The Role of Terms of Trade in Turkey and Indonesia`s Exit from the Middle Income Trap

Authors : Sezin Dargınoğlu, Cemal Erdem Hepaktan

Pages : 182-223

Doi:10.61127/idusos.1786252

View : 38 | Download : 194

Publication Date : 2025-12-31

Article Type : Research Paper

Abstract :This study comparatively examines the foreign trade terms performance of Turkey and Indonesia over the period 2003–2023 and evaluates the impact of this performance on economic development. Analyses based on indicators such as the net terms of trade (NTT), income terms of trade (ITT), and advanced pure terms of trade (APTT) show that Turkey, with its industry- and semifinished goods-focused structure, has increased its export volume; however, its dependence on imports has put downward pressure on its terms of trade. Indonesia, on the other hand, is more vulnerable to external shocks because of its commodity-oriented export composition, and its terms of trade are strongly affected by global price fluctuations. Both countries should improve their terms of trade by restructuring industrial policies and shifting toward high value-added sectors in exports to overcome the middle-income trap. The study highlights that terms of trade are a fundamental component not only of foreign trade but also of development policies.
Keywords : Dış ticaret hadleri, Türkiye, Endonezya, Orta gelir tuzağı, Gelir ticaret hadleri

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