Social Impact of Coffee Crisis on the Pasemah coffee farmers in South Sumatera

In the last two decades, the world price of coffee has fallen significantly. The crisis has suffered millions of small coffee farmers in developing countries. However, in contrast to Latin America and Africa, studies on the impact of recent coffee crisis on the farmers tend to neglect Indonesia, one of the important coffee producing countries in Asia. The purpose of this paper is to assess the impact of recent coffee crisis on the Pasemah coffee farmers. The Pasemah highland, in Lahat District, located at the Coffee Triangle or Southern Coffee Belt, which stretches across the three provinces in Sumatera, namely South Sumatera, Lampung, and Bengkulu. This highland is one of the important coffee producing areas in Indonesia and has a long history of the coffee cultivation. This study indicates that the recent coffee crisis also have a serious impact on the coffee farmers’ daily life in the Pasemah highland. The crisis depressed farmers’ level of living. The farmers used various strategies to survive their life. They changed their consumption pattern, such as substituting Dji Sam Soe—an expensive cigarette—with Gandum—a very cheap one. The story of prosperous coffee farmers has ended since the end of 1980s. Rather than ‘tunggu dusun’ (waiting the village), some of the Pasemah coffee farmers chose to stop operating their coffee farms and looked for other informal jobs, or went to Jabotabek to be urban informal workers. Other farmers preferred to make crop diversification on their farms. However, producing coffee is still an important agricultural activity for most farmers in Pasemah.coffee crisis, smallholder, Pasemah, South Sumatera, Indonesia

SOCIAL CAPITAL AND CREDIT IN A JAVANESE VILLAGE

The objective of this study is to investigate empirically the influence of social capital on the rural credit in the case of a Javanese village. Estimation results indicate difference impact of social capital on each type of credit. Meeting attendance was found positively influence the amount of formal credit. Meanwhile, number of memberships negatively affects the amount of informal credit. This study also confirms that the rural elites have more accessibility to economic opportunities such as formal credit than non-elites do. Therefore, this study suggests that the implementation of formal credit program in rural areas should consider not only the existing social capital but also the elites in the rural society. This approach perhaps bring improvement on the role of formal credit program as an anti poverty program in rural areas.social capital, rural credit, rural elites

Spatial Concentration of the Informal Small and Cottage Industry in Indonesia

This paper discusses the spatial concentration of the small and cottage industry without legal entity in Indonesia. The study period is 1998-2004 or a period after economic crisis which commonly known as the ‘era reformasi’ (reformation era). By employing the Herfindahl index, this study found an increase in the spatial concentration of the informal small and cottage industry during this period. It argues that reformation tend to increase the spatial concentration of the informal small and cottage industry. Beside the economic crisis that have suffered urban and Java areas, other possible explanation on the connection between trend of the concentration and the reformation is what commonly known as the cost of formality.spatial concentration, small and cottage industry, reformation, Indonesia

VULNERABILITY OF URBAN INFORMAL SECTOR: STREET VENDORS IN YOGYAKARTA, INDONESIA

This study has been focusing on the vulnerability of street vendors in Java since the time when Java was hit severely by the economic crisis in 1997/1998, which also had reversed the trend of economic formalization in Indonesia. For this aim, a survey was conducted during the month of February 2007 in Yogyakarta and Sleman districts in Yogyakarta Special Province. The survey covered 122 street vendors in several streets in both areas. These samples consist of three groups of street vendors: food seller, non-food seller, and services providers. Based on this survey, vulnerability index of street vendors is measured. The study found that most of street vendors in Yogyakarta experience vulnerability at the medium level. In general, vulnerability of food seller vendors is higher than other vendors. Vulnerability also varies across the locations of vending.informal sector, street vendor, vulnerability, Indonesia.

Creating New Regions, Improving Regional Welfare Equality?

In concurrent with reformation and decentralization, number of sub-national administrative in Indonesia increase significantly. Existing regions has been splitting to create new regions. As the result, number of municipalities and districts in Indonesia in recent years are more than 450. The creation of new regions has been expected will increase citizens’ welfare in the regions and reduce regional inequality. However, indicative evidences shows negative impacts of this reform such as increase of inefficient administration cost of government, decrease capacity to deliver public services and increase potential for inter-group conflict. All of these indicative evidences will affect the welfare of citizens as seen on the human development indicators. Based on this background, the aim of this article is to analyze the relation of creation of new regions with the evolution of regional welfare inequality. The study employed human development index (HDI) at sub-national level (kota/kabupaten) as the indicator of welfare. The evolution of regional inequality of the HDI is analyzed by comparing coefficient of variation in the HDI from 1996 to 2005. This paper also estimated a preliminary empirical model to assess the impact of pemekaran on the within province inequality. The policy implication of this finding is that pemekaran should be controlled.new region, ‘pemekaran’, human development index, inequality

Innovation and Social Capital in the Small-Medium Enterprises: a case of bamboo handicraft in Indonesia

This paper aims to seek what type of innovation and to estimate the impact of social capital on the innovation in the small-medium enterprises (SMEs) in Indonesia. The data used in this paper was collected from May to June 2008 in several clusters of bamboo handicraft producers in the district of Sleman, Yogyakarta Special Province. The research found that more than half of respondents are innovative producers. Innovation of product and organizational are the important types of innovation in the bamboo handicraft. Social capital, measured by an index of trust significantly influences the innovation index. Other important variables that influence the index of innovation are location, sex, and education. However, in the logistic regression, only education that significantlly explain the probability of innovation.innovation, social capital, trust, bamboo handicraft, Indonesia

Vulnerability of Urban Informal Sector: Street Vendors in Yogyakarta, Indonesia

This study has been focusing on the vulnerability of street vendors in Java since the time when Java was hit severely by the economic crisis in 1997/1998, which also had reversed the trend of economic formalization in Indonesia. For this aim, a survey was conducted during the month of February 2007 in Yogyakarta and Sleman districts in Yogyakarta Special Province. The survey covered 122 street vendors in several streets in both areas. These samples consist of three groups of street vendors: food seller, non-food seller, and services providers. Based on this survey, vulnerability index of street vendors is measured. The study found that most of street vendors in Yogyakarta experience vulnerability at the medium level. In general, vulnerability of food seller vendors is higher than other vendors. Vulnerability also varies across the locations of vending.informal sector, street vendor, vulnerability, Indonesia

Social networks and innovation (handicraft industry in Bantul, Yogyakarta)

This research found most of the handicraft producers have conducted various innovations during last five years. The newest innovations are managerial innovation, marketing innovation and product innovation. Meanwhile, product innovation and managerial innovation are the most important innovations in enhancing the business performance. Based on the actors, innovation in this case could be classified as producer driven innovation. The main information source of product innovation, process innovation, and service innovation is the producer’s experiences itself. The study found that the role of social networks in the process of innovation activities is rather limited. This finding is also supported by a fact that the strongest social network of the producers is only the relation with family and close friend in term of their closeness, trust, and willingness to share information. Regression analysis also indicates the aggregate of social network elements does not influence the number of innovations. Components of social network that still show positive impact on the innovation are only the closeness with business partners and with members of other association. The study also suggest that research on the role of social network or social capital on innovations is need to consider more appropriate indicators of social networks. At the empirical level, differences in location or industry may require different indicators of social networks.social network, innovation, handicraft industry

Does Geographic Factors Determine Local Economic Development?

The purpose of this paper is to analyze the influence of geographic characteristics on the local economic development. There are two important reasons related to that objective. First, study on this topic in the case of Indonesia is rather limited, especially in the field of local economic development of the country. Second, geographically, Indonesia is a heterogeneous country and its consequence is development policy should also consider the geographic characteristics of the country. The study estimates impact of some geographic variables on the Gross Domestic Regional Product (GDRP) per capita and GDRP density as indicators of local economic development with data of the districts in the Central Java province uses regression models. Geographic variables used in the model are distance to economic centres, location of districts, and a measure of clustering of economic activity. Other socio-economic variable is also used in the model, such as literacy rate which is one of the components of human development index (HDI). This study found that in general geography influences local economic performance; however, geography is not the only determinant of economic performance. It also suggests that study on geographic inequality not only apply “per capita approach” but also “density approach” to get a more comprehensive picture of the impact of geography on economic development.geographic, local economic development, Indonesia

SPATIAL DYNAMIC OF SMALL AND MEDIUM ENTERPRISES IN THE RECENT ECONOMIC CRISIS

This article discusses the spatial dynamic of small and medium enterprises (SMEs) in Indonesia during the crisis (1998-2000), focusing on the SMEs without legal entity, except agriculture activities. The spatial distribution of SMEs seems increasing which measured by Herfindahl index applied on employment and number of establishment. The study also applies an econometric approach to investigate the determinants of SMEs’ employment. The findings of empirical analysis are that the regional output (GDRP) and population have positive impact on the employment while regional minimum wage (UMR) have an opposite impact. This study confirms previous studies that SMEs in Java more severe than in other provinces.small-medium enterprises, economic crisis, spatial dynamic, Indonesia.