In depicting the dynamics of the global economy, the term ‘cross border’ emerges as a key element reflecting activities that transcend national boundaries. Specifically, in the context of trade, this concept encompasses all forms of economic interactions occurring across the borders of nations, ranging from imports and exports to cross-border investments. In this article, we will delve into the detailed meaning of cross border and its significant impact on the Indonesian economy.
Definition of Cross Border
“Cross border” refers to any form of economic activity or business transaction that takes place across national borders. In the context of international trade, this term encompasses the import and export of goods or services between two or more countries. In other words, an economic activity or business is considered cross border if it involves more than one country in the process.
Impact of Cross Border on Indonesia
- Broader Global Access: One positive impact of cross border activities is the expanded opportunity for global market access for local Indonesian products. Through import and export activities, Indonesian products can penetrate international markets, creating larger opportunities for expansion.
- Benefits for Foreign Traders: Cross border activities provide significant advantages for foreign traders looking to enter the Indonesian market. By bringing their products or services to Indonesia, foreign traders can reach local consumers, expand market share, and foster healthy competition dynamics.
- Lack of Tax Contribution: Despite its benefits, the negative impact of cross border activities can be found in the lack of tax contributions from foreign traders. If they do not pay taxes proportionally, this can adversely affect the country’s revenue, resulting in an imbalance in resources for development and public services.
- Challenges for Local Products: Competition with foreign products can pose a challenge for local products, especially if foreign products offer more competitive prices or have specific attractions. Local products need to innovate and enhance their quality to remain competitive in the domestic market.
In facing the dynamics of its activities, Indonesia must carefully consider how to optimize its benefits. While opening doors to global access and providing advantages for foreign traders, challenges related to tax contributions and the competitiveness of local products need to be addressed. The government and business stakeholders in Indonesia play a crucial role in managing these dynamics wisely to ensure that the benefits of cross border activities are enjoyed in a balanced manner by all involved parties. Through strategic measures, Indonesia can formulate policies that support sustainable economic growth and the well-being of its society in an increasingly complex global trade era.