INTERREGIONAL TRADEPATTERN AND CHALENGES
Kusuma Agung Handaka
0906583900
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
 X 1  z11  z12  z13    z1n  Y1

 X 2  z 21  z 22  z 23    z 2n  Y2


 X n  z n1  z n2  z n3    z nn  Yn .

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 Output
 Interregional Input Output (Model Isard)
 Multiregional Input Output (Model
Chenery-Moses)
MULTI REGIONS MODEL
Interconnections 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 MODEL

The multiregional IO
INTERREGIONAL TRADE
(INDONESIA CASE STUDY)
In this study, we will concern the interisland case
 The islands are Sumatera, Java and Bali,
Kalimantan, Sulawesi, Maluku, Papua, and
Nusa Tenggara

REGIONAL OUTPUT
STRUCTURE




Based on Indonesia IO table 2005, total
output in Indonesia was 5.499.794.719
Intermediate 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 STRUCTURE
58.8 percent of that total output was
produced in Java and Bali
 19.3 percent was produced in Sumatera
 While the rest, 21.9 percent was
produced in the rest islands with the
smallest was in Maluku with only 0.3
percent

FINAL DEMAND
In 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 COEFFICIENT


As 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 COEFFICIENT
Kalimantan 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.

CONCLUSIONS
 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
THANK YOU