Why Trends of Protection Changed Over Time in Indonesia?

The 1980s witnessed a declining trend of trade protectionism in many countries in the world, including Indonesia. In contrast to the argument that protectionism is likely to be strongest when a countrys economic position is weak, major trade reforms in Indonesia took place after the mid-1980s economic crisis. This leads to the question: what factors determine the change of protectionism over time? Using Indonesia as a case study, this paper argues that trends of import protection were influenced by changes in real oil prices and real exchange rate.