But, as of August 2003, the rate goes down again from roughly Rp.8,100 per US$1.00 at the beginning of the month to Rp. 8,500 per US$1.00 to the middle of the month according to the newspapers. According to these situation, Rp.8,800 per US$1.00 is applied unless otherwise stated as the rate using in this report.

5.10 HOUSEHOLD ECONOMY

5.10.1 Household Economy Based on Public Statistics Status of household economy should be clarified for making clear their affordability to pay for recommended electricity charge to cover the cost for operation and maintenance of the recommended facilities for the rural electrification with renewable energy in targeted provinces.

Table 5.10-1 shows a status on per capita household expenditures in whole Indonesia and in targeted 3 provinces.

Janu

ary

February March April May

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Table 5.10-1 Per Capita Expenditure for Consumption in Indonesia and Targeted Provinces

As shown in the above table, the amount of their expenditure has been increased with almost more than 20 % per annum. In other words, they have been able to pay such amount. It means that they have an income with almost the same amount of expenditure at least.

Assuming that their family sizes were not so much different from 3.94 persons/HH in Indonesia, 4.42 persons/HH in South Sulawesi Province, 4.90 persons/HH in East Nusa Tenggara Province and 3.87 persons/HH in West Nusa Tenggara Province as of 2000 shown in Tables 1.2 and 1.3, it may be estimated that their household income level in total in 1999 in Indonesia, South Sulawesi Province, East Nusa Tenggara Province and West Nusa Tenggara Province were Rp.541,560/HH, Rp.593,710/HH, Rp.410,000/HH and Rp.424,060/HH respectively.

As mentioned above, it may say that the household income level in South Sulawesi Province is rather higher than that in the national average.

5.10.2 Household Economy Based on Rural and Social Survey On the other hand, the JICA Study Team has made a Rural and Social Survey in 2001. According to a result of the said survey, average family size and working members in a household in rural areas of targeted 3 Provinces of South Sulawesi, East Nusa Tenggala and West Nusa Tenggala are 5.81 persons/HH and 1.91 persons/HH in average. Under this family structure, the average family income was Rp.954,622/HH per month in average for the whole villages in targeted 3 Provinces. In this case, it is assumed that the total amount of expenditure is the same amount level of their income. Accordingly, per capita income in targeted 3 Provinces is Rp.500,465 per month in average. Details are reported in next chapter.

Following Table 5.10-2 shows its result on the household economy:

(Rpiah/person)

1993 1996 1999

Averageannual

increasingratio (%)

1993 1996 1999

Averageannual

increasingratio (%)

1993 1996 1999

Averageannual

increasingratio (%)

1993 1996 1999

Averageannual

increasingratio (%)

Food 24,772 38,725 86,511 23.17% 21,784 34,172 86,569 25.86% 19,349 27,620 58,719 20.32% 20,610 30,969 77,340 24.66%Non food 18,792 31,252 50,943 18.08% 13,624 24,127 47,754 23.25% 9,426 13,822 24,950 17.61% 11,149 16,292 32,236 19.36%

Housing and household facility 7,834 13,574 21,880 18.67% 5,230 9,132 16,879 21.56% 4,197 6,213 9,947 15.47% 4,626 6,481 13,197 19.09%Goods and services 5,086 7,926 14,756 19.43% 3,369 6,079 12,279 24.05% 1,770 2,828 6,123 22.98% 2,509 3,667 7,289 19.45%Clothing, footwear and headgear 2,637 3,725 7,194 18.21% 2,068 3,302 6,897 22.23% 1,700 2,210 4,932 19.43% 1,943 2,345 5,218 17.90%Durable goods 1,569 3,628 3,944 16.61% 1,294 3,167 5,789 28.36% 732 1,419 2,254 20.62% 1,203 2,450 4,194 23.14%Taxes and insurances 597 1,014 1,173 11.91% 434 637 1,395 21.48% 254 348 494 11.72% 255 383 369 6.35%Paties and ceremonies 1,070 1,385 1,995 10.94% 1,229 1,809 4,514 24.21% 773 804 1,200 7.61% 613 966 1,969 21.47%

Total 43,565 69,977 137,453 21.11% 35,408 58,299 134,323 24.88% 28,775 41,442 83,669 19.47% 31,759 47,261 109,577 22.93%Sorces:

Expenditure for Consumption of Indonesia 1999, Central Statistic Organization.Expenditure for Consumption of Indonesia and the Provinces 1999, Central Statistic Organization.

Expenditure item

West Nusa Tenggara ProvinceSouth Sulawesi Province East Nusa Tenngara ProvinceIndonesia

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Table 5.10-2 Household Economy in Rural Areas in Targeted 3 Provinces

(Rupiah/HH.month)Expenditure (Rp./m)

Utilities

South Sulawesi Province 5.80 1.55 217,125 74,355 0 0 29,227 0 35,778 77,670Electrified village in Jeneponto 4.40 1.40 210,000 28,333 0 0 0 0 40,000 6,000Non-electrified village 6.00 1.57 218,143 79,286 0 0 29,227 0 35,250 167,257

Capital village 7.00 1.00 122,000 48,000 0 0 60,000 0 0 0Tana Toraja 7.00 1.00 122,000 48,000 0 0 60,000 0 0 0

Non-capital village 5.83 1.67 234,167 86,087 0 0 26,150 0 35,250 167,257Tana Toraja 6.00 1.40 253,000 114,375 0 0 0 0 0 0Sinjai 4.60 1.40 119,000 38,333 0 0 1,500 0 0 0Pangkep 6.30 1.70 250,000 60,000 0 0 28,889 0 29,400 167,257Selayar 5.80 2.40 280,000 117,500 0 0 0 0 45,000 0

East Nusa Tenggala Province 6.03 2.85 83,684 85,000 0 0 15,857 0 0 33,950Electrified village in South Timor Tengah 6.00 4.40 80,000 49,000 0 0 0 0 0 5,740Non-electrified village 6.03 2.62 84,242 110,714 0 0 15,857 0 0 175,000

Capital village 5.60 2.20 45,000 100,000 0 0 15,857 0 0 0Alor 4.00 2.00 65,000 100,000 0 0 20,000 0 0 0Sumba Timur 7.20 2.40 20,000 0 0 0 5,500 0 0 0

Non-capital village 6.21 2.79 98,958 112,500 0 0 0 0 0 175,000Ngada 5.11 2.44 126,111 100,000 0 0 0 0 0 0Ende 5.20 2.60 190,000 115,000 0 0 0 0 0 175,000Alor 10.40 3.80 33,000 0 0 0 0 0 0 0South Timor Tengah 5.00 2.60 25,000 0 0 0 0 0 0 0

West Nusa Tenggala Province 5.45 1.55 411,000 215,000 0 0 0 400,000 0 96,286Electrified village in Lombok Tengah* 5.60 1.60 977,000 233,333 0 0 0 600,000 0 88,300Non-electrified village 5.40 1.53 208,857 208,125 0 0 0 200,000 0 116,250

Non-capital village 5.40 1.53 208,857 208,125 0 0 0 200,000 0 116,250Dompu 5.20 1.40 350,000 350,000 0 0 0 200,000 0 116,250Bima 5.50 1.60 152,400 66,250 0 0 0 0 0 0

Average per capita income of non-electrified villages in targetted 3 provinces:Average family size/working members 5.81 1.91Average per capita income (Rupiah/capita.month) 500,465

South Sulawesi Province 61,449 0 0 204,124 11,081 96,661 77,174 40,938 0 721,457Electrified village in Jeneponto 6,233 0 0 52,233 7,833 200,000 21,250 31,667 0 551,317Non-electrified village 67,205 0 0 298,939 11,967 92,833 88,947 46,667 0 836,782

Capital village 58,646 0 0 118,646 20,000 31,375 22,500 0 0 362,521Tana Toraja 58,646 0 0 118,646 20,000 31,375 22,500 0 0 362,521

Non-capital village 65,635 0 0 294,292 10,181 103,522 100,000 43,077 0 871,325Tana Toraja 71,775 0 0 71,775 7,633 105,938 84,000 79,000 0 715,721Sinjai 13,850 0 0 15,350 0 8,167 5,000 5,000 0 190,850Pangkep 75,458 0 0 301,004 0 106,286 51,429 25,000 0 793,718Selayar 55,675 0 0 100,675 15,278 153,000 810,000 10,000 0 1,486,453

East Nusa Tenggala Province 42,575 0 0 92,382 13,500 50,448 63,529 18,500 0 407,043Electrified village in South Timor Tengah 10,650 0 0 16,390 17,199 55,600 53,333 3,100 0 274,622Non-electrified village 42,822 0 0 233,679 9,800 49,375 65,714 29,500 0 583,025

Capital village 36,000 0 0 51,857 23,500 67,188 0 25,750 0 313,295Alor 34,000 0 0 54,000 0 76,667 0 0 0 295,667Sumba Timur 40,000 0 0 45,500 23,500 61,500 0 25,750 0 176,250

Non-capital village 39,774 0 0 214,774 667 40,469 65,714 31,000 0 564,082Ngada 32,667 0 0 32,667 0 22,917 118,750 0 0 400,444Ende 17,250 0 0 192,250 0 55,000 53,000 31,000 0 636,250Alor 39,600 0 0 39,600 0 35,000 0 0 0 107,600South Timor Tengah 29,000 0 0 29,000 667 75,000 36,000 0 0 165,667

West Nusa Tenggala Province 114,526 0 0 610,812 24,455 319,089 197,643 77,273 85,000 1,940,271Electrified village in Lombok Tengah* 94,640 0 0 782,940 9,000 479,450 90,000 150,000 0 2,721,723Non-electrified village 54,876 0 0 371,126 30,250 230,000 240,700 70,000 85,000 1,444,058

Non-capital village 54,876 0 0 371,126 30,250 230,000 240,700 70,000 85,000 1,444,058Dompu 83,200 0 0 399,450 52,625 412,500 446,000 183,333 85,000 2,278,908Bima 43,755 0 0 43,755 7,875 84,000 35,400 21,429 0 411,109

(Average income per HH in non-electrified villages in 3 targetted provinces) 954,622Remarks: It is assumed that the total expenditure is the same amount of total income.

Province/Type of villages

Hous-ing

Sani-tation

Province/Type of villages

Total ofexpendi-

ture

Family size(persons)

Workingmembers(persons)

Food Cloths

Others

Input

Sub-total Tax

Potablewater

Irrigationwater Gas Electri-

city

HealthcareFuel Others

Edu-cation

Trans-port-ation