Competitiveness analysis of Indonesian processes and non-processed agricultural commodities in the ASEAN Region

Abstract

The commitment of the ASEAN Economic Community opens opportunities up for member countries including Indonesia to improve the trade balance, especially in processed and non-processed agricultural products. These opportunities should be followed by increasing the competitiveness of each country. The purpose of this study was to analyze the development of exports of processed and non-processed Indonesian agricultural products in the ASEAN region and the competitiveness of exports of agricultural products in ASEAN countries to the main destination countries. TSI analysis was used to determine the development of exports, while the Constant Market Share (CMS) and Revealed Comparative Advantage (RCA) approaches are used to analyze the competitiveness and competitive advantages of each ASEAN member country. The results showed that Indonesia was in the top position for the export of agricultural processed products in 2009 with a TSI reaching 0.87. Whereas non-processed agricultural products led by Thailand with TSI reached 0.89. Increased competitiveness of processed and non-processed products is more influenced by increased demand in export destination countries. The RCA index of non - processed agricultural products in Thailand reached a peak in 2014 at a 3.2 position, while Indonesia had the highest RCA index in agricultural processed products which reached 8.80. This shows that Indonesia has comparative advantages in agricultural processed products compared to other countries in ASEAN.