Global trade raised living standards for millions. New barriers are reversing the trend

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🗞️ Driving the news: In Indonesia and other emerging economies, the benefits of export-led development are waning as new trade barriers and intensifying competition — particularly from China — undermine once-thriving manufacturing sectors
• The Panamtex textile factory in Pekalongan, a symbol of rising living standards, has closed, reflecting a broader reversal that threatens millions of livelihoods and the global gains once attributed to trade liberalization

🔭 The context: Since the 1990s, global trade enabled developing nations to narrow the wealth gap by building export-driven industries
• Countries like Indonesia became key suppliers for Western markets, lifting rural populations into a growing middle class
• But in recent years, protectionist policies, shifting supply chains, and China’s manufacturing dominance have weakened that growth engine, leading to factory closures and job losses across Southeast Asia

🌍 Why it matters for the planet: The erosion of export-led industrialization raises concerns about equitable development and resilience in the face of global economic shifts
• As traditional trade pathways falter, countries may turn to more resource-intensive industries or deregulated domestic production, potentially increasing environmental pressure
• A weakened middle class in emerging economies also poses challenges to climate adaptation, social stability, and clean energy transitions

⏭️ What's next: Governments across Southeast Asia may need to reorient economic strategies—investing in upskilling, domestic markets, and sustainable industries — to avoid regression
• The shift also puts pressure on global trade frameworks to adapt more inclusively
• International financial institutions and trade partners will face growing calls to support transitions that balance competitiveness with climate and development goals

💬 One quote: “Factories started closing, and everything we built started to slip away,” said Tabi’in, a former textile worker in Pekalongan

📈 One stat: Indonesia’s textile exports fell by over 25% from 2021 to 2024, according to national trade data

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