Expert: Optimising Industry and Trade Agreements Key to Boosting Indonesia's Export Performance
IPB University economics professor Sahara assesses that optimising industry, downstreaming, and trade agreements are the main driving factors for Indonesia’s export and economic performance.
“To improve Indonesia’s trade performance, we must of course accelerate industrial upgrading, because our exports are still resource-based. In this context, to increase complexity, downstreaming must move from natural resource-based downstreaming towards medium-high technology manufacturing,” Sahara said during an online discussion held by the Center of Reform on Economics (CORE) Indonesia in Jakarta on Friday.
She further said that optimising the utilisation of Indonesia’s trade agreements with partner countries is also crucial for national trade performance.
Examples of such trade agreements include the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), the Indonesia-Tunisia Preferential Trade Agreement (IT-PTA), the Indonesia-Peru Comprehensive Economic Partnership Agreement (IP-CEPA), and the Free Trade Agreement (FTA) between Indonesia and the Eurasian Economic Union (EAEU).
With optimal utilisation of these strategic agreements, Sahara believes local micro, small and medium enterprises (MSMEs) have the opportunity to introduce value-added products from Indonesia.
“This trade strategy must not stop at signing agreements. What is far more important is ensuring that producers in Indonesia, including MSMEs, can utilise these trade agreements, make use of the rules of origin, mutual recognition, and the trade facilitation available,” Sahara said.
She also reminded Indonesia to pay attention to environmental sustainability values in its flagship products or commodities by building green trade infrastructure with integrity.
“Because environmental issues will continue to be raised, including in the coming years. Building green trade infrastructure is becoming a necessity,” said the CORE Indonesia research associate.
“If we can build the domestic system more quickly in relation to green trade infrastructure, those standards could actually become a competitive advantage. China has already been able to do this, so its products can compete in international markets because the green aspect has been incorporated,” she added.
Previously, President Prabowo Subianto, in his 2026 State Address, expressed optimism that economic growth by the end of the year could reach 6 percent if pursued with appropriate and rational policies.
Economic growth in the first quarter of 2026 was recorded at 5.61 percent, and in the first half of 2026 it grew by 5.45 percent.