Emerging Asia's Growth and Domestic Policy Reforms: Implications for Indonesia's Economy and Trade to 2030

Arndt-Corden Department of Economics

Event details

ACDE Seminar

Date & time

Tuesday 30 April 2013
2.00pm–3.30pm

Venue

Seminar Room B, Coombs Building, Fellows Road, ANU

Speaker

Kym Anderson, ANU, University of Adelaide & CEPR

Contacts

Arianto Paturnu & Daniel Surydarma
61259786 / 61250304
This paper explores how Indonesia’s production and trade patterns might change over the next two decades in the course of economic development and structural changes in Indonesia and the rest of the world under various growth and policy scenarios. We employ the GTAP model and Version 8 of the GTAP database, along with supplementary data from a range of sources to support projections of the global economy to 2030. We first project a baseline from 2007 to 2030, assuming trade-related policies as of 2007 do not change in each region but that agricultural land, extractable mineral resources, population, skilled and unskilled labour, capital and real GDP grow or decline at exogenously selected rates such that real prices of primary products in 2030 are only slightly above 2007 levels. Given the relatively long time-frame over which we are modelling, we modify the standard GTAP agricultural product income elasticities for rapidly growing developing countries, along with Armington elasticities, to more appropriately reflect their likely values over this time-frame. The core projection of the world economy is compared briefly with an alternative baseline involving slower productivity growth in primary sectors (so that real international prices for primary products are well above 2007 levels by 2030, consistent with recent projections by some international agencies). Then the estimated effects of two alternative policy reforms are reported. One is an expansion of global rice exports associated with the opening of Myanmar. The other is the implementation of Indonesia’s new Food Law and the recently-imposed export taxes on numerous primary products. The final section draws out implications for the welfare of farmers, food consumers, and policymakers in Indonesia.

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