benefits n misunderstanding WTO

There are ten benefits and misunderstandings of WTO trading system (www.wto.org). Ten benefits are (i) The system helps promote peace, (ii) Disputes are handled constructively, (iii) Rules make life easier for all, (iv) Freer trade cuts the costs of living, (v) It provides more choice of products and qualities, (vi) Trade raises incomes, (vii) Trade stimulates economic growth, (viii) The basic principles make life more efficient, (ix) Governments are shielded from lobbying, and (x) The system encourages good government.

In the other side, ten misunderstanding that is mean the costs of WTO are (i) The WTO dictates policy, (ii) The WTO is for free trade at any cost, (iii), Commercial interests take priority over development, (iv) over the environment, (v) over health and safety, (vi) The WTO destroys jobs, worsens poverty, (vii) Small countries are powerless in the WTO, (viii) The WTO is the tool of powerful lobbies, (ix) Weaker countries are forced to join the WTO, and (x) The WTO is undemocratic.


This agreement can not be implemented easily, especially for the developing countries. There are many difficulties and cost of WTO agreement implementation. The problem lies not only with the current negotiating process. The problem is more fundamental: the WTO’s structure, rules, and processes are systematically biased against the interests of developing countries.

Globalization: pros n cons

seperti Stiglitz baru-baru ini bilang,
saya tidak anti globalisasi, namun globalisasi perlu dimanage

Trade liberalization is a condition that we can keep away from. The world is becoming more globalized; there is no doubt about that. Globalization brings with it many new challenges, and in the field of world trade, the challenge of gaining market access in the new global economy calls for a consistent rethinking of strategy. Sometimes the discussion of trade liberalization is parallel with the emerging of regional trade block. If WTO is connected with globalization, trade block is related to regionalization phenomenon. There is no contradiction between trade regionalization and globalization. Global economy integration needs some new trade block establishment.

Even though globalization is a condition that can not be avoided, there are many pros and cons. There are many costs of trade liberalization and FTA, beside their advantages. The pros part thinks trade globalization and integration as a beneficial movement that can promote economic growth, development and poverty reduction. The resulting integration of the world economy has raised living standards around the world. Many developing countries have substantially increased their exports of manufactures and services relative to another condition before. Opening up their economies to the global economy has been essential in enabling many developing countries to develop competitive advantages in the manufacture of certain products. There is considerable evidence that more outward-oriented countries tend consistently to grow faster than ones that are inward-looking.

In the other side, the cons say that trade globalization and integration tend to make a new “oligopolies” and “monopolies” market. The greatest impact will be experienced by developing countries. For most developing countries, many negotiating that are dominated by industrialized countries have been marginalized their position in the economy. Globalization can make an adverse demand-side effect to Gross Domestic Product cause of import growth will be greater than export growth.

Some previous researches find out three costs of globalization and free trade area (FTA). First is trade diversification. FTA causes the trade or economic diverting from efficient non member economic to non efficient member economic. This condition occurs when trade barriers are removed that create a new cost, if the trade diverting is larger than trade creation, it will perform static welfare loss. This problem can be solved through (i) commodities are not perfect substitution, (ii) no trade diverting if non-member tariff is small enough, and (iii) if member trade barriers is quite small, cost and price should be similar with non-member countries. Second is decreasing tariff revenue for several countries. The import tax revenue will decrease when trade is diverted to the member country as a consequence of agreement. The last cost of FTA is adjustment cost. The adjustment cost is a short run cost. The cost arise cause of industries rationalization for efficiency and competitiveness.

best pratice ekonomi - bisakah?

Indikator-indikator ekonomi menunjukkan bahwa proses pemulihan ekonomi masih terus berlangsung. Kondisi ekonomi yang terjadi 10 tahun paska krisis sudah menunjukkan beberapa perbaikan, namun belumlah mampu berada pada titik yang terbaik. Lemahnya implementasi kebijakan ekonomi dan masalah-masalah ekonomi serta non ekonomi yang tidak terpecahkan memiliki andil atas lambatnya pemulihan ekonomi Indonesia. Hasil yang dicapai dalam perbaikan sektor finansial tidak diiiringi dengan pencapaian yang sama oleh sektor non finansial. Situasi industri dan investasi samapai saat ini masih memprihatinkan, sehingga terlihat jelas kesenjangan antara sektor riil dan sektor keuangan. Stabilitas ekonomi Indonesia pun tampaknya belum menunjukkan kondisi yang relatif stabil terutama bila dilihat dari adanya aliran modal jangka pendek, “mini krisis” yang terjadi pada tahun 2005, sektor industri yang stagnan, tidak dipercayanya sebagian LC Indonesia, modal asing masuk yang rendah dan indikator-indikator yang lain. Kondisi ini seolah-olah menggambarkan bahwa Indonesia terbang dengan satu mesin, yaitu mesin pasa keuangan, sedangkan mesin-mesin yang lain masih mati.

Bila dilihat dari sisi kebijakan yang telah diambil oleh pemerintah, tampak permasalahan utama adalah pada implementasi kebijakan. Masing sektor ekonomi di Indonesia memiliki tantangan yang berbeda. Misalnya sektor keuangan masih perlu melakukan penyelesian implementasi API, sektor industri dituntut memiliki kebijakan dan pola pembangunan industri yang sesuai dengan kemampuan masing-masing kluster, sektor fiskal masih ditantang dengan belum terselesaikannya masalah tax reform, sektor sosial masih perlu memikirkan pengentasan kemiskinan dan lain sebagainya. Namun di balik semua itu tantangan utama yang dihadapi oleh Indonesia, adalah penyiapan institusi, regulasi, infrastruktur dan sumber daya manusia yang mampu mendukung pelaksanaan reformasi secara utuh. Kebijakan yang dilakukan di Indonesia hampir seluruhnya merupakan “best practices” yang ada di dunia, padahal di sisi lain, secara institusi, infrastruktur dan sumber daya manusia, Indonesia belum sampai pada tahapan best practices. Kondisi ini harus dipecahkan melalui perbaikan-perbaikan institusional dan sumber daya manusia, agar kondisinya semakin mendekati kondisi ideal, sehingga pelaksanaan kebijakan dapat berjalan dengan optimal.

(tulisan ini merupakan draft sub bab buku 10 tahun paska krisis yang ditulis untuk PSAP UGM)