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  • Author: Kiki Verico, Mari Pangestu
  • Publication Date: 08-2020
  • Content Type: Working Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: This paper analyses the economic impact of globalisation in Indonesia from the end of the 1960s to date. The analysis found that globalisation generated a positive impact on Indonesia’s economic growth through the trade and investment channel; reduced wage inequality and child labour participation; and increased labour absorption, including women's participation in the labour market. Through the trade channel, globalisation also contributed to Indonesia’s productivity and structural economic transformation, benefited small and medium-sized enterprises (SMEs), contributed to poverty alleviation and reduced inequality, and increased trade in services such as tourism. Through the investment channel, there is evidence of the spillover effect of technology transfer, technology progress, improvement of the role of SMEs, and contribution to poverty alleviation. The waves of open and more restrictive trade and investment policies, which Indonesia has gone through in the last few decades, reflect the political economy reality – that is, the impact of globalisation is dynamic and only felt in the medium term, whereas the cost and potential negative impact is often felt more immediately throughout trade creation. The trade creation increases imports from countries with which free trade agreements have been negotiated, decreasing the domestic producer surplus. Since globalisation will create net benefits in the long run, Indonesia should continue its process of globalisation and integration with the world economy to ensure the net benefits and to move forward in its structural transformation, while managing the costs of globalisation and its transition process.
  • Topic: Globalization, International Cooperation, International Trade and Finance, Economic Growth
  • Political Geography: Indonesia, Asia, Indo-Pacific
  • Author: Arianto A. Patunru
  • Publication Date: 08-2019
  • Content Type: Working Paper
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: The paper is motivated by the current emphasis on the share of domestic value added in exports (SVEX) as a policy criterion for export development strategy in developing countries. Our hypothesis is that the policy emphasis on SVEX, which harks back to the import substitution era, is inconsistent with the objectives of achieving economic growth with employment generation in this era of economic globalisation. We test this hypothesis by examining the relationship of the SVEX with both export-induced employment and the total domestic value added, or the contribution of exports to gross domestic product, by applying the standard input–output methodology to data from Indonesian manufacturing. Our findings do not support the view, widely held in policy circles, that industries characterised by a higher SVEX have the potential to make a greater contribution to employment generation and total domestic value added. The policy inference is that, in this era of economic globalisation, policy makers should focus on the export potential of industries in designing export development policy, rather than on the SVEX.
  • Topic: Globalization, Labor Issues, Trade, Global Value Chains
  • Political Geography: Indonesia, Indo-Pacific
  • Author: Iqbal Shailo
  • Publication Date: 07-2016
  • Content Type: Journal Article
  • Journal: The Rest: Journal of Politics and Development
  • Institution: Centre for Strategic Research and Analysis (CESRAN)
  • Abstract: This study briefly discusses three case studies of regional integration, namely the Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT), the South African Development Community (SADC) and the Asia Pacific Economic Cooperation (APEC), to critically examine contemporary integration project as a phenomenon in which sovereignty, identity and boundary/territory are constructed and confirmed. Poststructuralist approaches reconsider regional communities as pre-given institutes, practices and actors, and inspire to focus on how these categories are constructed and implemented. I am concerned with two important questions: what are the central theoretical dilemmas concerning the concept of regional integration; and how can critical geopolitics employ the integration project and constructive discourses to form a broader view of regional integration?
  • Topic: Globalization, Regional Cooperation, Geopolitics, Borders, Regionalism
  • Political Geography: Indonesia, Malaysia, Asia