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Jakarta Post

Analysis: Boosting manufacturing growth through global value chains

  • Astari Adityawati

    Mandiri

Jakarta   /   Wed, August 14 2019   /  02:26 am

To increase our exports, we need to revive the manufacturing industry rather than rely on the export of commodities, as commodity prices are quite volatile. Indonesia’s trade pattern has been shifting in the last 10 years. During the period of 2010-2014, natural resources and commodity exports were an important source of revenue as global demand for and prices of these commodities significantly increased.Since 2015, when commodity prices dropped sharply, commodity exports have become more vulnerable to price fluctuation. Currently, Indonesia should focus more on how to boost growth of the manufacturing industry to alleviate the dependency on commodity exports.The pattern of world trade has changed rapidly toward industrial component (intermediates) trading, which accounts for an increasing share of global trade. Regional and global supply chains are thus becoming much more important to...