Navigating Sustainability and Open Trade: A Deep Dive into Indonesia's Case

Abstract: This study confronts the global urgency of sustainability challenges by evaluating the relationship between international trade and sustainable development, with a specific focus on Indonesia. As a nation deeply entangled with environmental issues and heavily dependent on natural resources, Indonesia's sustainability path under the influence of international trade is a subject of crucial importance. From 1981 to 2019, this thesis investigates the relationship between trade openness and sustainable development, employing genuine savings as an indicator of sustainable development. The results highlight a noteworthy negative relationship between trade openness and genuine savings in both the short and long run. This relationship compels a reevaluation of the traditionally perceived benefits of trade, underlining potential environmental drawbacks associated with resource-intense exports.