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Economic Development and Trade Liberalization: the Indonesian Experience

Author

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  • Fausti, Scott W.
  • Bishry, Rony

Abstract

From 1950 to 1965, Indonesia followed an import substitution industrialization development strategy .. From 1966 to the present, Indonesia has moved toward an export oriented development strategy. This paper tests the predictions of the Heckscher-Ohlin-Samuelson (HOS) model of international trade by comparing Indonesia's economic performance under two contrasting development strategies. The paper concludes that Indonesia's economic performance under the opposing development strategies supports the predictions of the HOS model. Furthermore, the Indonesian experience under the two development strategies supports the "trade as an engine of growth" hypothesis.

Suggested Citation

  • Fausti, Scott W. & Bishry, Rony, 1994. "Economic Development and Trade Liberalization: the Indonesian Experience," Economics Staff Papers 232235, South Dakota State University, Department of Economics.
    • Handle: RePEc:ags:sdsusp:232235
    DOI: 10.22004/ag.econ.232235
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    References listed on IDEAS

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    1. World Bank, 1987. "World Development Report 1987," World Bank Publications - Books, The World Bank Group, number 5970.
    2. Martin, Will & Warr, Peter G, 1993. "Explaining the Relative Decline of Agriculture: A Supply-Side Analysis for Indonesia," The World Bank Economic Review, World Bank, vol. 7(3), pages 381-401, September.
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