Indonesia Trade Pattern

First of all, I’m going to explain about H-O (Heckscher-Ohlin) theory. According to http://www.nobelprize.org/educational/economic-sciences/trade/ohlin.html, H-O theory explains the trading reasons between countries, this theory assume that every country has its specialization. For example, country A has many technologies, but few labors while country B has many labors, but few technologies. From here, they can exchange their needs by trading. The concept of H-O theory is the international trade could trigger economic growth.

Indonesia trade pattern which uses the H-O theory is likely related to investments. The country use its national wealth as investments to foreigners (other countries), such as lands, capitals and labors. For example, Indonesia makes its labors as an investment to foreigners, such as US.

I will pick the Indonesian textile industry to be analysed. The Indonesian textile industry is definitely competitive in international trade, though the Indonesian people will feel more prestige if they bought any foreign-branded. Take a look at The Executive, Buccheri, Terry Palmer, Edward Forrer, Peter Says Denim, Bagteria and (X)S.M.L. Those brands are kind of familiar to us, right? All of the brands I have written are made in Indonesia and originally from Indonesia. Feel surprised? Don’t be.

Here is the product life cycle that I got from http://www.dineshbakshi.com/images/product%20life%20cycle.jpg, every product will pass every stage in case of trading.

Athilla Meidictine Johanita

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