Implementation of the Railway Revitalization Policy and its Implications for
the Indonesian Economy: A Social Accounting Matrix Multiplier Approach
Introduction :
Problems that are often faced in development planning are inequality and
inequality. One of the causes is the uneven distribution of investment both regionally
and sectorally. One of the efforts that can be taken to reduce inequality and
unevenness in development is to know each sectoral role. This sectoral role is
expected to contribute income to the development of a region.
The transportation sector is a sector that plays an important role in
development in Indonesia. This sector is included in infrastructure development that
serves to support all aspects and activities of development. A study by the World
Bank (1994) states that the elasticity of Gross Domestic Product (GDP) to
infrastructure in a country ranges from 0.07 to 0.44. This means that an increase in
infrastructure availability by 1 percent will have an impact on GDP growth by 7
percent to 44 percent, so it can be concluded that infrastructure development has a
major effect on economic growth.
The vital role of infrastructure for Indonesia is reflected in Indonesia's
national economic development target by Bappenas, which assumes an average
economic growth of 6.6 percent per year, requiring investment in roads, electricity,
telephones and drinking water in 5 years (2005-2009) totaling Rp. 690 trillion. The
transportation sector is also an important part of production and transportation
activities.
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It plays a role in distributing goods and services. To improve the performance of the
transportation sector, it is necessary to plan, implement, control and supervise each
development program, so that transportation services can be realized that are smooth,
safe, reliable, with rates that are affordable to the general public (Dinas Infokom
Jatim, 2008).
Transportation development is very important in supporting and driving the
dynamics of development, because transportation functions as a catalyst in supporting
economic growth and regional development. The success of this development is
influenced by the role of transportation as the lifeblood of politics, economy, socio-
culture, and defense and security. The transportation network system is seen in terms
of effectiveness, high accessibility, integrated, sufficient capacity, organized, smooth
and precise, easy to achieve, on time, comfortable, affordable rates, orderly, safe, low
pollution and in terms of efficiency in the sense of low public burden and high utility.
Trains have more value than other transportation when viewed from their
large transport capacity, low pollutant costs, and affordable prices. Table 1 shows
how rail transportation compares with other transportation, in terms of transport
capacity, fuel consumption, and pollutant cost burden. The comparison of railway
transport capacity is quite large with other means of transportation, as well as the
burden of pollutant costs incurred.
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In increasing the movement of people and goods to remote areas of the
country, it is necessary to support the availability of adequate transportation facilities
and infrastructure. Railway transportation is the best choice because it is a
transportation that has an important role in serving the movement of passengers and
goods. Railways are also said to be a vital instrument for the country in achieving
economic progress. Railways become reliable transportation, which can be said to be
the lifeblood of transportation. This can be seen from the conditions in many
countries that pay attention to the development and continue to build trains.
A train is a means of transportation in the form of a vehicle with motion
power, which generally consists of a locomotive (a vehicle with motion power that
runs alone) and a series of trains or carriages. The train or carriage is relatively large
so that it can carry passengers and goods on a large scale. Trains are proven to
provide great benefits compared to other transportation, which is seen from its ability
to save maintenance costs, save energy, and reduce pollution (RIPN, 2010).
Indonesia has a new legal basis to make major changes to the national
railways. The main driver of the revitalization of national railways is the issuance of
the Railway Law Number 23 Year 2007 on railways as a replacement for Law
Number 13 Year 1992. This law is like an entry gate to improve Indonesia's
development through the transportation sector, especially railways. Railway
development is not only carried out by the government, but is carried out jointly by
local governments, BUMN, BUMD, and the private sector. The ultimate goal of
railway development is to increase the market share of railways in national economic
mobility so that it can function as the backbone of the national logistics and
distribution system in the Indonesian economy in the future.
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National railways based on Law No. 13 of 1992, that railways is an economic
domain that must be organized by economic actors efficiently and professionally.
This increased role of railways will in time create an integrated transportation system,
which is the integration and integration of railways with road transportation, sea
transportation, and air. For this reason, railroad access to ports for freight
transportation and to airfields for passenger transportation must be built. Increasing
the role of railways in the economy can also be done by building rail network
interactions with industrial areas, agricultural centers, mining areas, and other
economic areas.
Problem Formulation:
Railways have advantages over other means of transportation, such as their
ability to transport large numbers of passengers and goods, energy saving, land
saving, environmentally friendly, high level of safety, and addictive to technological
developments. The problems of Indonesian railways are the background of the
government in revitalizing the railways.
Railway revitalization is one of the ways the government is improving the
Indonesian economy. This is done because the government recognizes the role of the
railway sector in improving the Indonesian economy. Law Number 23 Year 2007
opens up opportunities to build national railways to make railways more open. This is
the basis for the transportation sector to revitalize the railway. This is inseparable
from the investment to realize a reliable and operationally feasible railway
transportation requires a relatively large investment to improve the competitiveness
and carrying capacity of railway facilities and infrastructure, both through
government (APBN) and private financing. The government is responsible for
providing transportation either through APBN or APBD financing mechanisms,
public-private partnerships or fully private (RKDP, 2010).
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P.T. KA as a railroad transportation operator can be further improved, so that railroad
producers get better satisfaction. With the revitalization of the railway, it is expected
that the connection between one place to another can be maximized, so that
mobilization has increased.
This railway revitalization policy will be implemented if the government first
seeks to resolve transport market imbalances. Railways are the best alternative for
long-distance land transport of both passengers and goods, and for the mobilization of
urban and metropolitan transport. The inefficient economic movement in Indonesia
can also be seen from the transportation system in Indonesia. Until now Indonesia has
not had an efficient transportation system so that the movement of people and goods
is highly dependent on road transportation. Investment from the government and
private sector in increasing market share will be very helpful for the creation of good
and efficient transportation. Based on the explanation above, the problem formulation
in this study is how the impact of the implementation of the railway revitalization
policy on the Indonesian economy, seen from the value added of production factors,
the distribution of institutional income, and how it is related between production
sectors.
Research Objectives:
The promising condition of Indonesian railways resulted in the government
issuing a railway policy based on Law No. 23/2007 through the railway revitalization
policy. Based on the above problems, this study aims to analyze the impact of the
implementation of railway revitalization policy on resource allocation, institutional
income, and linkages between production sectors.
Economic Development
According to Todaro and Smith (2006), development must be seen as a
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multidimensional process that includes fundamental changes in social structure,
public attitudes, and national institutions, while also pursuing accelerated economic
growth, addressing income inequality and alleviating poverty, so it can be concluded
that development is a physical reality as well as the determination of the community
to work as hard as possible for a better life.
This development theory also explains that a resilient industry is created by
the process of increasing the ability and capacity of sectors that use existing
resources, through capital accumulation. Capital accumulation is formed from the
surplus earned by each actor in economic activity. The higher the inter-sectoral
linkages, the more sector actors are involved in economic activities. This mutually
supportive increase in inter-sectoral linkages will in turn provide a strong foundation
for subsequent industrial development.
Relationship between Investment and Economic Growth:
Economic growth is a process of increasing the output or production of goods
and services per capita in a country. Economic growth is closely related to the total
output of the country concerned. Gross Domestik Product (GDP) is used to measure
the total market value of a country's output. The market value of national output can
be seen through national product and national income. These two concepts have the
same total value, which is GDP. The national product reflected in GDP emphasizes
national output, while national income emphasizes the income earned from the total
output.
Investment activities are one part of development activities because
investment can increase the economic growth of a region. As expressed by Harrod-
Domar (1957) cited by Jhingan (1993), investment is the key to economic growth
because investment can create income and can expand the production capacity of the
economy by increasing the capital stock.
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Investment based on the owner of the capital consists of private investment
and government investment. Government investment is generally in the form of
infrastructure such as roads, ports, and electricity needed by the community,
including the business world to carry out production activities. Meanwhile, private
investment generally consists of production factors such as machinery, raw materials,
and auxiliary materials to increase the production of goods and services. In an
economy, foreign investment has both micro and macro roles. Foreign investment
here plays a role in increasing national investment activities and economic growth
(BKPM, 2005).
From a macroeconomic point of view, investment has a fairly high role in
determining economic growth in a country/region besides public consumption
government expenditure, and net exports. According to Sukirno (1981), the size of
investment made in an economic activity/production is determined by interest rates,
income levels, technological progress, forecasts of future economic conditions, and
other factors.
Infrastructure
Infrastructure can be divided into two types, namely economic infrastructure
and social infrastructure. Economic infrastructure is physical infrastructure, both
those used in the production process and those utilized by the wider community. In
this sense, all public infrastructure, including electric power, telecommunications,
transportation, irrigation, clean water, and sanitation and waste disposal. Meanwhile,
social infrastructure includes health and education infrastructure (Ramelan, 1997).
The availability of infrastructure such as roads, ports, airports and so on is
social overhead capital, which has a strong relationship with the level of regional
development, which is characterized by the rate of economic growth and community
welfare.
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This can be seen from the fact that regions that have better infrastructure
systems have better economic growth rates and community welfare. Therefore, it can
be said that the provision of infrastructure is a key factor in supporting national
development (Bappenas, 2003).
Road infrastructure is an infrastructure that has a strategic role, especially in
the early stages of development of a country or region. Its availability not only plays
an important role in encouraging economic activity, but also in providing encourages
the provision of various other types of infrastructure. The development of electricity
infrastructure networks, telephone networks, railroads, ports, airports, and other
infrastructure.
Wagner's theory states that there is a positive relationship between economic
growth and the amount of government spending on infrastructure development. This
theory states that government spending will grow faster than GDP. In an economy, if
per capita income increases relatively government spending will also increase. The
basis of Wagner's theory is empirical observations from developed countries
(Mangkoebroto, 2001). Government spending will increase in order to finance the
demands of the community for ease of mobility to support economic activities.
Definition of Revitalization:
According to the Big Indonesian Dictionary (KBBI) revitalization is a
process, method, and act of reviving something that was previously underutilized.
The target of revitalization is usually to prevent a decline in economic production
through the creation of employment businesses and regional economic income,
increase regional economic stability with efforts to develop business and marketing
areas and attachments to other activities.
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According to the Law of the Republic of Indonesia Number 23 Year 2007 on
Railways, the railway is a unified system consisting of infrastructure, facilities, and
human resources, as well as norms, criteria, requirements, and procedures for the
implementation of railway transportation.
Passenger Trains
The production of passenger rail transportation from 2005 to 2009 tended to
increase. From 14,345 million passenger kilometers in 2005, it rose to 19,779 million
passenger kilometers in 2009. This shows that the number of passengers in 2005 per
kilometer was as much as 14,345 passengers, and in 2009 there were 19,779
passengers per kilometer. On average, there was an increase in production of 6.64
percent per year. The increase in production is also indicated by an increase in the
number of passengers carried. In 2005, the realization of passengers carried was
151.5 million passengers and increased in 2009 to 207.0 million passengers or an
average increase of 6.44 percent per year.
The increase in passenger transportation production occurred in the Sumatra
and Java regions. The average increase in railway production in the Java region was
6.74 percent per year, while for the Sumatra region it was 4.55 percent per year.
Compared to the previous year in 2009 there was an increase in passenger production
in Java and Sumatra regions by 10.68 percent and 2.46 percent respectively. The
increase resulted in a general increase in passenger train production in Indonesia of
10.27 percent.
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The number of rail passengers can also be seen that in the Java region there
was an increase from 148.4 million people in 2005 to 202.8 million people in 2009,
or an average increase of 6.45 percent per year. The number of passengers in Sumatra
increased from 3.1 million passengers in 2005 to 4.2 million passengers in 2009 or an
average increase of 6.26 percent per year. The production of passenger transportation
in 2009 in the Java region was greater than the Sumatra region, namely 95.36 percent
versus 4.64 percent. This is due to the composition of the number of passengers in the
Java region is greater than the Sumatra region with a composition of 97.97 percent to
2.03 percent.
Freight Train:
There was an increase in freight train production of 5.19 percent per year. The
increase in freight train production occurred in Sumatra and Java by 5.20 percent and
5.16 percent per year, respectively. In 2009 there was an increase of 8.06 percent. In
Sumatra and Java there was an increase of 2.50 percent and 35.75 percent
respectively.
The amount of rail freight in Java decreased from 4,459 thousand tons of
freight in 2005 to 3,975 thousand tons of freight in 2009 or an average decrease of
2.27 percent per year. The number of goods in Sumatra increased from 12,882
thousand tons of goods in 2005 to 14,948 thousand tons of goods in 2009, or an
average increase of 3.02 percent per year.
In contrast to passenger trains, in the type of freight train transportation, the
Sumatra region provides a greater proportion of national freight train production at
78.98 percent, while the Java region's freight train production is 21.02 percent.
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Common Railway Problems
Services:
The quality of train services must still be improved, when viewed from
various service benchmarks, such as safety, comfort, accuracy, speed of
transportation, ease of access, and ease of service. The quality of service and ticket
sales system is not yet transparent and optimal. Information systems and integrated
ticket service systems both with other transportation that can provide convenience for
all consumers and the same service system that can be accessed from various
locations have not been developed. The online computerized system is still
experiencing many obstacles and is not optimal, including the round-trip ticket
purchase system, as well as ticket sales services via the internet, telephone and travel
agents openly.
Comfort, accuracy, and cleanliness issues still need to be considered before
the trip, inside the train, and after the trip. To support the performance of these
services, various facilities are needed, including waiting facilities at the station,
supporting facilities on the train. In addition, due to the declining condition of train
facilities and infrastructure, the aspect of customer satisfaction has decreased. For
customers or users of railroad services, there are important basic things that need to
be fulfilled by P.T. Kereta Api Indonesia in serving the community. The basic
facilities, such as lighting, availability of water and restrooms, adequate seating, and
adequate entrances.
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Security is also an issue and demand for passengers and freight transportation.
Security is a concern with the number of thefts t ha t occur, as well as safety in
transit with the possibility of train crashes or collisions. Below can be seen the
development of Indonesia's railway assets.Railway Relative Fares
The market system in national railways is still monopolistic in terms of the
number of operators. On the other hand, there is competition from other
transportation services, such as air and road transportation. Tariff increases for rail
transportation were initially insensitive to foreign exchange appreciation, although
still dependent on imported products. In 2002, there was increased competition
among air transportation with tariff wars, as well as demands for rail tariff
adjustments in accordance with the needs of its basic costs.
In the freight transportation system, although the railway service is a
monopoly, it has not been able to take advantage of opportunities in a professional
and independent manner, especially in conducting customer negotiations, lack of
operator flexibility in applying commercial tariffs that are balanced with operating
and maintenance costs, and have not been able to fully take into account the
reimbursement of investment value efficiently, so that there are still many tariffs set
below the economic tariff or unable to reach the level of cost recovery. The lack of a
transportation management and marketing system, and the lack of support for loading
and unloading facilities are also problems.
Division of Authority between Central and Local Government
In Law No. 22/1999 on Regional Government and Law No. 25/1999 on
Financial Balance between the Center and the Regions,
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it will affect Law No. 13/1992 on Railways, in addition to the need for
adjustments regarding the implementation of Government Regulation No. 12/1998 on
Company Companies. This is due to changes in authority, from the former authority
of the central government, to the authority of local governments in the framework of
regional autonomy. With this regional autonomy, each Regional Government has the
authority to develop their respective regions, which in this case requires good
coordination and cooperation between the Central Government, Regional
Governments, P.T. Railways, and railroad service users.
1. Article 13 of Law No. 13 of 1992 states that "For the smooth and safe
operation of the railroad, the government establishes arrangements regarding
the railroad track, the government establishes arrangements regarding the
railroad track which includes the road benefit area, road property area, and
road supervision area including the bottom and the top". The government in
this case is the central government and local governments, so it is necessary to
change the formulation of the article. In Law No. 22/1999 Chapter IV, which
determines what authorities are delegated to the regions and what remains in
the intervention of the central government, and through Government
Regulation No. 25 which is a follow-up on the authority of the government
and the authority of the province as an autonomous region. Which is the
authority of the local government, related to railways, either in part or in
whole, namely the fields of transportation, public works, labor, spatial
planning, land, and financial balance.
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2. The change of the company's status to a persero, resulted in the need for a
review that had previously been regulated in article 4 of Law Number 13 of
1992 which states that "Railways are controlled by the State and their
development is carried out by the government". Based on Law Number 1 of
1995 concerning Limited Liability Companies and Government Regulation
Number 12 of 1998 concerning Limited Liability Companies (persero), the
government's position as a shareholder in a p e r s er o , the same rights and
obligations as other shareholders in the company. Regarding the ownership of shares
by the State either entirely, or 51 percent of the shares issued, a review is conducted
whether the provisions include those owned by local governments.
3. In the implementation of railways, which is seen in article 6 of Law No. 13 of
1992 is fully organized by the government and its implementation by the
organizer. After the organizing body changes to P.T. Kereta Api, the
management and organizational mechanisms are carried out in accordance
with the principles of a limited liability company by providing the widest
possible opportunity to develop its business so that P.T. Kereta Api (Persero)
can become a more advanced and independent agency.
4. Article 8 of Law Number 13 of 1992 states that the government provides and
maintains railroad infrastructure. Related to the changes that are now a
persero, the provisions need to be reviewed. As for the duties of P.T. Kereta
Api (persero), in addition to having to foster profits and provide high-quality
services, P.T. Kereta Api is also tasked with organizing public benefit
functions. So it is necessary to give responsibility between the central
government, local government and P.T. Kereta Api.
5. The pricing policy written in article 30 of Law No. 13 of 1992 stipulated by
the government, needs to be reviewed by seeing
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whether local governments need to be involved given that the economic
conditions of each region are not the same.
Government Funding:
In Law No. 13 of 1992 it is written that the government is obliged to the
investment and maintenance of railway infrastructure, while for the facilities
themselves are the obligations of the operator / railway organizing body. In the
implementation of funding issues of railway infrastructure and facilities have not
received support from regulatory systems, institutions and government policies that
are conducive, efficient and accountable. Government funding sources are
increasingly limited for maintenance and investment in infrastructure, as well as the
development of new infrastructure, while other funding sources and the role of the
private sector has not yet developed.
Coordination of planning and policy between the government and operating
agencies is still not well integrated in optimizing existing resources. The system of
sharpening funding priorities for investment plans and maintenance of infrastructure
has not been implemented optimally in clear stages so that there is often a mismatch
between the government's development plan with the plan for the operating system in
the long term. The allocation of government funding for the development of railways
is implemented through the allocation of APBN development funds in the
transportation sector in the finance department.
The implementation of these policies by the government is the most important
effort to operate safer trains. Incidents that occur in the field are caused by the lack of
adherence to regulations governing train operations.
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fire. In addition, the community also plays an important role in maintaining the
facilities on the train.
Government policy in setting economy class passenger fares is generally still
regulated. Economy class passenger transport fares are still set by the government,
while freight transport fares are commercial in nature, in which there is no
government intervention. The freight rates can still be negotiated between operators
and service users. In reality, freight tariffs are not flexible, as there are still many
freight tariffs that are far below operating costs, and ultimately lead to losses.
In 2002, some rail operations in North Sumatra suffered losses of up to Rp. 32
billion per year for all freight and passenger transportation, West Sumatra suffered
losses of Rp. 29 billion per year. The lower productivity and eventual losses are due
to a lack of professional marketing and pricing management, operational and
management inefficiencies, and the railroad employee incentive system.
Basic Framework of SAM Model (Social Accounting Matrix)
The SAM or SNSE is a matrix that summarizes the overall social and
economic accounts. The accounts are categorized into two groups: endogenous
accounts and exogenous accounts. The endogenous balance sheet group is divided
into three blocks, namely: (1) the factors of production balance block; (2) the
institutions balance block; and (3) the activities balance block.
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production. And the three blocks are referred to as the production factor block, the
institution block, and the production activity block. In simple terms, the SNSE
framework can be seen in Table.
Empirical Review:
Triastuti's research (2010) entitled Analysis of the Impact of Revitalization in
the Agroindustry Sector on the Indonesian Economy with Input Output Analysis,
shows that in household consumption, the agroindustry sector has the largest
contribution to final demand compared to investment, exports, and imports. Linkage
and dispersion impact analysis shows that the agro-industrial sector is more capable
of influencing the formation of output and income to its upstream sector than its
downstream sector. The output and income multiplier analysis shows that the ability
of the agro-industrial sector to influence the formation of output and income is strong,
but much stronger is the ability of the agro-industrial sector to increase employment
in the economy. Given the important role of the agro-industrial sector in the
Indonesian economy, it should be followed by greater government attention by
making it easier for other investors to join.
Based on research conducted by Malandow (2001) on "Public Investment for
Infrastructure on Investment Behavior at the Regional Level" it is concluded that
government development spending has an influence on private investment. The
influence consists of two things, namely: First, the government still has policy
variables to help regional development and these variables have a significant effect
on private investment. Second, it is most likely that development expenditure is
regulated by the local government itself through the APBD, especially for road
construction does not have a significant effect on private investment.
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significant relationship with private investment. In addition, variables describing the
activities of private citizens have a large direct influence on private investment.
Research conducted by Ucup in 2010 with the title "analysis of the effects
caused by changes in the steel industry from the existence of China ASEAN Free
Trade on the income of economic sectors and income distribution in Indonesia". The
analysis method used is Social Accounting Matrix, where this study looks at how
changes in the export of iron and steel industry on the income of production factors,
institutions and economic sectors. The results showed that the impact on production
factor income was seen that the decline in net exports of the basic iron and steel
sector by 98.92 percent and the basic iron and steel goods sector by 2.43 percent
resulted in the largest decrease in income in the production factor block occurring in
the non-labor production factor with a decrease of 0.1124 percent or Rp 1,513.39
billion from its initial income of Rp 1,346,454.27 billion. The decline in non-labor
production factor income reached 52.74 percent of the total decline in production
factor income. This indicates that the iron and steel industry sector is a capital-
intensive industry.
The second rank with the largest decrease was occupied by the production
factor of production, transportation equipment operators, manual and unskilled
laborers in the city by 0.109 percent, or a decrease of Rp 244,666 billion from its
initial income of Rp 244,459.37 billion. Through changes in the net export amount of
the iron and steel industry, it can be seen the difference in the increase and decrease
in the income of production factors.
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In the scenario of possible impacts caused by the ASEAN China Free Trade
Agreement (ACFTA) when it is enacted in Indonesia. To analyze the possible
negative impact of ACFTA (through the trend of net export changes in 2009-2010) on
the iron and steel industry sector.
The impact on institutional income can be concluded that the largest increase
in income due to an increase in net exports of t h e iron and steel industry is an
increase in income derived from an increase in net exports of basic iron and steel
goods industry. The total increase in institutional income due to an increase in net
exports of basic iron and steel industry is 0.343 percent or Rp 140.6 billion. While the
total increase in institutional income due to an increase in net exports of the basic iron
and steel industry is 0.077 percent or Rp 33.33 billion. This indicates that the iron and
steel industry sector is more sensitive in increasing national institutional income.
Changes in net exports made in the basic iron and steel industry sector, which have
the greatest influence on changes in the income of national production sectors are
changes in net exports of the basic iron and steel goods industry sector, which can be
interpreted that the iron and steel goods industry sector is more sensitive in increasing
the income of the national production sector.
Research conducted by Susiliwati in 2007 with the title "The Impact of
Economic Policy in the Agroindustry Sector on Poverty and Household Income
Distribution in Indonesia". The analysis method used in this study is to use the Socio-
Economic Balance System model. This study aims to analyze the impact of policy
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economic activity in the agro-industrial sector on poverty and household income
distribution. The data used is data from Susenas. The results of this study show that
policies to increase exports, investment, and tax incentives in the agro-industrial
sector have an impact on reducing poverty and improving household income
distribution, while policies to increase government development spending in the agro-
industrial sector have less positive impact. Economic policies in the non-food agro-
industrial sector have a greater impact on improving household income distribution.
Economic policies in the prioritized agro-industrial sector are the most effective in
reducing poverty and improving household income distribution.
The research entitled "Analysis of Railway Revitalization Policy and its
Implications for the Indonesian Economy: Social Accounting Matrix Approach
(Period 2005 - 2010)" is different from previous studies in terms of the methods used.
The Social Accounting Matrix method is more detailed because it can see how the
influence of a policy to the smallest sector.
Framework of Thought:
Based on the background, objectives and benefits described earlier, it can be
seen how the research framework is, where Indonesia's economic development is
supported by the transportation sector, especially rail transportation. This is because
railways have the opportunity to improve the Indonesian economy. The revitalization
of national railways supported by Law Number 23 Year 2007 is the basis for the
revitalization of railways. The impact of the revitalization will be reviewed using
System of Socio-Economic Balance (SNSE) model, which in turn can see what the
impact of the revitalization policy is on the Indonesian economy and what are the
appropriate policy implications of the railway revitalization policy.
Data Type and Source
According to Sugiyono (2005: 129) data collection is done in various settings,
various sources, and various ways. Based on the source, data can be divided into two,
namely primary data and secondary data. Secondary data is data that has been
collected by other parties or data collection agencies and published to the data user
community. Meanwhile, primary data is data obtained from respondents directly
collected through field surveys using certain specially made data collection tools.
The data sources in this study consist of:
1. Primary data sources, namely actors who are directly involved with
the object of research.
2. Secondary data sources, namely actors who are not directly related to
the object of research, but are helpful and provide information for
research. Secondary data from other parties that come from books,
magazines, literature, articles, the internet, and scientific writings.
This research uses SNSE table data and secondary data from several related
institutions, such as the Jakarta Central Statistics Agency (BPS), the Ministry of
Transportation, especially the Railways planning section, data from the internet, the
Jakarta transportation library, and other literature related to this problem. The data
used as analysis material are SNSE Tables
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2008 by disaggregating the transport sector to allow the rail sector to be analyzed.
The authors also disaggregated the transportation sector into road and rail
transportation.
3.1. Analysis Method
The Social Accounting Matrix (SAM) or System of Socio-Economic
Accounts (SNSE) is a data system that contains social and economic data in an
economy (Thorbecke, 1988). SAM is one of the important data collection systems
and analytical tools developed to monitor and analyze various matters, including: to
observe whether an economic policy can promote economic growth and make income
distribution more equitable in a country. The SNSE is a traditional double input
economic balance in the form of a partition matrix that records all economic
transactions between agents, especially between sectors in the production block,
sectors in the institution block (including households), and sectors in the production
factor block, in an economy (Pyatt and Round, 1979; Hartono and Resosudarmo,
1998).
In addition, the NSE is a good data collection system because: (1) The NSE
summarizes all economic transaction activities that occur in an economy for a certain
period of time, thus the NSE can easily provide an overview of the economy of a
region;
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and (2) the NSE captures the socio-economic structure of an economy, thus the NSE
can provide insights into poverty and income distribution in the economy, among
others.
The NSE is also a data framework system presented in matrix form, which
provides an overview of the economic and social conditions of the community and
the linkages between the two in a comprehensive, consistent and integrated manner.
As a comprehensive and integrated data framework system, the NSE covers a wide
range of economic and social data in a consistent manner as it ensures a balance of
transactions in each balance sheet contained therein. The NSE is also modular in
nature as it can link various economic and social variables within it, so that the
linkages between these variables can be shown and clarified. The SNSE is an
important analytical tool because: (1) analysis using SNSE can show well the impact
of an economic policy on people's income, thus the Social Accounting Matrix (SAM)
can determine the impact of an economic policy on poverty and income distribution;
and (2) analysis using SNSE is relatively simple, so its application can be done easily
in various countries.
Indonesia SNSE Table 2008
The 2008 SNSE table consists of four main balance sheets: production factor
balance sheet, institution balance sheet, activity/sector of production, and exogenous
balance sheet. The production factor balance sheet consists of 17 balance sheets, the
institution balance sheet consists of 10 balance sheets, namely 8 household balance
sheets, 1 enterprise balance sheet, and 1 government balance sheet. Activity balance
sheet
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or production sector consists of 24 balance sheets, also consisting of 1 trade margin
balance sheet, 1 transportation margin balance sheet, and 24 domestic commodity
balance sheets. The exogenous balance sheet alone consists of 24 imported commodity
balances, capital balance, i n d i r e c t taxes, subsidies, and foreign exchange. The
total number of balance sheets is 105. The Construction and Disaggregation Steps of
the 2008 Indonesia SNSE Table are:
Data processing was carried out by aggregating and disaggregating the 2008
Indonesian SNSE Table to resemble the basic framework of the Social Accounting
Matrix with a matrix of 56 x 56. This is useful in the analysis process. The stages of
the SNSE Table aggregation are:
1. Insert a new row and column in the exogenous balance sheet of SNSE
Indonesia 2008 which will be referred to as ROW (Rest Of the World).
2. Sum the rows and columns of the imported commodities to get the ROW
(Rest Of the World) value.
3. Delete rows and columns of imported commodities
4. Remove the diagonal matrix values connecting production sectors and
domestic commodities
5. Sum the columns of production sectors and domestic commodities to create
production activity blocks in the SAM (Social Accounting Matrix), as well as
the rows.
6. Enter the value in the trade margin row into the trade sector row
7. Delete trade margin rows and columns
8. Insert the value of the freight margin row into the rows of the land transport
sector, the air, water, and communication transport sector, and the transport
support sector.
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and warehousing as per with proportion expenditure column
transportation margin to each of these sectors
9. Delete the transportation margin row and column.
The production sector balance in SNSE Indonesia 2008 consists of 24 sectors, where
railways and land transportation are sub-sectors included in the land transportation
sector. Thus, disaggregation of the land transportation sector is carried out so that the
railroad sub-sector can be studied. The data used to complete the disaggregated sub-
sector balance sheet is taken from the 2008 Input-Output Table data which consists of
66 sectors.
Social Accounting Matrix (SAM) Basic Framework
One of the purposes of SAM is to broaden the picture of the national income
system, where SAM is more focused on discussing the welfare levels of different
socioeconomic groups (MaGrath, 1987). According to Wagner (1999) there are
several advantages to using a SAM model in economic planning. First, SAM is able
to describe the structure of the economy, the linkages between production activities,
income distribution, consumption of goods and services, investment savings, and
foreign trade. This shows that SAM can explain the linkages between demand,
production, and income within an economy. Second, SAM can provide a framework
that can unify and present all regional economic data. Third, the SAM can calculate
the regional economic multiplier, which is useful for measuring the impact of an
activity on production, income distribution, and demand,
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which describes the structure of the economy. Meanwhile, BPS (2003) suggests that
the SAM tool can be used as socioeconomic data that explains the structure of the
economy:
1. The performance of a country's economic development, such as Gross Domestic
Product (GDP) distribution, consumption, savings, and so on.
2. Factorial income distribution, which is income distribution broken down by
factors of production including labor and capital.
3. Distribution of household income broken down by various groups.
4. Household expenditure patterns.
5. The distribution of labor according to the sector or business field where they work,
including the distribution of labor income that they obtain as compensation for their
involvement in the production process.
6. There are six types of balance sheets in a complete SAM Matrix namely. 1.
activities, 2. commodities, 3. factors of production (labor and capital), 4. domestic
institutions consisting of households, firms and government, 5. capital, 6. rest of the
world. The first five balance sheets are classified as endogenous balance sheets,
while the sixth balance sheet becomes an exogenous balance sheet that can affect
the size of changes in the endogenous balance sheet when injected into the balance
sheet.
In the basic framework of Indonesian SAM there are 4 main balance sheets,
namely: 1. production factor balance, 2. institution balance, 3. production sector
balance, 4. exogenous balance which consists of capital and rest of the world (ROW)
balance (Daryanto, 2001b). Each of these balance sheets occupies rows and columns.
The balance sheet of factors of production includes labor and capital. In this row of
the balance sheet
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shows receipts from wages and rent, and also shows capital income, while the column
shows revenue distributed to households as labor income, distribution to firms, and
non-firm profits, as well as firm profits net of government payments.
Institutional accounts include households, firms, and government. Households
are disaggregated into socio-economic groups of different levels. Household revenues
come from, among others, income from factors of production, various forms of
transfers such as income transfers between households, income transfers from the
government, from firms or from abroad. Meanwhile, household expenditures are
intended for consumption of goods and income taxes, and some are included for
saving in the capital account. In the case of firms, revenues come from profits earned
and partly from transfers, while expenditures go to tax payments and transfers. For
the government, expenditure is in the form of subsidies, consumption of goods and
services, transfers to households and housing. Some are in the form of savings. Its
own revenue comes from taxes and transfers of income from abroad.
The activity or production sector balance sheet is a balance sheet that explains
the transactions of purchasing raw materials, intermediate goods and rent to produce a
commodity. Columns consist of all expenditure transactions which include
intermediate demand, wages, rent, and value added from taxes. The rows show all
revenue transactions which include domestic sales, export subsidies, and receipts.
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The last balance sheet is the exogenous balance sheet which contains the
capital account, and foreign transactions or rest of world (ROW). In the capital
account, revenue is in the form of income in the form of household, private, and
government savings. While from the expenditure side, the commodity balance is in
the form of investment. Transactions between domestic and foreign countries are also
recorded in the final balance sheet which contains all foreign-related revenues that
come from exports, transfers of institutional income from abroad, transfers of income
from factors of production, and capital inflows from abroad. Expenditures include
imports, payments for factors of production and transfers abroad. The amount of
expenditure and revenue in each balance sheet must be the same. This is to show that
in the SAM table there is always a balance of each balance sheet.
Multiplier Matrix Calculation and decomposition:
In conducting analysis using SNSE, calculation of the multiplier matrix
(multiplier analysis) and decomposition of the multiplier matrix is an important
technique or step. By obtaining the multiplier matrix from an SNSE, the impact of a
policy on various sectors in an economy can be seen, including the impact of a policy
on income distribution. The decomposition of the multiplier matrix is done to clarify
the multiplier process in an economy, in other words, the decomposition of the
multiplier matrix can show the stages of impact that occur due to the implementation
of a policy on various sectors in an economy. From several kinds of multiplier
matrices, the decomposition of the matrix
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The multipliers developed by Pyatt (1979) are relatively widely used. In the
multiplier decomposition, Pyatt and Round broke the multiplier matrix into three
closed loop multiplier matrices. In general, the transfer multiplier matrix, the open
loop multiplier matrix, and the closed loop multiplier matrix. The general transfer
multiplier matrix shows the direct impact of a sector's activity on other sectors within
the same block. The open loop multiplier matrix shows the impact of a sector's
activity on sectors in other blocks. While the closed loop matrix shows the impact of
a sector's activity on other sectors within the same block after first affecting sectors in
other blocks.
Balance Sheet Multiplier Effect Analysis:
The flow of receipts and expenditures expressed in monetary units in the
SNSE table is shown by the transaction matrix T. If each cell in the matrix T is
divided by the number of columns, a new matrix will be obtained that shows the
average expenditure trend expressed in proportion (ratio).
Policy Simulation and Justification:
Social Accounting Matrix can examine and analyze how the effect of the
implementation of railway revitalization on the Indonesian economy, by conducting
several simulations so that later it can be seen how it affects the allocation of
resources (capital and labor), institutional income, and relationships between
production sectors (production activities). The scenarios of this study are: Simulation
of Railway Revitalization Policy Implementation.
Justification of the railway revitalization policy is in accordance with the
mandate of Law No. 23 Year 2007 on Railways, where the Government is obliged to
provide the cost of construction and maintenance of railway infrastructure.
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Conversely, the procurement of facilities is the obligation of the operator as
the organizer of railway facilities. Revitalization of railways requires funds of Rp
19.3 trillion, as part of the implementation of Law No. 23 Year 2007 on Railways.
Revitalization is used by improving the quality of railway facilities and infrastructure
and restructuring P.T. Kereta Api. The restructuring is carried out by inventorying
assets, performance audits, and financial audits with a time limit of up to the next
three years.
