Abstract
The developments of the world trade requires the improvement of the competitiveness of products, including agricultural commodities. At the regional level, Indonesias agricultural commodities face the ASEAN free market competition. This study aims to identify and examine the competitiveness of Indonesian exports of several agricultural commodities in the international market by employing the index of competitiveness of trade specialization by trade specialization index (TSI), and the index of market penetration, by revealed comparative advantage (RCA). This study observed the HS 4 digit agricultural commodities, along 2011-2015. The study finds that the index of commodity trade specialization of estate crops sub-sector is in a stage of maturation of the world trade, or it has a very strong competitiveness. The food crops sub-sector stand on the introduction stage of the world trade or it has low competitiveness, or in other words, Indonesia is a net importer of the sector commodities. Although some of commodities have the strong competitiveness, but on the other hand, they do not have a strong comparative advantage. This is shown by the RCA value that less than 1. It means that a part of agricultural commodities, namely food crops, horticulture and estate, are still import oriented.The developments of the world trade requires the improvement of the competitiveness of products, including agricultural commodities. At the regional level, Indonesias agricultural commodities face the ASEAN free market competition. This study aims to identify and examine the competitiveness of Indonesian exports of several agricultural commodities in the international market by employing the index of competitiveness of trade specialization by trade specialization index (TSI), and the index of market penetration, by revealed comparative advantage (RCA). This study observed the HS 4 digit agricultural commodities, along 2011-2015. The study finds that the index of commodity trade specialization of estate crops sub-sector is in a stage of maturation of the world trade, or it has a very strong competitiveness. The food crops sub-sector stand on the introduction stage of the world trade or it has low competitiveness, or in other words, Indonesia is a net importer of the sector commodities. Although some of commodities have the strong competitiveness, but on the other hand, they do not have a strong comparative advantage. This is shown by the RCA value that less than 1. It means that a part of agricultural commodities, namely food crops, horticulture and estate, are still import oriented.
Highlights
Economy Community (AEC) since 1 January 2016 has been bringing the logical consequence of the liberalization of regional trade by the reduction of tariffs, the harmonization of regulation, and the facilitation of trade in goods and services
In addition to contributing to the national economy, this sector roles in the creation of employment, income increasing, ensuring the needs of local food, raw materials production, and a source of foreign exchange
The role of the agricultural sector in the economy is indicated by its significant contribution to the Gross Domestic Product (GDP) of Indonesia in 2015 (13.49 percent), increase from 2014 which amounted by 13.34 percent (BPS, 2017)
Summary
The implementation of the ASEANEconomy Community (AEC) since 1 January 2016 has been bringing the logical consequence of the liberalization of regional trade by the reduction of tariffs, the harmonization of regulation, and the facilitation of trade in goods and services. The agricultural sector is proved to be able to recover the economy in times of crisis. In addition to contributing to the national economy, this sector roles in the creation of employment, income increasing, ensuring the needs of local food, raw materials production, and a source of foreign exchange. The agricultural sector plays a role in maintaining food security, economic stability and political security. The role of the agricultural sector in the economy is indicated by its significant contribution to the Gross Domestic Product (GDP) of Indonesia in 2015 (13.49 percent), increase from 2014 which amounted by 13.34 percent (BPS, 2017). In 2015, the average of labor absorption by agricultural sector is 34 per cent per year of the total workforce of Indonesia (World Development Indicators, World Bank)
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