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Impact Of East Asia’s Growth Interruption and Policy Responses: The Case Of Indonesia

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  • Anderson, Kym
  • Strutt, Anna

Abstract

Assessments to date of the consequences of implementing the Uruguay Round (UR) of multilateral trade negotiations have assumed medium-term rates of economic growth in East Asia that now seem unsustainable. This paper compares one set of those estimates to 2005 with an alternative set involving an interruption to East Asian economic growth in the late 1990s, using the global, economy-wide GTAP model. Attention focuses on results for Indonesia, the worst-affected country in the region. An important consequence of the crisis is that Indonesia is likely to become more agrarian for a time than it otherwise would have been. Also, both income levels and the gains from the UR will be lower at the completion of UR implementation in 2005 than would have been the case without the crisis. Hopefully this will boost support in Indonesia (and other East Asian countries) for a push to catch up through further unilateral, regional and global trade and investment liberalizations and domestic policy reform. The benefits to Indonesia from embracing further unilateral reform, as estimated by the GTAP model, are contrasted with the costs of the alternative strategy of reneging on UR commitments to liberalize trade. Of particular importance are policies affecting agriculture’s capacity to be an engine of growth recovery.

Suggested Citation

  • Anderson, Kym & Strutt, Anna, 1999. "Impact Of East Asia’s Growth Interruption and Policy Responses: The Case Of Indonesia," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 125027, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare99:125027
    DOI: 10.22004/ag.econ.125027
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    File URL: http://ageconsearch.umn.edu/record/125027/files/Strutt.pdf
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    References listed on IDEAS

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    1. Warwick J McKibbin & Will Martin, 1998. "The East Asian Crisis: Investigating Causes and Policy Responses," Departmental Working Papers 1998-06, The Australian National University, Arndt-Corden Department of Economics.
    2. Anna Strutt & Kym Anderson, 2000. "Will Trade Liberalization Harm the Environment? The Case of Indonesia to 2020," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 17(3), pages 203-232, November.
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    Cited by:

    1. Anderson, Kym, 2003. "Trade Liberalization, Agriculture, and Poverty in Low-income Countries," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    2. Wittwer, Glyn & Berger, Nicholas & Anderson, Kym, 2001. "Modelling the World Wine Market to 2005: Impacts of Structural and Policy Changes," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 171982, Australian Agricultural and Resource Economics Society.
    3. Anna Strutt & Terrie Walmsley, 2011. "Trade and sectoral impacts of the global financial crisis – a dynamic computable general equilibrium analysis," STUDIES IN TRADE AND INVESTMENT, in: Trade-led growth: A sound strategy for Asia, chapter 14, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    4. Kym Anderson, 2005. "Agricultural trade reform and poverty reduction in developing countries," Chapters, in: Sisira Jayasuriya (ed.), Trade Policy Reforms and Development, chapter 9, Edward Elgar Publishing.
    5. Anderson, Kym & Yao, Shunli, 2003. "How Can South Asia and Sub-Saharan Africa Gain From the Next WTO Round?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 466-481.
    6. Anderson, Kym, 2000. "Agriculture, Developing Countries, And The WTO Millennium Round," CEPR Discussion Papers 2437, C.E.P.R. Discussion Papers.
    7. Phouphet Kyophilavong, 2011. "Will trade liberalization in least developed countries help during the crisis? Evidence from the Lao People’s Democratic Republic," STUDIES IN TRADE AND INVESTMENT, in: Trade-led growth: A sound strategy for Asia, chapter 13, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    8. Wittwer, Glyn & Berger, Nick & Anderson, Kym, 2003. "A model of the world's wine markets," Economic Modelling, Elsevier, vol. 20(3), pages 487-506, May.

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    Keywords

    International Relations/Trade;

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