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Indonesia-Electric Power

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Indonesia Index

The government-owned National Electric Company (PLN) supplied virtually all the electricity in the nation. At the end of 1989, total capacity for electricity generation from PLN was just under 9,000 megawatts, most of which was from steam-powered generators. Total supply of electricity in FY 1989 was 29,500 million kilowatts, and about one-third of villages throughout Indonesia had electricity. In spite of consistent growth in PLN capacity--at a rate of about 15 percent per year since 1969--there was concern that demand would outstrip supply as businesses sought to expand manufacturing output. Industry used about 45 percent of total power generated. PLN began negotiations with private suppliers for the first time in 1992 to build power generators to sell electricity to PLN distribution lines. The negotiations, which involved two international consortiums, could result in up to four 600-megawatt coal-fired facilities at Paiton, Jawa Timur Province, an increase in Java's total generating capacity of 37 percent. The Paiton facilities were slated to come online in the 1995-97 period. Additionally, two other 1,200-megawatt coal-fired generator facilities were scheduled for completion in FY 1997 and FY 1999 in Sumatera Selatan and Jawa Barat, respectively.

In summary, Indonesia's entire economy, like the infrastructure and services sector, was transformed by a government determined to reap the benefits of modern industry and technology. Long a predominantly agrarian nation, by 1989 Indonesia saw agriculture accounting for only 20.6 percent of GDP. In some respects, continued economic growth in the 1990s offered more challenges than were confronted in earlier decades. The vast rural population generally benefited from rapid industrialization but remained poor by international standards. At around US$500, Indonesia's GDP per capita still ranked among low income nations such as China and India. With the growth in Indonesia's manufactured exports, the nation entered a highly competitive world economy. The goal of rice self-sufficiency was achieved, but further improvements in agriculture faced more complex environmental and technological constraints. As the mid-1990s approached, private business appeared able to continue the record of growth set by the government-led economy in the 1970s. The government's task evolved into ensuring that private business success was based on efficiency, not political connections, and providing the public services and infrastructure vital to an island archipelago.

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A classic survey of the Indonesian economy under Suharto, The Indonesian Economy during the Soeharto Era, edited by Anne Booth and Peter McCawley, has been thoroughly updated in The Oil Boom and After: Indonesian Economic Policy and Performance in the Soeharto Era, also edited by Anne Booth. Many of the contributors to this volume also write for the Australian quarterly, Bulletin of Indonesian Economic Studies [Canberra], an excellent source of current scholarly analysis of the economy. The regular feature, "Survey of Recent Developments," by different authors in each issue of the bulletin, gives a thorough review of new government policy and the most recent factual information on economic developments. An annual review of the economy, Indonesian Assessment, is also published by Australian National University.

Rice Policy in Indonesia, by Scott Pearson and others, and Reforming Economic Systems in Developing Countries, edited by Dwight H. Perkins and Michael Roemer, are valuable reviews of Indonesian policy making by university economic advisers who were often on the scene. A more political view of policy making can be found in the writings of Richard Robison, especially his Indonesia: The Rise of Capital.

The weekly Far Eastern Economic Review and the daily Asian Wall Street Journal, both published in Hong Kong, offer less scholarly but more up-to-date information. The Indonesian economic press is improving rapidly with such specialized publications as The Monthly Report by the Center for Policy Studies and the Indonesian Capital Market Journal, both English publications from Jakarta that regularly review economic developments, the latter with a mind to potential investors in Indonesian stocks. Statistical sources on the economy are plentiful, including publications from the Indonesian Central Bureau of Statistics and Bank Indonesia, whose annual Report for the Financial Year gives a thorough picture of economic developments from the government viewpoint, and publications by the World Bank and the IMF. (For further information and complete citations, see Bibliography.)

Data as of November 1992

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