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.
"The Role of the Ocean Economy in the National Income Accounts of Indonesia,"
Journal of Ocean and Coastal Economics:
2, Article 11.
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 License.