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Fifty Years Of Trade Policy In Indonesia: New World Trade, Old Treatments

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  • Mari Pangestu
  • Sjamsu Rahardja
  • Lili Yan Ing

Abstract

Indonesia's trade policy has evolved over the last 50 years. It has been influenced by the country's level of development and the conflict between openness and protectionism; external developments, such as commodity booms and busts and increased competition; and international commitments, whether multilateral or regional. As a result, trade policy has often been ambivalent and ineffective. Given that Indonesia has undergone various transformations and that the world is a different place from what it was in 1965, the country needs to take a more pragmatic and forward-looking stance. Trade policy needs to be part of a comprehensive strategy to improve competitiveness and diversify exports. If Indonesia is to be part of the new paradigm, where the production of goods and services is based on production networks and global value chains, its policy focus will need to shift from protecting and favouring sectors to promoting trade and industrial policies that encourage the flow of goods, services, and people.

Suggested Citation

  • Mari Pangestu & Sjamsu Rahardja & Lili Yan Ing, 2015. "Fifty Years Of Trade Policy In Indonesia: New World Trade, Old Treatments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 51(2), pages 239-261, August.
    • Handle: RePEc:taf:bindes:v:51:y:2015:i:2:p:239-261
    DOI: 10.1080/00074918.2015.1061915
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    References listed on IDEAS

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    1. Olivier CADOT & Lili Yan ING, 2014. "How Restrictive Are ASEAN's RoO?," Working Papers DP-2014-18, Economic Research Institute for ASEAN and East Asia (ERIA).
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    Citations

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    Cited by:

    1. Masahiko Tsutsumi & Masahito Ambashi & Asuna Okubo, 2019. "FTA Strategies to Strengthen Indonesian Exports: Using the Computable General Equilibrium Model," Working Papers DP-2019-16, Economic Research Institute for ASEAN and East Asia (ERIA).
    2. Mari Pangestu & Lili Yan Ing, 2016. "ASEAN: Regional Integration and Reforms," Asian Economic Papers, MIT Press, vol. 15(2), pages 44-60, Summer.
    3. Esquivias, Miguel Angel & Purwono, Rudi & Sugiharti, Lilik & Heriqbaldi, Unggul & Handoyo, Rossanto Dwi, 2020. "Value Chains, Production Networks and Regional Integration: The Case of Indonesia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(1), pages 135-151.
    4. Hal Hill & Jayant Menon, 2021. "Trade policy in Indonesia and Thailand," The World Economy, Wiley Blackwell, vol. 44(12), pages 3492-3506, December.
    5. Gupta, Krisna, 2019. "Modeling the Importance of Financial Liberalization to Indonesia's Economic Growth," Conference papers 333064, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Wannaphong Durongkaveroj, 2024. "Structural transformation and inequality: Does trade openness matter?," The World Economy, Wiley Blackwell, vol. 47(6), pages 2631-2663, June.
    7. Maya H. Montolalu & Mahjus Ekananda & Teguh Dartanto & Diah Widyawati & Maddaremmeng Panennungi, 2022. "The Analysis of Trade Liberalization and Nutrition Intake for Improving Food Security across Districts in Indonesia," Sustainability, MDPI, vol. 14(6), pages 1-18, March.
    8. International Monetary Fund, 2018. "Indonesia: Selected Issues," IMF Staff Country Reports 2018/033, International Monetary Fund.
    9. Luh Putu Gita Santhi & Ni Putu Wiwin Setyari, 2019. "The Impact of Trade Facilitation on Export Performance in Six ASEAN Countries Period 2005- 2016," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 5(2), pages 89-100.
    10. Mahadevan, Renuka & Nugroho, Anda & Amir, Hidayat, 2017. "Do inward looking trade policies affect poverty and income inequality? Evidence from Indonesia's recent wave of rising protectionism," Economic Modelling, Elsevier, vol. 62(C), pages 23-34.
    11. Gupta, Krisna & Gretton, Paul & Patunru, Arianto, 2022. "Projecting the long run impact of an economic reform: the case of the Indonesian Omnibus Law and concurrent changes in trade policy," Conference papers 333472, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Barli Suryanta & Arianto A. Patunru, 2023. "Determinants of Foreign Direct Investment in Indonesia," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 15(1), pages 109-131, January.
    13. 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.
    14. 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.
    15. Krisna Gupta, 2021. "The heterogeneous impact of tariff and non-tariff measures on total factor productivity on Indonesia firms," Departmental Working Papers 2021-21, The Australian National University, Arndt-Corden Department of Economics.

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