This section explains the application of the modified commodity-balance approach (see Chapter 5) to construct an input-output table for the Berau District, East Kalimantan Province, Indonesia. The 2007 East Kalimantan Province Input-Output Table serves as the basis for ‗regionalisation‘ process to produce an estimate of the 2007 Berau District Input-Output Table.
In Indonesia, a national input-output table is usually constructed every five years and regularly updated by the National Statistics Office. However this is not the case for province or district levels, because constructing an input-output table requires a significant amount of expertise and financial resources. Thus the construction of ‗regional‘ I-O tables sometimes relies on specific research or development projects occurring in the regions.
In the Berau District, East Kalimantan Province, for example, the latest publication of the District Input-Output Table available is the 1996 Input-Output Table, which was developed by the Berau District Statistics Office or Badan Pusat Statistik Kabupaten Berau (Kantor Statistik & BAPPEDA, 1998). A Berau District Input-Output Table was constructed in order to provide a basis for developing the District‘s social accounting matrix table, which will subsequently be used as database for a computable general equilibrium modelling.
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Figure 6.1 explains in detail the process of deriving Berau District Input-Output Table using the 2007 East Kalimantan Province Input-Output Table. It basically summarises the Commodity Balance with Cross Hauling Approach (sections 5.1.2 of Chapter 5).
90 | P a g e Output
Allocation Intermediate Demand Demand Supply
Input
Allocation Intermediate Demand Demand Supply
Input
Figure 6.1 Deriving Berau District I-O Table using Commodity Balance with Cross Hauling Approach Estimate 2007
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The 2007 East Kalimantan Input-Output Table 6.1.1
The most recent (2007) East Kalimantan Province Input-Output Table, which consists of 50 sectors42 (Badan Pusat Statistik & BAPPEDA Kalimantan Timur, 2008) was used. Within the publication, three types of East Kalimantan Province Input-Output Tables are available:
the 2007 Total Transaction Input-Output Table based on Producers‘ Price,
the 2007 Total Transaction Input-Output Table based on Purchasers‘ Price, and
the 2007 Domestic Transaction Input-Output Table based on Producers‘
Price.
For the purpose of a constructing database for computable general equilibrium modelling43, the 2007 Total Transaction Input-Output Table of East Kalimantan based on Producers‘ Price was selected. This is in accordance with type (a) of the definition of Gross Domestic Price (European Commission et al., 2009, p. 105).
The input-output table then served as a parent table for deriving the Berau District Input-Output Table.
Compared to the 2007 East Kalimantan Input-Output Table, the 1996 Berau District Input-Output Table contains only 40 sectors. However, the 1996 Berau District Input-Output table has more detailed sectoral distribution in some sectors, such as forestry which was broken down into sectors of logs, swiftlet nests, and other forest products. The estate crop sector was also detailed into sub sectors of coconut, pepper, and others. The 1996 Berau District Input-Output Table, however, does not have oil palm or pulp and paper sectors. Sectoral distribution of the 2007 East Kalimantan Input-Output Table is shown in Appendix 6.1.
42 The Indonesia National Statistic Office publishes Klasifikasi Baku Lapangan Usaha Indonesia (or Indonesian Standard Industrial Clasification - ISIC) to guide the grouping of economic
activities that have similarities in their processing, material and technology into the same sector. In the national and regional accounting system, the term ‗sector‘ and ‗industry‘ are interchangeable.
43 This was based on discussions with Indonesian National Statistics Officers, during the first field visit which was conducted from January to May 2010.
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Estimating the Berau District Output (Intermediate Transactions and 6.1.2
Primary Inputs/Value Added)
Information on 2007 labour force survey collected in the Berau District was limited in sampling size since the survey was for national purpose, and was unable to be used for estimating the Berau District output. Therefore, information on sectoral domestic products, which is considered superior to the employment level data, was used. The 2007 sectoral domestic products data of both Berau District and East Kalimantan Province were obtained from the East Kalimantan Statistic Office. Next, share of the sectoral domestic products between the Berau District and the East Kalimantan Province was calculated and utilised to scale down the East Kalimantan Province‗s production output, in order to get estimates of the Berau District‘s production output.
In 2007, the Berau District Statistics Office reported the domestic product of 37 sectors, while the East Kalimantan Statistics Office informed provided domestic product information on 50 sectors. Consequently, some Berau District sectors need to be disaggregated, as follow:
Agricultural Sector
The Berau District domestic product of the agriculture sector was recorded as (IDR million) 131,322.69 in 2007. The sector domestic product value was disaggregated into into five subsectors: paddy, cassava, vegetables, fruits, and other foods. The values were distributed according to the proportion of labour working in those subsectors, assuming that employment levels correspond to the level of output for every sector. The 2007 National Labour Force Survey or Survey Tenaga Kerja Nasional or SAKERNAS 2007 provides information on employment levels in each of the subsectors.
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Estate Crop Sector
The domestic product of the estate sector of Berau District was Rp. 91,007.76 million in 2007. This sector was also split into sub sectors of pepper plantation, oil palm plantation, and other estate crops using data on employment levels in estate crops, which was derived from the Berau District Statistics Office, 2008 as well as from the East Kalimantan Estate Crops Agency, 200744.
Forestry Sector
In the East Kalimantan Province Input-Output Table, the forestry sector is dissagregated into subsectors of log/timber and other forest products (non-wood products). The Berau District‘s forestry sector of Rp. 415,924.58 million was also disaggregated accordingly, by utilising the share of domestic products between log and non-wood products of the 1996 Berau District Input-Output Table. This suggests that the shares of domestic product of the logging sector and the non-wood/other forest products sector were 90% and 10% respectively.
Livestock and fishery
The livestock and fishery sectors have also been disaggregated into their subsectors using information on labour working in those subsectors, assuming similar labour productivity. The disaggregation process and employment information source were similar to those of the agriculture sector.
Appendix 6.2 shows the sectoral distribution and the gross regional domestic products distribution of the Berau District and the East Kalimantan Province as well as the calculated share/ratio of sectoral domestic products distribution of the Berau District to the corresponding domestic products of the Province. Marine transportation and pulp, paper and printing sector had the highest and second highest shares/ratio of 0.341 and 0.259, respectively. The high share/ratio of the marine transportation sector was probably due to the Tandjung Jabung Port, the
44 http://perkebunan.kaltimprov.go.id/potensi-9-kabupaten-berau.html visited 2010
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main port linking the district to other regions. Meanwhile a high share of the pulp and paper and printing was due to the Kiani Nusantara Pulp and Paper Company, which is located in the District. The timber and the timber industry sectors‘ ratio were estimated to only be 0.119 and 0.002 respectively; while in the estate crops group, the shares of pepper plantation, oil palm plantation and other crops sectors were the lowest with only 0.024, 0.050 and 0.073.
Finally, those shares/ratios were utilised to scale down the intermediate transactions, primary inputs, and domestic products of East Kalimantan to produce estimates of Berau District‘s intermediate inputs z (row 1 to 190), primary inputs/value-added w (as in row 201 to 209), and domestic production x (row 210).
Estimating the Berau District‘s Final Demand (excluding Exports) 6.1.3
The Berau District‘s final demand excluding exports (consisting of both household and government consumption, capital formation/accumulation, and change in stocks), is set:
FD = C + G + I where:
FD : Final Demand (excluding exports), C : Household consumption,
G : Government consumption, and
I : Investment, which is a sum of capital formation and change in stock.
As suggested by Jackson (1998), share of the total final demand excluding exports was calculated using information on the total Berau District Final Demand and the East Kalimantan Province‘s counterparts. Table 2.4 provides the total Berau District final demand excluding exports and that of East Kalimantan Province, including the calculated shares. Those shares were employed to scale
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down the East Kalimantan Province final demand excluding exports. This process assumes that the structure of Berau District‘s final demand follows that of East Kalimantan Province.
Table 2.5 depicts the process of deriving the Berau District households‘
consumption from that of the East Kalimantan Province. The share of the Berau District households‘ consumption was 0.023 and this value was used to scale down the East Kalimantan Province household consumption. The Berau District‘s Government Consumption, Capital Formation/Accumulation, and Changes in Stock were estimated in a similar fashion.
Table 6.1 Share of Household and Government Consumption, Capital Formation, Change in Stock, Imports and Exports
No Items
Berau District (in Million
Rupiah)
East Kalimantan Province (in Million Rupiah)
Share
(1) (2) (3) (4)
1 Household consumption 733,432.10 32,073,591.02 0.023
2
Government
consumption 353,089.35 11,965,400.87 0.030
3
Capital Formation &
Change in Stock
(Investment) 1,040,070.79 34,913,159.12 0.030
5 Export 3,027,025.39 220,374,308.12 0.014
6 Import 808,890.10 77,394,570.14 0.010
Total Gross Regional
Domestic Products 4,344,727.53 221,931,889.00 0.020
Source: Berau District Statistics Office
Table 6.2 The Berau District and East Kalimantan Province‘s Sectoral Distribution and Share of Domestic Products
96 | P a g e Share of total *) 0.023
(1) (2) (3)
1 Paddy - -2 Cassava 135,989.25 3,105.43 3 Vegetables 1,139,139.38 26,013.26
… … … …
50
Uncategorised
Activity - -Total 32,073,591.02 733,432.10
Sector The East Kalimantan
Households Consumption
The Berau District Households Consumption No.
Estimating the Berau District Trades (Exports and Imports) 6.1.4
Prior to calculating the Berau District‘s trade pattern, product heterogeneity was estimated by using information of the East Kalimantan trade figures.
Subsequently, the product heterogeneity of East Kalimantan was used to estimate the degree of cross hauling of the corresponding commodity for the Berau District. However, the cross hauling of the Berau District is embedded within the process of calculating the Berau District trade volume. Once the District‘s trade volume, consumption and production have been calculated, Berau District‘s exports and imports can be estimated.
Finally all the estimates of z, x, d, e and m were then assembled to create a complete Berau District Input-Output Table. A (description of) Berau District Input-Output Table is shown in Table 6.5.
97 | P a g e Table 6.3 Initial estimate of the 2007 Berau District Input-Output Table (x Rp. 1000.00)
Output Allocation Intermediate Demand Final Demand
Total Demand
Supply
Total Supply
Input Structure Sector 1 2 … 50 180
(total intrmd dmd)
Household Consumption
Government Consumption
Capital
Formation Change in Stock Export Import Output
Intermediate Inputs
1 8,008,757 0 … 0 9,486,598 0 6,032.36 - 1,063,263 47,526,816 58,082,710 0 97,836,289 97,836,289
2 0 562,113 … 0 694,585 3,109,688 - - 38,077 14,430,880 18,273,231 0 30,343,872 30,343,872
… … … … .. … … … … … … … … … …
50 0 0 … 0 0 0 0 0 0 0 0 8,817,475 0 0
Sum of
Intermediate Inputs 190 20,003,547 2,097,535 … 0 3,067,216,082 733,432,100 353,089,350 883,486,940 156,583,850 3,027,025,390 8,243,386,508 7,427,138,779 808,890,100 8,236,028,879
Wages & Operating
Surplus 202 69,011,705 26,799,784 … 0 360,357,702
Depreciation 203 1,984,433 14,559 … 0 179,236,876
Net Indirect Taxes 204 6,836,604 1,431,993 … 0 0
Subsidy 205 - - - - -
Sum of Primary
Input ~ GRDP 209 77,832,742 28,246,337 … 0 4,344,888,030 Output
(Production) 210 97,836,289 30,343,872 … 0 7,412,104,112
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6.2 Constructing the Social Accounting Matrix of the Berau District, East Kalimantan
In the case where a previous social accounting matrix is available, a current social accounting matrix table can be obtained by updating the previous table i.e.
inserting more recent information on some matrices and balancing the matrix.
However, there is not any SAM of Berau District available. Consequently, the National Social Accounting Matrix 2005 and the Social Accounting Matrix of East Kutai District East Kalimantan 2000 were employed as a benchmark.45 In this regards, the Berau District Social Accounting Matrix Table was constructed by adapting and modifying model of the 2000 East Kutai District East Kalimantan Province Social Accounting Matrix Table. All initial values of social accounting matrix table of the Berau District, East Kalimantan Province except cells that were derived from the input-output were estimated by officers of the National Statistics Office46. This section is presented to illustrate the process of constructing the Berau District SAM.
The Berau District Social Accounting Matrix Table was designed to consist of the following accounts:
(a) Factors of Production
Labour and capital are the factors of production represented in the model. The labour factor is divided into three groups:
Forestry labour, which is further grouped into paid worker and non-paid worker categories;
45 During a field visit in March 2009, an officer of the East Kalimantan Statistics Office revealed that in 2010, a Social Accounting Matrix of East Kalimantan would be developed. Yet, until November 2010, it was not available. Data collection phase of this research was closed off by end of November 2010.
46 The Social Accounting Matrix of Berau District was prepared by Mr. Wisnu Winardi, Assistant Deputy Director at the Directorate of National Accounts, Indonesian National Statistics Office and his staffes. Mr. Winardi‘s extensive experience in working at the South Kalimantan Statistic Office provides an additional advantage.
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Agricultural labour, which is further classified into paid worker and non-paid worker categories, and
Other types of labour, which consists of paid worker and non-paid worker categories.
The 2000 East Kutai District and 2003 East Kalimantan Province SAM Tables (Justianto, 2005) did not separate capital as a factor of production into land and capital. However, the 2005 Inter-regional Input-Output Table for Indonesia disaggregates the capital factors into land and capital and the shares can be used as a proxy to disaggregate land factor from the capital of the Berau District47.
(b) Institutions
There are three types of institution in the district i.e. households, enterprise and government. The households was categorised into four groups. The enterprise and government institutions were not disaggregated.
Household Institutions
Households was disaggregated into four groups i.e. Forestry households, Agricultural (excluding Forestry) households, Non-Agricultural households and Other type of households. Each household category, except for the Other type of household, was further divided into worker and self-employed category48. Overall, there are seven household types in this institution. Further households disaggregation was not possible because the sample size of the Berau District was limited (when 2005 National Social Economic Survey was constructed)49.
Enterprise Institution; includes all firms in the Berau District,
Government Institution; refers to the Berau District government.
47 Resosudarmo, B.P., Indonesian Researcher and a CGE modeller in Australian National University. email communications October 2011.
48 Specified according to the head of the household‘s job occupation.
49 As was suggested by Mr. Wisnu Winardi, the National Statistics officers.
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(c) Producing Sectors or Activities and commodities
Based on discussion with the National Statistics officer, the Social Accounting Matrix was designed to have 24 sectors. Sectors which are less relevant to the study were aggregated. Yet, important sectors such as food crops, estate crops, oil palm plantation, as well as timber sector were retained.
This disaggregation is considered more detail than the 2000 Social Accounting Matrix Table of East Kutai District, East Kalimantan Province, which comprises only 13 sectors.50 Furthermore, the number of commodities is similar to the number of sectors, assuming one sector produces only one commodity.
The following table shows the aggregation of 50 sectors into 24 sectors/commodities.
50 The National Statistics officer suggested that to have higher number of sectors would be unreasonable because, at the district level, data were lacking to support such high level sectoral distribution.
101 | P a g e Table 6.4 Aggregating 50 sectors into 23 sectors
No Sector Original sectors
1 Food and cash crops Sectors 1-4
2 Oil palm plantation Sector 6
3 Other estate crops Sectors 5 and 7
4 Poultry & other livestock Sectors 8-9
5 Timber/logging Sector 10
6 Other (non-wood) forest products Sector 11
7 Marine & inland fishery Sectors 12-13
8 Coal, oil & natural gas, other non oil & natural
gas mining Sectors 14-16
9 Quarrying Sector 17
10 Food and beverage industry Sector 20
11 Textile, leather and foot-based industry Sector 21
12 Forestry-based industry Sector 22
13 Pulp and paper including printing industry Sector 23 14 Fertiliser, chemical and rubber-based industry Sectors 24
15
Other products industries, oil refinery, LNG industry, cement & its associations industry, steel industry, transport, machinery & tool industry
Sectors 25-28, and 18-19
16 Electricity & water Sectors 29-30
17 Construction Sector 31
18 Trade, hotel & restaurant Sectors 32-34
19 Transportation Sectors 35-39
20 Communication Sector 40
21 Banks & other financial services Sectors 41-42 22 Rentals & company services Sectors 43-44
23 Other services Sectors 45-48
Source: Author
(d) Capital Accounts; also referred to as Saving and Investments (e) Net Indirect Taxes
(f) Rest of the World (Berau)
The rest of the world represents regions out of the Berau District, such as the rest of East Kalimantan, Indonesia, and out of Indonesia. This follows a single region social accounting matrix model of the East Kutai District 2000 and the Sumatra Island Social Accounting Matrix/CGE Model of Nu Nu San et al. (2000).
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Specifying the Social Accounting contents 6.2.1
Before a detailed social accounting matrix table was constructed, an initial social accounting matrix table of 10 x 10, a slightly extended version of Table 5.2, was developed to provide a basis for the detailing process (see Table 6.5 and Table 6.6). Table 6.5 informs the meaning of each cell, while Table 6.6 shows value of each cell of the matrix. In both table, highlighted cells indicates that those data were obtained from the input-output table. The rest of the matrix was derived from variety of sources and was explained as follow:
Cells of the Social Accounting Matrix Table that are derived from the 24 sectors Berau Input-Output Table are:
a. Intermediate demand/input (T7.6)
Intermediate demand (or intermediate input) includes purchases and uses of both domestic and imported good and services. This also includes trade and transportation margin values (BPS, 2008). Information of the intermediate demand was taken the intermediate demand of the aggregated version of the Berau District Input-Output Table containing 24 sectors.
Hence, in the Berau District Social Accounting Matrix Table, they form a sub matrix of 24 x 24.
103 | P a g e Table 6.5 Structure of the Aggregate SAM (a matrix of 10 x 10)
Classifications No 1 2 3 4 5 6 7 8 9 10 Sum
Consumption Intermediate Input Investment Exports Total Demand
T7.3 T7.5 T7.6 T7.8 T7.10
Sources: Wisnu Winardi (2010), personnal communication, modified from Pusat Rencana Kehutanan Departemen Kehutanan & Direktorat Neraca Konsumsi Badan Pusat Statistik (2001) Notes:
- Values in the highlighted cells were derived from I-O table. Others were derived from a variety of sources.
- E.g. T3.1 refers to an intersection of Row 3 and Column 1.
104 | P a g e Table 6.6 Initial Estimates of the Aggregate Berau District SAM (in million)
Classifications No 1 2 3 4 5 6 7 8 9 10 Sum
Labour 1 1,630,768,400.83 2,591,571.59 1,633,359,972.42
Capital 2 1,843,842,419.17 2,609,021.41 1,846,451,440.58
Households 3 1,593,972,694.98 345,740,634.16 128,900,448.06 49,683,256.21 36,434,387.89 3,501,525.09 2,158,232,946.39 Enterprise 4 1,395,824,291.98 - 26,731,994.68 1,059,700.75 1,423,615,987.41 Government 5 172,099,357.93 216,333,799.63 48,644,786.39 870,116,710.00 29,569,506.26 1,336,764,160.21
6 6,564,379,623.55 6,564,379,623.55
7 733,432,100.00 353,089,350.00 3,089,768,803.55 1,040,070,790.00 3,027,025,390.00 8,243,386,433.55
8 160,419,261.80 430,044,060.42 100,818,698.16 348,788,769.63 1,040,070,790.00
9 870,116,710.00 870,116,710.00
10 588,646,345.84 246,490,146.67 22,927,167.79 610,544,838.30 166,001,010.45 808,890,100.00 0.00 2,443,499,609.05
2,182,619,040.82 1,988,055,072.80 1,217,778,335.58 1,333,337,949.24 704,988,232.89 6,564,379,623.55 8,243,386,433.55 1,040,070,790.00 870,116,710.00 3,415,145,484.73 VI. Net Indirect Tax
VII. Rest of the World Sum
V. Capital Account I. Factors of Production
II. Institution
III. Producing Sector IV. Commodity
Sources: Author‘s calculation and Wisnu Winardi (2010)‘s estimation, personal communication.
Note that values in the highlighted cells were derived from I-O table. Others were derived from variety of sources.
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b. Labour payment by industries (T1.6)
This cell represents value added allocated to factors of production (labour and capital), which was taken from wage and salary, gross operating surplus and depreciation51 sections of the input-output table. This transaction reflects returns for service paid by the producing sector and indicates the source of income for the factors of production and institutions (especially households).
In the Indonesian Social Accounting Matrix System, the labour factor of production consists of wages and salaries, i.e. actually represents formal paid workers. The informal workers e.g. unpaid family workers and self-employed workers are still accumulated in the gross operating surplus. For this reason, the value of the informal workers should be excluded and taken out of the operating surplus52. Included in the informal workers are unpaid family workers and the self-employed (Badan Pusat Statistik, 2008a).
In the Berau District Social Accounting Matrix Table, this labour factor of production was expanded into a sub-matrix of 6 x 24.
c. Gross operating surplus or non-labour payment by industries (T2.6)
The capital factor of production is estimated from net operating surplus (the gross operating surplus less the portion that has been taken out as imputed wages and salary). This forms a matrix of 1 x 24.
d. Net indirect taxes/taxes minus subsidy (T9.7)
Net indirect tax represents income to government, beside transfers from RoW to the government. In the SAM table, each net indirect tax forms a sub matrix of 1 X 24.
51 Depreciation is assumed to be compensation from the capital factor of production.
51 Depreciation is assumed to be compensation from the capital factor of production.