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The Impact of International Trade Liberalization on Oil and Gas Management Policies in Developing Countries: A Case Study of Indonesia

Abstract

This study aims to analyze the impact of international trade liberalization on oil and gas management policies in developing countries, with a focus on Indonesia as a case study. As a country rich in natural resources, Indonesia faces challenges in maintaining sovereignty over the management of its national oil and gas industry amidst commitments to international trade agreements such as GATT/WTO. Through a qualitative approach and analysis of international agreement documents, national regulations, and oil and gas industry data, this study finds a significant influence of trade liberalization principles on oil and gas management policies in Indonesia.

The results show that Indonesia's commitments in WTO agreements, such as the National Treatment principle and the prohibition of quantitative restrictions, have limited the government's policy space in regulating foreign participation, implementing local content requirements, and controlling prices in the oil and gas sector. Although Indonesia has undertaken reforms to comply with WTO rules, such as through the Oil and Gas Law No. 22 of 2001, there are still efforts to safeguard national interests, such as the role of Pertamina and state control over oil and gas resources. This study concludes that careful strategies are needed for Indonesia and other developing countries to balance commitments to trade liberalization with the protection of national interests and sovereignty over natural resources. This research contributes to the discussion on the impact of economic globalization on developing countries and highlights the importance of adequate policy space for the management of strategic resources such as oil and gas.

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