Erza Killian “Rethinking the current free trade debate in Indonesia” (the Post, April 13) makes some points.
Almost 40 years after Susan Strange made the case, she continued to
make these points well into the 1990s and was largely successful in
creating an entire area of inquiry: first the international political
economy, and now the global political economy with her efforts in the
1990s.
Indeed, these perspectives are a must read for many, but as Ezra
Killian notes, beginning with the original article would be good!
Free trade with China for any actor will be hard, particularly as China
is competitive at every level: China is not Japan or the US in this
sense, as neither can compete with Indonesia’s lower wages.
So, if there are no tariff barriers to China’s exports to Indonesia,
the likelihood is that entire segments of Indonesia’s light, medium and
heavy manufacturing will vanish.
Only the natural resources — which China needs desperately — will be
sent from Indonesia, while everything else will come from China.
I am exaggerating of course, but this simply to draw a stark contrast.
While there are many regional and international political reasons — should China lead?
For why Indonesia needs to be hesitant and seek protection for its
domestic industry, the domestic political factors ought not be
overlooked either.
Ultimately, trade is political because it involves jobs gained and jobs
lost in each locale affected by it.
Aggregate numbers do not convey the
pain of the unemployed in the short term, and it is this group of
unemployed that governments (elected ones especially) have to worry
about.
Lost jobs means lost legitimacy of governments, and so lost elections.
Jayantha Jayman
New York
