This paper examines episodes of capital bonanzas and sudden stops in Indonesia by utilising binary response models and several episode-identification approaches. Our identification suggests that whenever bonanza episodes occurred, capital sudden stop episodes followed in a more extended period. The estimations demonstrate that domestic factors are relatively dominant in determining the capital bonanzas, and the federal funds rate has a more significant impact on inducing the probability of capital sudden stops in Indonesia. We also found that Turkey and South Africa are the most contagious economies for Indonesia. This paper proposes some policy reforms to enhance the stability of capital inflows in Indonesia, including financial regulation and public finance policies such as a reverse Tobin tax and market-driven public debt rules.

In contrast to previous studies that mostly focused on the winners and losers of the US–China trade war, this study investigates the poverty and income distribution impact of the trade dispute in a developing country, using Indonesia as a case study. Employing a dynamic, computable general equilibrium model that is multi-region and multi-household, this study found that the trade war increases households’ real income and reduces poverty in Indonesia. The impact of the trade war, which is channeled into the Indonesian economy via trade diversion, improves the country’s terms of trade and eventually increases the returns of primary factors owned by households. However, Indonesia’s income inequality might increase as the rise in real income of upper-income households exceeds the rise in real income of lower-income households. The policy measures introduced by Indonesia to take advantage of the trade war might lower poverty incidence further and alter the impact of negative income distribution from the trade war.

This paper presents coffee producers’ subjective perceptions of voluntary sustainability standards (VSS) programs across southern Sumatra, a global center for Robusta coffee production. Household surveys and a series of farmer interviews revealed that producers generally had positive perceptions of these programs. Despite positive perceptions, the standards had little impact on yield or household incomes. This apparent paradox is explained by improved social networks and social capital, which were seen as important for broader livelihood security. Producers believed that VSS facilitated access to material support and increased knowledge exchange. This builds both bonding and bridging social capital, all with minimal disruption to the low-input system of coffee production that fits within farmers’ broader livelihood strategies. Our approach highlights the challenges that impact assessments (including applications of the living income concept) face when seeking to establish ostensibly objective measures of well-being.

BACKGROUND AND OBJECTIVES:

The Indonesian Government is promoting sorghum as an alternative commodity to substitute wheat. The cultivation of this commodity on dryland is initiated in forestry areas through social programs. This study aimed to analyze the economic feasibility, perception of farmers, and environmental sustainability of sorghum-eucalyptus agroforestry in Majalengka.

METHODS: 

This study innovatively combined qualitative and quantitative methods to assess economic, social, and environmental aspects across five dimensions, namely business organization, actors, working mechanisms, economic impacts, and sustainability of business and environment. Data were collected through focus group discussions and interviews with questionnaires, containing 5 dimensions and 23 attributes. The data collected were analyzed using the revenue-cost ratio, Likert scale, and scoring formulation, as well as multi-dimensional scale method. The level of environmental sustainability status and leverage attributes were examined using the Rapfish program and Monte Carlo analysis.

FINDINGS: 

Sorghum-eucalyptus agroforestry was economically feasible with a revenue-cost ratio value higher than one. Farmers’ perceptions regarding the five dimensions of sorghum-eucalyptus were positive except for the operational mechanisms, and business and environmental sustainability. A distinfuished area of unfavorable perception was the use of sorghum waste as a substrate for renewable energy. The environmental sustainability index for sorghum-eucalyptus agroforestry was categorized as low except for the economic (61.9) and actor (52.3) which attained the moderately sustainable. The results showed that the sustainability analysis using multi-dimensional scale could be used as a guide in formulating strategies for enhancing and developing sorghum-eucalyptus agroforestry in the future.

CONCLUSION: 

The problems in this study were related to the institutional governance of agroforestry business. The inclusion of the community, government, and private sector was unequal in carrying out  the sustainability function of each dimension. The challenge for the future was proper and sustainable management of development efforts to realize economic sustainability, add value for society, and ensure environmental sustainability in agroforestry areas.

The Government of Indonesia has been promoting the advancement of the biodiesel sector to fulfill its commitment to support clean energy, energy security, and rural development. This paper examines the economic impact of the biodiesel sector using a computable general equilibrium model. Besides analyzing the impacts on the national macroeconomic conditions, other sectors, and household incomes, our model has also included a regional block to capture the impact of the biodiesel mandate on regional growth. Two simulations were performed: (1) fulfillment of the 30% biodiesel blending target (B30 mandate), and (2) Simulation 1 combined with the European Union’s biodiesel trade ban resulting in an export reduction of 5.18%. The results show that the two simulations provide positive impacts on macroeconomic variables, including real gross domestic product and real wages. However, the B30 mandate and the combined effect of the EU trade ban still yield an inflationary effect in the short term. They also potentially reduce the production of several agricultural products—such as sugarcane, fruits, vegetables, and soybeans—leading to an increase in food prices. The policy implications highlight that the current B30 mandate and EU ban cannot automatically improve the fuel trade balance.