Indonesia's G20 Role and Export Performance with the US, China, and Japan
DOI:
https://doi.org/10.38142/jtep.v5i4.1685Keywords:
Indonesia, G20, Exports, VECM, Economic GrowthAbstract
This study examines the relationship between Indonesia’s G20 membership and its bilateral exports to China, the United States, and Japan over the period 1995–2023. The objective is to analyze how trade integration with these three major partners influences Indonesia’s economic growth. Using the Vector Error Correction Model (VECM), with data obtained from the World Bank, UN Comtrade, and the Central Statistics Agency (BPS), the research investigates the short- and long-term dynamics between exports, gross domestic product (GDP), gross fixed capital formation (GFCF), and exchange rates. The empirical findings confirm the presence of cointegration among the variables, indicating long-term equilibrium. Exports to China show the strongest and most significant positive impact on GDP, with an error correction mechanism revealing a 24% annual adjustment speed. Exports to the United States also contribute positively, but with lower elasticity, reflecting limited macroeconomic spillovers despite persistent trade surpluses. By contrast, exports to Japan display the weakest impact on GDP, with slower adjustment dynamics (18% per year) and high dependence on primary commodities. The results imply that while Indonesia’s G20 integration has enhanced trade opportunities, the country remains structurally vulnerable due to its reliance on resource-based exports. Policy recommendations include diversifying export markets, strengthening value-added manufacturing, reducing non-tariff barriers, and optimizing the role of regional trade agreements such as ACFTA and IJEPA.
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