InterCAFE LPPM IPB and Indonesia Eximbank conducted a research study on the impact of Export Financing to Indonesian Social and Economy

In order to measure Indonesia’s social and economic impact on the existence and export financing facilities provided by Indonesia Export Financing of Indonesia (LPEI), Indonesia Eximbank collaborates with the International Center for Applied Finance and Economics (INTERCAFE) LPPM IPB, as an academic research institute that independent and experienced in conducting various economic and financial research studies both nationally and internationally.

Annual Report Indonesia Eximbank (2017) states that in 2017, LPEI has provided financing to export-oriented business sectors in Indonesia amounting to 100.62 Trillion Rupiah with the largest share of financing distributed to the paper industry, printing, transportation equipment, and metal goods by 16.69 %; the food, beverage and tobacco industry sector by 15.43%; and other agricultural sectors, namely plantations of 13.82%. Through the existence and provision of financing facilities by LPEI to various sectors, the study of the extent to which the existence and financing provided by LPEI plays a role in social and economic development in Indonesia needs to be done.

Generally, this study aims to: (1) Analyze the impact of LPEI facilities on production activities in sectors/ commodities that obtain many facilities from LPEI; and also in impact to socio economic condition in Indonesia using CGE analysis. CGE Analysis uses the Indonesian Socio-Economic Balance System (SNSE) data in 2008 which contains the linkages between production activities, consumption of goods and services, savings-investment, and foreign trade which consists of 24 business sectors aggregated into 14 sectors to facilitate analysis, and Eximbank Indonesia 2014-2017 annual report data to see Eximbank Indonesia’s current year 2014-2017 profit ratio for Indonesia’s GDP Sector 14 2014-2017 for mirroring the output of Sector 14 (Banks, Insurance, and Other Services) in 2008.

Data share LPEI 2014-2017 financing at the annual report is also needed to see the contribution of Share the amount of financing credit disbursed by LPEI in each sector to the value of GDP in the same sector. The variables selected to be simulated are productivity efficiency variables in each sector. This is done with the consideration that the presence of LPEI which provides financing to each production sector will increase capital stock in each sector, which in turn will increase productivity and efficiency, which in turn will increase employment, output growth, export growth , increasing national income, reducing poverty, and reducing income inequality.

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