Category Archives: Economic development

Indonesian Trade Minister Thomas Lembong’s Public Lecture at Monash University, March 2016

Indonesia’s Trade Minister H.E. Mr. Thomas Lembong visited Australia last week and did a Public Lecture at Monash University on Modern Economic Partnership Through Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

For those that didn’t get a chance to attend the session, here’s the recording of his public lecture and Q&A session.

Public lecture

 

Q&A Session

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IRD2014, SA-based Indonesian researchers’ contribution to policy discussions

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GoLive Indonesia and Indonesian Student Association South Australia chapter (PPIA-SA) co-organised the 2014 Indonesian Research Day on Wednesday, 23 April 2014. The event was attended by more than 50 participants from three universities in South Australia, namely the University of Adelaide, University of South Australia and Flinders University.

Professor Christopher Findlay, Dean of Faculty of Professions at University of Adelaide, in his keynote speech on the Australia-Indonesia bilateral relationships reinforced three principles needed to improve bilateral relationships between the two countries, namely economic integration, ‘no-surprise’ policy and consultations and respect.

The President of PPIA-SA, Mr Dias Satria, also a PhD candidate at University of Adelaide, expressed his confidence that with the support from various organisations in SA this event will be held annually.

For GoLive Indonesia, this is the third event that the project has co-organised following succesful PhD conference in Canberra  partnering with Indonesia Synergy in November 2013 and early career researcher conference at Bogor Agricultural University in March 2014 collaborating with InterCafe.

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Filed under Australia, Conference, Economic development, Economic Integration, Education, Indonesia, Infrastructure, Investment, PPIA academic discussion, Trade

The 2014 IPB-GoLive Indonesia Conference to promote Indonesian development agenda

Group photo at the end of the conference

Group photo at the end of the conference

GoLive Indonesia collaborating with Bogor Agricultural University organised the 2014 IPB-GoLive Indonesia conference “Driving change through research on the Indonesian development agenda” on 14 March 2014. The conference presented a keynote speech by Dr Iman Sugema, a senior researcher at INTERCAFE and five outstanding early career researchers from IPB. Dr Nunung Nuryartono, Director of INTERCAFE, officially opened the conference. This is the second conference that GoLive Indonesia has organised outside Adelaide. The first conference was held in Canberra collaborating with Indonesia Synergy.

Dr Nunung Nuryartono in his opening speech highlighted the potentials that Indonesian young researchers have to promote the Indonesian development agenda. He also hoped that the event could be continued in the future.

Dr Iman Sugema in the keynote speech identified a challenge faced by Indonesian researchers, that is to publish at reputable international academic journals. He hoped that this conference can inspire early career researchers to contribute to policy discussions in Indonesia as suggested by the conference’s theme and would be followed-up by a program to facilitate joint-working papers writing between IPB and the University of Adelaide researchers.

The first invited speaker, Dr Amzul Rifin, who completed his PhD at Tokyo University, presented his research on the impacts of export tax policy on cocoa farmers and supply chains.  He concluded that there is no change in marketing channel due to the implementation of export tax. Dr Rifin, concluded that with the export tax, margin of exporters decreased because of increased competition in obtaining cocoa beans from farmers.

Dr Muhammad Najib, also a Tokyo University graduate, presented his research on rural development and food processing SMEs in Indonesia. The SMEs contribute to more than a half of the total GDP. Food processing industries have potentials in Indonesia but they are facing challenges including limited supply of raw materials, knowledge about marketing and access to capital. Support for SMEs is needed as its development will contribute to rural development.

Dr Jaenal Effendi presented his work on the role of Islamic microfinance in poverty alleviation and environmental awareness in Pasuruan, East Java, Indonesia. Dr Effendi highligted positive effects of microfinance institutions on reducing poverty and a potential role of Islamic microfinance institutions in promoting environmental awareness.

Dr Sahara gave a presentation on “the transformation of modern food retailers in Indonesia: opportunities and challenges for smallholder farmers”. The Indonesian agricultural sector is denominated by the presence of smallholders, those who have land less than 0.5 ha. Using the chili sector as a case study, Dr Sahara identified challenges facing farmers participate in modern channels including education (which can affect innovation), distance to road and storage facilities. Opportunities from supermarket channel participation include higher prices, more access to inputs and higher per capita incomes.

Dr Eka Puspitawati presented her research on “patterns, determinants and effects of farmers’ participation in the modern channels: a case of Indonesia potato farmers”. Dr Puspitawati suggested that the government should improve access to infrastructure, input production and credits to assist farmers entering into modern channels.

GoLive Indonesia is grateful to the support that IPB especially the INTERCAFE staff Dr Nunung Nuryartono and Dr Lukytawati Anggraeni Putra and the financial support provided by the Australia Indonesia Institute at the DFAT. Both IPB and GoLive Indonesia hope that the conference can be continued in the future.

 

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Filed under Conference, Economic development, Food and agriculture, Indonesia

2013 Food Security Regional Dialogue-Medan: Inter-economy perspectives of food security scenarios

As part of promotion of evidence-based policy making, decision makers and researchers have applied a wide range of modelling to evaluate the effectiveness of food security programs. One widely applied model is a multi-country computable general equilibrium model or known as the GTAP.  Anna Strutt (University of Waikato) and Signe Nelgen (University of Adelaide) shared their work entitled “Food security scenarios for the Asia Pacific – inter-sectoral and inter-economy perspectives”.

Anna Strutt (University of Waikato)

Anna Strutt (University of Waikato)

Strutt and Nelgen’s study focuses on CIPTTV countries, namely China, Indonesia, Philippines, Chinese Taipei and Viet Nam aiming to capture the impact of potential policy changes and other external shocks. The study uses an economy-wide framework using a computable general equilibrium model, a global trade model GTAP. Some important features of the modelling include: attention is given to the structural detail of the economy and inter-relationships between sectors; Prices and quantities are determined simultaneously with markets usually are assumed to clear; Incomes are endogenously determined; There is optimising behaviour by consumers and producers, with prices inducing adjustment. The CGE model imposes constraints e.g. availability of factors of production.

The GTAP model and the latest available GTAP version 8.1 data base with a base year of 2007 for 134 countries/regions and 57 sectors are used. Aggregation is implemented to derive 25 sectors and 28 regions in the study. The data are first projected to 2015. Agricultural distortions by Anderson and Valenzuela (2008) are updated and mapped to the GTAP sectors. Bilateral preferences from the GTAP database are maintained. To better capture food security aspects, the study augments the GTAP with food nutrition data using kilocalories per day per person.

Signe Nelgen (University of Adelaide) to explain about agricultural distortions dataset

Signe Nelgen (University of Adelaide) to explain about agricultural distortions dataset

Five scenarios are being simulated for the CIPTTV region: 1) improved agricultural productivity (land consolidation may lead to a 5 per cent increase in TFP in land-using sectors; 2) increased rice self-sufficiency through increasing tariffs imposed on imports from all regions thus eliminating 99 per cent of rice imports; 3) Combination of 1) and 2); 4) increased rice self-sufficiency and retaliatory tariffs from a key rice exporter; and 5) natural disaster harming land productivity which is assumed to lead to a 5 per cent reduction in land productivity in the region.

The study concludes that policies to promote self-sufficiency through the use of protectionist trade policies such as tariff may lead to a worsening of key food security indicators such as household food consumption. But if agricultural productivity improvements are part of the policy mix, the impacts will be less severe. However, retaliatory trade policies are likely to worsen conditions.

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Filed under Agriculture, Conference, East Asia, Economic development, Economic Integration, Food and agriculture, Investment, Methodology, Trade

2013 Food Security Regional Dialogue-Medan: The Quiet Revolution in Staple Food Value Chains in Asia

Professor Tom Reardon of Michigan State University has lead research in the past 10 years on staple food value chains in China, Bangladesh, India, Indonesia, Philippines and Viet Nam where nearly 10,000 farmers and supply chain actors being surveyed. He gave a presentation over the Skype on Day 2 of the 2013 Food Security Regional Dialogue, Medan.

Modern supermarket in Medan, Indonesia

On eve of Green Revolution, there has been debate in these countries on development to choose the following. First is a large-farm development path where supporters saying large estate farms mean fast development. Moreover, there are no good technologies for small farm and small farms wont adapt new technologies.

The second is small farm development path where supporters saying Green Revolution provides technology that makes small farmers as or more productive than large estate farms.  Also, small farm path fits land scarce, labour abundant situation.

All six countries adopted small farm development path starting with the Green Revolution in the 1970s now have massive investments in rural infrastructure. But what progress have they made in small farm modernisation and in developing supply chains from small farms to domestic market (95 per cent of the food market in Asia), especially the rapidly growing cities (urban areas are 75 per cent of food market in Asia).

Tom’s project found some surprising findings. Small farms are rapidly becoming small businesses who sell 70-90 per cent of output such as rice farms in India, China, Vietnam and Bangladesh. They are very responsive to the improved contacts. There has also been rapid intensification of small farms where they shifted into high use of new varieties, purchased seed, fertiliser, pesticide and herbicide. Some examples include shrimp and mangoes in Indonesia where they use new commercial varieties and high use of inputs.

Tom’s project also observed rapid mechanisation of small farming. There was rapid shift to high use of farm machinery to free labour from grain farming to higher income activities (horticulture, rural non-farm jobs). Rapid diversification of small farms was also observed where small farms ‘climbed the value ladder’ shifting from rice/wheat into vegetables, fruits, fish, livestock, dairy,etc and providing them 4-8 times earnings; or shifting from low-quality to high-quality rice with 50-100 per cent higher returns as in Vietnam and China.

Tom’s project also reported ‘quiet revolution’ in food supply chains. It was mainly grassroot revolution by small/medium enterprises and driven by private sector (not government intervention).  There was rapid spread of ‘cold storages’ and  modernisation of wholesale markets and traders and rice mills. Spread of supermarkets in all six countries was also significant. This all supply chain development is important because it forms 50-70 per cent of food costs to consumers.

The role of the government has been extremely important. In all six countries except grain in Indonesia, government role in direct intervention is very small. There was minimal role in input supply and crop marketing. The role of government in enabling farmers and grass-roots private sector was very large. This includes agricultural research (eg seed varieties), investments in roads, ports, electricity grids, permitting cell phone expansion and promotion of information and extension.

*This summary was written by Risti Permani (University of Adelaide) and may be subject to her personal interpretation of the presentation.

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Filed under Agriculture, East Asia, Economic development, Economic Integration, Food and agriculture, Trade, Transport and logistics

2013 Food Security Regional Dialogue-Medan: Origins of issues, short and long-terms policy options

Food insecurity can be driven by various factors. The factors can be classified into three factors, namely economic, social and environmental aspects. Don Gunasekera of CSIRO and Professor Christopher Findlay of University of Adelaide explain the origins of food security issues and short-term and long-term policy options.

Erwidodo (ICASEPS), Anna Strutt (University of Waikato), Randy Stringer and Christopher Findlay (University of Adelaide)

Food insecurity can be driven by factors including structural factors and market failures, food price volatility, societal vulnerabilities, gender issues, etc. Structural factors and market failures include inequality in access to land and water, insecurity in smallholder land tenure, underinvestment in agriculture. The challenges are becoming evident when data suggest upward price trend over the past decade with volatility. Global food prices have been closely tracking fossil fuel prices. The price volatility mostly affects poor people. In terms of real prices, food prices compared to a decade ago are high.

Regarding societal vulnerabilities, urban food insecurity is more significant than rural poor insecurity. Here, food insecure people are defined bas per capita food consumption for a country or income decile falls short of the nutritional target of 2,100 Kcals/person/day. In Asia, the share of population belong to food insecure people have been decreasing.  But the story from Africa is quite different.

Regarding gender issues, 43 per cent of developing country agricultural labour force are women, 50 per cent in East Asia and Africa and 20 per cent in Latin America. Under performance of developing country agriculture is partly because women have less access to inputs (eg fertiliser), land, water, equipment, extension and credit. If women had better access to productive resources, yield on their farms would increase by 20-30 per cent.

Failures in institutional governance may explain food insecurity. Governments are often unable to respond rapidly and predictably to changing markets and other social and environmental challenges.

Don Gunasekera (CSIRO) at Medan dialogue

Short-term policy options include promotion of market information (ie AMIS), market-based risk management schemes (future contract, option contracts on food imports, transparent emergency food assistance); raising food supply from smallholder farmers, reforms to distortionary trade policies and management of macroeconomic implications. Trade policy reform is important given that domestic market insulating policies raised 40 per cent of the world price of rice in 2007-2008. Social safety nets should be distributed directly to the poor.

Long-term policy measures include reducing losses across supply chains, well-functioning global food markets, raising agricultural R&D, better-managed ecosystems, and well-functioning social protection systems. One third of food produced is lost or wasted globally each year. Hence, the need to increase production and productivity would be reduced by reducing food losses and waste. This is important not only for developing but also developed countries. Reasons include limited access to finance and technical assistance and other resources. In addition, global agricultural trade minimises the adverse impacts of external shocks. Nevertheless, long-term productivity growth is unlikely to be achieved without investments in R&D. Whilst food security concepts may vary between countries, interaction of policy matters.

*The session was summarised by Risti Permani (University of Adelaide) and subject to her personal views.

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Filed under Agriculture, Conference, Economic development, Economic Integration, Food and agriculture, Trade

Challenges and Opportunities for Indonesia and Australia Relationship in the Asian Century

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On 17 May 2013, Counsellor in Politics and  Senior First Secretary of Economic Affairs of The Republic of Indonesia Embassy in Australia, Mr Widya Rahmanto and Mr Denny Lesmana shared some valuable  insights into  “Challenges and Opportunities for Indonesia and Australia (IA) Relationship in The Asian Century”. This discussion forum was organised by the Indonesian Embassy, South Australian Chapter of The Indonesian Student Association (PPIA), and fully supported by  PPIA at Flinders University, University of Adelaide and University of South Australia and  GoLive Indonesia.

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Filed under Agriculture, Australia, Culture, Democracy, East Asia, Economic development, Economic Integration, Education, Employment, Food and agriculture, Indonesia, Infrastructure, Investment, PPIA academic discussion, Services, Trade