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Trump's protectionism will have limited effect on Indonesia: UOB
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Indonesian trade charts indicate exports by sector and imports by use in the first half of 2016. (-/-)
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ompared to its regional peers, Indonesia is unlikely to be affected by a possible protectionist movement from Donald Trump's US presidency as trade is no longer a main source of growth, Singaporean based bank UOB has said.
UOB economist Jimmy Koh said a Trump administration was likely to affect US-Asia trade with higher import tariffs and even the cancellation of trade agreements such as the Trans Pacific Partnership (TPP). In ASEAN, Vietnam, Malaysia and Thailand are the most vulnerable given a high trade dependency on the US.
"The US is the third-largest export market to Indonesia, accounting for 11 percent of Indonesia's exports in 2015. However, with one of the lowest shares of exports of goods and services to [gross domestic product] GDP among Asian countries, Indonesia will be less affected than its peers in the event of trade restriction measures," Koh said on Thursday.
According to the Central Statistics Agency’s (BPS) latest data, export shares to GDP are getting lower. In the third quarter, exports were only 19.5 percent of GDP while in the same period of 2015 and 2014 the figures were 21.84 and 23.01 percent, respectively.
Koh said Indonesia’s efforts to remove bottlenecks in infrastructure investment would help the country escape slow growth in the region. (evi)
