Indonesia's Trade-to-GDP Ratio Lowest in ASEAN

Indonesia's trade-to-Gross Domestic Product (GDP) ratio is the lowest in Southeast Asia (ASEAN). According to World Bank data, Indonesia's trade ratio is 43.02% of GDP, lower than Myanmar (47.5%) and Laos (75.83%). Meanwhile, Singapore has the highest trade ratio in ASEAN, more than three times its GDP.

Indonesia's lagging trade ratio compared to other ASEAN countries indicates a relatively low level of economic openness. This also suggests that domestic goods are still domestically oriented and have not been able to compete in the international market. Low exports lead to low foreign exchange earnings, despite high domestic demand for US dollars.

(Read Databoks: Indonesia's 2018 Trade Deficit: The Worst in History)

Therefore, government policies are needed to boost exports by accelerating licensing through the Online Single Submission (OSS) system, improving infrastructure, and providing incentives for export-oriented industries. Furthermore, improvements in human resource quality are necessary, both through formal education and vocational training.

(Read Databoks: Indonesia's Top 10 Trading Partners in 2018)