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Refocusing Indonesia’s trade expansion into non-traditional market case study: Ethiopia

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In 2022, Ethiopia was the second largest country in Africa in terms of population. It has a population of 120 million people, with work force amounting to 56 million people. Ethiopia’s GDP per capita is around 1.000 USD, the number will keeps increasing since Ethiopia manage to maintain its economic growth at 8,8% on average for the past 20 years. Ethiopian people is working hard to transform its country from focusing on agricultural sector into the service and industry sector. With these potentials, Ethiopia has transformed into one of Africa’s economic power house. Ethiopia is also the biggest hub for air transport in sub-Saharan Africa, with its Ethiopian Airlines connecting more than 50 major cities all over the continent.

For many years, trading between Indonesia and Ethiopia has been stagnant. With the ongoing development in Ethiopia, Indonesia will lost a tremendous opportunity to at least double the current export value if we do not start refocusing our trade now.

There are some challenges if we want to export into Ethiopia, for example Ethiopia’s position as a landlocked country, Ethiopia’s shortage of foreign currency, existing tariff barriers for Indonesian commodities, and minimum knowledges/interests among our traders about doing business with Ethiopia. While it is not easy to trade with Ethiopia, our ASEAN fellow namely Singapore and Malaysia have proven that it is possible to gain significant profit. There were times when their trade balance surpassed Indonesia’s.

Through this writing, Author offers six policy options for Indonesian government to boost Indonesia’s export into Ethiopia i.e. refocusing on commodities that has a high value/price in the market, utilizing Djibouti Free Zone to minimize logistic and transportation cost from Djibouti to Ethiopia, eliminating tariff barrier by making a Preferential Trade Agreement with Ethiopia, actively promote and persuade national players to do business with Ethiopia, cooperating with third country to develop a project in Ethiopia, and promoting INA-Access, a digital platform for the business people to interact.

Author believes that to tackle some of the challenges, Kemlu and KBRI Addis Ababa should work together to explore the policy options offered. By exploring and realizing these policy, we could see a significant change in Indonesia’s export value to Ethiopia.

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Ketersediaan

2023-0021

Sesdilu 74-2023

Training Materials Repository

Tersedia

Informasi Detail

Judul Seri

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No. Panggil

Sesdilu 74-2023

Penerbit

Jakarta : Kementerian Luar Negeri., 2023

Deskripsi Fisik

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Bahasa

English

ISBN/ISSN

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Klasifikasi

NONE

Tipe Isi

text

Tipe Media

computer

Tipe Pembawa

online resource

Edisi

-

Subjek

-

Info Detail Spesifik

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Pernyataan Tanggungjawab

UPT Sekolah Staf Dinas Luar Negeri

Versi lain/terkait

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