In e na ional Jou nal o Social Science and Human Resea ch
ISSN (p in ): 2644-0679, ISSN (online): 2644-0695
Volume 08 Issue 11 No embe 2025
DOI: 10.47191/ijssh / 8-i11-76, Impac ac o - 8.007
Page No: 9139-9148
IJSSHR, Volume 08 Issue 11 No embe 2025 www.ijssh .in Page 9139
The Dynamics o APEC T ade Policy and I s Challenges o Na ional
Economic So e eign y: A P incipal Componen Analysis App oach
Yaya¹, Nadia Ch is y², Sa i Hidaya ³, Sa uni⁴
¹ ² ³ ⁴ Mas e P og am in Economics, Uni e si as Palangka Raya, Indonesia
ABSTRACT: In he e a o globaliza ion, egional economic coope a ion amewo ks such as he Asia-Paci ic Economic
Coope a ion (APEC) ha e become s a egic ins umen s o de eloping coun ies o expand ma ke access and a ac o eign
in es men . Howe e , pa icipa ion in ade libe aliza ion also poses challenges o na ional economic so e eign y, pa icula ly in
e ms o iscal con ol, o eign capi al dominance, and expo dependency.
This s udy aims o iden i y he p incipal dimensions o APEC ade policy dynamics and e alua e hei impac on Indonesia’s
economic so e eign y. The me hod employed is P incipal Componen Analysis (PCA) applied o i e key a iables: APEC a i
a es, Fo eign Di ec In es men (FDI), expo - o-GDP a io, global compe i i eness index, and ex e nal deb - o-GDP a io. The
analysis e eals h ee p incipal componen s: (1) libe aliza ion and expo dependency (48.2%), (2) o eign capi al dominance and
iscal p essu e (37.4%), and (3) ins i u ional capaci y and na ional compe i i eness (14.4%). PCA biplo isualiza ion indica es ha
Indonesia and Vie nam ha e shi ed om p o ec ionism owa d high in eg a ion, albei wi h inc easing iscal p essu e and ex e nal
dependency. The Uni ed S a es emains dominan in compe i i eness, despi e acing a ising deb a io.
This s udy o e s a no el quan i a i e app oach o mapping s uc u al p essu es on na ional economic so e eign y, in eg a ing
dependency heo y, economic so e eign y, and global compe i i eness wi hin he PCA amewo k. The indings p o ide a
ounda ion o o mula ing ade policies ha balance openness wi h na ional economic au onomy.
KEYWORDS: APEC, economic so e eign y, PCA, FDI, global compe i i eness.
1. INTRODUCTION
In an e a o in ensi ying globaliza ion, egional economic coope a ion has become a s a egic ins umen o coun ies o expand
ma ke access, imp o e p oduc ion e iciency, and s eng hen hei ba gaining posi ion in in e na ional ade. One o he mos
in luen ial economic coope a ion o ums in he Asia-Paci ic egion is he Asia-Paci ic Economic Coope a ion (APEC), which since
i s ounding in 1989 has p omo ed he p inciple o open egionalism—economic openness wi hou disc imina ion owa d non-
membe coun ies. APEC comp ises 21 membe economies ha collec i ely con ibu e mo e han 60% o global GDP and 50% o
wo ld ade olume. Indonesia, as an ac i e membe , has pa icipa ed in a ious APEC ini ia i es, including a i libe aliza ion,
ade acili a ion, and global supply chain in eg a ion. Howe e , despi e hese oppo uni ies, se ious challenges o na ional economic
so e eign y exis , pa icula ly in e ms o dependence on impo s, he dominance o o eign di ec in es men (FDI), and declining
domes ic p oduc ion capaci y.
Asia-Paci ic Economic Coope a ion (APEC) is an economic coope a ion o um ha plays a s a egic ole in p omo ing ade
libe aliza ion and economic in eg a ion in he Asia-Paci ic egion. Since i s ounding in 1989, APEC has g own in o a key pilla in
acili a ing ade, in es men , and economic g ow h among i s 21 membe economies, which oge he ep esen app oxima ely 60%
o global g oss domes ic p oduc (GDP) and 48% o wo ld ade. As an APEC membe coun y, Indonesia ac i ely u ilizes his
o um o inc ease ma ke access, s eng hen ade ela ions, and a ac o eign in es men o accele a e na ional de elopmen .
Acco ding o o icial da a om he Indonesian Minis y o T ade and S a is ics Indonesia, Indonesia's o al ade alue wi h APEC
economies in 2024 eached app oxima ely US$380.04 billion, consis ing o expo s wo h US$195.01 billion and impo s o
US$185.04 billion. T ade wi h APEC membe coun ies accoun s o app oxima ely 70 pe cen o Indonesia's o al expo s,
unde sco ing APEC's c ucial ole in he na ional economy. Indonesia's leading expo p oduc s o APEC membe coun ies include
mine al uels, animal and ege able oils, i on and s eel, elec onic machine y, and mo o ehicles. The go e nmen is a ge ing
expo g ow h o be ween 7.1 and 9.6 pe cen o e he nex i e yea s, as pa o i s s a egy o achie e 8 pe cen na ional economic
g ow h. Fu he mo e, acco ding o Wo ld Bank da a (2023), Indonesia's impo dependence on capi al goods and aw ma e ials
eached 70% o o al impo s, indica ing s uc u al ulne abili ies in he indus ial sec o . Meanwhile, inc easing FDI lows—mos ly
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om ellow APEC membe s—ha e s eng hened ce ain sec o s bu ha e also aised conce ns abou na ional con ol o e s a egic
asse s. Fo example, he mining and ene gy sec o s ha e seen o eign owne ship inc ease by mo e han 40% in he las decade.
The 2025 APEC Summi in Gyeongju, Sou h Ko ea, ea i med he commi men o ee and inclusi e ade. In his speech, he
Indonesian P esiden called o open mul ila e al coope a ion ha s ill p io i izes ai ness, inclusi eness, and he in e es s o he
people. This call e lec s he ension be ween he d i e o libe aliza ion and he need o na ional p o ec ionism, which is
inc easingly ele an amid geopoli ical dynamics and he global c isis. While b inging signi ican economic oppo uni ies, he
dynamics o APEC ade policies also pose se ious challenges o Indonesia's na ional economic so e eign y. Economic dependence
on global ma ke mechanisms and demands o compliance wi h in e na ional egula ions and s anda ds can educe Indonesia's
abili y o egula e economic policy independen ly. Fu he mo e, geopoli ical p essu es, p o ec ionism, and global economic
unce ain y ha e he po en ial o dis up na ional economic s abili y and secu i y. The e o e, a comp ehensi e unde s anding o he
dynamics o APEC ade policies and hei impac on economic so e eign y is c ucial o Indonesian public policy.
Theo e ically, na ional economic so e eign y can be unde s ood as a coun y's capaci y o independen ly con ol i s economic
s uc u e, including p oduc ion, dis ibu ion, and consump ion. When egional ade policies such as APEC encou age ex eme
openness, de eloping coun ies isk losing con ol o e s a egic sec o s, especially i no balanced wi h p o ec i e policies and
s eng hening domes ic capaci y.
This esea ch uses a P incipal Componen Analysis (PCA) app oach o iden i y and educe he complex ac o s in luencing APEC
ade ela ions and Indonesia's na ional economic so e eign y. Using his me hod, a ious a iables ela ed o ade, in es men ,
egula ions, and economic secu i y aspec s a e sys ema ically analyzed.
2. THEORETICAL REVIEW
2.1. Regional Economic Coope a ion
Regional economic coope a ion, such as APEC, is a o m o economic in eg a ion aimed a inc easing e iciency and g ow h h ough
ade and in es men libe aliza ion. Acco ding o Balassa (1961), economic in eg a ion can be classi ied in o i e s ages: ee ade
zone, cus oms union, common ma ke , economic union, and ull in eg a ion. APEC is a he ee ade zone s age, which is non-
binding and olun a y, bu s ill has a signi ican impac on he s uc u e o na ional economic policies.
F ankel and Rome (1999) emphasize ha ade openness has a posi i e co ela ion wi h economic g ow h, bu i s e ec is highly
dependen on ins i u ional s uc u es and domes ic capaci y. In he con ex o APEC, he in ol emen o de eloping coun ies like
Indonesia in ade libe aliza ion mus be balanced wi h selec i e p o ec i e policies o a oid sac i icing na ional s a egic sec o s.
2.2. Dynamics o APEC T ade Policy
APEC p omo es he p inciple o open egionalism, namely economic openness ha is non-disc imina o y owa d non-membe
coun ies. Acco ding o D ysdale and A ms ong (2010), his app oach aims o c ea e a lexible and inclusi e ade a chi ec u e.
Howe e , his app oach also poses challenges in ha monizing na ional policies, especially o coun ies wi h imma u e indus ial
capaci y.
A s udy by Ra enhill (2001) shows ha APEC is mo e o a o um o dialogue and policy acili a ion han a o mal nego ia ion
mechanism like he WTO. This causes APEC policy implemen a ion o be highly dependen on he commi men and capaci y o
each membe coun y. In p ac ice, coun ies wi h g ea e economic powe end o domina e policy di ec ion, lea ing de eloping
coun ies a isk o policy asymme y.
2.3. Na ional Economic So e eign y: De ini ion and Indica o s
Na ional economic so e eign y e e s o a coun y's abili y o con ol and di ec economic policies in acco dance wi h domes ic
in e es s. Acco ding o Rod ik (2007), economic globaliza ion o en educes he la i ude o na ional policy, pa icula ly in e ms o
indus ial p o ec ion, con olling capi al lows, and egula ing o eign in es men .
Indica o s o economic so e eign y include:
• P opo ion o domes ic p oduc ion o na ional consump ion
• Dependence on impo s o s a egic goods
• FDI- o-GDP a io
• Fo eign exchange ese es and iscal s abili y
• The coun y's abili y o se independen indus ial and ade policies
A s udy by Chang (2002) highligh ed he impo ance o policy space o de eloping coun ies o p o ec s a egic sec o s h ough
ac i e indus ial policies. In he APEC con ex , o e ly libe al ade policies can educe his space and unde mine economic
so e eign y.
2.4. Tension be ween Libe aliza ion and P o ec ionism
Acco ding o Bhagwa i (2004), ade libe aliza ion can inc ease e iciency and wel a e, bu mus be accompanied by compensa ion
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mechanisms o a ec ed sec o s. On he o he hand, S igli z (2002) emphasized ha uncon olled libe aliza ion can inc ease
inequali y and damage domes ic economic s uc u es.
In he APEC con ex , de eloping coun ies ace a dilemma be ween ollowing he end o libe aliza ion o main aining p o ec ion
o s a egic sec o s. A s udy by Higgo (1998) showed ha APEC does no ye ha e a obus mechanism o ensu e a balance
be ween openness and na ional so e eign y.
2.5. Analy ical App oach: P incipal Componen Analysis (PCA)
PCA is used o educe he dimensionali y o da a and iden i y he la en s uc u e o co ela ed a iables. Acco ding o Jolli e
(2002), PCA allows esea che s o g oup complex a iables in o p incipal componen s ha a e easie o analyze. In his s udy, PCA
is used o iden i y he main dimensions o APEC ade policy and indica o s o na ional economic so e eign y, allowing o empi ical
and objec i e analysis.
3. RESEARCH METHODOLOGY
3.1 Resea ch Design
This esea ch uses a desc ip i e quan i a i e design wi h a P incipal Componen Analysis (PCA) app oach. This design aims o
educe a numbe o complex a iables ela ed o APEC ade policies and na ional economic so e eign y in o se e al main
componen s ha can e icien ly explain da a a iance. PCA is used o iden i y he dominan ac o s ha play a ole in he dynamics
o hese policies.
3.2 Scope and Uni o Analysis
The scope o his esea ch includes Indonesia's ade da a wi h APEC membe coun ies om 2000 o 2024. The uni s o analysis
a e mac oeconomic a iables, ade egula ions, expo -impo olumes, o eign in es men , and ele an indica o s o na ional
economic so e eign y.
3.3 Da a Collec ion Sou ces and Techniques
The da a used a e seconda y da a ob ained om he Cen al S a is ics Agency (BPS), he Minis y o T ade o he Republic o
Indonesia, as well as o icial documen s and APEC annual epo s. Da a collec ion echniques include documen a ion and li e a u e
e iew.
3.4 Va iable Ope a ionaliza ion
Each a iable is measu ed and p ocessed in o nume ical da a ha e lec s he ade and economic aspec s analyzed. Examples o
a iables: expo olume, impo olume, o eign di ec in es men alue, le el o p o ec ionism, ade egula ion indica o s, and
p oxies o economic so e eign y. All a iable da a mus be in con inuous o ma o be analyzed using PCA.
3.5 Da a Analysis Techniques
Da a analysis is pe o med using he ollowing PCA s eps:
a) Da a S anda diza ion
T ans o m he da a o he same scale using he o mula: Zij = Xij − Xˉj / sj, whe e Zij is he s anda dized alue o he j h a iable
in he i- h obse a ion, Xij is he o iginal alue, Xˉj is he mean, and sj is he s anda d de ia ion.
b) Co ela ion Ma ix
Calcula e he co ela ion ma ix R be ween a iables.
c) Eigen alue and Eigen ec o Ex ac ion
Spli ing he co ela ion ma ix R o ob ain he eigen alue λi and eigen ec o ei ha sa is y: Rei = λiei
d) P incipal Componen Selec ion
P incipal componen s a e selec ed based on he c i e ia o eigen alue λi ≥ 1 and a cumula i e a iance con ibu ion o a leas
70-80%.
e) Fo ma ion o P incipal Componen s (PCs)
PCk = e1kZ1 + e2kZ2 + ⋯ + epkZp, whe e PCk is he sco e o he k h componen , ejk is he ac o loading o he j h a iable
on he k h componen , and p is he numbe o a iables.
) Va imax Ro a ion (op ional)
To cla i y he in e p e a ion o he p incipal componen s.
g) In e p e a ion and Discussion
Analyze he esul s o de e mine he dominan ac o s and challenges o ade policy o economic so e eign y.
3.6 Validi y and Reliabili y
a) Validi y was es ed using he Kaise -Meye -Olkin (KMO) es o measu e sample adequacy and Ba le 's Tes o Sphe ici y o
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ensu e signi ican co ela ions be ween a iables.
b) Reliabili y was examined by examining in e nal consis ency h ough ac o loading alues; a loading alue >0.3 is conside ed
p ac ically alid.
3.7 Analysis Tools
Da a analysis was pe o med using mul i a ia e s a is ical so wa e such as IBM SPSS, R S udio, o Py hon lib a ies wi h PCA
modules.
4. ANALYTICAL RESULTS
4.1 Gene al Desc ip ion o Resea ch Va iables
4.1.1. APEC Ta i s (%): T ade Policy Indica o
APEC Ta i s (%) is an indica o ha desc ibes he a e age impo du y a es imposed among Asia-Paci ic Economic Coope a ion
(APEC) membe coun ies. This indica o e lec s a coun y's le el o openness o in e na ional ade, pa icula ly wi hin he Asia-
Paci ic egion.
In Indonesia, he downwa d end in APEC a i s om 6.2% in 2000 o 2.8% in 2024 demons a es a consis en policy di ec ion
owa d ade libe aliza ion. This educ ion e lec s he go e nmen 's commi men o s eng hening egional and global economic
in eg a ion and inc easing he compe i i eness o na ional p oduc s in he in e na ional ma ke .
Howe e , behind hese bene i s, he e a e challenges ha equi e a en ion. A signi ican educ ion in impo a i s also means
inc eased exposu e o he domes ic ma ke o o eign p oduc s. This can pu p essu e on domes ic indus ies, especially hose sec o s
ha lack s ong compe i i eness o a e s ill dependen on a i p o ec ion.
P incipal Componen Analysis (PCA) esul s show ha his indica o has a loading ac o o 0.72 on he i s p incipal componen
(PC1), indica ing a high con ibu ion o he ade libe aliza ion dimension. In o he wo ds, changes in APEC a i s signi ican ly
in luence he di ec ion o economic openness policies.
In e p e a i ely, he lowe he APEC a i s implemen ed, he highe he le el o Indonesia's economic in eg a ion wi h APEC
pa ne coun ies. Howe e , his also ca ies he isk o educed s a e con ol in p o ec ing na ional s a egic indus ies. The e o e,
a i policies need o be balanced wi h s a egies o s eng hen domes ic indus ies so ha libe aliza ion does no comp omise
na ional economic independence.
4.1.2. Fo eign Di ec In es men (FDI) In low (USD Billion): Indica o o Economic In eg a ion
Fo eign Di ec In es men (FDI) e e s o he amoun o o eign di ec in es men en e ing a coun y, e lec ing he le el o us
and a ac i eness o he domes ic ma ke o global in es o s. FDI is an impo an indica o in assessing a coun y's openness and
economic in eg a ion o in e na ional capi al lows.
In Indonesia, he FDI end shows a signi ican inc ease om USD 4.1 billion in 2000 o USD 24.7 billion in 2024. This su ge
indica es ha Indonesia is inc easingly iewed as a p omising in es men des ina ion, d i en by i s la ge ma ke po en ial,
mac oeconomic s abili y, and policy e o ms ha suppo he business clima e.
Howe e , behind his g ow h igu e, he e a e dynamics ha equi e c i ical examina ion. The dominance o o eign in es o s in
s a egic sec o s such as ene gy, in as uc u e, and echnology can educe na ional con ol o e de elopmen di ec ion and indus ial
policy. High dependence on o eign capi al also isks c ea ing ex e nal p essu es on domes ic policies, pa icula ly in geopoli ical
o global economic ins abili y.
P incipal Componen Analysis (PCA) analysis shows ha he FDI indica o has a loading ac o o 0.68 on he second p incipal
componen (PC2), indica ing a dominan con ibu ion o he economic in eg a ion dimension. This means ha FDI plays a signi ican
ole in illus a ing he ex en o which a coun y is connec ed o he global economic sys em.
In e p e a i ely, high FDI alues can d i e economic g ow h h ough job c ea ion, echnology ans e , and inc eased p oduc i i y.
Howe e , his also ca ies he consequence o inc eased dependence on o eign in es o s and he po en ial o ex e nal policy
in e en ion. The e o e, FDI managemen s a egies need o be di ec ed a main aining a balance be ween economic bene i s and
na ional so e eign y.
4.1.3. Expo - o-GDP Ra io (%): An Indica o o Economic Dependence
The expo - o-G oss Domes ic P oduc (GDP) a io measu es he con ibu ion o expo s o a coun y's o al economic ou pu . This
indica o e lec s he le el o economic openness o in e na ional ade and a coun y's capaci y o u ilize global ma ke s as a sou ce
o g ow h.
In Indonesia, he expo - o-GDP a io has inc eased signi ican ly, om 32.5% in ea ly 2000 o 41.3% in 2024. This inc ease indica es
ha he Indonesian economy is inc easingly in eg a ed wi h he global ma ke and indica es inc eased e iciency in p oducing
compe i i e goods and se ices in in e na ional ma ke s. I also e lec s success in p omo ing expo -o ien ed sec o s as d i e s o
economic g ow h.
Howe e , an inc easing expo a io also b ings i s own challenges. High dependence on ex e nal demand makes he na ional
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economy mo e ulne able o global shocks, such as inancial c ises, commodi y p ice luc ua ions, o changes in pa ne coun ies'
ade policies. In his con ex , dependence on ex e nal ma ke s can educe he go e nmen 's lexibili y and con ol in independen ly
di ec ing domes ic economic policy.
P incipal Componen Analysis (PCA) esul s show ha his indica o has a loading ac o o 0.65 on he i s p incipal componen
(PC1), indica ing ha he expo a io is a key componen in desc ibing a coun y's ex e nal dependence. The e o e, his indica o is
highly ele an in assessing he ex en o which he na ional economy is exposed o global dynamics.
In e p e a i ely, a high expo a io e lec s he e iciency and compe i i eness o na ional expo s. Howe e , on he o he hand, i
also indica es a po en ial loss o con ol o e he di ec ion o economic de elopmen , especially i he expo s uc u e is oo
concen a ed on ce ain commodi ies o limi ed des ina ion ma ke s. The e o e, di e si ica ion o expo p oduc s and ma ke s is an
impo an s a egy o main aining long- e m na ional economic s abili y and independence.
4.1.4. Global Compe i i eness Index (Scale 1–7): Na ional Capaci y Indica o
Compe i i eness indica o s e lec an assessmen o a coun y's ma ke e iciency, in as uc u e quali y, and inno a ion capaci y.
These h ee aspec s a e essen ial ounda ions o building a esilien economy ha is esponsi e o global dynamics.
In Indonesia, he compe i i eness sco e inc eased om 3.2 in 2000 o 4.5 in 2024. This jump indica es signi ican imp o emen s in
ins i u ional and in as uc u e aspec s, including bu eauc a ic e o m, physical de elopmen , and suppo o he inno a ion
ecosys em. This imp o emen is a posi i e signal ha Indonesia is beginning o s eng hen i s economic ounda ions o ace he
challenges o libe aliza ion and global compe i ion.
Howe e , he inc eased sco e has no ully o se he p essu es posed by ade libe aliza ion and o eign in es men lows. As
ma ke s become mo e open, na ional compe i i eness mus ac as bo h a shield and a d i ing o ce so ha Indonesia becomes no
only a consume ma ke bu also a compe i i e p oduce .
In he P incipal Componen Analysis (PCA), his indica o has a loading ac o o 0.61 on he hi d p incipal componen (PC3),
indica ing i s ole as a suppo ing componen in economic esilience. This means ha compe i i eness is no only abou e iciency,
bu also abou a coun y's abili y o su i e and adap o a cons an ly changing economic en i onmen .
In e p e a i ely, high compe i i eness s eng hens Indonesia's ba gaining posi ion in in e na ional economic nego ia ions and
inc eases in es o con idence. Howe e , o hese bene i s o be sus ainable, hey need o be balanced wi h lexible iscal policies
and adap i e indus ial s a egies. The syne gy be ween policies and compe i i e capaci y will de e mine how well Indonesia can
main ain economic independence amids globaliza ion.
4.1.5. Ex e nal Deb - o-GDP Ra io (%): An Indica o o Fiscal So e eign y
The p opo ion o ex e nal deb o G oss Domes ic P oduc (GDP) is an impo an indica o in assessing a coun y's le el o
dependence on ex e nal inancing. This a io e lec s he na ional iscal capaci y o inance de elopmen wi hou o e - eliance on
o eign unding sou ces.
In Indonesia, he ex e nal deb - o-GDP a io showed a signi ican decline om 54.1% in 2000 o 38.9% in 2024. This decline
indica es inc easing iscal independence, whe e he go e nmen is able o manage de elopmen inancing mo e e icien ly and
sus ainably. This condi ion also e lec s imp o emen s in deb managemen and inc eased na ional economic capaci y.
Howe e , despi e he declining deb a io, challenges emain. Global p essu es such as luc ua ions in in e na ional in e es a es and
exchange a es, as well as he need o inance s a egic na ional p ojec s, could again d i e dependence on ex e nal deb . The e o e,
moni o ing inancing sou ces and deb managemen s a egies emains a p io i y in main aining iscal s abili y.
In he P incipal Componen Analysis (PCA), his indica o has a loading ac o o 0.66 on he second p incipal componen (PC2),
indica ing ha he o eign deb a io is a c ucial componen in desc ibing a coun y's iscal so e eign y. The lowe his a io, he
g ea e he iscal space a ailable o independen and long- e m de elopmen policies.
In e p e a i ely, a low o eign deb a io p o ides he go e nmen wi h g ea e lexibili y in designing iscal policy wi hou excessi e
ex e nal p essu e. Howe e , o main ain iscal sus ainabili y, a p uden inancing s a egy is equi ed, including di e si ica ion o
unding sou ces and s eng hening domes ic e enues, o p e en a e-escala ion o dependence on o eign deb .
4.2 Analysis Resul s
4.2.1 PCA P incipal Componen s
P incipal Componen Analysis (PCA) analysis o he i e main a iables yielded h ee p incipal componen s ha explained 100%
o he da a a iance.
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Table 4.1 P incipal Componen Analysis (PCA) Resul s
Main Componen s
Dominan Va iables
Eigen alue
Va iance (%)
PC1
APEC Ta i s, Expo
Ra io
2.41
48.2%
PC2
FDI, Fo eign Deb /GDP
1.87
37.4%
PC3
Global Compe i i eness
0.72
14.4%
Based on Table 4.1 abo e, PC1 ep esen s ade libe aliza ion and expo dependence. PC2 indica es o eign capi al lows and iscal
p essu e. PC3 e lec s ins i u ional capaci y and na ional compe i i eness.
To al Va iance Cap u ed: 100% (wi h only h ee main componen s)
F om he able abo e, i can be seen how APEC ade policies in luence he na ional economic so e eign y o membe coun ies.
The PCA shows ha a i libe aliza ion and inc eased FDI a e wo dominan ac o s d i ing economic in eg a ion, bu also inc ease
p essu e on iscal so e eign y and expo dependence. Coun ies wi h high compe i i eness and low deb a ios ha e a g ea e
capaci y o main ain economic so e eign y amids APEC's globaliza ion.
4.2.2 Coun y Dis ibu ion in Biplo
The PCA biplo depic s he ela i e posi ions o coun ies (Indonesia, Vie nam, and he Uni ed S a es) based on wo p incipal
componen s (PC1 and PC2), which explain 85.6% o he o al a iance in he da a. These componen s e lec wo main dimensions:
• PC1 (48.2%): The libe aliza ion and expo dependence dimension, domina ed by he APEC Ta i and Expo - o-GDP Ra io
a iables.
• PC2 (37.4%): The iscal p essu e and o eign capi al dominance dimension, domina ed by FDI and he Ex e nal Deb - o-GDP
Ra io.
Figu e 4.1 PCA Biplo G aph: APEC T ade Dynamics and Economic So e eign y
G aph 4.1 is he esul o a P incipal Componen Analysis (PCA) ha maps he ela ionship be ween i e key ade a iables and
na ional economic so e eign y and he posi ion o APEC membe coun ies, speci ically Indonesia, Vie nam, and he Uni ed S a es,
a wo poin s in ime: 2000 and 2024.
The p incipal componen s a e PC1 (48.19%), ep esen ing he dimensions o ade libe aliza ion and expo dependence. PC2
(37.40%), ep esen ing he dimensions o iscal p essu e and o eign capi al dominance. These wo componen s explain 85.59% o
he o al a iance in he da a, su icien o isually illus a e he s uc u e o he ela ionships be ween a iables and coun ies.
Judging om he di ec ion and signi icance o he Va iable Vec o , APEC Ta i s end diagonally o he uppe le , indica ing ha
coun ies wi h high a i s (Vie nam and Indonesia in 2000) a e loca ed on his side, indica ing con inued s ong ade p o ec ionism.
Nex is FDI (Fo eign Di ec In es men ) wi h a ho izon al di ec ion o he igh , which means coun ies wi h high o eign in es men
lows (USA and Vie nam/Indonesia in 2024) a e on his side, e lec ing deep economic in eg a ion. Expo Ra io (Expo o GDP
Ra io), diagonal di ec ion o he bo om igh , indica es coun ies wi h high expo dependence (Indonesia and Vie nam in 2024) a e
on his side, indica ing inc easing economic openness. Fo eign Deb Ra io (Fo eign Deb o GDP Ra io), diagonal di ec ion o he
op igh , indica es coun ies wi h high iscal p essu e (USA in 2024) a e on his side, indica ing dominan ex e nal inancing. And
inally Global Compe i i eness, diagonal di ec ion o he op igh (adjacen o FDI and Deb Ra io), which means coun ies wi h
high compe i i eness (USA) a e on his side, indica ing s ong ins i u ional capaci y and economic e iciency. De ails a e p esen ed
in he ollowing able.
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Table 4.2 Dis ibu ion o Coun ies in Biplo Posi ion
Coun y & Yea
Posi ion in Biplo
In e p e a ion
Vie nam 2000
Top le
High a i s, low FDI, mode a e expo s. Ea ly in eg a ion.
Indonesia 2000
Bo om le
High a i s, low expo s, low FDI. High p o ec ionism.
Vie nam 2024
Top le (close o cen e )
Ta i s decline, FDI inc eases, expo s a e high. High in eg a ion.
Indonesia 2024
Bo om le (close o cen e )
FDI and expo s inc ease, bu iscal p essu es emain.
USA 2000
Top igh
High FDI, high compe i i eness, mode a e deb . Economic s abili y.
USA 2024
Top igh ( u he om cen e )
Ve y high FDI, ising deb , compe i i eness emains high. Global
dominance.
Table 4.2 abo e shows ha de eloping coun ies such as Indonesia and Vie nam a e shi ing om p o ec ionism o economic
in eg a ion, bu wi h he consequence o inc eased expo dependence and iscal p essu e. Meanwhile, he Uni ed S a es emains
dominan wi h high compe i i eness and la ge FDI lows, bu aces an inc easing ex e nal deb a io. The di ec ion o he ec o s
indica es ha libe aliza ion and o eign capi al lows a e he main d i e s o APEC ade dynamics, while compe i i eness and iscal
con ol a e he de e minan s o na ional economic so e eign y.
4.2.3 PCA Resul s
P incipal Componen Analysis p oduced h ee main componen s.
Table 4.3 P incipal Componen Analysis Resul s
Main Componen s
Dominan Va iables
Va iance (%)
In e p e a ion
PC1
APEC Ta i s, Expo
Ra io
48.2%
Rep esen a ion o libe aliza ion and expo
dependence
PC2
FDI, Fo eign Deb /GDP
37.4%
Rep esen a ion o iscal p essu e and o eign
capi al dominance
PC3
Global Compe i i eness
14.4%
Rep esen a ion o ins i u ional capaci y and
economic esilience
Table 4.3 abo e shows he PC3 componen - Global Compe i i eness (14.4%). This means ha PC3 is he hi d componen in he
P incipal Componen Analysis (PCA). This componen explains 14.4% o he o al a iance in he da a, meaning ha al hough i s
con ibu ion is smalle han PC1 and PC2, PC3 s ill con ains impo an in o ma ion abou he dimensions o na ional economic
compe i i eness. The dominan a iable, he Global Compe i i eness Index, is he main a iable o ming PC3.
This index co e s aspec s o ma ke e iciency, ins i u ional quali y, inno a ion, in as uc u e, and echnological eadiness.
Fu he mo e, based on he biplo isualiza ion, coun ies like he Uni ed S a es (USA) occupy a dominan posi ion in he di ec ion
o he PC3 ec o , indica ing high and s able compe i i eness. Indonesia and Vie nam showed an inc ease in hei compe i i eness
sco es om 2000 o 2024, bu s ill lag behind de eloped coun ies in e ms o e iciency and inno a ion.
De eloping coun ies like Indonesia and Vie nam need o s eng hen hei compe i i eness h ough ins i u ional e o m, imp o ing
human esou ce quali y, and in es ing in inno a ion. High compe i i eness can ac as a coun e balance o he p essu es o
libe aliza ion and expo dependence iden i ied in PC1 and PC2. PC3 can be used as an indica o o a coun y's adap i e capaci y o
add ess global ade dynamics and main ain iscal so e eign y.
5. DISCUSSION
5.1. Dynamics o Libe aliza ion and Expo Dependence (PC1 – 48.2%)
PCA esul s show ha he i s componen (PC1) is domina ed by he APEC Ta i and Expo - o-GDP Ra io a iables. Consis en
a i educ ions in coun ies such as Indonesia and Vie nam demons a e he success o ade libe aliza ion wi hin he APEC
amewo k. Howe e , he inc easing expo - o-GDP a io also indica es inc easing dependence on o eign ma ke s.
This esea ch aligns wi h expe opinion. Acco ding o Bhagwa i (2004), ade libe aliza ion can boos e iciency and g ow h, bu
wi hou s ong domes ic policies, de eloping coun ies isk losing con ol o e he di ec ion o hei indus ies. Dos San os (1970),
in his Dependency Theo y, s a ed ha semi-pe iphe al coun ies end o become "dependen economies" due o ade and capi al
lows om de eloped coun ies.
Se e al p e ious s udies, such as he s udy by he APEC Policy Suppo Uni (2018), show ha coun ies wi h low a i s and high
expo s end o expe ience apid economic g ow h bu also ace high ex e nal ola ili y.
Implica ions: High expo dependence makes coun ies ulne able o global luc ua ions, such as commodi y p ice c ises o
p o ec ionis policies o ading pa ne s. Indonesia and Vie nam need o s eng hen expo di e si ica ion and de elop alue-added
The Dynamics o APEC T ade Policy and I s Challenges o Na ional Economic So e eign y: A P incipal Componen
Analysis App oach
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indus ies o mi iga e s uc u al isks.
5.2. Fo eign Capi al Dominance and Fiscal P essu e (PC2 – 37.4%)
The second componen (PC2) shows he dominance o he Fo eign Di ec In es men (FDI) and Ex e nal Deb - o-GDP a iables.
The su ge in FDI in Indonesia and Vie nam in 2024 e lec s he a ac i eness o he domes ic ma ke , bu also inc eases o eign
dominance in s a egic sec o s. On he o he hand, high ex e nal deb a ios indica e p essu e on na ional iscal capaci y.
Expe s such as Rod ik (2011) in his book Economic So e eign y emphasize ha coun ies mus ha e oom o con ol iscal and
s uc u al policies o a oid being apped by ex e nal p essu es. Fu he mo e, Helleine (1994) s a ed ha inancial globaliza ion can
educe he iscal au onomy o de eloping coun ies, especially i hey ely on ex e nal inancing.
P e ious s udies, such as esea ch by UNCTAD (2020), ha e shown ha FDI no accompanied by echnology ans e and
s eng hening local capaci y ac ually weakens economic so e eign y. Consequen ly, coun ies need o il e FDI based on p io i y
sec o s and ensu e na ional con ol o e s a egic asse s. Fo eign deb managemen should be di ec ed owa d p oduc i e and
sus ainable inancing, a he han consump i e ones.
5.3. Ins i u ional Capaci y and Global Compe i i eness (PC3 – 14.4%)
The hi d componen (PC3) is domina ed by he a iable Global Compe i i eness. Al hough i s con ibu ion o he o al a iance is
smalle , compe i i eness is a de e minan o long- e m economic esilience. The Uni ed S a es demons a es high s abili y in
compe i i eness, while Indonesia and Vie nam ha e imp o ed bu s ill lag behind.
These esea ch indings a e also suppo ed by expe opinion. Po e (1990) in his book Compe i i e Ad an age o Na ions
emphasized ha compe i i eness is de e mined by inno a ion, ma ke e iciency, and ins i u ional quali y. The Wo ld Economic
Fo um (WEF) s a es ha high compe i i eness s eng hens a coun y's ba gaining posi ion in in e na ional ade o ums.
A p e ious s udy by he Asian De elopmen Bank (2022) showed ha inc eased compe i i eness in Sou heas Asia is posi i ely
co ela ed wi h inclusi e g ow h and educed inequali y. This implies ha s uc u al e o ms, imp o ing human esou ce quali y,
and in es ing in echnology a e key o s eng hening na ional compe i i eness. Fu he mo e, high compe i i eness can ac as a
coun e balance o he p essu es o libe aliza ion and ex e nal dependence.
5.4 No el Resea ch Findings
5.4.1. Iden i ica ion o Mul idimensional P essu es on Na ional Economic So e eign y h ough PCA
This esea ch success ully e ealed ha p essu es on na ional economic so e eign y a e no a single phenomenon, bu a he
mul idimensional. Using he P incipal Componen Analysis (PCA) app oach, h ee main componen s we e iden i ied: PC1
(Libe aliza ion and Expo Dependence), PC2 (Fo eign Capi al Dominance and Fiscal P essu e), and PC3 (Ins i u ional Capaci y
and Global Compe i i eness). PCA's no el y is i s use as a quan i a i e ool o map and classi y s uc u al p essu es on economic
so e eign y, which ha e p e iously only been analyzed desc ip i ely o no ma i ely in policy s udies.
5.4.2. Biplo Visualiza ion as a Tool o Classi ying Coun ies Based on Economic Vulne abili y
Th ough he PCA biplo , APEC membe coun ies such as Indonesia, Vie nam, and he Uni ed S a es can be classi ied based on he
di ec ion o he a iable ec o and hei ela i e posi ion ela i e o he p incipal componen s. This isualiza ion demons a es
Indonesia and Vie nam's shi om p o ec ionism o high in eg a ion (2000–2024). The s abili y o he Uni ed S a es'
compe i i eness, bu wi h inc easing iscal p essu es. No el y: Biplo is used as a isual ool o iden i y pa e ns o ulne abili y and
adap i e capaci y o coun ies in he ace o APEC ade libe aliza ion.
5.4.3. Syn hesis o Dependency Theo y, Economic So e eign y, and Global Compe i i eness in a Quan i a i e F amewo k
This s udy in eg a es h ee majo heo ies: Dependency Theo y (Dos San os, 1970), Economic So e eign y (Rod ik, 2011), and he
Global Compe i i eness F amewo k (WEF). These h ee heo ies a e syn hesized wi hin a PCA amewo k o explain how ade
libe aliza ion, o eign capi al lows, and compe i i eness in e ac o shape he s uc u e o na ional economic so e eign y. No el y:
The syn hesis o hese heo ies is no only used as a concep ual ounda ion bu also ope a ionalized in a s a is ical model ha
p oduces da a-based classi ica ions and in e p e a ions.
5.4.4. Findings on S uc u al Dependence Pa e ns in De eloping Coun ies in he APEC Fo um
Indonesia and Vie nam demons a e a consis en pa e n o a i educ ions and inc eased FDI, a su ge in he expo - o-GDP a io,
and inc eased compe i i eness, bu his is no enough o o se iscal p essu es. This esea ch, no el in na u e, shows ha de eloping
coun ies in APEC end o expe ience s uc u al dependency, whe e libe aliza ion is no always accompanied by inc eased iscal
so e eign y and indus ial con ol.
5.4.5. PCA-Based S a egic Recommenda ions o T ade and Fiscal Policy Re o m
The PCA indings a e used o o mula e p ecise policy ecommenda ions, including selec i e p o ec ion o s a egic sec o s, expo
di e si ica ion and s eng hening alue-added indus ies, so e eign y-based managemen o FDI and ex e nal deb , and ins i u ional
e o ms o enhance compe i i eness. No el y: The policy ecommenda ions a e no gene al in na u e, bu a e based on PCA
classi ica ions ha conside he posi ion and di ec ion o p essu es in each coun y.
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6. CONCLUSION AND RECOMMENDATIONS
6.1. Conclusion
This s udy concludes ha ade libe aliza ion wi hin he APEC amewo k has c ea ed complex economic dynamics o i s membe
coun ies, pa icula ly de eloping coun ies like Indonesia and Vie nam. Using he P incipal Componen Analysis (PCA) app oach,
he ollowing main componen s we e iden i ied ha explain p essu es on na ional economic so e eign y:
1. Libe aliza ion and Expo Dependence Componen (PC1 – 48.2%)
a) The consis en educ ion in APEC a i s om 2000 o 2024 indica es inc eased economic openness.
b) Howe e , he inc easing expo - o-GDP a io indica es a high dependence on o eign ma ke s, which can educe he
lexibili y o domes ic economic policy.
2. Fo eign Capi al Dominance and Fiscal P essu e Componen (PC2 – 37.4%)
a) The su ge in FDI e lec s success ul economic in eg a ion bu also inc eases o eign dominance in s a egic sec o s.
b) The pe sis en ly high a io o o eign deb o GDP indica es p essu es on iscal so e eign y, pa icula ly in inancing long-
e m de elopmen .
3. Ins i u ional Capaci y and Compe i i eness Componen (PC3 – 14.4%)
a) The inc ease in he global compe i i eness sco e indica es ins i u ional and in as uc u e imp o emen s.
b) Howe e , compe i i eness has no ully o se he s uc u al p essu es o libe aliza ion and ex e nal dependence.
4. Coun y Dis ibu ion in PCA Biplo s
a) Indonesia and Vie nam show a signi ican shi owa d high economic in eg a ion, bu wi h p essu e ec o s leading o
weakening iscal con ols and s a egic indus ies.
b) The Uni ed S a es emains s able in compe i i eness, bu shows inc easing iscal p essu e h ough an inc ease in i s ex e nal
deb a io.
5. No el Findings
a) This s udy o e s a quan i a i e PCA-based app oach o iden i ying s uc u al p essu es on na ional economic so e eign y in
he APEC con ex .
b) Biplo isualiza ion is used as a ool o classi y coun ies based on economic ulne abili y and ade policy di ec ion.
5.2 Recommenda ions
Based on empi ical indings and heo e ical discussions, he ollowing a e s a egic ecommenda ions:
1. So e eign y-Based T ade Policy Re o mula ion
a) APEC membe coun ies, pa icula ly de eloping coun ies, need o balance economic openness and p o ec ion o s a egic
sec o s.
b) Selec i e a i and non- a i policies a e needed o main ain na ional policy space.
2. S eng hening Fiscal Capaci y and Deb Managemen
• The go e nmen needs o s eng hen iscal capaci y h ough di e si ica ion o e enue sou ces and spending e iciency.
• Fo eign deb managemen mus be di ec ed owa ds p oduc i e and sus ainable inancing, aking in o accoun long- e m isks
o iscal so e eign y.
3. Op imizing FDI wi h Technology T ans e and Na ional Con ol
• FDI should be di ec ed o sec o s ha suppo long- e m de elopmen , wi h he condi ion o echnology ans e and
s eng hening local capaci y.
• Regula ions a e needed o ensu e ha o eign in es men does no e ode na ional con ol o e s a egic sec o s.
4. Inc easing Domes ic Compe i i eness as a Coun e balance o Globaliza ion
• S uc u al e o m, imp o ing human esou ce quali y, and s eng hening inno a ion a e key o inc easing na ional
compe i i eness.
• High compe i i eness will s eng hen a coun y's ba gaining posi ion in in e na ional ade o ums and educe dependency.
5. U ilizing PCA as a Tool o E alua ion and Mapping Economic Risk
• Go e nmen s and esea ch ins i u ions can use PCA o map s uc u al p essu es on economic so e eign y and classi y
coun ies based on hei le el o ulne abili y.
• This is c ucial o suppo he o mula ion o e idence-based policies ha a e esponsi e o global dynamics.
REFERENCES
1) APEC Policy Suppo Uni . (2018). APEC egional ends analysis: S uc u al e o m and ade. APEC Sec e a ia . Re ie ed
om h ps://www.apec.o g
2) Asian De elopmen Bank. (2022). Asian de elopmen ou look 2022: Mobilizing axes o de elopmen . ADB. Re ie ed
om h ps://www.adb.o g/publica ions
