Economic Cooperation in Natural Rubber: The Impacts on Natural Rubber's World Supply and Indonesia's Economy

In 1999, the International Natural Rubber Agreement (INRA) which had regulated the world’s natural rubber since 1979 collapsed. This paper analyzed the impacts of this international agreement on both the global trade and supply of natural rubber as well as on Indonesia, a major producer of rubber. This study adopted two approaches in its assessment: (1) the Cournot-Nash Equilibrium, which analyzes the "external effects" or the global market conditions for natural rubber before and after the collapse of INRA; and (2) the Input-Output Table Simulation on rubber products, which assesses the "internal effects" or the economic conditions in Indonesia before and after the collapse of INRA.