Analysis of Potential Non-Traditional Trading Partner Countries for Improving Indonesia's Trade Balance Through Countertrade Schemes

Abstract

—Indonesia’s trade performance in 2018 experienced a deficit of USD 3,8 Billion, due to increasing of oil and gas imports. Countertrade scheme is proven as one way to improve the trade balance for country who experienced trade balance deficit through increasing on oil and gas exports channel. This study aims to identify the non-traditional trading partners as well as the products that are potential to be selected as non-oil and gas export destination for Indonesia through countertrade scheme. This study utilizes trade performance index and the composite index analysis using different criteria when applied to select country and products. The results show that there are six potential countries include Saudi Arabia, Nigeria, Qatar, Angola, Azerbaijan and the United Arab Emirates. On the product side, Electronic and coal are the common potential products to be proposed through countertrade scheme as that products are potential in all selected countries. There are another eight potential products for six countries that are selected, include machinery, jewelry, cigarettes, dairy products, processed fruits, mollusks, vegetable materials, automotive, synthetic rubber, processed oily grains, processed fruits, coffee beans, CPO and its derivatives, pearls, processed fats animal or vegetable oils, ash and metal scraps, precious metals, rice, salt, sulfur and lime.