Indonesia Trade Brief

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Introduction The KOF Index of Globalization ranks Indonesia 87th in the world in total globalization, below its immediate neighbors like Brunei, Malaysia, the Philippines and well below Singapore. The country ranked 76th in economic globalization, 146th in social globalization and 39th in political globalization. The country's economic globalization score is based on trade flows and restrictions, equally. Indonesia's score in terms of economic trade is likely dragged down by its significant trade barriers. These barriers represent an obstacle to flourishing trade for Indonesia, which otherwise performs well in terms of its international trade profile. Data and Arguments The country's economy is in the trillion-dollar class, and ranks 16th in the world, just below Canada and just above Turkey (CIA World Factbook, 2012). With ranks of 27th in the world for exports, 30th for imports, 34th for inbound FDI and 37th for outbound FDI (Ibid), Indonesia's flows are much greater than its globalization ranking would indicate. This points to trade barriers as being a drag on its KOF score. These figures at least to some extent tied to commodity prices, as Indonesia's exports and inbound FDI in particular are tied to its mineral and forest wealth (World Bank, 2010). Indonesia is a member of the World Trade Organization, and therefore is committed to lowering its trade barriers. The WTO publishes statistics on tariffs that illustrate that, in general, the Indonesian trade market
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