INTERREGIONAL TRADE-PATTERN AND CHALENGESKusuma Agung Handaka0906583900

Background

Problem of central and regions relationship

Decentralization to overcome the problems

Objectives

Determine the Output Structure

Determine the Final Demand Structure

REVIEW OF INPUT-OUTPUT ANALYSIS(Basic Concept)It can be used to predict the

effect exerted by growth of demand in a particular sector on the rest of the local economy

IO analysis involves construction of a square n x n matrix, which recorded all flows of sales/distribution of output (in the rows) and purchases/input composition (in the columns)

REVIEW OF INPUT-OUTPUT ANALYSIS

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222322212

111312111

nnnnnnn

n

n

YzzzzX

YzzzzXYzzzzX

REGIONAL INPUT-OUTPUT ANALYSIS

Macro economic indicator cannot depict the figure at regional level.

Regions have their own characteristics

IO AT REGIONAL LEVEL

There are three regional IO Models:Single regional Input OutputInterregional Input Output (Model

Isard)Multiregional Input Output (Model

Chenery-Moses)

MULTI REGIONS MODELInterconnections among regions

are captured in the trade coefficient tables.

Let say, the total shipments of good i into region M from all the regions is

The Interregional trade coefficient is

MULTI REGIONS MODELThe multiregional IO

INTERREGIONAL TRADE(INDONESIA CASE STUDY)

In this study, we will concern the inter-island case

The islands are Sumatera, Java and Bali, Kalimantan, Sulawesi, Maluku, Papua, and Nusa Tenggara

REGIONAL OUTPUT STRUCTUREBased on Indonesia IO table 2005, total

output in Indonesia was 5.499.794.719Intermediate input has the biggest

contribution to Indonesia Output structure (about 40.90 percent)

The second biggest contribution give by households consumption (23.41 percent)

While the lowest contribution given by stock change, which only achieves 0.42 percent

REGIONAL OUTPUT STRUCTURE58.8 percent of that total output

was produced in Java and Bali19.3 percent was produced in

SumateraWhile the rest, 21.9 percent was

produced in the rest islands with the smallest was in Maluku with only 0.3 percent

FINAL DEMANDIn line with the gross output, the final

demand shares the same characteristic in its distribution.

Java and Bali island has the biggest final demand, achieved 59.4 percent.

The second biggest final demand comes from Sumatera that achieve 19.8 percent.

While the smallest, Maluku, has final demand 0.3 percent. It is fewer than the foreign import that achieve 5.7 percent.

INPUT COEFFICIENTAs the biggest gross output island, Java and

Bali island, to produce 1 rupiah output, it needs intermediate input from Java and Bali itself 0.40 rupiah. The second biggest contribution comes from foreign import, which achieved 0.06 rupiah.

Sumatera island input coefficient shows that in order to produce 1 rupiah output, it needs intermediate input from Sumatera itself 0.36 rupiah. While the second biggest contribution comes from Java and Bali, 0.06 rupiah.

INPUT COEFFICIENTKalimantan input coefficient, Sulawesi,

Maluku, Papua, and Nusa Tenggara also show the same characteristic as Sumatera. The biggest intermediate input comes from their own island, while Java and Bali gives the second biggest contribution.

Java and Bali island shows their domination in providing the intermediate input in the rest of the islands in indonesia.

In the regional output structure analysis, intermediate input gives the biggest contribution (40.90 percent)

58.8 of output in Indonesia was produced in Java and Bali island

In line with the output characteristics, Java and Bali has the biggest final demand (59.4 percent) of total final demand in Indonesia

CONCLUSIONS

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