Trade Reform in Indonesia, 1987–95

This paper quantifies Indonesian trade liberalisation between 1987 and 1995 as measured by changes in real effective rates of protection (RERP), i e effective rates of protection corrected for trade policy-induced changes in wages. The RERP for manufacturing, including oil refining, fell from 27% in 1987 to 11% in 1995, for manufacturing, excluding oil refining, the fall was from 59% to 16%, and for agriculture from 9% to 4% The standard deviation of RERPs for all tradeable sectors fell from 42 percentage points to 26; and for manufacturing, excluding oil refining, from 102 percentage points to 39.