IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/79530.html
   My bibliography  Save this paper

Indonesia towards 2030 and beyond: A Long-Run International Trade Foresight

Author

Listed:
  • Verico, Kiki

Abstract

One of the most important variables in the emerging economies like Indonesia is the stability of the exchange rate. Unstable exchange rates make it almost impossible for all business ventures to plan the business. The higher the depreciation of the Rupiah the higher the inflation rate and this will decrease people's purchasing power. In the balance of payments, the stability of the exchange rate and capital account are strongly influenced by the current account balance. A study found that in Indonesia, in the long run (Johansen Procedure) Indonesia current account balance affects the real exchange rate while in the short run (VECM) it affects the nominal exchange rate. The study also found that in the current account balance the one that affecting the exchange rate is the trade balance. Indonesia's trade balance relies on a surplus of trade in goods, especially agricultural products, petroleum and gas. The price of products in the primary sector is very vulnerable because of the volatility of primary products due to that of world’s oil and gas price. Indonesia's current account balance is highly dependent on manufacturing product trade. Another study found that in real-world, manufacturing trade influences more the capital flows than vice versa. Therefore, in order to maintain a positive long-term economic growth and stable exchange rate, Indonesia must increase its trade competitiveness, especially in the manufacturing sector. This paper will explore the challenges and opportunities of international trade in Indonesia towards 2030 and afterwards.

Suggested Citation

  • Verico, Kiki, 2017. "Indonesia towards 2030 and beyond: A Long-Run International Trade Foresight," MPRA Paper 79530, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:79530
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/79530/1/MPRA_paper_79530.pdf
    File Function: original version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/79645/1/MPRA_paper_79645.pdf
    File Function: revised version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/79665/1/MPRA_paper_79665.pdf
    File Function: revised version
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Verico, Kiki, 2018. "Does Indonesia’s macroeconomic work well towards the political year?," MPRA Paper 86164, University Library of Munich, Germany.

    More about this item

    Keywords

    Long-run foresight; international trade; 2030 and beyond; Indonesia; Indonesia economy;

    JEL classification:

    • F0 - International Economics - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:79530. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.