Impact of Liberalization on Indonesian Food Security: An Error Correction Model Approach

Abstract

This study aims to examine the impact of trade liberalization in South East Asia on Indonesia's food security and to analyze the factor that determines food security in Indonesia. Error Correction Model (ECM) approach was used to analyze time-series data from 1980 to 2016. The result is trade liberalization that marked by the implementation of the AEC (ASEAN Economic Community), trade barriers elimination among ASEAN member countries, and trade openness affected food security in Indonesia in the short-run and long run. In the short run, food security was significantly influenced by rice availability, consumption growth, openness, rainfall, and AEC implementation. While, rice availability, rainfall, and AEC implementation was influenced by food security in Indonesia in the long run