top of page
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
crossref
doi
open access

Published: 28 May 2024

Indonesian Petroleum Industry and Development: A Centennial Survey and Future Prospects

Muhammad Kholid Syeirazi, Eko Prasojo, Muh Aziz Muslim

University of Indonesia, Indonesia

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

Download Full-Text Pdf

doi

10.31014/aior.1992.07.02.583

Pages: 165-175

Keywords: Oil and Gas Development, Ups and Downs, Future Prospects

Abstract

The contribution of oil and gas to development is a classic debate among scholars. Some believe that oil and gas are positively related to development, while others believe the opposite. This study examines the contribution of oil and gas to development in Indonesia. Historical analysis of long-term data series, extracted from statistical documents since the colonial era, shows a positive relationship between oil and development in Indonesia. Although its contribution fluctuates, oil and gas have contributed to growth and welfare. However, the future of Indonesia’s oil and gas industry is at stake. Declining reserves and production and shrinking upstream investment due to declining competitiveness amid the green energy transition agenda threaten the sustainability of Indonesia’s oil and gas industry in the future.

References

  1. Alexeev, Michael & Conrad, Robert F. (2009). “The elusive curse of oil,” Review of Economics and Statistics, 91 (3), 586–598. doi: https://doi.org/10.1162/rest.91.3.586

  2. Aslaksen, Silje. (2010). “Oil and democracy: more than a cross-country correlation?” Journal of Peace Research,” 47 (4): 421-31. https://doi.org/10.1177/0022343310368348

  3. Atkinson, Giles & Hamilton, Kirk. (2003). “Savings, growth and the resource curse hypothesis,” World Development, 31 (11): 1793–1807. https://doi.org/10.1016/j.worlddev.2003.05.001

  4. Auty, Richard M. (1993). Sustaining development in mineral economies: The resource curse thesis. Routledge.

  5. _______. (2007). “Natural resources, capital accumulation and the resource curse,” Ecological Economics, 61(4): 627-634. https://doi.org/10.1016/j.ecolecon.2006.09.006

  6. Balassa, Bela. (1980). The process of industrial development and alternative development strategies. Princeton University.

  7. Bannon, Ian & Collier, Paul (eds). (2003). Natural resources and violent conflict: Options and actions. World Bank. https://doi.org/10.1596/0-8213-5503-1

  8. Blanco, Luisa& Grier, Robin. (2012). “Natural resource dependence and the accumulation of physical and human capital in latin america,” Resources Policy, 37 (3): 281–95. https://doi.org/10.1016/j.resourpol.2012.01.005

  9. Bodea, Cristina et al. (2016). “Oil and civil conflict: can public spending have a mitigation effect?” World Development, 78: 1–12. https://doi.org/10.1016/j.worlddev.2015.09.004

  10. Booth, Anne. (1998). The indonesian economy in the nineteenth and twentieth centuries: A history of missed opportunities. Macmillan Press.

  11. Boos, Adrian & Müller, Karin Holm-. (2013). “The relationship between the resource curse and genuine savings: empirical evidence,” Journal of Sustainable Development,” 6 (6): 59-72. http://dx.doi.org/10.5539/jsd.v6n6p59

  12. BP. (1951-2023). Statistical review of world energy.

  13. BPS. (1956-1984). Statistical Pocketbook of Indonesia.

  14. BPS. (1984-1997). Statistik Indonesia (Indonesian statistics).

  15. Badan Pusat Statistik (1998-2023). Statistik Indonesia (Indonesian statistics)

  16. Brunnschweiler, N. & Bulte, Erwin H. (2008). “The resource curse revisited and revised: A tale of paradoxes and red herrings,” Journal of Environmental Economics and Management, 55 (3), 248–264. https://doi.org/10.1016/j.jeem.2007.08.004

  17. CCS (1893-1898). Jaarcijfers voor het Koninkrijk der Nederlanden-Koloniën (Annual figures for the Kingdom of the Netherlands-Colonies).

  18. CBS (1899-1923). Jaarcijfers voor het Koninkrijk der Nederlanden-Koloniën (Annual figures for the Kingdom of the Netherlands-Colonies).

  19. CKS-DLNH (1924-1930). Statistisch Jaaroverzicht voor Nederlandsch-Indië (Statistical annual overview for the Netherlands East Indies).

  20. CKS-DLNH (1931-1941). Indisch Verslag: Statistisch Jaaroverzicht van Nederlandsch-Indië (Indian report: Statistical annual review of the Dutch East Indies).

  21. CKS-DEZ (1934-1941). Indisch Verslag: Statistisch Jaaroverzicht van Nederlandsch-Indië (Indian Report: Statistical Annual Review of the Dutch East Indies).

  22. CKS. (1935). Statistisch Zakboekje voor Nederlandsch Indië 1934 (Statistical pocketbook for the Dutch East Indies 1934).

  23. CKS (1939). Handelsstatistiek Java 1823-1873 & Handelsstatiestiek Nederlandsch-Indië 1874-1937 (Trade statistics Java 1823-1873 & Trade statistics Dutch East Indies 1874-1937).

  24. CBS (1939). Historische Prijzen in Nederlandsch-Indië sedert 1825 (Historical Awards in the Dutch East Indies since 1825).

  25. CKS (1939). De Economische Ontwikkeling van Nederlandsch-Indië in Cijfers en Grafieken (The Economic development of the Dutch East Indies in figures and graphs).

  26. CKS (1947). Meerjarige Overzichten van de In- en Uitvoer van Indonesië 1936-1941 and 1946-1949 (Multi-year overviews of the imports and exports of Indonesia 1936-1941 and 1946-1949).

  27. CBS-DEA (1941-1984). Statistical Pocketbook of Indonesia.

  28. Corden, W. Max & Neary, J. P. (1982). “Booming Sector and De-Industrialisation in a Small Open Economy,” The Economic Journal, 92 (368): 825-848. https://doi.org/10.2307/2232670

  29. Daniele, Vittorio (2011). Natural resources and economic growth: a curse or a blessing? Rivista Italiana Degli Economisti, 16 (3): 507-528. https://ideas.repec.org/a/mul/jqat1f/doi10.1427-35767y2011i3p507.html

  30. Davis, Graham A. & Tilton, John E. (2005). “The resource curse,” Natural Resources Forum, 29: 233–42. https://doi.org/10.1111/j.1477-8947.2005.00133.x

  31. Dietz, Simon et al. (2007). “Corruption, the resource curse and genuine saving,” Environment and Development Economics, 12 (01), 33–53. https://doi.org/10.1017/S1355770X06003378 

  32. Drake, P. J. (1972). “Natural resources versus foreign borrowing in economic development,” The Economic Journal, 82 (327): 951-62. https://doi.org/10.2307/2230260

  33. Dunning, Thad. (2005). “Resource dependence, economic performance, and political stability,” Journal of Conflict Resolution, 49 (4): 451-82. https://doi.org/10.1177/0022002705277521

  34. _________. (2008). Crude democracy: Natural resource wealth and political regimes. Cambridge University Press.

  35. Frankel, Jeffrey A. (2010). “The natural resource curse: A survey,” NBER Working Papers No. 15836. https://www.nber.org/papers/w15836

  36. Gelb, Alan. (1988). Oil windfalls: Blessing or curse. Oxford University Press.

  37. Gylfason, Thorvaldur. (2001). “Natural resources, education and economic development,” European Economic Review, 45 (4), 847–859. https://doi.org/10.1016/S0014-2921(01)00127-1

  38. Gylfason, Thorvaldur, et al. (1999). “A mixed blessing: Natural resources and economic growth,” Macroeconomic Dynamics. 3: 204–225. https://doi.org/10.1017/S1365100599011049 

  39. Gylfason, Thorvaldur & Gylfi Zoega. (2006). “Natural resources and economic growth: The role of investment,” World Economy, 29 (8): 1091–1115. https://doi.org/10.1111/j.1467-9701.2006.00807.x

  40. Ginsburg, Norton. (1957). “Natural resources and economic development,” Annals of the Association of American Geographers, 47 (3): 197-212. https://doi.org/10.1017/CBO9780511754036

  41. Haber, Stephen H. & Victor A. Menaldo. (2010). “Do natural resources fuel authoritarianism? A reappraisal of the resource curse,” American Political Science Review, 105 (1): 1-26. https://doi.org/10.1017/S0003055410000584 

  42. Heal, Geoffrey. (2006). “Are oil producers rich?” Initiative for Policy Dialogue Working Paper Series September 2006. https://policydialogue.org/files/publications/papers/Ch06.pdf

  43. James, Alexander. (2015). “The resource curse: a statistical mirage?” Journal of Development Economics, 114: 55–63. https://doi.org/10.1016/j.jdeveco.2014.10.006

  44. Karl, Terry Lynn. (1997). The paradox of plenty: Oil booms and petro-states. University of California Press.

  45. Iimi, Atsushi. (2007). “Escaping from the resource curse: evidence from botswana and the rest of the world,” IMF Staff Papers, 54 (4): 663-99. doi:10.1057/palgrave.imfsp.9450020

  46. Lederman, Daniel & Maloney, William F. (Eds.). (2007). Natural resources: Neither curse nor destiny. Stanford University Press & The World Bank.

  47. Manzano, Osmel & Rigobon, Roberto. (2001). “Resource curse of debt overhang?” NBER Working Paper No. 8390: 1–37. https://www.nber.org/papers/w8390

  48. MEMR. (2007-2023). Handbook of energy & economic statistics of Indonesia.

  49. Nankani, Gobind. (1979). “Development problems of mineral-exportingcountries,” World Bank Staff Working Paper No. 354. https://documents1.worldbank.org/curated/ar/777281468741386714/pdf/multi0page.pdf

  50. Nting, Rexon T. (2019). “The Political Economy of Mineral Exploitation in Cameroon,” African Research Review, 13 (1): 1-13. DOI:10.9734/bpi/ieam/v7/3017D

  51. Ross, Michael L. (2001). “Does oil hinder democracy?” World Politics, 53 (3): 325-61. DOI:10.1353/wp.2001.0011

  52. ________, 2012. The oil curse: How petroleum wealth shapes the development of nations. Princeton University Press.

  53. Rosser, Andrew.  (2007). “Escaping the resource curse: The case of indonesia,” Journal of Contemporary Asia, 37 (1): 38 – 58. https://doi.org/10.1080/00472330601104557

  54. Rostow, Walter. (1961). The Stages of economic growth: A non-communist manifesto. Cambridge University Press.

  55. Sachs, Jeffrey D. & Warner, Andrew M. (1995). “Natural resources abundance and economic growth”. NBER Working Paper No. 5398. https://www.nber.org/papers/w5398

  56. ________. (1999). “The big push, natural resource booms and growth,” Journal of Development Economics, 59 (1): 43–76. https://doi.org/10.1016/S0304-3878(99)00005-X

  57. _______. (2001). “The curse of natural resources,” European Economics Review, 45 (4): 827–838. https://doi.org/10.1016/S0014-2921(01)00125-8

  58. Sala-i-Martin, Xavier & Subramanian, Arvind. (2012). “Addressing the natural resource curse: An illustration from Nigeria,” Journal of African Economies, 22 (4): 570 – 61. https://doi.org/10.1093/jae/ejs033

  59. Sarraf, Maria & Jiwanji, Moortaza. (2001). Beating the resouce curse: The case of Botswana. World Bank.

  60. Shao, Shuai & Yang, Lili. (2014). “Natural resource dependence, human capital accumulation, and economic growth: A combined explanation for the resource curse and the resource blessing,” Energy Policy, 74: 632–642. https://doi.org/10.1016/j.enpol.2014.07.007

  61. SKK Migas. (2012-2023). Annual Report.

  62. Sovacool, Benjamin K. (2010). “The political economy of oil and gas in southeast asia: Heading towards the natural resources curse,” The Pacific Review, 23 (2): 225-59. https://doi.org/10.1080/09512741003624484

  63. Stijns, Jean-Philippe C. (2005). “Natural resource abundance and economic growth revisited,” Resources Policy, 30: 107–130. https://doi.org/10.1016/j.resourpol.2005.05.001

  64. _________. (2006). “Natural resource abundance and human capital accumulation,” World Development, 34 (6): 1060–1083. https://doi.org/10.1016/j.worlddev.2005.11.005

  65. Taguchi, Hiroyuki & Khinsamone, Soukvisan. (2018). “Analysis of the ‘dutch disease’ effect on the selected resource‐rich asean economies,” Asia & the Pacific Policy Studies, 5 (2): 249–63. https://doi.org/10.1002/app5.233

  66. Usui, Norio. (1997). “Dutch disease and policy adjustments to the oil boom: A comparative study of Indonesia and Mexico,” Resources Policy, 23 (4): 151-62. https://doi.org/10.1016/S0301-4207(97)00023-8

  67. Van der Ploeg, Frederick & Poelhekke, Steven. (2009a). “Volatility and the natural resource curse,” Oxford Economic Papers, 61 (4): 727–760. https://doi.org/10.1093/oep/gpp027

  68. _________. (2009b). The volatilit y curse: Revisiting the paradox of plenty, DNB Working Paper No. 206. https://www.cesifo.org/en/publications/2009/working-paper/volatility-curse-revisiting-paradox-plenty

  69. _________. (2010). “The pungent smell of “red herrings”: Subsoil assets, rents, volatility and the resource curse,” Journal of Environmental Economics and Management, 60 (1): 44–55. https://doi.org/10.1016/j.jeem.2010.03.003

  70. Van der Eng, Pierre. (2010). “The sources of long-term economic growth in Indonesia, 1880–2008,” Explorations in Economic History, 47 (3): 294-309. https://doi.org/10.1016/j.eeh.2009.08.004

  71. Van Zanden, Jan Luiten & Marks, Daan. (2012). An economic history of Indonesia, 1800–2010. Routledge.

  72. Wälde, Thomas. (1984). “Third world mineral development: Recent issues and literature,” Journal of Energy & Natural Resources Law, 2 (4): 282-301. https://doi.org/10.1080/02646811.1984.11433498

  73. Wood, Adrian & Berge. Kersti. (1997). “Exporting manufactures: Human resources, natural resources and trade policy,” The Journal of Development Studies, 34 (1): 35–59. https://doi.org/10.1080/00220389708422502

  74. Wright, Gavin & Czelusta, Jesse (2004). “The myth of the resource curse,” Challenge, 47 (2): 6-38. https://doi.org/10.1080/05775132.2004.11034243

bottom of page