SOME FEATURES ON THE INDONESIAN ECONOMY

In February 1997, the population of Indonesia passed 200 million people. This made it the world’s fourth most populous country. There has been a slowing of the population growth rate. It was 2.32% between 1971 (when Indonesia’s population was 119 million people) and 1980 while for the period 1990 (when there were 179 million Indonesians) to 1995, the growth rate was 1.66% per year. Over 100 million people live on Java, an island with an area of about 132000 km^2. Indonesia’s overall land area is 1919317 km² and there are over 13 000 islands making up the Indonesian archipelago. Perhaps about half of these islands are uninhabited. Indonesia is divided into 28 provinces, which vary greatly in such characteristics as population, income level, rate of economic development and industry structure. That the provinces are diverse should not be surprising. Indonesia stretches more than 5 000 km from east to west and more than 1800 km from north to south. It is a tropical country, lying on the equator and extending from 94⁰ to 141⁰ east longitude

Levine (1982) classifies Indonesia into inner islands (Java, Bali and Madura) and the outer islands (Sumatera, Kalimantan, Suliwesi, and others). The inner islands are the ones that are more heavily populated and contain a high proportion of Indonesia’s best soil, which is volcanic. Much of the soil on the outer islands is poor quality podzollic soil. Its land is suitable for tropical and sub-tropical crops and for lowland and upland crops.

The island of Jawa (Java) has three provinces - Jawa Timur (East Java), Jawa Barat (West Java) and Jawa Tengarah (Central Java). It also has the autonomous regency of Yogyakarta and the administrative region of the capital, Jakarta. Java’s land area represents approximately 10% of Indonesia’s area. About 60% of Indonesia’s population live in Java, resulting in a very high population density of 814 people per km² in 1990 and 868 per km² in 1995. Despite this high population density, Java is where much of the livestock industry is to be found. Proximity to the consumers is perhaps the main reason. Kalimantan makes up around 28% of Indonesia’s land area, making it the largest of Indonesia’s islands. It has one of the lowest population density and is relatively undeveloped (Table 1).

Table 1. Percentage of population and density per km² by province, 1971 to 1995

Province	Percentage of total population				Population density per km2
	1971	1980	1990	1995	1971	1980	1990	1995
	(%)	(%)	(%)	(%)	(km2)	(km2)	(km2)	(km2)
DI Aceh	1.68	1.77	1.90	1.98	36	47	62	69
Sumatera Utara	5.55	5.67	5.72	5.71	93	118	145	157
Sumatera Barat	2.34	2.31	2.23	2.22	56	68	80	87
Riau	1.38	1.47	1.84	2.00	17	23	35	41
Jambi	0.84	0.98	1.13	1.22	22	32	45	53
Sumatera Selatan	2.89	3.14	3.52	3.70	33	45	61	70
Bengkuku	0.44	0.52	0.66	0.72	24	36	56	66
Lampung	2.33	3.14	3.35	3.42	83	139	181	200
Sumatera	17.45	19.00	20.35	20.96	44	59	77	86
DKI Jakarta	3.84	4.41	4.60	4.68	7762	11023	12495	15445
Jawa Barat	18.14	18.61	19.73	20.13	467	593	765	847
Jawa Tengah	18.35	17.20	15.90	15.23	640	742	834	867
DI Yogyakarta	2.09	1.87	1.62	1.50	785	868	919	920
Jawa Timur	21.41	19.79	18.12	17.38	532	609	678	706
Jawa	63.83	61.88	59.97	58.91	576	690	814	868
Bali	1.78	1.67	1.55	1.49	381	444	500	521
Nusa Tenggara Barat	1.85	1.85	1.88	1.87	109	135	167	181
Nusa Tenggara Timur	1.93	1.86	1.82	1.84	58	57	68	75
Timor-Timur		0.38	0.42	0.43		37	50	56
Nusa Tenggara	5.56	5.76	5.67	5.63	75	96	115	124
Kalimantan Barat	1.69	1.69	1.80	1.87	14	17	22	25
Kalimantan Tengah	0.59	0.65	0.78	0.84	5	6	9	11
Kalimantan Selatan	1.43	1.40	1.45	1.49	45	55	69	77
Kalimantan Timur	0.62	0.83	1.05	1.19	4	6	9	11
Kalimantan	4.33	4.56	5.08	5.38	10	12	17	19
Sulawesi Utara	1.44	1.43	1.38	1.36	90	111	130	139
Sulawesi Tengah	0.77	0.87	0.95	1.00	13	18	25	28
Sulawesi Selatan	4.35	4.11	3.89	3.88	71	83	90	104
Sulawesi Tenggara	0.60	0.64	0.75	0.81	26	34	49	57
Sulawesi	7.16	7.05	6.97	7.05	45	55	66	73
Maluku	0.91	0.96	1.04	1.07	15	19	25	28
Irian Jaya	0.77	0.80	0.92	1.00	2	3	4	5
Maluku & Irian Jaya	1.68	1.76	1.96	2.07	4	5	7	8
Indonesia	100.00	100.00	100.00	100.00	62	77	93	101

Source: Direktorat Jenderal Peternakan (1996), p 126 for 1971 to 1990 data; Biro Pusat Statistik Indonesia (1996), p. 35.

Figure 1. Nominal GDP and agriculture’s share of GDP

The key agricultural commodity is rice. Self-sufficiency in rice was achieved in 1984 due to the government providing farmers with high quality seeds, fertilizer and insecticides. Rice self sufficiency has been maintained since then although doubts exist whether this will be the case in the future. El Nino induced dryness and a loss in plant production due to the forest fires are reasons for this uncertainty. Other important agricultural industries are cassava, rubber, tea and palm oil. The role of livestock has been increasing and the development of the livestock industries has been a major priority for the government after rice self-sufficiency. Over the last decade, livestock has made up between 10% and 11% of agriculture, and around 2% of GDP (Figure 2).

Figure 2. Contribution of agricultural industries to total agricultural output

Per person income in Indonesia is below US$1000 per person. In recent years, the middle class has been expanding (albeit from a small base) as the growth of the economy has created many business and employment opportunities. According to Kasryo and Suryana (1992), rural poverty decreased from 44.2 million in 1976 to 17.8 million in 1990. Similarly, income inequality as measured by the Gini coefficient has declined. The index fell from 0.343 in 1978 to 0.25 in 1990 for all households, while for rural households the coefficient dropped from 0.38 to 0.34 over the same period (Kasryo and Suryana 1992). Nonetheless, there are still many very poor people, particularly in rural areas. These numbers have increased along with increasing unemployment due to the decline in Indonesia’s economic growth. As will be explained later in more detail, some of the livestock programs the government has introduced have had the objective of improving the income position of the very poor. There were about 19 million farm households in Indonesia in 1983 with control of land. The area most households controlled was small, averaging less than 0.5 ha. Moreover, 2.3 million households had under 0.1 ha, and a further 7 million had between 0.1 ha and 0.49 ha. About 11 million of the 19 million farm households were on Java (Table 2).

Table 2. Number of farm household and area of land under the household’s control, 1983

Province	under 0.05 ha	0.05 - 0.09 ha	0.10 - 0.24 ha	0.25 - 0.49 ha	0.50 ha & above	Total
	(000)	(000)	(000)	(000)	(000)	(000)
DI Aceh	8.8	12.2	39.3	71.1	265.2	396.6
Sumatera Utara	51.5	46.5	134.3	170.3	603.6	1006.2
Sumatera Barat	17.4	19.0	57.0	107.0	305.6	506.0
Riau	13.0	7.4	12.1	19.4	323.0	283.9
Jambi	7.7	5.6	11.4	19.1	188.4	232.2
Sumatera Selatan	13.7	10.1	19.2	47.1	478.2	568.3
Bengkuku	2.3	1.5	3.5	10.3	116.7	134.3
Lampung	9.6	11.5	28.3	100.6	574.2	724.2
DKI Jakarta	9.3	5.2	3.8	1.7	3.1	23.1
Jawa Barat	327.7	358.4	841.3	809.4	1214.5	3551.3
Jawa Tengah	282.3	251.8	748.8	930.8	1375.5	3589.2
DI Yogyakarta	30.8	44.1	103.0	89.4	161.8	3976.3
Jawa Timur	326.7	269.2	845.1	1024.1	1511.0	429.1
Bali	17.6	14.7	45.8	81.2	187.2	346.5
Nusa Tenggara Barat	28.8	17.8	59.6	81.6	209.9	397.7
Nusa Tenggara Timur	8.4	9.0	19.7	42.6	377.1	456.8
Timor-Timur	5.6	4.2	4.6	6.4	93.2	114.0
Kalimantan Barat	6.2	4.3	10.0	24.0	348.6	393.1
Kalimantan Tengah	2.4	2.1	3.4	5.5	137.6	151.0
Kalimantan Selatan	11.0	9.3	32.1	66.0	201.0	319.4
Kalimantan Timur	5.8	3.9	4.8	8.4	92.6	115.5
Sulawesi Utara	11.5	8.3	23.9	39.0	206.9	289.6
Sulawesi Tengah	5.2	3.4	5.8	14.8	178.7	207.9
Sulawesi Selatan	40.3	24.3	64.9	122.3	548.8	800.6
Sulawesi Tenggara	5.1	3.7	6.1	14.3	119.7	148.9
Maluku	5.8	5.1	8.9	12.3	158.9	191.0
Irian Jaya	16.5	14.9	19.2	24.4	87.7	162.7
Total	1271.0	1167.5	31559.9	3943.3	9977.7	19515.4

Source: Direktorat Jenderal Peternakan (1986), p 137.

Table 3. Number of farm and livestock households, 1983 and 1993

Province	Farm households (A)		Livestock households (B)		B/A
	1983	1993	1983	1993	1983	1993
					(%)	(%)
DI Aceh	396000	523000	112527	157000	28.4	30.0
Sumatera Utara	1006000	1118000	184081	245000	18.3	21.9
Sumatera Barat	506000	539000	97357	119000	19.2	22.1
Riau	284000	403000	38130	73000	13.4	18.1
Jambi	232000	295000	41002	48000	17.7	16.3
Sumatera Selatan	568000	838000	80297	128000	14.1	15.3
Bengkuku	134000	190000	23493	28000	17.5	14.7
Lampung	724000	974000	92459	199000	12.8	20.4
DKI Jakarta	23000	13000	3656	1000	15.9	7.7
Jawa Barat	3551000	3541000	435251	487000	12.3	13.8
Jawa Tengah	3589000	3606000	723478	906000	20.2	25.1
DI Yogyakarta	429000	433000	101189	153000	23.6	35.3
Jawa Timur	3976000	4245000	1282434	1526000	32.3	35.9
Bali	346000	351000	165532	205000	47.8	58.4
Nusa Tenggara Barat	397000	454000	141426	169000	35.6	37.2
Nusa Tenggara Timur	457000	551000	187384	249000	41.0	45.2
Timor-Timur	114000	131000	32664	60000	28.7	45.8
Kalimantan Barat	382000	491000	99958	144000	26.2	29.3
Kalimantan Tengah	151000	224000	22730	30000	15.1	13.4
Kalimantan Selatan	320000	366000	37231	59000	11.6	16.1
Kalimantan Timur	115000	182000	23399	37000	20.3	20.4
Sulawesi Utara	290000	349000	75699	91000	26.1	26.1
Sulawesi Tengah	208000	260000	56841	68000	27.3	26.1
Sulawesi Selatan	800000	935000	315046	310000	39.4	33.2
Sulawesi Tenggara	149000	200000	23248	42000	15.6	21
Maluku	191000	266000	22826	43000	12.0	16.2
Irian Jaya	163000	258000	64025	106000	32.3	41.1
Indonesia	19501000	21736000	4483363	5683000	23.0	26.1

Source: Direktorat Jenderal Peternakan (1996), p 49.