A VAR Analysis of FDI, Economic Condition, Market Size, Infrastructure, Labor and Tax Efforts in Indonesia

Penulis: Benny Gunawan Ardiansyah, Researcher at State Revenue Policy Center Fiscal Policy Office, Ministry of Finance (Tahun 2015)

The dynamic relationshipp between FDI and other variables, like economic condition, market size, infrastructure, labor and Tax Efforts in Indonesia. This study tried to elaborate to investigate the domestic short-run and long-run variables., that affect the FDI into Indonesia using annual data for the period of 1968-2013. The empirical research using this method in the case of Indonesia is limited, the study therefore provides an interesting advance in the literature on the economics of FDI in Indonesia. This sudy utilized vector autoregressive approach for analyzing, particularly  error correction mechanism. The results showed that The objectives of this study is The results for lomg-run analysis showed that the FDI positively influenced by GDP, GDP per capita, infrastructure and work force. Meanwhile the tax efforts had negative impact to the FDI. But, in the short run FDI flows are positively influenced by the past FDI flows and work force. Meanwhile it was negatively affected by the GDP in the short-run. Other variables, such as GDP per capita, infrastructure and tax efforts had the mixed impact.

Key words: FDI, Tax Efforts, VAR

 

Telah dipresentasikan dalam forum ilmiah "The 5th Indonesian Regional Science Association (IRSA) International Institute" pada tanggal 3-4 Agustus 2015 di Bali


Availability Payment for Public Private Partnership Project: The Application and Case Study in Indonesia

Penulis: Hadi Setiawan and Lukman Z.H. Harahap (Tahun 2015)

Infrastructure development is one of the development focuses of the new Indonesian Government to achieve its mission in making equitable growth for Indonesian people. This focus was in line with some of research that said the importance of infrastructure for economic development of a country. Kessides (1993) said that the infrastructures provide economic development impact in two ways, which are infrastructure contributes to economic growth and infrastructure contributes to raising the quality of life. Saho and Dash (2012) and Yoshini and Nakahigashi (2000) also state that infrastructure plays an important role for economic growth. The Government of Indonesia (GoI) planned to develop infrastructure in year 2015-2019 at cost around Rp 5.452 trillion (US$ 41.7 billion). This cost may not be charged entirely to the Indonesian budget, because it means on average the fund needs around Rp 1.100 trillion per year or about 55% of the total state budget expenditure in 2015. Therefore, it needs other financing schemes that could help the development of the infrastructure. One scheme is through the Public Private Partnership (PPP) which is planned to fulfill around Rp 1.090 trillion or 20% of the total funding (Fiscal Policy Office, 2014). To attract investors in the PPP scheme, the GoI has made various efforts, including provide several government support and guarantees, but it seems that the PPP scheme still not succeed yet. One of the new ways of the GoI in improving PPP is through availability payment. Availability payment is a payment scheme for the provision of infrastructure services by entities that cooperate with the government in the PPP scheme in which the payment is determined by the quality of the provision of infrastructure. This paper aims to elaborate about the possibility of applying the availability payment in Indonesia, benchmark of the application availability payment in other countries, and the most suitable scheme of availability payment in Indonesia, as well as a case study of the application availability payment in West Semarang Water Supply project. Methodology used in this research is qualitative methods focusing on literature review.

Keywords: Availability payment, infrastructure, public private partnership, government support

Telah dipresentasikan dalam forum ilmiah "The 5th Indonesian Regional Science Association (IRSA) International Institute" pada tanggal 3-4 Agustus 2015 di Bali


The Impact of International Palm Oil Price Decreasing on Indonesian Economic Growth

Penulis: Cornelius Tjahjaprijadi (Tahun 2015)

Indonesia is one of the important crude palm oil producers in the world. In term of production, Indonesia is the biggest crude palm oil exporter as also Malaysia to three main importers, namely India, China, and European Union.The changes of international crude palm oil price can affect economic growth in short and long terms.This article is aimed to investigate the impact of international crude palm oil price changes on economic growth in short and long terms by using CGE Agefis model. The model parameters are taken from GTAP and data used are 2008 Indonesia Input Output and 2008 Social Accounting Matrix from Central Bureau of Statistics. The effect of the international palm oil price decreasing of -3 percents in the short term resulted in a decreased change in all GDP components, namely consumption, export, import, and GDP. Meanwhile in the long term, the falling price caused rise in growth changes on export and GDP, while the decline occurred in consumption and import. On the other hand, the international palm oil price decreasing of -3 percents also affect its performance of some related production sectors. In the short term, palm industry shows an increased in growth of its imports, while its exports, domestic demand, and output experience decreasing growth. Meanwhile fatty oils industry experience growth in its imports, domestic demand, output, and exports. Chemistry industry shows an increasing growth in its exports, domestic demand, and output, while its imports experience decreasing growth. In the long term some production sectors are also affected by the falling international palm oil price of -3 percents. Palm industry experiences decreasing growth in its exports, domestic demand, and output, while its imports are going up. Meanwhile fatty oils industry has increasing growth in its imports, exports, domestic demand, and output. The same things are happened also in chemistry industry. In sensitivity analysis, simulations that are done by changing parameters show that there are some changes on variables used in the model. The changes are not only occured in the growth magnitudes but also in the growth directions that are so different rather than the baseline.

Telah dipresentasikan dalam forum ilmiah "The 5th Indonesian Regional Science Association (IRSA) International Institute" pada tanggal 3-4 Agustus 2015 di Bali


ESELON I KEMENTERIAN KEUANGAN


KONTAK: Jl. Dr. Wahidin No. 1 Gd. R. M. Notohamiprodjo, Jakarta Pusat 10710
email: ikp@fiskal.depkeu.go.id

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