Fluctuations of Indonesia's Trade with ASEAN Countries 2000-2020

Abstract

This study analyzes Indonesia's trade fluctuations with ASEAN countries in 2000-2020. These fluctuations are influenced by economic factors, policies, integration, and extraordinary events. Export and import data were obtained from ASEANstats and World Bank. The methods used are uses a quantitative approach with a panel data analysis method trade with ASEAN countries is dominated by inter-industry trade, especially in the manufacturing sector. We found that Export and import trade of ASEAN countries has a close relationship with economic growth. Export and import trade can be a source of income, foreign exchange, and investment for ASEAN countries, and can increase productivity, efficiency, and diversification of economic sectors. However, export and import trade can also have negative impacts, such as trade balance deficits, economic dependency, and development inequality. Therefore, ASEAN countries need to develop appropriate and sustainable trade strategies and policies, in order to maximize the benefits and minimize the risks of export and import trade. Gravity variables, such as gross domestic product, distance, population, and ASEAN membership, also affect Indonesia's trade with ASEAN countries. This study provides policy implications to increase Indonesia's trade with ASEAN countries in the future.