Does the Relative Importance of Agriculture Increase After The Asian FInancial Crisis
Hermanto Siregar
Abstract
It is found that the short-term contribution of agricultural growht to economic growth at national level increases from 31 percent in 1996 to 48 percent in 1999, whereas that of industrial sector decreases from 36 to 23 percent for the same years. This pattern of change also takes place in most provinces, except in some provinces in the East paert of Indonesia, particularly in Kalimantan, Central and South Sulawesi, and Maluku, whereby growth contributionsof both agricultural and industural sectors to economic growth raise. Prior to the crisis, all provinces having 'high' growth contributions in both sectors are of West part of the country. This, however, does no longer hold after the crisis. It is also found that the increase in the short-term contribution of agricultural growth to the nation economic growth comes with highest proportion from growth in forestry, output of which may have been partly obtained from extracting (non-cultivating) activities. There is evidence that the current share of agriculture on GDP is higher than its long run counterpart which is 11 percent suggesting that unless sufficient efforts are to be made to improve agricultural technology and to overcome its supply bottlenecks, the relative importance of agricultural sector will inevitably decrease significantly. In addition to such efforts, this study also suggest that it is necessary to establish and secure strong linkages between agriculture and manufacturing and trade sectors.
The
purpose of this paper is to identify the nature of these concerns and
to find mechanisms that the donor community could employ to respond
creatively to the challenges that are likely to emerge in this domain.
