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The cost of COVID-19 on the Indonesian economy: A Social Accounting Matrix (SAM) multiplier approach
Sustained economic growth and a declining trend in poverty over the years in Indonesia potentially will come to a halt this year. This development cost comes as a result of the COVID-19 pandemic outbreak that recently hit the country. Like in many other countries, one of the largest costs of COVID-19 comes from the social distancing policy, which is a proven public health measure to reduce the spread of the virus by limiting people’s movements and interactions for a certain period of time. The government of Indonesia adopted this approach by gradually introducing in certain regions the Large-scale Social Restriction (PSBB) policy from early April 2020. PSBB restricts non-essential economic...
The role of agriculture in the structural transformation of Indonesia
Indonesia has managed to combine high rates of growth, rapid reductions in rural poverty and a significant structural transformation of its economy all at the same time without a big increase in urban manufacturing. Agriculture was a critical part of this transformation through two important channels. First, export-oriented agriculture, particularly palm oil and rubber contributed to rising foreign exchange receipts and helped make compatible rapid growth without balance of payments pressure on the macro economy. Second, through the release of workers from low productivity agriculture to more productive nonagricultural activities, structural change contributed between 25 and 50 percent of the rise in national labor productivity depending on the period. The government also played an important role in agricultural development and productivity growth. Public investments in irrigation in combination with subsidies for fertilizer and improved seeds increased agricultural productivity generating an adequate supply of food for domestic needs with less labor.
Assessment of outcomes based on the use of PIM-supported foresight modeling work, 2012-2018
This report presents results of a study to assess the use of foresight modeling tools and outputs produced since 2012 and funded through Flagship 1, Cluster 1.1 of the CGIAR Research Program on Policies, Institutions, and Markets (PIM). The goal of this study is to examine how the tools and outputs of foresight modeling supported by PIM through Flagship 1 (hereafter “PIM-supported foresight modeling”) have been used by stakeholders. The study aims to identify as many uses of and outcomes from the PIM-supported foresight modeling as possible. It is by no means comprehensive, but it does cover usage by a wide range of stakeholders from across the CGIAR system, other international organizations, academia, and national governments.
Evaluating the Local Economywide Impacts of Irrigation Projects
Despite years of development interventions, agricultural productivity in Africa south of the Sahara still trails far behind all other continents, leaving many rural populations in dire poverty. This suggests that our understanding of the impacts of agricultural development projects is still imperfect; perfecting it is likely to be a crucial step in achieving development. Projects that raise agricultural productivity, in addition to directly affecting farmers, can have an impact on local prices, wages, and rents, especially in rural areas of Africa, which tend to be less-than-perfectly integrated with outside markets. Price changes, in turn, transmit project impacts to others within the local...
Impacts of the Russia-Ukraine War price shocks on the Bangladesh economy: A general equilibrium analysis
The spike in global commodity prices caused by the Russia-Ukraine war has had major adverse impacts on many developing countries, including Bangladesh, that still depend heavily on energy and food imports. Although the Bangladesh economy has rebounded after the COVID-19 pandemic, the latest global trade shock has threated to increase food insecurity and poverty. This study utilizes the Bangladesh RIAPA economywide model to assess the impact of increases in global commodity prices and explores potential policy interventions to reduce negative impacts. Simulation results show that increases in international commodity prices create a GDP loss of 0.36 percent and an increase of three million in ...
Synopsis: Implications of public investments and external shocks on agriculture, economic growth and poverty in Papua New Guinea: An economywide analysis
Policy simulations utilizing an economy-wide model based on PNG national accounts and survey data highlight the importance of linkages between the agricultural and non-agricultural sectors of the PNG economy. There are potentially major benefits of increased agricultural productivity for national income and urban households. To reduce rural poverty, however, transport and processing costs must be lowered, as well. Even if only half of the increase in foreign exchange earnings from the 2022 world energy price shock is absorbed into the PNG economy, the real exchange rate appreciates by 13 percent, reducing incomes from export crops. However, increased domestic demand for non-tradable crops co...
Mitigating poverty and undernutrition through social protection: A simulation analysis of the COVID-19 pandemic in Bangladesh and Myanmar
The COVID-19 pandemic resulted in severe income losses, but little is known about its impacts on diets and nutritional adequacy, or the effectiveness of social protection interventions in mitigating dietary and nutritional impacts. We first assess the likely impacts of COVID-19 shocks in Bangladesh and Myanmar on poverty and food and nutrient consumption gaps. We then analyze the estimated mitigating effects of five hypothetical social protection interventions of a typical monetary value: (1) cash transfers; (2) in-kind transfers of common rice; (3) in-kind transfers of fortified rice enriched with multiple essential micronutrients; (4) vouchers for a diversified basket of rice and non-staple foods; and (5) food vouchers with fortified rice instead of common rice. The simulation results suggest modest effectiveness of the cash transfers for mitigating poverty increases and little effectiveness of all five transfers for preventing increasing food and nutrient consumption gaps among the poorest 40%. Rice fortification is, however, effective at closing key micronutrient consumption gaps and could be a suitable policy instrument for averting ‘hidden hunger’ during economic crises.
2014 Social Accounting Matrix for Lao PDR: A Nexus Project SAM
The 2014 Laos Social Accounting Matrix (SAM) follows IFPRI's Standard Nexus SAM approach, by focusing on consistency, comparability, and transparency of data. The Nexus SAMs available on IFPRI's website separates domestic production into 42 activities. Factors are disaggregated into labor, agricultural land, and capital, with labor further disaggregated across three education-based categories. The household account is divided into 10 representative household groups: Rural and urban households across per capita consumption quintiles. Nexus SAMs support the improvement of model-based research and policy analysis in developing countries and allow for more robust cross-country comparisons of national economic structures, especially agriculture-food systems.
Mitigating poverty and undernutrition through social protection: A simulation analysis of the COVID-19 pandemic in Bangladesh, Myanmar, and Indonesia
This study addresses the policy-relevant question of how, in the face of major economic shocks, social protection interventions can more effectively mitigate undernutrition. In particular, it considers the scope of scaled-up fortification of staples to avert the “hidden hunger” of micronutrient deficiencies. As a re-cent and still relevant example, it focuses on the kinds of economic shocks brought about by the COVID-19 pandemic which, especially during the first lockdowns of April 2020, resulted in severe job and income losses for the poor and thus reduction and changes in spending, with urban and rural non-farm households typically affected more severely than farm households. However, ...
Implications of public investments and external shocks on agriculture, economic growth and poverty in Papua New Guinea: An economywide analysis
Policymakers in Papua New Guinea face difficult choices as to how best to promote economic growth and reduce poverty in the context of vast differences in technology and infrastructure across the country. Fluctuations in world prices of petroleum, minerals, and export crops complicate the management of the economy because of their large impacts on export earnings and government revenues, as well as household welfare. Moreover, other shocks, such as the Covid-19 pandemic that shut down major parts of the economies of PNG and the rest of the world, have far-reaching effects on various economic sectors, as well as the health and welfare of the population. This paper presents an analysis of inve...
