Indonesia Globalisation Assignment

8/16/2019 Indonesia Globalisation Assignment

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Shaun McManus Indonesia and Globalisation 2015

Indonesia, in recent decades has been signifcantly inuenced byglobalisation through increased international trade, oreigninvestment, e!osure to the international economic cycle and ra!idindustriali"ation# $hrough strong economic develo!ment and gro%th

over decades, Indonesia has established itsel as the largesteconomy o the South &ast 'sian economic region# Globalisation isthe integration bet%een di(erent countries and economies and theincreased im!act o international inuences on all as!ects o lie andeconomic activity# $hrough actors o globalisation has seeneconomic gro%th has increased at a steady rate o 5)*+ or G- inthe last decade# International trade in Indonesia has gro%nconsiderably as o recent, %ith e!ected gro%th in im!orts ande!orts in its economy# Indonesia has become increasinglyintegrated %ith the global economy through !artici!ation in global,regional and bilateral trade agreements, elevating its role in theglobal centre# es!ite globalisation !resenting many !ositiveim!acts on Indonesia, its e!osure to the international economiccycle !resents negative im!acts o globalisation such as the 'sian.inancial /risis 1)13# In res!onse to the e(ects o globalisation, the Indonesian government has im!lementedstrategies in the orm o economic !olicy to control actors o globalisation on its o%n economy# Globalisation has had a highlysignifcant im!act on its economy, rom o!ening u! its global doorsto the global economy has achieved !rogressive trade outcomes,global, regional and bilateral agreement and combating its e!osure

to the economic cycle#

Increased international trading activity in Indonesia as a result o globalisation has had a ma4or im!act on the e!orting industry o Indonesia# ver the last hal century, Indonesia has becomeincreasingly integrated in international trade, %ith its ratio o tradeto G- rising rom 60+ in 170 to *0+ in the early 2000s#International trade, through globalisation has inuenced theIndonesian economy since becoming more o!en in the globaleconomy in the 10s, it has lo%ered !rotectionist trade barriers,resulting in com!etitive !ressures and encouraging businesses to be

more e!ort ocused# -rior to the 10s ho%ever, Indonesia %as aheavily !rotected economy# Its oil boom in the 170s resulted in theim!lementation o harsh trade barriers in order to !rotectgovernment o%ned businesses# 8arge Indonesian governmente!enditure has been set on uel subsidies, %hich are recorded tobe larger than all central government social and ca!ital s!endingcombined# il e!orts continue to be a signifcant source o revenueor the Indonesian economy# $he uel subsidy, %orth 9:S20 billionand accounting or 16+ o government revenue %as cut in 2016#

$his subsidy cut resulted in !etrol !rices to rise rom ;;+)**+ !er

litre# In res!onse to this rise, the government im!lementedcom!ensation handouts to the !o!ulation to attem!t to !romote the

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Indonesia=s !artici!ation in trade agreements has heavily im!actedits economy as a result o globalisation# ver recent years,Indonesia has had a more elevated role on the global centre,through its membershi! o the Grou! o 20 G203 ma4or %orldeconomies# @eing active members o !rominent trade agreements

such asA $he Borld $rade rganisation B$3, $he 'S&'C .ree $rade'greement 123 and the 'sia)-acifc &conomic /oo!eration'-&/3 orum, as %ell as bilateral trade agreements such as the

Da!an)Indonesia &conomic -artnershi! 2003# Indonesia su!!ortedthe oha Eound, %ith its ho!e or reductions in agricultural!rotection by advanced economies# Indonesia=s involvement inthese trade agreements have aided in reducing trade !rotectionmethods such as tari(s and other non)tari( barriers# 'ter o!eningits economy to the global economy, trade agreements began tothrive# Doining these organisations has allo%ed Indonesia to gainmany trading o!!ortunities %ith many neighboring economies andin the !rocess, brea< do%n trade barriers bet%een nations#Indonesia=s membershi! %ith the 'S&'C .ree $rade 'greement123 covering emerging economies in South &ast 'sia %ith thegoal o lo%ering and eliminating tari(s, reducing tari(s or theIndonesian economy# $he !olicy im!lemented by 'S&'C is the/ommon &(ective -reerential $ari( Scheme, %here tari(s are lessthan 5+ or goods originating rom economies %ithin 'S&'C# In2007, the !lan or the creation o the 'S&'C &conomic /ommunityin 2015, %here the mar


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es!ite the !ositive im!act o globalisation being highly !ositive orthe Indonesian economy, the 'sian .inancial /risis o 17 and 1a(ected Indonesia incredibly# 's a country that can be severelyim!acted by these crisis=, Indonesia=s e!eriences notes ho% thevolatility o global fnancial mar


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Indonesia has been signifcantly im!acted by the e(ects o globalisation on its economy and e!erienced the challenges o sustaining economic gro%th and develo!ment# $hrough actors o globalisation such as increased international trade, global, regionaland bilateral trade agreements and e!osure to the economic cycle,the Indonesian government has succeeded in reducing tradebarriers such as tari(s to increase its im!orts and e!orts or itsnation, increasing national G-# Indonesia=s trade agreements andinvolvement in organisations such as 'S&'C and '-&/ have allo%edor easier trade and .I o%s, reducing !rotectionist !olicy bet%eenneighboring countries and the e(ects o the 'sian .inancial /risisallo%ed Indonesia to develo! ne% economic !olicy to strengthen itseconomy# Indonesia are a country that has develo!ed through

globalisation#

@ibliogra!hy

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htt!Aro#uo%#edu#aucgivie%content#cgiarticleJ1570KcontetJaab4

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Indonesia Globalisation Assignment

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