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Effective rates of protection revisited for Indonesia

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  • Stephen V. Marks
  • Sjamsu Rahardja

Abstract

This paper calculates nominal and effective rates of protection for Indonesian tradables sectors in early 2008, and compares these figures with previous calculations for 1987 and 1995. Such a review is overdue. Many non-tariff barriers to imports and exports have been abolished, though new import restraints on rice and sugar are notable exceptions to this trend. Import tariffs have been lowered, particularly through regional preferential trade arrangements. We account for such arrangements in two different ways. Export taxes persist in certain natural resources sectors, but most rates have been reduced. We find that more than half of the effective support provided to tradable products sectors now comes from subsidies on fuels, fertiliser, electricity and liquefied petroleum gas, rather than from trade policies per se. Duty drawbacks and exemptions for exporters boost the effective rate of protection for tradables sectors overall by a small fraction of 1%, and for no input--output sector by more than 3%.

Suggested Citation

  • Stephen V. Marks & Sjamsu Rahardja, 2012. "Effective rates of protection revisited for Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 48(1), pages 57-84, April.
    • Handle: RePEc:taf:bindes:v:48:y:2012:i:1:p:57-84
    DOI: 10.1080/00074918.2012.654484
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    References listed on IDEAS

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    1. Budy P. Resosudarmo & Arief Anshory Yusuf, 2006. "Is the Log Export Ban Effective? Revisiting the Issue through the Case of Indonesia," Economics and Environment Network Working Papers 0602, Australian National University, Economics and Environment Network.
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    Cited by:

    1. Wannaphong Durongkaveroj, 2024. "Structural transformation and inequality: Does trade openness matter?," The World Economy, Wiley Blackwell, vol. 47(6), pages 2631-2663, June.
    2. Michael T. Rock, 2015. "Southeast Asia’s Democratic Developmental States and Economic Growth," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 7(1), pages 23-51, April.
    3. Kiki Verico, 2021. "What has been happening to Indonesia’s Manufacturing Industry?," LPEM FEBUI Working Papers 202158, LPEM, Faculty of Economics and Business, University of Indonesia, revised 2021.
    4. Wannaphong Durongkaveroj, 2024. "Trade openness and the growth-poverty nexus: Reappraisal with a new openness indicator," Departmental Working Papers 2024-7, The Australian National University, Arndt-Corden Department of Economics.
    5. Hal Hill, 2018. "Asia's Third Giant: A Survey of the Indonesian Economy," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 469-499, December.

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