IO – President Jokowi is fretting as he ponders recent economic developments. The President’s cabinet received a strong reprimand and instruction to immediately improve.
Why not! The current account deficit is increasing from year to year. Indonesia’s 2018 current account deficit reached the highest amount in history, setting a new record.
Specifically, President Jokowi shared a warning with the Minister of Energy and Mineral Resources and the Minister of BUMN. According to him, oil and gas imports have been very high, and the oil and gas deficit is very large. The performance of the oil and gas sector which has not been optimal is seen as the cause of the worsening trade balance.
However, Jokowi’s concern differs from what was conveyed by Pertamina’s Managing Director Nicke Widyawati. What the President conveyed was immediately corrected through the mass media before the Minister of Energy and Mineral Resources. According to Pertamina’s President Director, Indonesia’s oil and gas imports are currently declining, quite extraordinarily.
The difference in data between the President and Pertamina’s director raises a public polemic. Who is correct? President or President of Pertamina? The public questions the accuracy of the data presented by President Jokowi. If the President Director of Pertamina is right, then President Jokowi’s reputation will suffer. This could be because of the less credible presidential whispers conveying accurate information.
What is really happening? Is our oil and gas sector improving? Is it true that imports declined significantly? Is it true that oil and gas import dependence is decreasing?
If you look at Bank Indonesia (BI) data, Indonesia’s oil and gas imports during the first quarter of 2019 indeed declined, compared to the same period last year. They were down USD1.2 billion or 24 percent compared to 2018.
Even with the decline, however, the oil and gas trade deficit was still high. Likewise, according to the latest data released by Statistics Indonesia (BPS), Indonesia’s oil and gas imports declined throughout January-May 2019 compared to the same period the previous year. But this decline is not much compared to the increase in imports that occurred the previous year.
Throughout 2018 the public is aware that the performance of the oil and gas sector needs to be monitored. In 2018 Indonesia’s external balance of oil and gas imports reached USD 7 billion, up 24 percent compared to the import value in 2017. It seems that this was used as the basis by the President to warn the Minister of Energy and Mineral Resources and the Minister of BUMN.
So it turns out the President and his staff read different data. Then who is in the wrong? Who should be responsible for public confusion about this problem? The way to be followed in reading the performance of the oil and gas sector. Wallahualam.