New paper

(Full draft will be made available here soon; the paper was prepared for and presented in a conference organized by FONDAD).

M. Chatib Basri and Arianto A. Patunru,

University of Indonesia, 2007

How to Keep Trade Policy Open: The Case of Indonesia

Abstract:

We survey the dynamics of trade protection in Indonesia. In the aftermath of the 1998 crisis, Indonesia underwent impressive trade liberalization. However, from 2001 on, protectionism was on the rise again. The paper aims to elucidate how conflict over trade policy takes place in Indonesia after the economic crisis and to examine the prospect for further trade liberalization. We argue that it is unwise to assume that pressures for trade protection will easily subside. To support our key arguments we discuss the cases of rice import ban and crude palm oil export tax. We conclude that unless Indonesia can maintain the competitiveness of the real exchange rate, overcoming the supply side problems, improving infrastructure and reducing high cost economy, further trade liberalization will not be easy.