Indonesian Exports are Still Prospective

Exports and imports have an important role of the development in economics sectors of a country. The role of exports and imports are fulfilling the needs of citizens, increasing Country’s revenue and encouraging the development of industrial activities. Central Statistic Agency (BPS) recorded a total export of Indonesia, during October 2011 reached US$ 16.80 billion. Although export figures are down 4.21% from September 2011, but compared to the same period in previous year which is October 2010 the export value was 16.70% higher. Crisis in Europe does not affect Indonesia’s export significantly to EU such as Germany, France, and UK. Based on the data, Indonesia’s export to EU countries have raised to US$ 1.48 billion in October 2011 from US$ 1.39 billion in September 2011.

Deputy Chief of Statistic and Distribution Services of BPS Djamal, the decreasing of exports in October 2011 from September 2011 due to falling 26.30% of oil and gas exports from US$ 3.93 billion becomes US$ 2.90 billion while, exports from non-oil and gas are increasing about 2.17 percent, from US$ 13.61 billion to US$ 13.91 billion. Cumulative value of exports from January to October 2011 noted about US$ 169.03 billion; it has increased 34.88% compared to October 2010. Here are five commodities from non-oil and gas sectors:

MAIN NON-OIL AND GAS EXPORTS BY COMMODITY

Description	Market Share (%)		Growth (%)
			Nominal		Real		Price
	2010*	2011**	2011		2011		2011
		Jan-Sep	2nd Quarter*	3rd Quarter**	2nd Quarter*	3rd Quarter**	2nd Quarter*	3rd Quarter**
1. Coal	13.8	15.5	19.7	9.2	23.0	5.2	- 2.8	3.8
2. Palm oil	10.4	10.2	81.1	- 20.4	89.5	- 12.2	- 4.4	- 9.3
3. Rubber Product	7.1	9.1	9.4	- 7.4	10.3	3.6	- 0.7	- 10.6
4. Textile & Clothing	8.7	8.4	2.1	- 1.1	0.1	5.9	2.0	5.1
5. Metal Product	7.6	7.9	4.2	- 1.1	6.1	3.9	- 1.8	1.1

*) Preliminary figure www.m.bi.go.id

**) Very Preliminary figure

Meanwhile, the value of import on October 2011 is US$ 15.65 billion; it has made up about 3.18% from September 2011. BPS also noted total of import from January to October 2011 is about US$ 145.68 billion, and it figures up US$ 36.18 billion from the same period of the previous year (October 2010).

Theories and Analyses

Receipt of payment for exports and imports of goods and services are summarizing in balance of payment in current account transactions. The difference between exports and imports is called net exports, or trade balance. If export exceeds imports, the country is said to run trade surplus, conversely if exports are less than imports is said a trade deficit. According to data, Indonesia has trade surplus about US$ 23.35 billion (Data from January to October 2011) and it equals to 26.5% of GDP (28% for exports, 25% for imports). In equilibrium condition: Y = C + I + G – IM + X (Y= Yield, C= Consumption, I= Investment, IM = Import, X = Export), from that equation if we ignore C, I, G, it can be said the higher export will lead to the higher yield, and lower export will lead to lower yield, conversely with import, higher import will subtract the yield, and lower import will lead to add the yield of one country. However it’s not depended on the volumes, but on which kind of goods or services.

Indonesia has well enough about the volume of export, but if we look deeper, almost the commodities are still in a raw material which has a lower price. According to data above, coal is the main commodity of non-oil and gas export; it is the highest export share of 15.5% during 2011 (until September). The value of coal exports during the period of this report is the highest value since 2009, amounting to US$ 7.1 billion or growing 9.2% compared to the previous period. Growth in coal exports are more influenced by growth in export volume (5.2%) whiles the price of coal exports grew by 3.8% in quarterly reports.

In third quarter-2011 palm oil exports experienced a negative growth of -20.4% compared to previous quarter, down from US$ 5.2 billion (2^nd quarter) to US$ 4.2 billion (3^rd quarter). In addition decreasing in export value was caused by decrease in export volume of palm oil and also affected by the world’s palm oil prices fell by 5.9% from US$ 1,147/MTon (2^nd quarter) to US$ 1,079/MTon (3^rd quarter).

Exports of rubber products are also experienced a negative growth (-7.4%) from the previous quarter. The export value of rubber products in 3^rd quarter reached US$ 3.6 billion, down from US$ 3.9 billion in 2^nd quarter. It is due to the decline in world’s rubber price by 12% of US$ 530.1 cents/kg to US$ 465.3 cents/kg. It caused by the weakening world demand due experiencing a debt crisis in EU, the weakening of U.S. economy and yet recovery in the automotive industry in Japan after the earthquake and tsunami.

The export value of textile and clothing on 3^rd quarter is US$ 3.4 billion, slightly lower than previous quarter. Decline of textile exports by 1.1% is caused by a decrease in export volume, mainly textile to the EU country destination which is the second largest market for Indonesian textile and garment exports. Exports of metal product in 3^rd 2011 was recorded US$ billion, down 1.1% from the period before. Decline in exports of metal products is caused by a decline in export volume metals, including tin (-14.2%s), aluminum (-3.5%), iron (-18.61%), and zinc (-21.3%).

Policies and Recommendations

According to the theories which say volume of exports is not the main thing to lead higher yield of a country, but it depend on which kind of goods. Government should increase the exports by sending intermediate or final goods to foreigner country. Actually Indonesia has a lot of natural resources but can’t process it to be intermediate or final goods, in my analysis one of the factor is Government has not yet concern about microeconomics sectors, it means the interest rate for them is still too high. They are not being able to continue the process to be intermediate or final good due to the limitation of the principle that they have. The monetary policy that government should do is decreasing the interest rate. Why? based on the theory, when the interest rate decrease, foreign investor will subtract the investment in Indonesia which is lead lack of the dollar or foreign currency that come to domestic, when it happens, it will decrease a exchange rate of rupiah to other currency. The decreasing of exchange rate will lead the increasing output, when output has increased it will push export to be increased. Otherwise it also takes the role of the middle class as “the driving engine” of economic growth in Indonesia, according to Senior Economist of INDEF Didik J. Rachbini, 10% the upper middle class in Indonesia has substantial purchasing power as same as Singaporean and some European. By directing and giving example to all citizens to buy, use and wear domestic product it will help micro business to be developed.

From the imported sectors, due to the theories “Openness goods markets are push the ability of consumers and firms to choose between domestic goods and foreign goods. In no country is choice completely free of restriction. Even the countries most committed to free trade have tariffs (taxes on imported goods) and quotas (restrictions on the quantity of goods that can be imported on at least some foreign goods)”. The Policy that should Government do to control imported goods is by keeping the tariff and limiting the quotas. From all those policies, hopefully it will subtract the dependency of imported products and push export to be growth.

Still, it is not only as Government’s homework, but also our responsibility as a good citizen to make Indonesia’s Economic grow significantly. Start from now on, let’s buying, using, and wearing domestic product constantly!

Workers Strike at Freeport

The problem of Indonesian workers strike at Freeport Indonesian cannot be separated from the substance, the unfair of wages. According to data, in 2006 Indonesian workers wages is in the lowest position, as a comparison, Freeport pay $10.70 per hour in north America, US$ 10.10 per hour in South America, and Freeport Indonesia pay US$ 0,98 per hour. In 2010, the average payment of wages is about US$ 66.43 per hour, meanwhile Indonesia is only $ 4.42- $ 7.356 per hour. Based on those data, thousands of Indonesian workers at this copper and gold mining company strike to ask the management for changing workers agreement. They want be paid around US$ 30-50 per hour, this amount is adjusted by the standard of Freeport Mc Moran corporation.

On Monday (10/11/2011), one of the Indonesian workers, Petrus Ayamise was killed when the Indonesian workers and National Police of Republic Indonesia clashed at the Gorong-Gorong bus terminal Timika, Papua. This incident was happened when thousands of Indonesian workers went to strike action and tried to meet the Management of Freeport Indonesia, but they are prevented by the police. This clashed caused one worker and one policeman died, 16 others injured whom 9 of them are members of the National Police.

After the incident, Governments urged to all of the workers at Freeport Papua to do not stop the production, while Management and other related parties search for way to resolve it. “So far Freeport is still doing the production,” Minister of Energy and Mineral Resources of Republic Indonesia told to reporters in Jakarta. Based on reports received, the amount of copper mined is around 232.500 tons while 218.500 tons copper is still in process.

This situation shows that the management of natural resources is dominated by foreigners, and oriented to the needs of foreigner. It will not bring prosperity to the people of Indonesia. While, Indonesia is only positioned as States Producing of cheap raw materials, cheap labor and large market for industrial production for foreign industry.

Freeport’s problem is one of the examples for “Efficiency Wage Theories”, the management not yet applied this theory as a base of the determination of wages. Those theories are linking the productivity or the efficiency of workers to the wage that they are paid. Based on theories “Firms that see employee morale and commitment as essential to the quality of their work, will pay more than firms in sectors where workers activities more routine”.

The main business of Freeport is mining gold and copper where the job is full of risk and dangerous, workers mining at the height of 4285 meters above sea level. Besides that, leaving the family, working in high risk situation, and wasting a lot of times for mining copper and gold is the other reason why the workers demand for higher wages. They need some guarantee for health and safety during the work, one of them is through the wages they are received. “The now wages” is make them feel insecure, because it is the lowest between the other Freeport in the world.

The Theory suggests that worker’s productivity has a positive relation with wages. Workers that are paid an average or below average wage might feel confident that they could get a new job with comparable pay, which could cause them to value their jobs less and slack off. In other words, if company pay a worker more, they will work harder and produce more output than if company paid as same as others. From the “Efficiency Wages Theories”, we can say the higher wages will motivate and stimulate the worker to work harder and produce more, and also the opposite, lower wages will caused the laziness of the worker to work hard, it can be affected to the decreasing of the production in company,

The goal of Freeport is being the world’s best mines where located in high rainfall environments. It means to reach the goals company need some input, one of them is a high quality workers. The quality worker is not only marked by their education, but also from the commitment of the workers to stick with the job in all of the condition. To stimulate it, management should give the feedback and the awareness to all of the workers who already give the value to the company. Raising the wages can be one of the tools to make them feel appreciated and keep stay to the company.

“Efficiency Wage Theories” are about paying workers for higher wages may lead to increase productivity from the workers. If the workers get a relatively higher wages, they may feel more loyal to the company. With a higher wages, they may also fear being made unemployed and so will work harder to make sure they keep their job.

This problem will make a huge impact to others if cannot be resolved soon. The impact is not only for the workers, the company, and the surrounded citizens but also for this country. The decreasing of the productivity will lead to the decreasing of output in Freeport. If output is continually decreased, it will lead to the unemployment, which is made the increasing of unemployment rate in this country.

Freeport seems to be understood that the prosperity and security of its workers is the key to its own growth and sustainability, because they are the people who responsible of production. Both Management and Workers should realize that they are as one unity, management needs the workers as a tool to reach their goals, and also Workers need them to fulfill their needs.

The policy should be taken to resolve this problem by all the related parties based on “Efficiency Wages theories” is raising the wages of the workers; it can be the way to make them feel good about the job. This is one of the instruments which can lead them to the higher productivity or the efficiency. Workers that are paid higher might have a great spirit to work hard; this spirit will bring Freeport to reach their goals.

2011 Here I comeeeeeeeeeeeeeeeeeee

yeah.... even already 6th January i just Wanna Say

" HAPPY NEW YEAR"

as a reflection 2010 is really a blast year for me, i got a lotta lesson, i failed and up then. But really lucky that Alloh still gimme a chance to feel another experience in 2011. In this year i want make my dream then focusing on my life. so enjoy to make your dream come true.

X.O.X.O

Paper Sheet

Now already 10.30 Pm,, and I'm still strugglin wif my Final paper,, and i'm too stuck to conitinue these paper,, yeah don't know where I begin from,, Chapter 1 already make me Insane,,,there are still 4 chapters to finish it...may be this only a lil obstacle i must face,,, I believe Allah will gives a hand for me...Honestly i want skip this till next year but why must skip if i'm surely believe that I can do it perfect.....Just need a suppotrt and a sincere prayer for all of you!!!
Because Nothing's Impossible if you do it seriously and pray for your best..

nb: Just wanna say good luck for my junior for un tomorrow and next s days....I believe you can!!!

Life is soooooooooooo beautiful

Yeah after watched "Life is so Beautiful", I directly googling about Quote of Life..

Here is some results...Hopefully It will Inspire You...

"Sit quietly, doing nothing, spring comes, and the grass grows by itself".

Zen

"So great has been the endurance, so incredible the achievement, that, as long as the sun keeps a set course in heaven, it would be foolish to despair of the human race".

Ernest L. Woodward

"So much of our time is preparation, so much is routine, and so much retrospect, that the path of each man's genius contracts itself to a very few hours".

Ralph Waldo Emerson

"Some desire is necessary to keep life in motion".

Samuel Johnson

"Some have been thought brave because they were afraid to run away".

Thomas Fuller

"Someone may have stolen your dream when it was young and fresh and you were innocent. Anger is natural. Grief is appropriate. Healing is mandatory. Restoration is possible".

Jane Rubietta

"Strength lies in differences, not in similarities".

Stephen Covey

"Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome".

Booker T. Washington

nite everyone......