Abstract

This study aims to analyze the economic conditions of Indonesia in 2005. This study employs Input-Output (IO) analysis as an analysis instrument. The data of this study is the Indonesian IO table for 2005. Thus, the Indonesian economy is represented by Indonesian industrial sectors mentioned in the data. There are nine industries used in the present study, namely (1) agriculture, livestock, forestry, and fishery, (2) mining and quarrying, (3) manufacturing industry, (4) electricity, gas, and water supply, (5) construction, (6) trade, hotel, and restaurant, (7) transport and communication, (8) financial, real estate, and business services, and (9) services. The results show that the manufacturing industry has great potency for the Indonesian economy. Thus, the government of Indonesia should focus on the development of the sector. The example of the development effort is to increase the final demand of government for the industry. The results also show that the services sector is an influential sector in terms of generating the new high household income on the Indonesian economy in the future. Therefore, the government of Indonesia should trigger the sector in order to achieve the objective. As with the previous recommendation, the additional final demand of government for the sector can be a promising action. On the other hand, the recommendation given by this study in order to improve the outputs of Indonesian industries is to restrict the import activities.

Author (1)