The Impact of Tourism Toward International Trade

Abstract

The implementation of ASEAN Economic Community (AEC) at the beginning of 2016 has become the big challenges for the labor market in Indonesia. However, AEC can be seen as an opportunity for those who have the readiness to face this greater openness. The government assess that workers in tourism sector was the most prepared sector to face this economic issue in terms of quality and quantity. It implies that tourism has become the locomotive of Indonesia economic growth. This potential has appeared because it is related indirectly or directly with various sectors of industry. Tourism sector has been proven contributed to foreign exchange of the state, develop the private sectors, improve the performance of infrastructure sector, and create job opportunities. In addition, the tourism sectors are also able to increase international trade of Indonesia. Nevertheless, the government must pay attention to the linkage between tourism sectors with international trade. Hence, this study attempts to see how tourism sectors influence Indonesian exports and imports. The theory will base the research. By focusing on the theory the comparative excellences and Heckscher-Ohlin, the analysis will be aimed to see the correlation between tourism and international trade. In the analysis the researcher will be use Error Correction Model (ECM) in order to know how the correlation happened both in short term as well as in the long term and how correction fluctuations can be carried on.