Contribution of Forestry Sector in Indonesian Economy: Analysis Using Social Accounting Matrix (SAM)

This paper analyzes the contribution of forestry sector to Indonesian economy. With official BPS Indonesia socioeconomic balance system (SAM) 2005, matrix 107X107, I analyze the contribution of the forestry sector in Indonesian economy to capture the potential aspects of this sector related with structure of production, factor inputs of production (worker and non-worker), allocation (distribution and redistribution) factor income of production, demand composition for final consumption, export, investment, and its linkages to other sector in economy. The results, in 2005 the forestry sector absorbed 0.53% from total Indonesian employment and contributed 0.78% to Indonesian GDP. Thus this value added distributed 41.4% to factor production worker and 51,8% to factor production non-worker (capital). Export commodities from this sector contributed 0.26% to total export and its import contributed 0.05% to total import Indonesia. From the multiplier effects, the direct effect of injection 1 million rupiah in the forestry sector will increase 2.019 million rupiah of endogenous activities through opened loop multiplier and the indirect effect will increase 5.493 million rupiah through closed loop multiplier. The total activity impact from the backward linkages is 8.512 million rupiah. It means 1 million rupiah increasing in final demand in the forestry sector will rise 8.512 million rupiah to the endogenous activities in the economy while the total activity impact from forward linkage is 2.449 that it means 1 million rupiah increasing in final demand of each sector in the economy will rise 2.449 million rupiah of production in the forestry sector.