In this issue, the Journal of the World Studies presents four selected articles focusing mainly on the Indonesian position in regional and global trading system. Three out of four articles published in this issue are the results of collaborative research conducted by the researchers from the Center for World Trade Studies. The main topic of the research is analysing the Indonesian position in international trade covering automotive, agriculture, and service sectors both at regional and multilateral trade relations. Unlike previous issues that all articles were in English, the articles published in this issue are bilingual, using both Bahasa Indonesia and English.
The first article is written by Muyanja SSenyonga on the Indonesian automotive industry’s competitiveness in the post 2015 AFTA. This article argues that the Indonesian automotive industry in some respects is ready for post 2015 ASEAN. This is discernible from a number of areas such as the availability of semi skilled and skilled labor; supportive regulatory framework that has protected domestic automotive product manufacturers from unfair competition from ASEAN and non ASEAN manufacturers which include buy Indonesian products policy, local content requirement, compulsory certification requirements based on Indonesian standards. This is coupled with the rapid growth of the automotive market, which is supported by high private consumption, low financing cost for vehicle purchases, government commitment to increase investment in infrastructure as well as in the multitrillion dollar Master program for acceleration and expansion of economic development in Indonesia. Nonetheless, weak areas remain, which makes the high potential domestic automotive market an easy target for other key ASEAN automotive manufacturers (Malaysia and Thailand), as well as non ASEAN countries such as China, India, European Union members (especially Germany, France, England, and Sweden). Such weaknesses include among others, some components of the regulatory framework that increase the cost of operations, production, distribution, import-export, hiring and firing workers; compulsory certification based on Indonesian standards even as Indonesia (though not yet a signatory) like other ASEAN members reached an agreement in principal to base quality standards of automotive products on UNECE 1958 agreement which are recognized and in some aspects are used in determining quality of automotive products (vehicle emissions).
The analysis on the performance of Indonesian tea in international trade is the topic of the second article published in this issue. This article is written collaboratively by Jangkung Handoyo, Dwidjono, Sugiyarto, and Setiawan Suryo, lecturers and researchers at the Faculty of Agriculture Universitas Gadjah Mada. This article intends to understand the trend of tea production of several tea producers in the world, to analyse the trend of Indonesian tea export and to comprehend the competitiveness of the Indonesian tea in international market. By utilising Revealed Comparative Advantage (RCA), Revealed Symmetric Comparative Advantage (RSCA), Acceleration Ratio (AR), and Trade Specialization Index (TSI) analytical tools, the article finds that the trend of tea production from China, India, Sri Lanka, Kenya, and Indonesia are significantly increasing from year to year. The finding also shows that the Indonesian tea is able to compete in international market and reach a maturity level.
The third article on the implication of Agreement on Agriculture to Indonesian horticulture trade is written jointly by Jamhari and Agus Dwi Nugroho, lecturer and researcher of the Faculty of Agriculture, Universitas Gadjah Mada. The Indonesian horticulture trade indicates that the value of imports is higher than the value of exports for raw or processed commodity. The purpose of this study is to analyze the performance of import, the competitiveness and the factors that affect Indonesia’s import of garlic, onions, potatoes and oranges. Type of data used secondary data from the years 1991-2010. To analyse the level of competitiveness is used Revealed Comparative Advantage (RCA) and Acceleration Ratio (AR). To investigate the factors affecting the import of horticultural Indonesia is used Error Correction Model (ECM). Trend in Indonesia garlic, onions, potatoes and oranges import show an increase. Indonesia has low competitiveness and accelerating exports of garlic, onions, potatoes and oranges Indonesia. In this respect, the AoA policies significantly affect the import of garlic and onion. While the ratio of the price of domestic products with international product prices affect the import of all commodities.
The last article is written jointly by Muhammad Fawaiq and Ranni Resnia, researchers at the Indonesian Ministry of Trade. This article focuses mainly on the opportunity and the challenges of the Indonesian construction service sector in ASEAN on ASEAN Framework Agreement on Services (AFAS). This article argues that the role of trade in services becomes more important as its contribution to ASEAN countries’ GDP achieved 40 – 70% last year. Gradual liberalisation in service sector until 2015 is creating opportunities in both outward and inward investments. This study objects to map commitment position of Indonesian trade in construction services on AFAS, analyse conformity of Indonesian commitment on AFAS with existing related regulations, and estimate performance of construction services firms. Method used in this paper are Hoekman Index, descriptive analysis, and Return on Asset (ROA) and Return on Equity (ROE) to estimate construction firms performance toward competition. The results show that Indonesian’s commitment on AFAS is at the same level as Malaysia and Cambodia, which lower than commitments of Singapore, Laos, Myanmar, Thailand, and Vietnam, but it is higher than Brunei Darussalam and Philippines. Indonesian commitment is in accordance with existing regulations. Lastly, performance of construction firms has been increasing since 2008 until 2011.