Indonesia's foreign trade in development

Abstract

This study is intended to explore some potentialities and problems of Indonesia's trade expansion and rapid growth as they relate to its development trajectory. Since the change of regime in 1966, the economy has been transformed by effective economic management and the capability of taking advantage of a favourable international environment. The size of the economy, has expanded by around 500% since 1966. The country has completed its first period of sustained economic growth, which, while it may not have been equivalent to the very high growth rates of the Asian NICs, has been among the best of all developing countries.

Undoubtedly, trade has proceeded rapidly, although in some instances the benefits to welfare of the mass of the people are debatable. The study seeks to reveal all the circumstances that have brought about the changes and to look at how foreign trade has acted as both the expediter and engine of growth.

The study also tries to unravel some of the above topics by exploring not only the standard economic argument, but also the element of history and the political economy of the economic reform. In elucidating rapid trade expansion and the striking growth of the economy, this study found that Indonesia is still confronted by the problems of growth with equity. There is strong pressure amidst criticism of the expansion of large business enterprises that a competition policy is also necessary to curb unfair competition. (Abstract shortened by UMI.)