Determinants of Indonesian Gold Export to Singapore in 2006-2017

Abstract

—In Southeast Asia, Indonesia is the highest gold producer, in which Singapore has become the main destination for Indonesian gold exports since 2014. The volume of Indonesian gold exports to Singapore increased eightfold compared to 2013. At the same period, Singapore, which is not a gold producer is one of the top 10 countries with the highest gold export value in the world, while Indonesia's position is left behind Singapore. This study aims to analyze the variables that affect the volume of Indonesian gold exports to Singapore in 2006-2017. The analytical method used in this research is Autoregressive Distributed Lags (ARDL). The results showed that in the short term, there were significant effects of gold export volume a quarter prior, Indonesian gold production a year prior, Singapore’s investments a year prior, and exchange rate. In the long term, the exchange rate and gold production were significantly affected by the gold export volume. The policy recommendation is government support in stimulating the establishment of national gold refining and manufacturing industry to increase profits by exporting value-added products through infrastructure and high technology support. The government should encourage the refining and gold manufacturing industries by implementing the Good and Service Tax elimination.