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Journal of Ocean and Coastal Economics

Document Type

Research Article

Abstract

This paper presents the role of the Ocean Economy in the National Income Accounts of

Indonesia including the concept and methodology used to estimate the contribution of

this ecosystem to Indonesian value added. Currently, the national income account of

Indonesia only recognizes the fishery sector. Fishery activities have been considered as

one of the sub-sectors of agricultural sector together with sub-sectors of farm food

crops, plantation or non-food crops, forestry, and livestock. There are some drawbacks

in the concept of national income accounts, since it follows the UN system of national

accounts (SNA) that recognize only economic sectors or activities which produce the

value added, while it does not recognize the ecosystems such as lakes and river

ecosystems, forests as well as terrestrial and ocean ecosystems as production sectors.

The present concept of the SNA produces an undervaluation of forest and ocean

sectors, which in turn may direct the policy makers to have a tendency to deplete the

forestry and fishery resources in order to increase the contribution of those two

sectors to the national income accounts. Otherwise, the two sectors will be allocated

small national budget for their operations. Therefore the paper concludes that a new

concept of national income accounts based on ecosystem products and services to be

developed, as a satellite account to the national income account is needed.

Furthermore the new concept of national income account for the ocean economy

should adopt the UN System of Environmental and Economic Accounts, which takes

into account the extractive and non-extractive products as environmental and

biological services in to the ocean income account. The new concept of ocean

accounting based on both extractive and non-extractive products instead of only based

on the extractive one which have market values may guarantee the sustainability of

the ocean in particular and will be good for the whole economy of the country in

generally. Hence the national income accounts of the ocean economy will show how

the blue economy or the ocean economy really function as one of the important

sectors for the whole economy of the country.

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