Indonesia's export comparative and competitiveness advantages in the 'emerging market' scheme during the pandemic

Abstract

Relevance. The unprecedented disruptions caused by the COVID-19 pandemic had a profound impact on the global economy, including Indonesia. Despite the challenges, Indonesia successfully managed to navigate and recover its international economic activities. Analyzing how Indonesia navigated its export advantages during the COVID-19 pandemic is crucial for understanding its resilience in the global economy. Research objective. The study aims to analyze the comparative and competitiveness of Indonesian export products, particularly the food processing industry, under the scheme of emerging markets and developing economies during the COVID-19 pandemic. Data and methods. This study relies on the data from Badan Pusat Statistik (BPS) and the Indonesian Ministry of Trade, along with world export data from the World Bank, OECD, and the International Trade Center, to examine the food processing industry during the 2021-2022 pandemic. Using the Revealed Comparative Advantage (RCA) model, it classifies comparative products for potential exports and diversification guidance. The Export Product Dynamics (EPD) model measures competitive advantage and serves as an early warning indicator, providing a comprehensive trade analysis for identifying growth opportunities and mitigating risks. Results. The RCA findings indicate that Indonesian processed food products for emerging market countries exhibit strong comparatives, supported by factors such as selling prices, production capacity, innovative technology, and trade tariff policies. This is reinforced by the results of the EPD analysis, which shows the dominance or rising star status of these products. Conclusions. The dominance of processed Indonesian food products points to the need for the government to uphold and expand exports beyond emerging market countries. Recommended measures include initiating revitalization, transformation, market analysis, and evaluating products categorized as falling stars or experiencing failures, missed opportunities, and retreats. Additionally, a focus on the upstream-downstream sectors of the food processing industry is crucial.