Bulletin of Indonesian Economic Studies, Vol. 44, No.

2, 2008: 289–311

WHAT CEREALS WILL INDONESIA STILL IMPORT IN 2020?

Robin Bourgeois* Dian Kusumaningrum*

CIRAD, Montpellier Bogor Agricultural University, Bogor

Most existing projection models forecast that Indonesia will become a net importer
of increasing amounts of basic cereals such as rice, maize and wheat, implicitly
providing grounds for the government’s continuing pursuit of food self-sufficiency
at any cost. A growing urban population, increases in income per capita, trends in
planted area and new technologies are determining factors used in these models.
The present paper employs a scenario approach based on a combination of time-
series models, qualitative assessments and a cross-country analogy with Malaysia
to build a picture of likely food cereal production and consumption patterns in
2020. Consequent levels of imports are calculated and estimates of their weight in
the Indonesian economy are presented, comparing four periods: 1975, 1990, 2005
and 2020. These estimates are then used in considering policy issues related to food
security and self-sufficiency.

INTRODUCTION
In the early 1990s, the decline in consumption of traditional cereals (rice and coarse
grains) in Asia was foreseen as an inescapable consequence of urbanisation (Huang
and David 1993), providing room for the booming wheat-based products, animal
proteins, fruits and vegetables. Urbanisation, rising incomes and the westernisa-
tion of lifestyles are expected to shape Indonesia’s consumption patterns in ways
similar to those in most other advanced Asian countries (Pingali 2004; Molyneaux
and Rosner 2004; Pinstrup-Andersen 2001; Bottema, De Silva and Stoltz 1994).
This phenomenon particularly affects young people (15–25 years), who accounted
for 45% of Indonesia’s population in 2007 (BPS-Statistics Indonesia 2007) and it
has significant implications for the country’s future food situation. However, the
role of cereals in Indonesia has not changed exactly as expected or as commonly
projected. Wheat consumption has increased, but remains at rather low levels.
Rice consumption per capita has risen over the last two decades and is one of the
highest in the world. Maize food consumption does not show signs of weaken-
ing, and even if animal protein consumption has significantly climbed, it remains
lower than in many other Asian countries. Is Indonesia the exception, or is it just
lingering on the pathway?

* Email: robin.bourgeois@cirad.fr; CIRAD (Centre for International Cooperation in Agro-

nomic Research for Development), UPR Politiques et Marchés (Policies and Markets Re-
search Unit), Montpellier, F-34398 France. The authors wish to thank Peter Timmer, Keith
Fuglie and Bruno Dorin for useful comments, and three anonymous referees for their criti-
cal review and helpful suggestions. The views expressed here are those of the authors.

ISSN 0007-4918 print/ISSN 1472-7234 online/08/020289-23 © 2008 Indonesia Project ANU

DOI: 10.1080/00074910802169038

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 290 Robin Bourgeois and Dian Kusumaningrum

By about 2020 Indonesia will have to feed 40 million more people, and for the
first time the urban population will outnumber the rural. Urban growth, indus-
trial construction and the expansion of infrastructure will contribute to the con-
version of agricultural land to non-agricultural purposes (Rana 2003; Suprapto
2002). This phenomenon primarily affects irrigated rice fields, at an estimated
annual rate of 2.7% (Simatupang, Rusastra and Maulana 2004: 116). Sawit (2004:
186) estimates the conversion rate for all agricultural land at 0.43% per annum.
New land clearing for agricultural purposes now occurs only outside Java, on less
fertile soils usually more suitable for tree crops than for grain cultivation.
Today Indonesia meets its cereal needs through imports (wheat, rice and maize)
and domestic production. A restrictive policy and bumper harvests have recently
reduced rice imports, after a series of years in which they reached several million
tonnes following the 1997–98 crisis. For the first time in 20 years the government
was able to declare rice self-sufficiency in 2004.1 It appears willing to pursue a ‘full
self-sufficiency trend for rice’ (Timmer 1994: 41) and even to extend this objective
to maize, sugar and soybean (AARD 2005). How sound is this strategy—and the
related investments—given the potential evolution of the domestic cereal sector?
In this article, we discuss food demand and supply in Indonesia to 2020, with
particular emphasis on the trade balance, and more specifically the balance between
domestic production and imports. After introducing the methodology and data
issues, we provide a picture of the current domestic supply of rice, maize and
wheat, and discuss its dynamics. We then explore possible food demand for cere-
als by 2020, and the country’s capacity to satisfy it through domestic production.
In conclusion, we assess the financial burden that the procurement of basic cereals
may place on Indonesia’s trade balance in 2020, and compare it with the burden
today and in the 1970s and 1980s. We use the results to gauge the appropriateness
of self-sufficiency policies today as a means to achieve food security.
Some of our results contradict the best known projections—those of the US
Department of Agriculture (USDA); the International Food Policy Research Insti-
tute (IFPRI); the Arkansas Global Rice Model; the Food and Agricultural Policy
Research Institute (FAPRI, based at Iowa State University); and the Organiza-
tion for Economic Co-operation and Development and the Food and Agriculture
Organization (OECD–FAO).2 Our findings show that under specific conditions
Indonesia may be able to overcome its reluctance to import rice, at least from
a demand–supply matching perspective. Our results for wheat-based products
concur with most other estimates, as Indonesia’s dependence on wheat imports

1 Indonesia first proclaimed rice self-sufficiency in 1984. Soon afterwards, public policy
switched to focus on non-agricultural sectors, and since then the country has imported rice
almost continuously, with particularly high levels of imports following the crisis.
2 The four models we refer to in this article are the trade baseline projections from the
USDA’s Economic Research Service, developed by Childs and Hansen; the Arkansas Glo-
bal Rice Model developed by Wailes, Cramer, Chavez and Hansen; the FAPRI model elab-
orated by the Centre for Agricultural and Rural Development at Iowa State University,
under the supervision of J. Beghin; and projections of the Centre for Agro-Socio-Economic
Research and Development (Pusat Penelitian dan Pengembangan Sosial Ekonomi Per-
tanian, PSEP) presented by Syafa’at et al. (2005). We refer also to the OECD–FAO 10-year
projections regularly published and updated in the Agricultural Outlook reports.

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 What cereals will Indonesia still import in 2020? 291

grows. Maize production can satisfy the country’s food requirements and, under
some assumptions, the growing demand from the feed sector.

METHOD
The method used to explore the future of food grain demand in Indonesia com-
bines a quantitative component, based on food demand and supply trend pro-
jections, with a qualitative discussion of the results. This choice stems from the
observation that existing quantitative models provide rather diverging views.
Koyama (2000) indicates, for example, that econometric models applied to long-
term food demand–supply forecasting share a common limitation: their design is
for medium-term projections (5–7 years), and implicitly assumes that the economic
structure will remain unchanged over the longer term. He states that ‘[a]lthough
the results of projections are basically the outcome of econometric models, most of
them also reflect the opinions of regional or commodity experts. Therefore, the final
figures published are not associated directly with the models’ (Koyama 2000: 2).
Discrepancies in the elasticity values used for modelling future demand and sup-
ply also produce diverging forecasts: table 1 shows the forecasts of demand–supply
balance generated by the use of different elasticities in the models listed above.

TABLE 1 Demand–Supply Balance Forecasting Models for Rice, Maize and Wheat in
Indonesia: Elasticities Used and Forecasts Generateda

Model Rice Maize Wheat

FAPRI DIE = –0.12 DPE for food = –0.17 n.a.

DPE for feed = –0.19
2014 forecast: –3.8 SOP = 0.28
2015/16 forecast: –1.2
Arkansas 2010 forecast: –4.5 n.a. n.a.
USDA DPE = 0.17 DPE = –0.05 DPE = –0.56
DIE = –0.06 DIE = 0.6. DIE = 0.85
2014 forecast: –1.8 2015/16 forecast: –1.5 2015/16 forecast: –5.5
PSEP DPE = –1.2 DPE = –2.8 (rural), n.a.
DIE = 0.5 (rural), –1.5 (urban)
–0.106 (urban) DIE = 0.055
SOP = 0.128 SOP = 0.096
2020 forecast: +8.0 2020 forecast: +31.6
OECD–FAO DPE = 0.13 n.a. DPE = –1.0
DIE = –0.23b DIE = 0.78b
2014 forecast: –3.0

a DPE = Demand to own price elasticity; DIE = Demand to income elasticity; SOP = Supply to own
price elasticity; n.a. = not available. Forecasts are of the demand–supply balance and are in millions of
tonnes. For a brief explanation of the models listed, see footnote 2.
b OECD–FAO (personal communication, confidential).

Sources: FAPRI: FAPRI (2006)’ <http://www.fapri.iastate.edu/tools/elasticity.aspx>; Arkansas: Wailes

et al. (2000); USDA: USDA (2006); PSEP: Syafa’at et al. (2005); OECD–FAO: OECD–FAO (2005).

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 292 Robin Bourgeois and Dian Kusumaningrum

FIGURE 1 A Trends/Ruptures Model for Cereal Supply-Demand Analysis

in Indonesia

Trends Ruptures

GDP Total population Urbanisation

Urban/Rural
Westernisation
GDP per capita

Consumption pattern
Consumption per capita

Quantities needed Qualitative change

Demand

Imports
Exports Trade balance outlook

Supply

Expansion/
substitution
Cultivated area
Prices
Yield Agricultural land
Technology Policies

Climate

Diseases

In this paper we use a ‘positive’ approach similar to that of the FAO in its
2015–30 perspective on world agriculture (Bruinsma 2003: appendix 2; Bruinsma
2004: 9–10). This approach builds on quantitative analyses and projections based
both on historical trends and on more qualitative analyses to assess the acceptabil-
ity and rationality of the qualitative trends. The heuristic framework used here
combines different sets of variables that interact together and affect the final trade
balance per commodity, as depicted in figure 1.
The underlying analytical structure of this framework is presented in figure 2.
The monthly and yearly time-series data on which our 2020 forecasts rely are

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 What cereals will Indonesia still import in 2020? 293

FIGURE 2 Structure of the Forecasting Frameworka

Data set
Source:
FAO, USDA, BPS

1 Time series method
Forecasting techniques
• Compare four models
• Check diagnostics Result 1
• Choose model with smaller
MADE, MAD and MSD

Regression techniques
• Check diagnostics
2 Regression method Result 2
• Choose the model that has
a higher R2 value

Comparison with Malaysia

3 Analogy method • Use 1980–2000 Malaysia data
Result 3
• Forecast 2000–20 data in
Indonesia

Compare the results

with convergence
criteria

Final result

a MAPE = mean absolute percentage error; MAD = mean absolute deviation; MSD = mean squared
deviation.

sourced primarily from the FAO’s FAOSTAT database, Indonesia’s central statis-
tics agency (BPS-Statistics Indonesia) and the USDA. Monthly data used for crop
production projections (rice and maize) and annual data used for other forecasts
are available from the authors.
Data of this type are widely used in most of the aforementioned models,
but their reliability must be discussed because it is questioned, for instance,
by Fuglie (2004). BPS data on agriculture are especially subject to criticism, as
outlined by Jammal (2003). Sastrotaruno and Maksum (2002) in particular argue
that historical series on rice production are over-estimated by roughly 17%
owing to flaws in planted area data collection methods. Our study addresses

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 294 Robin Bourgeois and Dian Kusumaningrum

this problem by including alternative calculations based on data series with a

smaller rice area.
We selected and systematically tested four time-series projection methods and
used the most accurate.3 The results were also compared with the results of our
own regressions based on FAOSTAT and BPS data (maize and wheat) and/or ana-
lysed by analogy with Malaysia (rice and wheat). GDP and population forecasts
are based on existing literature. Data and the results from the time-series projec-
tions can be obtained directly from the authors.

FOOD GRAIN SUPPLY AND DEMAND TODAY

The ‘economic miracle’ of rapid and balanced growth that preceded the 1997–98
crisis boosted Indonesia’s GDP from less than $250 per capita in 1970 to more
than $900 in 1997.4 The number of people living below the one-dollar (purchasing
power parity) poverty line dropped significantly, from 60% in the mid-1970s to
10% just before the crisis (Feridhanusetyawan and Pangestu 2004).
The 1997–98 economic crisis had a severe impact on Indonesia. It became a
social crisis, then a political crisis, marking the beginning of three very difficult
years. Growth resumed in 2000; GDP per capita finally reached its 1997 level in
2004 (Feridhanusetyawan and Pangestu 2004), and in 2005 it was $1,020 (IMF
2006). However, in 2005, the International Monetary Fund (IMF) estimated the
magnitude of permanent output loss due to the crisis at over 20% (Cerra and
Saxena 2005).
The share of agriculture in Indonesia’s GDP plunged from 50% in 1970 to just
16% in 2005. However, 48% of the 100 million-strong labour force still worked in
agriculture.5 Consequently, the rural and agriculture sector remains a fundamen-
tal element in the socio-economic dynamics of the country, and agriculture-related
policy decisions affect not only the evolution of food supply but also the lives of
millions of farmers and agricultural workers, in particular in the grain sector.

The edge of rice self-sufficiency

In 1974, price hikes in international markets for agricultural products triggered seri-
ous supply problems for Indonesia. The country is regularly the largest rice importer
in the world and this has led agricultural policy to pursue rice self-sufficiency. Fig-
ure 3 illustrates the success of this policy. In the mid-1980s, in spite of a 50% increase
in per capita rice consumption between 1970 and 2002 and a net population increase
of 30 million people, Indonesia effectively became self-sufficient in rice. Imports
dropped to below 1%, on average, between 1984 and 1994.

3 The methods we tested were: Winter’s method; trend analysis; decomposition fit; and
exponential smoothing. Following Montgomery, Johnson and Gardener (1990) we selected
the most accurate, that is, the method yielding the smallest mean absolute percentage error
(MAPE), mean absolute deviation (MAD), and mean squared deviation (MSD).
4 GDP per capita was $933 in 1997 and $239 in 1970 (in 1990 constant dollars), according to
the United Nations Common Database at <http://unstats.un.org/unsd/cdb/>, accessed
7 October 2005. (In this journal ‘$’ = US dollars unless otherwise specified.)
5 Based on FAOSTAT data at <http://faostat.fao.org/>, accessed 7 October 2005.

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 What cereals will Indonesia still import in 2020? 295

FIGURE 3 Milled Rice Production, Consumption and Imports

40 400

Production ('00,000 tonnes, rhs)

30 300

20 200
Consumption (kg per capita, rhs)

10 100
Imports (% of
total supply, lhs)
0 0
1970 1974 1978 1982 1986 1990 1994 1998 2002

Source: FAOSTAT, <http://faostat.fao.org/>, combined with BPS-Statistics Indonesia, Economic Indica-

tors, various issues.

Rice production doubled between 1974 and 1990. Yields increased from 2.6 to
4.3 tonnes per hectare as a result of mass intensification policies and the introduc-
tion of high-yielding seed varieties. Intensification was supported by extension
activities and by the supply of fertilisers and other chemicals to farmers at sub-
sidised prices. In parallel, the logistics agency, Bulog,6 maintained a supportive
economic environment by reducing risks for producers (Timmer 1996). The price
of rice was stabilised by means of a nationwide network of public storage facili-
ties and a guaranteed floor price for producers announced at the beginning of the
planting season (Sidik 2004).
However, this costly policy did not sit well with international pressure for
agricultural trade liberalisation. Progressive deregulation was taking place in the
agriculture sector by the end of the 1980s, slowing production growth. Yields have
remained close to their 1980 levels since then. Rice demand continued to expand
under the combined effects of demographic growth and higher income levels, and
Indonesian imports rose again in the mid-1990s.
During the 1997–98 crisis, imports reached record levels—almost 3 million
tonnes in 1998 and 5 million tonnes in 1999—as a consequence of El Niño-induced
drought and market dysfunctions in the supply of inputs and the commerce of
agricultural goods. Indonesia again became one of the largest rice-importing
countries. The crisis strongly affected its economy, and this partially explains the
level of imports until 2002. Climatic conditions also impinged on self-sufficiency.
In 2003, owing to the knock-on effects of the 2002–03 drought, Indonesia imported

6 Bulog is a public agency in charge of promoting agricultural development. In 2002, it

acquired a new statute and became a commercial, profit-oriented, para-statal company. It
still regulates the price of rice.

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 296 Robin Bourgeois and Dian Kusumaningrum

1.3 million tonnes of rice.7 More favourable climatic conditions, combined with
a ban on rice imports, led some experts to announce that Indonesia had again
reached self-sufficiency in 2004.
Between 1995 and 2005, rice imports averaged less than 3% of total supply. If
rice were not, above all, a strategic and cultural commodity and allegedly the
backbone of rural stability, this level of self-sufficiency could probably be viewed
as appropriate. However, since 2005, the ban on rice imports that was expected to
lead to full self-sufficiency has generated a surge in domestic prices and is consid-
ered one reason for the recent increase in poverty in Indonesia (Basri and Patunru
2006; Timmer 2006; World Bank 2006). The government’s current dilemma is that
it must choose between protecting farmers in an attempt to achieve lasting full
rice self-sufficiency—with the risk of increasing poverty—and allowing imports
to push domestic prices downwards—thus risking loss of political support from
rural areas.

Progressively turning to wheat-based products

Indonesia does not produce wheat, and wheat-based products were not widely
consumed in the country until the early 1990s (figure 4). Poor and middle-class
people—the majority of the Indonesian population—principally consume rice,
cassava, maize and processed soybean. With yearly consumption slightly above
20 kilograms of flour equivalent per capita in 2004, Indonesia remains a small
consumer of wheat compared with most Asian countries. However, consumption
growth is rapid, at 6% per annum, and since the early 1990s wheat consump-
tion has steadily increased. The link between wheat consumption and changes
in the lifestyle of Asian citizens due to urbanisation is well documented (Fabiosa
2006; Pingali 2004). This applies to Indonesia, where our calculations yield a very
strong coefficient of correlation (0.94) between wheat imports and the number of
urban people, while the coefficient is smaller (0.69) for the rural population.
A large number of people who live in the cities adopt a more occidental con-
sumption pattern, including in their regular diet bread, pastries and cakes, whose
consumption has grown at an annual rate of 20% since the mid-1990s. The number
of urban people has also increased five-fold since the mid-1970s, and processing
industries continue to develop wheat-based products that make cooking easier for
working people. The market for ‘instant noodles’ has experienced strong growth,
and 60% of wheat flour is currently used in their production, a figure that doubled
between 1987 and 1997 (USDA 1997).
In the 1990s, wheat was the only cereal whose consumption per capita surged.
The crisis ended this growth, because import costs rose three-fold in local currency
and the number of wheat consumers halved. Since then the consumption trend
has resumed (figure 4). Directly imported flour represents only 10% of domes-
tic consumption; the rest is locally processed from imported grains. Indonesia’s
wheat imports totalled nearly 5 million tonnes in 2002.

7 Discrepancies in import estimates are noticeable, for example, between USDA and BPS
data. Here BPS data are used, although Sastrotaruno and Maksum (2002) consider BPS
production data to be over-estimated by 17%. This explains why the consumption, produc-
tion and import data in figure 3 do not match exactly. Nevertheless, this does not affect past
trends as described.

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 What cereals will Indonesia still import in 2020? 297

FIGURE 4 Evolution of Urban Population and Wheat Consumption

120 25

100 Urban population (millions, lhs)

20
Wheat consumption (kg per capita, rhs)
80
15
60
10
40

5
20

0 0
1970 1974 1978 1982 1986 1990 1994 1998 2002

Source: FAOSTAT, <http://faostat.fao.org/>, combined with BPS-Statistics Indonesia, Economic Indica-

tors, various issues).

Food and feed: dual-purpose maize

In Indonesia, maize is used for human consumption, both fresh and as a raw
material for the processing industries (for example, in flours, syrups and crack-
ers). The share of fresh maize in direct consumption by households has expe-
rienced a steady decline. According to Ariani and Pasandaran (2003: 217), only
the poorest households still devote a significant part of their food expenditure to
fresh maize, and the higher the monthly expenditure the lower the share of maize.
While this traditional use of maize has declined, the food industry processes rap-
idly growing quantities of maize, and this is now the key factor behind the contin-
ued growth of maize consumption in the food sector (Kasryno, Pasandaran and
Fagi 2003). In parallel, maize is increasingly used by the feed sector, especially for
the production of local poultry feed.8
By the end of the 1970s, agricultural support policies extended to maize, with
the establishment of a floor price in 1978 (Timmer 1987). However, this was of
little relevance, since a three-fold jump in animal production between 1970 and

8 Statistical data on national maize production and consumption show inconsistencies.

While BPS and BPS-based FAOSTAT data indicate that Indonesia currently produces
around 11 million tonnes of maize, the USDA/FAS (Foreign Agricultural Service) database
presents a figure of around 6 million tonnes. The two sources are consistent in relation to
imports, exports, feed use and harvested area, but give widely differing estimates of con-
sumption as food and yield per hectare. According to USDA data, maize consumption per
capita is 16.4 kilograms, while BPS and FAOSTAT sources show it as 37 kilograms. Yields
are 2 tonnes per hectare according to USDA and 3.2 tonnes per hectare according to BPS/
FAOSTAT. Recent evidence based on detailed fieldwork (Swastika et al. 2004) indicates
that BPS and FAOSTAT data on average yields are more reliable, while USDA data on con-
sumption as feed seem more consistent.

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 298 Robin Bourgeois and Dian Kusumaningrum

FIGURE 5 Maize Production, Consumption and Imports

50 40

40 Consumption (kg per capita, rhs)

30

30
20
20 Imports (% of total supply, lhs)

10
10 Production (million tonnes, rhs)

0 0
1970 1974 1978 1982 1986 1990 1994 1998 2002

Sources: 1970–2003: FAOSTAT, <http://faostat.fao.org/>; 2004–05: FAOSTAT and BPS estimates.

1980 had led to the rapid growth of the animal feed industry, which became a
significant consumer of maize (Rosegrant et al. 1987). Though Bulog never bought
more than 3% of domestic production, domestic prices stabilised. Intensification
programs stimulated fertiliser application and fostered the planting of improved
varieties from 1983.
Until 1994, Indonesia only marginally traded maize, effectively achieving
self-sufficiency. Since 1994, growing demand from the animal feed industry has
led to systematic imports. During the 1990s, trade liberalisation did not impede
growth in maize production because this rather competitive crop, unlike rice, is
only marginally affected by intervention. New high-yielding varieties can explain
most of the growth in productivity and cultivated area (Kasryno, Pasandaran and
Fagi 2003). Between 1970 and 2002, total per capita maize consumption for food
and feed almost doubled. Annual variations occurred but did not affect the long-
term trend (figure 5). The 1997–98 crisis undermined consumption, with the most
affected population shifting temporarily from rice and maize to cassava. In 2005,
the Ministry of Agriculture’s Action Plan for Food Security established targets of
maize self-sufficiency by 2007 and the potential capacity to export maize by 2010
(AARD 2005).
With the introduction of new varieties of maize, average yields of around 5
tonnes per hectare are not unheard of (Swastika et al. 2004). Current production
could probably satisfy the domestic demand for animal feed. However, the feed
industry requires a regular supply of around 300,000 tonnes of maize per month.
The bulk of Indonesia’s production is released over three to four months,9 and
storage capacity is limited. Industries have thus to resort to seasonal imports to

9 In a few cases, mainly in Lampung and some parts of South Sulawesi, yearly maize pro-
duction may include two cycles (Swastika et al. 2004).

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 What cereals will Indonesia still import in 2020? 299

bridge shortfalls between demand and supply. Since 2000 imports have regularly
reached one million tonnes, around 10% of total supply (figure 5).
A low level of intervention is typical of Indonesia’s maize policy, and pro-
ducer prices were aligned with international prices at a correlation coefficient of
0.66 between 1990 and 2004. The dynamics of the feed sector provided sufficient
impetus to maintain domestic prices close to international prices over this period.
However, the recurrent threat of avian influenza outbreaks has created uncer-
tainty about uninterrupted expansion of the poultry sector and, indirectly, about
the regularity of domestic demand for maize. Maize-based bio-ethanol generation
is a factor that will influence local demand and availability of the crop. However,
the ambitious plans of the government to promote bio-fuel, more specifically the
bio-fuel ‘New Deal’, have so far given priority to sugar cane molasses and cassava
as inputs (Basri and Patunru 2006: 306).
In summary, in 2005, Indonesia was almost self-sufficient in rice, thanks
to bumper harvests and an import ban following an erratic period of rather
voluminous imports. Wheat consumption is steadily growing, reflecting the
emergence of a more diverse urban consumption pattern. Maize consumption
for food and feed continues to grow gradually, and improved varieties have
allowed the country to limit imports. The feed sector is the driving force behind
seasonal imports, primarily for reasons of logistics and infrastructure, and is a
potential source of instability on the demand side. In the next section, we dis-
cuss how this picture may evolve, exploring possible scenarios for these com-
modities by 2020.

THE OUTLOOK FOR INDONESIAN FOOD GRAIN DEMAND

The demand outlook for cereals that we develop below combines a discussion
of trend projections with a comparative approach. The trend projections are also
used for the analysis of supply prospects, in particular for domestic production.
We then compare prospective demand and production to derive future import
requirements, and assess the economic burden that grain imports could place
on the country’s trade balance by 2020 compared with past and present circum-
stances.

Demand prospects
Future cereal demand in Indonesia is determined by the evolution of (i) quan-
titative factors such as the number of consumers, the rural–urban share in the
population, and consumer purchasing power; and (ii) qualitative factors, includ-
ing changes in consumption patterns (Pinstrup-Andersen 2001; Molyneaux and
Rosner 2004).
Different sources give differing projections for the population of Indonesia.10
The BPS-based FAO data and projections used in this paper give an estimate of
261 million people in 2020, some 40 million more than in 2005. This expansion
would lead to the urban population surpassing the rural population in about

10 For 2020 the US Census bureau forecasts 287 million people and the United Nations
255 million.

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 300 Robin Bourgeois and Dian Kusumaningrum

FIGURE 6 Projections of Rice Consumption in Indonesia in 2020a

(kilograms of milled rice per capita)
180

Indonesia 1981–2003
150 Indonesia 2004–20 (projected)

120

Malaysia 1961–2000
90

60

30

0
1984 1988 1992 1996 2000 2004 2008 2012 2016 2020
a The Malaysian 1961–2000 line is shifted on the graph so as to start in 1981 on the horizontal axis. The
Indonesian 2004–20 line is calculated using the part of Malaysia’s consumption line corresponding to
the period 1984–2000.

Source: Adapted from FAOSTAT, <http://faostat.fao.org/>.

2010. According to FAO projections, the rural population is expected to stabilise at

slightly above 100 million people by 2015.
After average growth of 7% per annum between 1977 and 1997 (Balisacan, Per-
nia and Asra 2003), Indonesia’s GDP per capita contracted sharply in response
to the Asian crisis and then progressively recovered. The forecast by the national
planning agency (Bappenas) of 5.9% growth for the period 2002–19 (Chowdhury
2002) is used in our first growth scenario (GDP1). Combined with 1.5% popula-
tion growth, it returns a 4.4% annual increase in Indonesian GDP per capita,
which is consistent with other forecasts (Hawksworth 2006) and estimates (Sen
and Steer 2005; Basri and Patunru 2006). Our time-series projection returns a
lower growth rate of 4.8% (GDP2), close to the USDA (2006) baseline projection
set at 5%, and the FAO 2015–30 projections of 4.2% for 2009–15 and 4.9% for
2015–30 (Bruinsma 2004).
Our discussion of trends is juxtaposed with analogical references to Malaysia
to assess the relevance of the 2020 projections. Malaysia can be considered as hav-
ing undergone between 1980 and 2000 the phases Indonesia will go through in
2000–20.11 GDP per capita in Indonesia between 1980 and 2004 is close to that in

11 Common conditions such as geographic proximity, a majority Muslim population and

the related language and ethnic origin of the dominant ethnic group persuaded us to use
Malaysia for comparison.

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 What cereals will Indonesia still import in 2020? 301

Malaysia from 1960 to 1984, and follows very similar patterns.12 Furthermore,
Malaysia’s urban population surpassed the rural population in 1990, 20 years
before the same event is projected to take place in Indonesia.

Future rice demand

The time-series model applied to 1981–2003 milled rice data from FAOSTAT indi-
cates that annual per capita consumption could decline from its 2003 level of 150
kilograms to around 135 kilograms in 2020.13 The comparison with Malaysia sug-
gests a similar decline (figure 6).
Under this hypothesis, called RDH1, Indonesia will require 35 million tonnes
of rice to satisfy the consumption requirement of its 261 million inhabitants in
2020. An alternative hypothesis with no changes in consumption at 150 kilograms
per capita (RDH2) is used to test the sensitivity of the final results against RDH1.
In this case, the rice requirement will reach 39 million tonnes.

Future maize demand

Our calculation of future maize requirements includes the feed industry, but
inconsistency in data between FAO, USDA and BPS makes forecasting problem-
atic for maize consumption (Ariani and Pasandaran 2003; Tangendjaja, Yusdja
and Ilham 2003). A time-series projection and a regression model using FAO-
STAT/BPS data give maize consumption of 42 kilograms per capita in 2020,
while if USDA data are used, maize food consumption by households and the
processing industry is projected to reach 25 kilograms per capita at that time.
Kasryno, Pasandaran and Fagi (2003) consider that an annual decline of 2% in
direct consumption and an increase of 3% in food industry consumption are
plausible given past trends and prospects, while Tangendjaja, Yusdja and Ilham
(2003), using USDA data, project a decline of 1.75% and an increase of 7.2% per
year, respectively. Kasryno, Pasandaran and Fagi (2003) project maize consump-
tion by households and the food industry to reach seven million tonnes or 26 kil-
ograms per capita (MDH2) by 2020. We associate this result with GDP2 because
it uses rather conservative GDP growth to estimate food industry requirements.
MDH1, corresponding to stronger GDP growth, is based on Tangendjaja, Yusdja
and Ilham’s (2003) assumptions, adapted for longer-term projections up to 2020.
We consider that direct consumption of maize will decline at a higher rate than in
MDH2 (3%), while food industry consumption will grow at 6%. Total consump-
tion per capita in 2020 would approach 41 kilograms, of which 37 kilograms
would be used by the food processing industry. This figure is equivalent to 10.5
million tonnes of maize required (MDH1).
We do not present here the analysis of current and prospective demand for maize
from the feed sector, linked to the poultry industry (Swastika et al. 2004; Swastika et
al. 2005), that we also conducted. Our results indicate that this sector would require
between 8 million (MDF2) and 13 million (MDF1) tonnes of maize for feed by

12 Evidence is available from the authors upon request.

13 For all ensuing references to time-series model results, the details of the projections can
be obtained directly from the authors.

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 302 Robin Bourgeois and Dian Kusumaningrum

2020.14 This is consistent with the findings of Tangendjaja, Yusdja and Ilham (2003:
240), who calculate the requirement for maize as feed at 11 million tonnes by 2020.

Future wheat demand

The projection based on 1990–2001 wheat consumption data returns a consump-
tion level of close to 26 kilograms per capita in 2020. This figure is based on GDP2
and gives a wheat requirement of 7 million tonnes in 2020 (WDH2), which is
consistent with the results of two regression models using, respectively, urban
population data and urban + rural population data, and with a comparison to
Malaysia. In the GDP1 hypothesis, we link wheat consumption per capita to GDP
per capita using a demand-to-income elasticity of 0.8. The result is 30 kilograms
per capita or 8 million tonnes (WDH1). With higher wheat consumption and
lower rice consumption, GDP1 is consistent with the general evolution of Asian
consumption patterns.

Prospects for supply through domestic production

Indonesia can supply its demand for rice and maize through domestic production
with or without imports, whereas to date wheat supply relies solely on imports.
Two key factors directly determine rice and maize production in Indonesia: culti-
vated area and yield.
Using data for the period 1998–2002 (Ministry of Agriculture 2002) we reviewed
area planted to perennial crops, and analysed potential rice and maize area expan-
sion in Indonesia. On Sumatra, perennial crops have experienced strong growth
(of one million hectares) and expansion of rice or maize production is unlikely.
Lampung, where maize can be grown for animal feed processing, is a possible
exception. In North Sumatra, Kasryno, Pasandaran and Fagi (2003) see potential
for maize expansion based on an analysis of 1990–98 production data. In Kali-
mantan, expansion of rice and maize cultivation is limited; trends show expan-
sion of tree crops, with area planted to oil palm increasing by 0.5 million hectares
between 1998 and 2002. Sulawesi shows potential for maize cultivation boosted
by the feed industry and high-yielding varieties.

Rice supply
Area planted to rice fluctuates between 11.5 and 12 million hectares, and pros-
pects for significant further expansion are slight. Even though the government
targets the expansion of rice cultivation, this will be difficult to achieve. On Java,
suitable agricultural lands are already cropped and are facing growing pressure
from non-farm activities. Away from Java, more agricultural lands are available,
but climatic conditions and less developed infrastructure usually make these less
suitable for rice cultivation. Yields have increased by only 10% in total since 1990,
reaching 4.5 tonnes per hectare in 2005, and prospects for a significant increase will
depend on the capacity to maintain irrigation infrastructure and on the release of
new technologies.
Our time-series projection estimates milled rice production in 2020 to be around
41 million tonnes (RPH1). A more conservative hypothesis (RPH2), assuming no
expansion in rice cultivated area and even some reduction due to pressure from

14 Data can be obtained directly from the authors.

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 What cereals will Indonesia still import in 2020? 303

other activities (stabilisation at 12 million hectares) and a 15% increase in yield

over the period (5.2 tonnes per hectare) results in 39 million tonnes of milled rice.
This hypothesis is consistent with the Arkansas Global Rice Model’s projection for
Indonesia, with the FAO rice production projections and with the projections of
Simatupang and Maulana (2006). Two sub-cases, RPH1b and RPH2b, where the
projections are made with a 15% smaller planted area, take into consideration the
possible over-estimation of total rice area. They give production estimates of 35
and 33 million tonnes of milled rice respectively.

Maize supply
Maize area is also relatively stable at around 3.3 million hectares. Yields, however,
have shown significant progress, reaching 3.4 tonnes per hectare in 2005—double
the yields of 20 years ago. The time-series projection indicates that Indonesia could
produce 17 million tonnes by 2020, a result that is consistent with the findings
of Kasryno, Pasandaran and Fagi (2003: xx). However, this hypothesis (MPH1)
should be considered as conservative: at least three elements may produce a dif-
ferent trend. One is the development of the meat production sector, which could
boost domestic maize production through higher demand from the feed indus-
try. Another factor is the adoption of high-yielding varieties that enable farm-
ers to take advantage of this increased demand. The third factor is the apparent
political will of the government to promote maize cultivation further. If the latter
induces an expansion of cultivated area, significantly higher domestic production
can be expected. An increase of 30% in cultivated area over 15 years, consistent
with a government commitment to expand area planted to maize by over one
million hectares, using varieties yielding up to 6 tonnes per hectare, would give
the country an additional 6 million tonnes, bringing the total to about 23 million
tonnes (MPH2). This figure is close to the shorter-term forecast by Simatupang
and Maulana (2006: 13) of 21 million tonnes by 2010.

Wheat supply
In the case of wheat, domestic demand will be satisfied through imports, as agro-
ecological conditions are largely unsuitable for wheat production and limit its
eventual profitability compared with other potentially competitive crops (WPH1
and WPH2 = 0).

CEREAL BALANCE AND SUPPLY COST SCENARIOS UP TO 2020

In this section, we discuss the net balance of trade for the three commodities, with
alternative scenarios based on the hypotheses presented in the previous section.
The cost burden for Indonesia under each scenario is then assessed and contrasted
with past (1975 and 1990) and 2005 conditions, in terms of value of imports as a
share of GDP.

Diverse import outcomes

Table 2 synthesises the results of demand and domestic production projections,
showing the net trade flows of products for each cereal under each hypothesis.
Concerning rice, our results show that in contrast with most other projec-
tions, which estimate Indonesia’s trade balance always to be negative (FAPRI

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 304 Robin Bourgeois and Dian Kusumaningrum

TABLE 2 Food Balance and Import Scenarios and Prospects for Basic Cereals in 2020
(million tonnes)

Scenarioa Demand Production Balance Food

Imports
(% of total
demand)

Milled rice RDH1 & RPH1 35 41 +6 0

RDH1 & RPH2 35 39 +4 0
RDH2 & RPH1 39 41 +2 0
RDH2 & RPH2 39 39 0 0
RDH1 & RPH1b 35 35 0 0
RDH1 & RPH2b 35 33 –2 6
RDH2 & RPH1b 39 35 –4 10
RDH2 & RPH2b 39 33 –6 15
Maize MDH1 & MPH1 10.5 23 +12.5 0
MDH1 & MPH2 10.5 17 +6.5 0
MDH2 & MPH1 7 23 +16 0
MDH2 & MPH2 7 17 +10 0
Wheat WDH1 8 0 –8 100
WDH2 7 0 –7 100

a R = rice; M = maize; W = wheat; D = demand; P = production; H = hypothesis; thus RDH1 = rice

demand hypothesis 1; MPH2 = maize production hypothesis 2.

Source: Authors’ calculations.

2002; USDA 2006; Wailes et al. 2000; OECD–FAO 2005), several outcomes are
possible, ranging from rather substantial net exports of 6 million tonnes (RDH1
and RPH1) to imports of the same magnitude (RDH2 and RPH2b). The worst-
case scenario would have net imports reaching 15% of the 39 million tonne
requirement, owing to a contraction in planted area and unchanging domestic
demand.
For further analysis we merge the cases presented in table 2 into two contrast-
ing sets of patterns that we call ‘rice 1’ and ‘rice 2’; ‘maize 1’ and ‘maize 2’; and
‘wheat 1’ and ‘wheat 2’ (table 3). The patterns for each grain are combined with
the two growth scenarios (GDP1 and GDP2) to produce two grain demand–sup-
ply scenarios. Scenario 1 consists of robust, sustained growth in GDP per capita
(GDP1), resulting in lower rice consumption, combined with improved rice pro-
ductivity (rice 1), higher wheat consumption (wheat 1), and persistently higher
maize consumption by the food industry (maize 1). Scenario 2 includes more
limited growth of GDP per capita (GDP2), resulting in stable rice consumption,
combined with a drop in productivity (rice 2), higher but limited wheat consump-
tion (wheat 2), and higher but limited maize consumption by the food industry
(maize 2). These scenarios probably set the boundaries within which the future
food grain balance will rest. Thus, they provide not only estimates of the share of
food imports but also a sensitivity test. The total amount of cereal consumed for
food will decrease under scenario 1, but will remain stable under scenario 2.

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 What cereals will Indonesia still import in 2020? 305

TABLE 3 Comparison of Two 2020 Import Scenarios with 2005 Imports

2005 2020 Scenario 1 2020 Scenario 2

(high growth, (lower growth,
low imports) high imports)

Population 220 261 261

GDP ($ billion) 227 672 566
GDP growth (%) 6 5.9 4.8
Imports (million tonnes)
Rice –1 Rice 1 0 Rice 2 –4
Maize 0 Maize 1 0 Maize 2 0
Wheat –5 Wheat 1 –8 Wheat 2 –7
Total cereal imports
(million tonnes) –6 –8 –11
Assumptions
Rice consumption per capita Decreasing (substitution Unchanged (urban and
of wheat for rice) rural poverty high)
Rice cultivated area & yield Some increase in area and Area stagnant, limited
yields increase in yields
Maize production Satisfies food demand and Satisfies food demand and
most feed requirements most feed requirements
Maize feed and food sectors Dynamic Limited growth
Wheat consumption Higher Higher but limited
Wheat production None None

Source: BPS, FAOSTAT and authors’ calculations.

Rice 1 is a no-import pattern; rice 2 corresponds to imports of 4 million tonnes

of rice. These two patterns reflect differences in the real extent of irrigated rice
land area; the rate of conversion of rice land to non-rice farming activities, espe-
cially on Java, in Lampung and on Bali; the evolution of rice farming technologies;
and household consumption levels. Both patterns may be positively or adversely
affected by climatic and biotic conditions such as rainfall levels and occurrence of
pests and disease. Water availability and management in irrigated areas will have
an increasingly crucial effect on rice output in the country.
Results show that Indonesia is likely to produce the maize required for direct
consumption by households and the food industry, so maize imports are not a food
self-sufficiency issue. Feed industry needs are the only determinant of imports
(and exports). Two patterns are also defined for maize. ‘Maize 1’ reflects favourable
growing conditions, declining household demand and rising food industry
demand. This pattern is associated with robust and growing demand from the
animal feed industry. ’Maize 2’ corresponds to more limited production growth,
coupled with more limited demand growth from the food and feed industries.
These two patterns reflect differences in the expansion of cultivated area; yield
development due to new varieties; and new feed industry dynamics related to
the evolution of meat consumption. Potential ruptures include the substitution

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 306 Robin Bourgeois and Dian Kusumaningrum

of locally produced alternative sources of feed (palm oil cake, cassava) for maize;
the diversion of land for bio-fuel crops; and the sustainability of new, intensive
maize-based cropping systems that require higher levels of inputs and soil and
fertility management skills.
Wheat imports are directly proportional to consumption, which depends on
growth in income per capita. The balance shows imports at a level of 7 (wheat 2)
or 8 (wheat 1) million tonnes in 2020. These two patterns reflect differences in GDP
growth and rice consumption. A potential rupture could occur with the partial
substitution of locally produced starch (cassava) for wheat used in industry.

The cost of food security and policy implications

As Timmer (1994) argues, Indonesia’s pursuit of self-sufficiency may not be
the best way to ensure food security. Here, the financial burden of future grain
demand on the economy is used as an indicator of the cost of food security,
represented by the share of total imports of the three cereals in GDP over three
periods (1971–75, 1986–90 and 2001–05). The first period corresponds to the
initiation of the rice self-sufficiency policy; in the second and the third periods
the achievement of self-sufficiency was proclaimed for the first and second time.
Table 4 presents the variables used for this calculation and the results corre-
sponding respectively to the two contrasted scenarios (1 and 2).
The results presented in table 4 highlight the costs of achieving food security
for the major cereals in Indonesia. They show that the cumulative cost of cereal
imports to ensure household and food industry requirements would be close to
0.34% of GDP in our lower growth scenario (intersection of ‘2020a’ column and
‘Total scenario 2’ row). In a more favourable growth scenario, the level would be
0.16% of GDP (intersection of ‘2020a’ column and ‘Total scenario 1’ row).
This is lower than the 2001–05 import level and close to the level of imports
at the time when Indonesia claimed to have reached self-sufficiency in the mid-
1980s. In the 1970s, cereal imports represented 1.8% of GDP and the country
promulgated rice self-sufficiency as one of its major policies. This suggests that
2020 projections point to an acceptable level of external dependence to ensure
food security in a country whose population will reach 261 million by 2020, 55%
of them urban dwellers.
The sensitivity of these results to international prices is also tested through
two additional levels of prices, high and low (2020b and 2020c, respectively) for
rice, maize and wheat, derived from 2020 price projections used in the IMPACT
model reported by Delgado et al. (1999: 35).15 The sensitivity to international
prices (intersection of 2020b and 2020c columns with total scenario 1 and total
scenario 2 rows) shows that the total cost of cereal imports for food purposes
would rise or fall marginally, by 0.03% of GDP or less, if prices were higher or
lower than base prices.
Against this backdrop, it is clear that the pursuit of food self-sufficiency for
rice and maize that emerged in the 1970s no longer has serious macroeconomic

15 IFPRI real price projections for 2020 are in 1990 constant dollars. Projected base prices
are $133 per tonne for wheat; $252 per tonne for rice; and $123 per tonne for maize. The re-
spective prices per tonne for wheat, rice and maize in the low price scenario are $124, $243
and $102; those in the high price scenario are $148, $268 and $149 per tonne.

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 What cereals will Indonesia still import in 2020? 307

TABLE 4 Indonesia 2020 Grain Imports by Demand–Supply Balance Pattern

1971–75 1986–90 2001–05 2020aa 2020ba 2020ca

GDP ($ billion)b
GDP1 18.6 85.9 227.1 672.0 672.0 672.0
GDP2 18.6 85.9 227.1 566.5 566.5 566.5
Cost of imports
($ million)b
Rice 1 271 23 183 0 0 0
Rice 2 271 23 183 1,008 1,072 972
Maize 1 0 9 135 123 149 102
Maize 2 0 9 135 861 1,043 714
Wheat 1 63 266 712 1,064 1,184 992
Wheat 2 63 266 712 931 1,036 868
Import cost as share
of GDP (%)
Rice 1 1.46 0.03 0.08 0.00 0.00 0.00
Rice 2 1.46 0.03 0.08 0.18 0.19 0.17
Maize 1 0.00 0.01 0.06 0.00 0.00 0.00
Maize 2 0.00 0.01 0.06 0.00 0.00 0.00
Wheat 1 0.34 0.31 0.31 0.16 0.18 0.15
Wheat 2 0.34 0.31 0.31 0.16 0.18 0.15
Total scenario 1c 1.80 0.35 0.45 0.16 0.18 0.15
Total scenario 2c 1.80 0.35 0.45 0.34 0.37 0.32

a 2020a: base prices hypothesis; 2020b high prices hypothesis; 2020c low prices hypothesis; for further
details, see footnote 15.
b Average for period; these values are used to calculate import cost as a share of GDP.
c Scenario 1: sum of import cost shares for rice 1, maize 1 and wheat 1; similarly for scenario 2.

Source: BPS, FAOSTAT and authors’ calculations.

justification. This implies, from a policy viewpoint, that other considerations should
now be given priority, including the impact of high domestic food prices on pov-
erty, and the related instruments that would enable the country to adjust domestic
prices to international market prices, such as buffer stocks of imported rice.
However, investment is still urgently required in the rice sector to ensure
that possible ruptures due to factors such as water shortages, neglect of irriga-
tion infrastructure and conversion of the most fertile land to other uses do not
jeopardise the existing capacity of productive resources. As the country is able to
produce more maize than is consumed by households and the food industry, the
question of maize imports is no longer a matter of food security. Given that the
feed industry remains the locus of future maize demand in the country, develop-
ing comparative advantage in maize production is a core issue. The recent history
of maize production shows price policy intervention to be unnecessary (Kasryno,
Pasandaran and Fagi 2003). In the rice sector, the adoption of high-yielding varie-
ties by farmers and the expansion of planted area will be boosted by a conducive

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 308 Robin Bourgeois and Dian Kusumaningrum

market, but this needs to be accompanied by infrastructure development and less

intervention. This shift to a more demanding production system must also be
monitored for sustainability, to avoid rapidly exhausting soil fertility and water
resources.

CONCLUSION
The current policy debate in Indonesia indicates that the government has not
abandoned its commitment to rice self-sufficiency and, conversely, has extended
this commitment to other commodities such as maize, sugar and soybean. Indeed,
protected by tariffs and bolstered by government intervention, Indonesian agri-
culture has achieved remarkable results, given that experts in the late 1970s had
sentenced Indonesia to famine. However, recent evidence that the rice import ban
is adversely affecting the poorest inhabitants by artificially inflating local prices is
challenging the government’s self-sufficiency mantra.
This article highlights some arguments against the pursuit of food self-suffi-
ciency in the cereal sector, by estimating the expected cereal food balance in 2020.
After examining the evolution of cereal production and consumption since the
1970s, it provides estimates of production and consumption to the horizon 2020,
discussing existing models and combining quantitative forecasting methods with
a cross-country comparison to Malaysia.
The results indicate that rice and wheat will be the largest sources of cereals in
the diet of a country whose urban population will exceed the rural population by
2010. However, even with 40 million more people to feed, Indonesia should be
able to satisfy its rice requirements under certain scenarios. These results provide
alternative views to those reflected in most prevailing projections in the literature,
which estimate that the country will remain a net importer of 2–3 million tonnes
of rice through to 2020. The latter projections are nevertheless compatible with
some of our scenarios, in particular those in which slow yield growth, steady con-
sumption and contracting cultivated area are hypothesised. Our results predict
that wheat consumption, driven by urbanisation and income growth, will reach 7
million tonnes by 2020, a figure fairly consistent with other projections.
Maize consumption by households and the food industry is satisfied by domes-
tic production under all scenarios. The maize trade balance will depend on the
dynamics of the feed industry and the evolution of the meat industry. Our results
indicate that Indonesia should also be able to cover its feed requirement, provided
that adequate infrastructure is developed to mitigate seasonality problems. How-
ever, our results are less optimistic than government expectations about Indo-
nesia’s becoming a large net exporter of maize.
The pursuit of full food self-sufficiency has been a major policy commitment
of the Indonesian government since the early 1970s. It was justified at that time,
given that the cost of food cereal imports had reached 1.8% of GDP. A comparison
of the cost of imports of the three cereals with two contrasted alternative scenarios
(high growth and low imports versus moderate growth and high imports) and
with three international price configurations for four time periods between 1970
and 2020 bears witness that this is no longer the case. With an expected share of
food cereals imports ranging between 0.15 and 0.37% of GDP in 2020, the pursuit
of food self-sufficiency is no longer justified from a macroeconomic perspective.

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 What cereals will Indonesia still import in 2020? 309

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 OUT NOW!
Expressing Islam:
Religious Life and Politics
Greg Fealy and Sally White editors
ANU College of Asia and the Pacific
The Australian National University
Some 190 million Indonesians profess Islam as their faith. Across the archipelago
they search for ways to express their religious belief, both in public behaviour
and in their private lives. Growing numbers of Muslims, particularly in urban
areas, are seeking more overtly Islamic expressions of their identity. Traditional
institutions and modes of expression retain their popularity but are undergoing
transformation. Islamic spiritual healing and traditional treatments such as
cupping and herbal remedies are juxtaposed with the rising popularity of more
modern phenomena such as shari’a banking and insurance, Muslim fashions,
Islamic multi-level marketing, corporate mystical brotherhoods and new
electronic preaching media like mobile phone sermons, cyber chat rooms and
internet fatwa services. At the same time, both in the regions and at the centre, a
concern for both public and private morality has led to calls for shari’a law to be
more comprehensively applied.
This book captures the complexity and rapidly changing nature of Islamic
religiosity. It critically examines developments in politics, society and culture, as
well as the increasing Islamisation of everyday institutions and life in Indonesia.
The contributors explore not only the diversity but also the spiritual, cultural and
material aspects of Islam in contemporary Indonesia.

Published in 2008 by the Institute of Southeast Asian Studies, Singapore, in

cooperation with the Australian National University, Canberra
The Managing Editor Tel +65 6870 2447
Institute of Southeast Asian Studies Fax +65 6775 6259
30 Heng Mui Keng Terrace
Pasir Panjang Road e-mail pubsunit@iseas.edu.sg
SINGAPORE 119614 http://bookshop.iseas.edu.sg

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