Indonesia Trade Brief

Furthermore Australia’s largest sector is in services whereas Indonesia’s is in industry. This could reflect the lack of tertiary education available in Indonesia as the workers will mainly be unskilled or low skilled. The GDP per capita is also drastically different and this would represent the average income in each economy, hence also reflecting the quality of life experienced.

Indonesia is a rich country with its resources. Not only oil and gas, but Indonesia also had been a producer of mining and agricultural products such as rubber, tin, tea, coffee, spices and timber. In 2002, timber is one of the key export for “non-migas” (non oil and gas) commodities to provide foreign trades.

Australian living standards are higher than Indonesia’s, this is a result of Australia maintaining higher economic performance through superior economic indicators. Australia’s economic indicators reflect a mature and relatively stable economic growth with a population 1/10th of Indonesia’s, in comparison, Indonesia’s economy reflects a growing developing economy. Indonesia’s economic trends are improving at a rapid rate and if this trend continues, Indonesia could have in the mid to long term superior economic growth and thus higher living standards than Australia. Particularly as Indonesia has a young population to fuel this.

Indonesia is now the 15th largest economy on the planet with a global output of just under 1.5% but is expected to rise in the coming years. Manufacturing is the largest single component of Indonesia’s economy with its main exports including crude petroleum and natural gas as well as rubber, coffee, cocoa and palm oil while Australia mostly benefits from exporting mineral fuels, gems, precious metals and meat. Indonesia received $187.3 billion USD from exports in 2012 ranking it 27th in profit from global exports but Australia placed 22nd and profited a total of $257.9 billion USD from its exports leaving Indonesia in the dust. Although Indonesia has showed significant growth recently their quality of life is still worse than Australia’s due to a lower Gross Domestic Product or GDP. GDP is the total value of goods produced and services provided within a country in the duration of a year and determines the strength of a countries currency.

Conducting business internationally can be a rewarding and very trying endeavor to take on. As a business owner, upper level of management or HR professional, one must constantly think about applicable laws in the area or country that they do business in.

According to AAFC (Agriculture and Agri-Food Canada, 2010) due to its extensive natural resources and geographical location, in the way of several of the world’s most important trading routes, Indonesia represents the Southeast Asia’s largest economy. On a global perspective, Indonesia is the fourth most populated country and has the largest Muslim population, besides being the world’s largest archipelago, with around 17,000 islands. The country’s GDP (Gross Domestic Product) is also showing considerable and stable growth throughout the years and unemployment rates dropped considerably (AAFC, 2011).

Indonesia had a GDP of 868.3 billion international dollars (GDP of Indonesia, 2016) and a GDP per capita of 3,475.25 international dollars in 2013 (GDP per capita, Indonesia, 2016). The GDP is primarily used to indicate an economies performance, it is measured by Y = C + I + E + G, where Y = GDP, C = Consumer Spending, I = Investment made by industry, E = Excess of Exports over Imports, G = Government Spending (Birch T, 2016). The GDP per capita is calculated by the GDP of a country, divided by the population of a country. The GDP and GDP per capita are very vital indicators of an economies progress. A rise in GDP shows that there an increase of value in an economy or there is a higher income or rise in expenditure which implies that there is a rise in the standard of living of the citizens and due to rise in income there will be a higher spending on various goods and services like healthcare, education, etc. Therefore as Australia’s GDP is higher than Indonesia’s there is an indication of higher living

Since oil price and devex are two of the most crucial factors affecting NPV and GT, thus both factors will be used to explain Indonesia’s fiscal flexibility and neutrality in more detail.

In recent years, Peru has been a stable emerging economy and has consistently experienced positive economic growth. Peru’s emergence as a growing economy and stable economy has been a recent phenomenon. During the 1980s, Peru was isolated from the global economy and many citizens of Peru believed in a protectionist economic worldview (Silva, 2014). Peru’s protectionist economic policies prevented the entry of foreign direct investment (FDI) and resulted in a very unstable and poor economy. Peru’s exports decreased dramatically and were nearly nonexistent (Silva, 2014).

Economic system is a system of beliefs (concerning work, property and wealth), activities (extractions, production and distribution), organizations(business firms, labour unions), and relationships(ownership, management) that provide the goods and services consumed by the members of a society.(Cullen 2011, p.81) The economic system is unique in that Indonesia has a market-based economy in which the government plays a significant role. There are 141 state-owned enterprises, and the government administers prices on several basic goods, including fuel, rice, and electricity. Growth rebounded in 2010 to 6.1% and is forecast to have reached 6.2%-6.5% in 2011. Poverty and unemployment have also declined despite the global financial crisis, with the poverty rate falling to 12,5% (March 2011) from 13.3% a year earlier and the unemployment rate falling to 6.6% (February 2011) from 6.8% a year earlier. In December 2011, Fitch Ratings upgraded Indonesia’s sovereign debt rating to investment grade. . There are many potential infrastructure projects in multiple sectors including hydroelectric and solar power, palm oil, new roads including toll motorways, mining, expansion of broadband internet, and

Trade is somewhat beneficial to Australia's position in the Asia-Pacific region. Australia's role in trade has several agreements that is tied with the other countries in the Asia- Pacific that helps our position. These agreements are social justice and equality issue the is trade with under developing countries and if all the workers are treated equally. Geopolitical advantage is the factors that affect Australia and other countries in the Asia- Pacific with their politics position and geography position. Trade has an economic advantage to Australia position which is gonna be a great investment for further years in Australia economy. We can therefore see that Australia position is very high in the Asia- Pacific

Indonesia today has rebuilt its financial stability and has tried to reorganize its fiscal policies since the global Asian monetary crisis. Even though the problems which rise from monetary crisis remain (such as unemployment), the condition of economic development in Indonesia is positively growing up. The total GDP (purchasing power equality) in Indonesia is $827, 4 billions (estimated in 2004) and the GPD per capita is $3,500. These numbers show a good progress sign for standard of developing countries.

Indonesia is the sixteenth largest economy, the largest economy in the South-east Asian economic region with the world's fourth largest population (263 million in 2017). It is an emerging economy that has increased its international integration, trade liberalisation and diverted from policies of import substitution towards export-led development. Indonesia is a member of the Group of 20 (G20) major economies and has been an active founding member of the World Trade Organisation (WTO). The impact of globalisation has benefited Indonesia as quality of life indicators and economic developments have improved but it also presents the challenge of improving regulations, building more competitive industries, increasing investment into education and infrastructure to remain competitive. Consequently, Indonesia has introduced numerous strategies to promote economic growth and development.

Indonesia’s industrialisation policies play an important role in supporting the achievement of high and sustained economic growth. The move towards export promotion from import substitution in the mid-1980s succeeded in restructuring the economy from agriculture to semi-industrious.

Worst financial crisis hit Indonesia's economy in 1997 to 1998. It caused instability in currency values, resulting Indonesian Rupiah depreciated to lowest level at 82.9% and low-level of competitiveness. This crisis had me to devote my interest to take International Economics as my education at the Faculty of Economics and Business of University of Indonesia. At my university time, I identified that exchange rate variability had a negative effect on trade and intermediate goods was one of key solutions to boost international trade.