Why Indonesia [probably] will fail in Implementing “Paid Plastic Bag” Policy? : A Casual Economics Review

Caution: It will be a long article, so I draw some illustration. However, still boring but mmm maybe not in a deathly level 🙂

Happy Earth Day, Planet Earth!
Earth Day special, I want to look like a real “Green-Economist” and based on some requests I will write about Paid-Plastic Bag Policy in Indonesia. I don’t want to stress you with crazy creepy economics terms, so I tried my best to make it as casual as possible.Ah! And sorry, in English… while I want to do “more” with the Indonesian version.

Well, here the news! Based on a paper written by Jambeck, et al (2015) [1], Indonesia became the second biggest plastic waste contributors in the ocean, just below China which was in the first place. Is it serious problem? Definitely, yes! Indonesia already experienced a huge drop in fish harvesting because of unsustainable fish-catching (e.g. using bomb, poison, etc), climate change, and now: waste, to be precise plastic waste. The details summarized in the graph below:

Every book, including history books, noted that environmental problem usually happened in lower-middle income countries which try to transform their economic structure. But who want to be trapped in the same trap? Indonesia also learns from the past.  We love popularity but not as plastic waste contributor in this blue planet! Then, started from February 2016, Indonesia tries to implement “paid plastic bag” policy in 22 cities. Such an out-of-dated policy for some countries, but it is very new in my lovely country. How the policy works? In brief, you should pay 200 IDR (around 2 JPY or 0,02 USD) / plastic bag every time you do shopping in any modern retail stores. 

Then what happened all around Indonesia? Lots of people reject this policy. Of course if I am a policy maker, I will realize that my policy will gain some critiques and that’s not my business to please everyone. My jobs are increase people wealth and create environment sustainability. Haters always gonna be haters, but haters sometimes give their most objective critics, so let’s analyze their critics points.

After 2 months, there is no significant reduction of plastic waste in Indonesia. Probably, it is even more plastic waste than anybody can predict!

I remember, once in television, my favorite writer Arswendo Atmowiloto said “Indonesia people made their own economics theories.” As economist I will give standing applause for this quote. Leave your economics textbook, because it is beyond our imagination.

To counter this point I just can say: This is too early to judge that this policy totally failed. Still 2 months! What you can do in 2 months? Like a baby, they just already started to see his parent clearly. In business terms it still “test the water” part.

But, can that point come true? unfortunately, I should say  “Yes”.

I have several reasons:

First, we haven’s accustomed yet. No further explanation needed.

Second, There are no efforts from the shops to reduce the use of plastic bag. If today you go to any random retail store or supermarket in Indonesia and buy something there. Maybe you will find the cashier simply totaling your groceries plus your plastic bag even if you only buy a can of cola. “Oh, but I don’t want to use plastic bag” upss… sorry, but it’s already counted.

Third, Indonesian never really interested in collecting small change. Huh? Is it related to the topic? I will give you long explanation for this one.

In Japan, I really hate 1 yen and 5 yen in my pocket. But the good news is at least here I can make ATM machine busy enough to count and save my coins. Also all groceries are in prices which need 1 yen and 5 yen nominal.
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In Indonesia? Nope! We even face difficulties to save our coins to the bank. Indonesia’s smallest nominal is 100 IDR. When I was kid I still can buy a candy with 100 IDR or using payphone, but today there are almost none with that nominal. So, if you have lots of 100 IDR coins, maybe you can keep it in your piggy bank, but it is also bring another problem. Once, my friend tried to bring her coins saving to the bank, she already counted that and she had around 500.000 IDR (around 50 USD or 5000 JPY) and this value is consisted by 5000 shinny 100 IDR coins!!! yes! around 5000 coins, maybe more.
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Money is money, she confident that Bank will be kind enough to accept her coins. She came to the Bank and TADAAAAA…Bank rejected it. With a sad face she just asked me “What should I do with this? Make it for weight-lifting?” Trust me, that’s a true story. If you don’t trust me you can read another story here [Indonesian only]

This physiological tendency  then used by some supermarket and convenient store to ask “Do you want to make donation with your small changes? “ and with a lazy tone, almost all of us just simply said “Ok” without even ask where that exchange will go (another reason why recently there are high report about “small corruption” by the cashier).

Thanks to “paid-plastic bag” policy, trend will be slightly changed then!
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If, for example, the exchange is 400 IDR, then an Indonesian see there are many things she already bought, of course it is rational decision for her to pay for 2 plastic bags than should donate it somewhere she never know. Even if she just needs one plastic bag, she still chooses to buy 2 plastic bags, one for her stuff, another one? Well… she will need it (although in fact no one ever re-use it, who need lots of plastic bag?). Even! If she don’t need plastic bag at all but then she heard the exchange will be, for example, 200 IDR! She probably say “Mmm…Oh okay, with one plastic bag please!” and she will feel she made a genius deal! How stingy Indonesian! Oh, no… that’s the most rational economic decision everyone probably take. In behavioral economics there is a statement that we, human, prefer something that gives exact utility for ourselves in the near future. We looking a way to fulfill our needs first before other people’s needs, even that’s a silly thing called plastic bag.

If this thing always happened then plastic industry will be so happy, yes! Why? 1. While there is no clear explanation where the money goes, let’s assuming it goes back to plastic bag producer, probably it can cover their production cost.  2. While demand of plastic bag are not changing (or even accidentally increased!) and there are no specific requirement from the government about plastic bag price, then voila! It is a great business for plastic company (sst… don’t say it to plastic company, please). I want to look cool here, let me draw you a curve to explain it.
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Using the curve above, assuming accidentally plastic bag demand increases (say because the price is very affordable and the increase of income of Indonesian) .Economy start in EQUILIBRIUM state and  give us price of plastic bag in in Peq and quantity sold in Qeq. If the demand INCREASE (D shifted to the right become D’) then Qeq become Q’. If government kept the price of plastic bag still in Peq,  capturing the opportunities in the market, plastic company will INCREASE supply  of plastic bag (S shifted to the right become S’).

In the other words, plastic company will produce more plastic bag to fulfill market’s need. It is also means an increase in plastic waste. It is undeniable. Of course maybe it is “too extreme” case. However, I want to show that as long as the price is below or same with equilibrium price, plastic bag still promising product for the plastic company.

So, what should we do if we want to decrease the quantity of plastic sold by the market?
Again, economist should draw a lot of curves!
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Assume we want to decrease Quantity sold until Q”, in economics one variable that can be modified is Price! Let’s make government firm enough to regulate the Price on P” which is above Peq. Supply curve always sticky enough to be changed (I mean we can’t force the company to reduce their benefit? Remember, in classical theory, company never care anything except maximizing their profit). But we, consumer… we sensitive with price :D. Consumer will think twice to buy that plastic bag, why should we waste money for such low quality plastic? Ewww…Go away plastic, our wallet really hate you! Right after that  comes into consumer mind, demand will decrease until D”. Plastic bag also will not profitable enough for the company and for sure they will decrease their production. What a news! we save the planet then!

Enough with curve,  still some points to explain.

Forth, “Monthly shopping” culture. If you go to Indonesia… you probably will see that people will buy huge amount of groceries! In our culture (based on my experience as 100% Indonesian!) we buy something for monthly needs. Here in Tokyo, I found that people buy groceries for weekly or daily so one small or medium size shopping bag will be enough.  I can show you how small Japan’s shopping bag is:

This is my shopping bag, I compare the size with B5 size book. Very compact (and fashionable). People can buy the bigger one than this, however the size is not really different with this one.

in Indonesia? Using shopping bag? Haha…No way!
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Once a high-middle income families go to supermarket they will buy everything! One sack of rice, 5 boxes of noodles, soap, cooking oil, sandals, clothes, pencil, hairdryer, Venus, Mars, Jupiter, Saturn, everything! How many shopping bags do we need then? Even me, researcher on climate change field and also an economist, I will pay for plastic bag for this. While the plastic bags also cheap! Only 200 IDR… and based in the news I conclude that this price is below equilibrium price. Then we face excess demand of plastic!

“Hei! But who can beat custom and even culture?.” This one is a difficult part.
But I remember, I am such a bookworm, and can’t help with it. Every time I go to the bookstore, I can empty my wallet and buy a mountain of books, some of them are very thick. Then I realize one thing… here in Japan, no matter how heavy my books are, they will provide me with paper bags. At first I am really worry about it, and the only English sentence written there was “This bag made by recycled paper”. I thought it will be broken just 3 steps after I left the book store. However, I went around Tokyo bringing that paper bag with full books inside and it kept my books safe until home. I don’t know exactly about total production cost of “strong” recycled paper bag is, but if it is cheap enough I hope Indonesia can try to that’s one.

Fifth, No garbage separation policy in Indonesia. In Indonesia, you can throw any garbage anytime (and anywhere). Some places already try to separate garbage into organic and non-organic, however that’s “useless” because there are no separated garbage truck between organic and non-organic garbage. So, why Indonesian should separate it if then it will mix again on the truck? Why? Tell me…WHY!?

Hey! But why is it related to the number of plastic waste? Before answer that, let me tell you my story.

I am living in a town where there is no policy about paid-plastic bag. So, every time I buy my groceries (while I am Indonesian, I love to buy something for at least for two weeks ahead :p),  I get lots of plastic bag. But only in a week, there are no plastic bag left in my home.

Why? Because here, I am struggling to separate waste!  On “Recyclable garbage” day I should separated them into 8 type of garbage: Newspaper, leaflet/books/magazine, cans, pet bottles, card boxes, milk/ beverages boxes, food tray, and glasses jar. Assume there is a day I have all of these Recycled garbage types, then I need 8 plastic bags to separate them!

This is example from Meguro-ku (I took it from internet), in my place (Oota-ku) Recyclable waste should be separated into 8 types 🙂 different town, different policy but overall you should do lots of efforts for this. (photo credit: https://travelfoodguru.wordpress.com)

In another day, there will also “burnable garbage day” and “Non-burnable garbage” day… of course I need another plastic bag to separate them carefully. Bye plastic bag…
I can assure you that my home is free from any form of plastic waste.
I also can’t randomly throw my garbage without following the rule; the truck will never take your garbage if the garbage is not fit with the schedule. Such a hassle, but we happy because no garbage everywhere and ministry of environment  also happy while it is easier for them to process all garbage.
I think plastic consumption in Tokyo is higher than any other place in Japan, but the waste management is very good also so it is not such a big burden for Japan.

Back to Indonesia… as I told you before, we love buying something in huge amount for monthly stock, then we get lots of plastic bags and have no idea what we can do with them after that. Some people keep it and assume they will need it later; some people just throw it away. But in another month we do the same thing again… again… and again…

The story will different if Indonesia has a good waste management system. I think it is too early (and too crazy) to follow Japan waste separation system (they start to apply this system from Meiji period actually). Maybe try to separate organic and non-organic waste will be a good start. In that time, at least Indonesia can recycle the garbage better! Not only pile everything on the landfills!

To be honest! I think the main reason why there are lots of plastic waste in Indonesia is not only because we use so many plastics in our daily life, but also because government still have no idea what should they do with all of the waste!

Personally (really… this is personal thought), without any disrespect to Indonesian government efforts in reducing plastic waste, applying paid plastic bag policy before applying good waste management system is like learn how to make an airplane before learn basic physics. Or if you are an economist, it is like learn applied econometric before learn math. I mean, it is possible to work but will take time… so much time! It is possible, but somehow not efficient.

Well, that’s it…
I hope I give a friendly explanation about everything and give you some idea how to criticize this topic smartly 🙂

Good luck, Indonesia.
Good luck, all Indonesian.
let’s make Jambeck et al  revise their research result soon 🙂


[1] Jenna R. Jambeck, Roland Geyer, Chris Wilcox, Theodore R. Siegler, Miriam Perryman, Anthony Andrady, Ramani Narayan,  Kara Lavender Law, Science  13 Feb 2015: Vol. 347, Issue 6223, pp. 768-771.

Karena kita [seharusnya] bukan bangsa pengemis!

Sebuah hal yang menyenangkan karena walau kayaknya jarang  ada yang komentar di blog saya ini *hahahaha sedih banget http://www.emocutez.com* tapi rupanya banyak pembaca tanpa jejak yang bilang membaca tulisan saya, huhuhuhuhu terharu banget.

Banyak sekali tanggapan dari para pembaca tanpa jejak tersebut ada yang suka ada yang bilang tulisan saya galau *barometer galau itu apa sih? sungguh tidak pernah ada maksud untuk menggalaukan masa*

tapi kemudian saya menyadari satu hal, kalian… para pembaca blog ini… belum pernah melihat tulisan saya yang “ekonomi” banget. Mungkin saya harus mulai mencoba membagi sudut pandang saya yang menyangkut sisi keilmuan saya. Aha! Baiklah kalau begitu…http://www.emocutez.com

Pada suatu hari… pada sebuah acara talkshow mengenai isu-isu ekonomi di sebuah TV swasta 2 minggu lalu *ah ribet, sebut merk aja deh E*onomi* Challenge* di Metro TV *
Kalian yang tidak cukup beruntuk menonton acara tersebut mungkin bisa ngintip di sini

Jika kalian menonton acara tersebut, pasti kalian akan terhanyut dengan kata-kata diplomatis dan simpatiknya Ketua Delegasi  Eropa terhadap Indonesia, Julian Wilson. Sungguh! tidak ada keraguan dari saya kepada Beliau bahwa Ia sangat pantas menjadi diplomat kelas kakap! Cara penyampaian gagasannya sangat rapi dan terstruktur, orang yang menyenangkan, rapi, optimis, etc…etc…etc… butuh pengalaman karir diplomatis bertahun-tahun untuk mencapai sikap seperti itu.

Tapi yang cukup mengganggu saya adalah narasumber lain pada acara tersebut! kenapa? Ah silakan baca dulu tulisan saya sebelum kita sampai pada opini pribadi saya tersebut.

Inti dari diskusi tersebut adalah untuk membicarakan peran Indonesia terhadap perekonomian Eropa. Indonesia sebagai ketua Asean tahun lalu ikut memberi andil menyelamatkan perekonomian Eropa. Perluasan kerjasama ekonomi antara Asean dan Uni Eropa membantu Uni Eropa seperti semacam nafas buatan bagi perbaikan perekonomia Eropa. Naaaaah! intinya, okey! ASEAN membantu eropa… lalu apa yang akan dilakukan Eropa untuk Indonesia? http://www.emocutez.com

Sebagai orang yang berkompeten untuk hubungan Indonesia-Uni Eropa, sebuah hal yang wajar saat pembawa acara menanyakan banyak hal kepada Julian Wilson, dan sungguh saya kagum dengan Julian Wilson karena jawabannya sangat diplomatis dan rapi sekali. Tanpa menutupi banyak hal, Beliau mengatakan bahwa ada sekitar 500.000 pekerjaan yang tercipta dari hubungan ekonomi UE-Indonesia dan ada  3 juta RT yang hidupnya bergantung pada perdagangan CPO Indonesia-Eropa. Yah! total kasar 3,5 juta pekerja di Indonesia bergantung pada hubungan UE-Indonesia lah ya. Lalu bagaimana dengan Eropa? Eropa juga sangat bahagia sekali karena mereka mengimpor ikan dan CPO dalam jumlah yang cukup besar dari Indonesia. Terutama CPO! Beliau mengatakan sekitar 70% produk mereka memerlukan CPO sebagai bahan baku dan karena hanya Malaysia dan Indonesia yang memproduksi CPO dalam jumlah besar dan kualitas baik. Apa Pak Julian berbohong? tentu tidak! Tapi apa kita begitu sangat diuntungkan? tidak juga! Catat ya, hanya ada 3 juta pekerjaan yang tercipta di Indonesia, tapi Eropa? mereka mengimpor CPO sebaga bahan baku industri mereka…! dan jika setidaknya 35%  saja industri di Eropa menggunakan bahan baku CPO dari Indonesia, maka CPO kita pasti juga sudah membuka banyak lapangan pekerjaan di Eropa dan pasti lebih dari hanya sekadar 3,5  juta! Lalu… nanti si hasil olahan itu akan diekspor ke Indonesia, dan kita tentu akan membeli dengan harga yang cukup tinggi, dan yang perlu kita catat dan ingat, penduduk Indonesia itu sangat banyak dan luas wilayah Indonesia itu hampir sama dengan luas eropa… jadi big potential market sekali!

Yang lebih menarik lagi adalah… mereka menyatakan bahwa sayap pesawat airbus mereka dibuat di Indonesia! Yaaa! dibuat di Indonesia dan kemudian diboyong ke Eropa, dan tentu mereka mendapat keuntungan karena sayap pesawat ala Indonesia tidak terlalu mahal! Dan si salah satu pesawat terbesar di dunia itu akan melayang setiap harinya dengan keuntungan yang berlipat-lipat. Meanwhile in Indonesia… Bolehlah kita ekspor sayap pesawat… tapi jangan lupa, kita impor pesawat! bukan hanya sayapnya saja! Seinget saya sih harga pesawat pasti lebih besar dong daripada sayapnya doang! iya kan? http://www.emocutez.com

Tentu saja Indonesia merupakan market yang sangat luar biasa bagi Eropa. Sekarang siapa yang paling diuntungkan? sorry to say… tapi di sudut pandang saya ya Eropa laaaah! Tapi apa pak Julian salah? Tidak! sama sekali tidak! Jika saya menjadi diplomat hal yang sama akan saya lakukan seperti Beliau, dan saya rasa Beliau cukup jujur menjawab pertanyaan yang diberikan. Yang salah adalah jika kita tidak menganalisis pernyataan-pernyataan Beliau dengan bijaksana.

Puncak acara akhirnya si pembawa acara menanyakan apa dampak krisis eropa terhadap ASEAN, khususnya Indonesia. Pak Julian menyatakan bahwa Eropa memang sedang jatuh dan dalam kondisi sulit *tuh kan nggak bohong* tapi dengan optimis Beliau mengatakan bahwa sudah ada perspektif menuju ke arah perbaikan ekonomi mereka. Yah, wallahu’alam ya… tapi tugas diplomat memang untuk menjaga diplomasi bilateral maupun multilateral jadi jawaban seperti itu yaaaaaa memang seharusnya begitu.

Yang mengagetkan adalah ketika salah seorang pengamat ekonomi dari INDONESIA, kemudian ditanya kira-kira apa dampak krisis eropa terhadap Indonesia. Apa coba jawabannya? “Yaaaah… yang paling utama masalah likuiditas. Eropa akan membatasi kreditnya kepada negara-negara di dunia. Yah, Indonesia kalau seperti itu harus mencari sumber-sumber likuiditas yang lain bla…bla…bla..” Sungguh saya sangat kecewa dengan komentar tersebut. Si komentator ini jelas-jelas “ngarep” banget untuk terus berhutang kepada Eropa… dan jelas-jelas secara linear hanya berpikir “Oh, Indonesia … kau harus senantiasa berhutang.” Sepecundang itukah bangsa ini? http://www.emocutez.com

Saya tidak akan menepis bahwa mungkin untuk beberapa hal negara ini harus berhutang. TAPI! tidak selamanya kita harus menggantungkan ekonomi ini pada hutang bukan? Jika kalian kebetulan mempelajari makroekonomi, maka hutang internasional cukup memberatkan suatu negara terbuka kecil (small open economics coutries). Minal Aidzin wal fa idzin aja ya… negara ini punya economic stabilizer  tools bernama kebijakan fiskal dan kebijakan moneter! Kenapa sih komentarnya nggak yang lebih optimis dan mutu seperti “Ya… pemerintah dan otoritas kebijakan moneter kita harus bisa menyesuaikan diri dengan kondisi ini bla…bla…bla…” saya tidak akan menjelaskan kurva-kurva atau persamaan ekonomi yang ngejelimet di blog ini. Tapi, saya ingin membuka mata pembaca sekalian bahwa sebenarnya harapan itu selalu ada! Saya ingin membuka mata diri saya dan Anda sekalian yang mungkin kelak dipercaya Tuhan menetapkan suatu kebijakan harusnya lebih memikirkan potensi di dalam negeri terlebih dahulu dibandingkan harus serta merta langsung berhutang. Hutang itu bukan penyelesaian masalah! Hutang hanya menunda dan menumpuk masalah! Setidaknya menurut saya.

Pun jika…kepepet banget… have no idea… dan harus terpaksa berhutang, kita harus ingat bahwa selama ini donator terbesar kita bukanlah Eropa, tapi Jepang dan beberapa negara di Asia. Eropa mah nomer ke sekian. Saat si komentator itu bilang “Yah… masalah likuiditas akan menjadi masalah besar kalau eropa tidak mau mengucurkan kreditnya” Owch please aja… kayaknya kok udah ngarep dan arghhhhh~ ini masalah jati diri bangsa,Bung http://www.emocutez.com. Kadang dalam hubungan internasional kita juga perlu jaim agar bisa lebih dipandang oleh negara lain. Bukan berarti menjadi congkak… bukan juga berarti menjadi begitu tertutup… hanya menjadi lebih bijak, mandiri, dan percaya diri terhadap kemampuan bangsa ini.

Yaaaah… capek juga nulisnya.
Oiya! salah satu filosofi ekonomi yang paling saya suka adalah bahwa ekspektasi masyarakat dapat berbanding lurus dengan kenyataan yang akan terjadi.
Sederhananya… ekspektasi kita mungkin saja (dan sangat mungkin) menjadi kenyataan!
Sekarang, apa kita cukup percaya diri terhadap kondisi perekonomian negara ini?
Sebagai pembanding… Ingatkah kalian bahwa Allah pernah menyatakan bahwa “Aku sesuai dengan prasangka hamba-Ku” ?
Saya rasa tidak ada alasan untuk memiliki ekspektasi negatif terhadap berbagai hal, bagaimana menurut Anda? http://www.emocutez.com