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Internship on Services Trade in Indonesia
April 4, 2016 - May 27, 2016- Ottawa
The important role of services in a country’s trade performance has largely been overlooked, and Indonesia has not kept up with its peers in taking advantage of the benefits from services exports. Three interns from the Ministry of Trade of Indonesia—Panji Nurindra and Indra Prahasta from the Directorate General of International Trade Negotiations (DGITN) and Bambang Sumarjono from Trade Research and Development Agency (TREDA)—spent two months researching the important role that services and services trade play in the Indonesian economy. They found that, compared with its peers, Indonesia’s share of domestic services embodied in its goods exports is lower than all countries except Cambodia and Vietnam. In addition, among its peers, Indonesia has by far the smallest share of foreign services embodied in goods exports. In their final report—The Importance of Services in Indonesian Trade—the interns noted that these results may be an indicator of a below-average participation level in global value chains compared with peer countries. High barriers to foreign direct investment (FDI) in the service sector may be one reason. Besides investment barriers, Indonesia’s service sector performance is also impeded by trade barriers.