indonesia

f i g u r e 4
Difference in outturns relative to 2010 as a percentage of GDP
1.5
1.0
Revenue
Other expenditures
Fuel subsidies
Overall fiscal balance
Difference in outturns relative to 2010 (% GDP)
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
-3.0
2011 2012 2013 2014 2015
Year
s o u r c e : World Bank, “Slower Gains,” 27.
n o t e : The 2015 figures are World Bank projections.
Prospects and Challenges for the Future
Indonesia faces a complex set of challenges in managing its future oil industry prospects. As a
net importer of oil rather than a net exporter, it now needs to move toward policies that are geared
to energy security. The recently adopted NEP14 provides an important new focus on energy security
and shifts toward managing demand growth. It aims to re-establish Indonesia’s energy independence,
strengthen energy efficiency, and accelerate the deployment of indigenous energy sources like coal,
natural gas, renewables, and geothermal energy to support domestic energy needs and economic
growth. To emphasize energy security, the NEP14 lays out plans for developing oil “buffer stocks” of
domestically stored oil that would be available in the event of a supply disruption, whether as a result
of a natural disaster like a tsunami or an international conflict.
30
NBR
Reinvigorating Oil Production
In the oil sector, Indonesia faces special challenges. The Jokowi government needs to address
opportunities on both the production side and the consumption side in order to reduce the
economic drag that the oil sector is currently exerting on the economy. On the oil production
side, any expectations of Indonesia becoming a net exporter again are long gone. Given declining
mature oil fields, including the large Minas and Duri fields in Central Sumatra, and much more
SPECIAL REPORT u DECEMBER 2015