REGIONAL ECONOMIC INTEGRATION AND ITS IMPACTS ON GROWTH, POVERTY, AND INCOME DISTRIBUTION: THE CASE OF INDONESIA

Indonesia continually tries to open its economy through free trade areas (FTAs) on bilateral, regional, and multilateral bases. This paper discusses the impacts of FTAs on the Indonesian economy, particularly for economic growth, poverty, and income distribution. By using a Global Computable General...

Full description

Saved in:
Bibliographic Details
Published in:Review of urban and regional development studies 2007-07, Vol.19 (2), p.138-153
Main Authors: Hartono, Djoni, Priyarsono, Dominicus Savio, Nguyen, Tien Dung, Ezaki, Mitsuo
Format: Article
Language:English
Subjects:
Economic development
Economic growth
Economic impact
Equilibrium models
Family income
Foreign trade zones
Free trade areas
Households
Income distribution
Income redistribution
Indonesia
Poverty
Regional integration
Studies
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Indonesia continually tries to open its economy through free trade areas (FTAs) on bilateral, regional, and multilateral bases. This paper discusses the impacts of FTAs on the Indonesian economy, particularly for economic growth, poverty, and income distribution. By using a Global Computable General Equilibrium (GCGE) model, we conducted the simulation analysis by setting eighteen scenarios for the ongoing and potential FTAs of different frameworks. Indonesia is found to benefit from joining in FTAs, except for the FTA with India. It is also implied that FTAs increase rural household income at higher rates than they increase urban household income. Moreover, FTAs' impacts are more favorable for unskilled workers than for skilled ones, and also for relatively poor households more than for rich households, both in urban and rural areas. In brief, FTAs provide Indonesia with income redistribution effects.
ISSN:0917-0553
1467-940X
DOI:10.1111/j.1467-940X.2007.00131.x