Quarterly Report - Kadin Indonesia

Lanka, Macao China, Egypt and China. The global expansions of textile from thesecountries are indeed a serious threat for the export growth or at least the global marketshare sustainability of Indonesian textile. With respect to clothing, the table indicates thethreats from these countries are more serious.Theoretically, competitiveness correlates positively with export, or hypothetically, itcan be assumed that higher competitiveness will generate higher export, and visa versa.However, many countries have been found to have exported as well as imported similarproducts at the same time. Trade data from the WTO show that since the last, say, twodecades, intra-trade among countries (i.e. trade within a sector/product) has increasedmore rapidly than inter-trade (i.e. trade among different sectors/products). This impliesthat, although Indonesia has comparative advantages in certain products, it does notalways mean that Indonesia is a net exporter of these products. Thus, the question iswhether Indonesia tend to be net exporting (or net importing) country of products inwhich Indonesia are highly specialized (i.e. products with RCA >1)? The index which isoften used to measure this trade tendency is called the Trade Specialization Index (TSI).The index compares the trade balance (export-import) of Indonesia of a given productwith the country’s total trade (export plus import) of this product. Values above 0.5 up to1 indicate that Indonesia tends to be a net exporting country for the product under review,and values below 0.50 and close to -1 indicate that Indonesia tends to be a net exportingcountry for the particular product.Table 25: RCA of T&C by Producing/Exporting Countries44 Kadin Indonesia – www.kadin-Quarterly Report - January 2006indonesia.or.id