Indonesia and its Countertrade Transactions

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Indonesia is one of the most active countries when it comes to counter-trading in the global market. The country has been an active participant in the countertrade market since the 1970s, when the global oil crisis led to economic recessions that hit developing countries hard due to their low access to foreign exchange and dwindling forex reserves (Rahmawati & Saputri, 2019). The need to conserve these reserves compelled the country to devise new ways of buying its imports without losing precious dollars essential for oil purchases and debt servicing.
In the global market, oil purchases often happen under strict cash terms, leading to dollar exchanges between buyers and sellers or importers and exporters (Onukwugha, 2019). Consequently, developing countries often experience massive cash outflows even as they earn foreign exchange from raw material exports. The additional pressures that come with debt servicing leave them often on the brink of bankruptcy before acquiring other essentials such as food and medicine, which is frequently in abundanc...