A Constant Market Share Analysis of Indonesia’s Fishery Export

Despite its importance in global fishery production as the world’s second-largest producer, Indonesia is not one of the top ten fish exporting countries. This study uses constant market share analysis to examine Indonesia’s fishery export performance. The data was collected from the United Nations International Trade Statistics Database and covered Indonesia’s fishery exports from 1999 to 2019. Indonesian fishery products are classified using four-digit Harmonized System codes ranging from 0301 to 0308. Export growth is decomposed into four components: the global market, commodity compositions, market distributions, and competitiveness effects. The results indicate that the significant growth of the global fishery trade was the primary driver of Indonesia’s fishery exports during the period. Indonesia is directing a significant portion of its exports to the most dynamic destination markets, such as China and ASEAN countries. The commodity composition and competitiveness effects were negative and significant throughout the period. Indonesia’s integration into the global economy through structural adjustment programs, a liberalization strategy, WTO accession, and participation in several trade agreements, but these policies have had little impact on competitiveness. Indonesia’s share of the global fish trade has declined from 4.11 percent in 1999 to 2.75 percent in 2019. Over the last 20 years, Indonesia’s market share has gone down, which shows its lack of competitiveness.


INTRODUCTION
Fish production has increased to over 35 million tons in the last decade. Approximately 178.5 million tons of fish were produced in 2018, with marine capture contributing 96.4 million tons and 82.1 million from aquaculture (FAO, 2020). China dominates fish production from marine capture (15 %), Peru and Indonesia (8 percent), Russia (6 percent), and the United States (4 percent). Aquaculture production is concentrated in Asia, with China, India, Indonesia, Vietnam, and Bangladesh being the most prominent producers. There has been an increase in total fish production due to a growth in aquaculture. Among the fastest-growing contributors to global food production is aquaculture, which has seen its share rise from 38.2 percent in 2008 to 45.99 percent in 2018. Aquaculture will continue to play a significant role in fish production in the future, as capture fishery production typically declines due to IUU fishing, environmental degradation, and climate change (Davies et al., 2019;Sunoko & Huang, 2014). Increases in fish consumption are primarily connected to an increase in production. Fish consumption has increased by 1.5 percent per year since 1961, while meat consumption has increased by only 1.1 percent per year. Fish consumption has gone up worldwide because of many things, such as improvements in product processing technology, cold chain systems, shipping and distribution, and the rise in people's incomes around the world (FAO, 2020).
Globally, the amount of fish produced and consumed has increased due to globalization and liberalization policies in recent decades. Fish and other aquatic products are among the most widely traded agricultural commodities globally (Bellmann et al., 2016;Davies et al., 2019;Smith et al., 2010).
The industry produces a wide range of goods. In 2018, more than 220 countries and territories exported fishery products worth USD. 164 billion. This trade value accounts for 11 percent of total agricultural production value worldwide. (FAO, 2020). China exports the most (14 percent), followed by Norway (7 percent), Vietnam and Chile (5 percent), the United States and India (4 percent), and the Netherlands and Canada (3 percent). International trade in fish products is primarily from developing to developed countries due to the lower labour costs (Anderson & Martnez-Garmendia, 2003). Despite increased export contributions, developing countries face barriers to entry into global markets due to various factors, including internal structural issues. In addition to technical challenges and technological advancements, many developing countries lack adequate infrastructure and services. When the product's quality deteriorates, there are losses due to market access barriers. Furthermore, there are insufficient rules and institutions to manage fisheries sustainably (FAO, 2014).
Despite its significant role in global fishery production, Indonesia is not one of the top ten fish exporters. Fishery products could be a significant source of revenue for the country, with a sea area of 6.4 million square kilometres and a coastline of 108.000 kilometres. Marine fisheries are expected to produce 12.54 million tons per year. Indonesian waters are home to more than a third of the world's fish species, including tuna, shrimp, lobster, and reef fish. Aquaculture is estimated to occupy 17.91 million hectares, with a harvesting rate of only 2.7 percent (MMAF, 2020). Existing resource potential is underutilized because most fishing fleets and aquaculture operations are small and traditional.
The Indonesian government recognizes fisheries as having strategic value in terms of economic development and national sovereignty. The fishing industry creates jobs and produces high-quality goods, ensuring the nation's food supply and security. The Indonesian government launched three major fishery projects in the 2020-2024 National Mid-Term Development Plan. This includes IDR25 trillion for shrimp and milkfish centre pond revitalization, IDR30 trillion for internationalizing fishing ports and fish markets, and IDR35 trillion for bolstered business guarantees for 350 farmerfisherman cooperatives (IDR226.4 trillion). In Indonesia, there are three main goals for increasing fishery production: increasing output, increasing export value, and promoting GDP growth. Since fishing is done in a way that doesn't hurt the environment, about 80 percent of the caught fish are well within biologically safe limits.
The Ministry of Marine Affairs and Fisheries has various funding opportunities. It facilitates fishing communities by providing a shipping fleet, aquaculture facilities for fish farmers, insurance guarantees, assistance to improve the quality of export products, and research to boost productivity. The government collaborates with the banking sector and provides low-interest loans to fishers known as "People's Business Credit." Governments also use a strategy to demonstrate that they have improved a country's economy, even though it is unlikely to benefit the government's status and political power. From Susilo Bambang Yudhoyono's presidency to Joko Widodo's, they attempted to boost national competitiveness through various programs to turn the country into a magnet for foreign investment. Yudhoyono's administration, for example, launched Minapolitan to boost aquaculture production and distributed 1,000 Inkamina ships to fishers. Despite continued previous fleet distribution, Widodo's government put out ministerial rules to protect resources by banning transhipment, foreign fishing fleets, and unfriendly fishing gear.
Generally, a country's declining global export market share indicates poor export performance. This decline, however, does not always imply that the country is losing competitiveness on the global stage. Competitiveness is determined by various factors, including the commodity's composition, the market Table 1. Fishery products description. destination, and, most importantly, the overall state of international trade. Thus, a country cannot be declared uncompetitive on a global scale because its economy is resource-constrained and closed or because its exports face stagnant global demand or stagnant markets (Klasra & Fidan, 2005). Aisya et al. (2005) conducted a previous study using the same method with four fishery commodities based on the available literature. Suwarno et al. (2012), Hidayati et al. (2015), and Suhana et al. (2016), on the other hand, concentrated on tuna, which motivated this study to gain a better understanding of the current export performance of various fishery commodities. The primary objective of this paper is to examine Indonesia's fishery export performance. This objective is accomplished using constant market share analysis, which decomposes the export growth into four components. This result of the study may contribute to a better understanding of the structural factors affecting this performance and more effective policy decisions that direct exports toward the world's most dynamic markets and products. Due to data availability, the study will concentrate on the period from establishing the Ministry of Marine Affairs and Fisheries in 1999 to the end of Widodo's first term as president in 2019. Research methods, results and discussions, and conclusions and recommendations are detailed.

METHODS
The primary data for this study was collected from the United Nations International Trade Statistics Database (UN Comtrade). The study's data spans two decades, from 1999 to 2019. This period was chosen to assess the various governments' export performance. It covers from the start of the reformation (1999) to the end of President Joko Widodo's first term (2019). The countries are selected in two stages. First, Indonesia's sample period's exports to all countries are calculated . Thirty countries have been identified as potential markets for Indonesian fishery products. The top importers of global fishery products were the United States, Japan, the European Union, and China.
On the other hand, ASEAN was chosen because Indonesia is an ASEAN member, and intra-ASEAN trade is growing in 4-digit HS Code Description 0301 fish; live 0302 fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0300302 0303 fish; frozen, excluding fish fillets and other fish meat of heading 0304 0304 fish fillets and other fish meat (whether or not minced); fresh, chilled or frozen 0305 fish, dried, salted or in brine; smoked fish, whether or not cooked before or during the smoking process; flours, meals and pellets of fish, fit for human consumption 0306 crustaceans; in shell or not, live, fresh, chilled, frozen, dried, salted or in brine; smoked, cooked or not before or during smoking; in shell, steamed or boiled, whether or not chilled, frozen, dried, salted or in brine; edible flours, meals, pellets 0307 molluscs; whether in shell or not, live, fresh, chilled, frozen, dried, salted or in brine; smoked molluscs, whether in shell or not, cooked or not before or during the smoking process; flours, meals and pellets of molluscs, fit for human consumption 0308 aquatic invertebrates, other than crustaceans and molluscs; live, fresh, chilled, frozen, dried, salted or in brine, smoked, whether or not cooked before or during the smoking process; flours, meals, and pellets, fit for human consumption Source: DESA/UNSD, Unites Nations Comtrade Database, 2020. value due to the ASEAN Free Trade Agreement (AFTA). While additional countries such as Australia, South Korea, and Hong Kong were included in the regions sampled, so were India (South Asia), the United Arab Emirates (Middle East), Turkey, the United Kingdom, and the Russian Federation (Europe), Canada (North America), Brazil (South America), and South Africa (Africa). The fishery products of Indonesia are classified using four-digit Harmonized System (HS) codes ranging from 0301 to 0308 (Table 1). This study looks at Table 1 fishery products.
Constant market share analysis, a popular technique for analyzing export performance, is a statistical technique that allows for the ex-post examination of changes in a country's total exports or aggregate market share (Klasra & Fidan, 2005). Traditionally, export growth has been divided into four components: global growth, commodity composition, market distribution, and competitive effects. The world growth effect equals the increase in exports if a country maintains its share of total world exports. The commodity (market) effect accounts for any additional growth due to a country's export structure being dominated by commodities (importing region) with rapidly increasing demand. The growth associated with shifting export shares is due to the competitive effect (the residual) (Leamer & Stern, 1970). Table 2 provides descriptive statistics on Indonesian fishery exports over the period, including the mean and coefficients of variation. In terms of value, the export of molluscs (0307) showed more variability, followed by fish fillets and other fish meat (0304), frozen fish (0303), and live fish (0301). This indicates that those products' exports fluctuated more than others'.
The following is CMS accounting by Leamer & Stern (1970), with the notation definitions adapted for this study. Fishery products in the international market are divided into eight groups of commodities so that the notation i in this study represent eight groups of commodities under HS (i = 1 ... 8), and there are thirty-one export destinations: Japan, China,…. and the rest of the world (j = 1 ... 31).
V i . = value of Indonesia's exports of commodity i in period 1; V' i . = value of Indonesia's exports of commodity i in period 2; V. j = value of Indonesia's exports to country j in period 1; V'. j = value of Indonesia's exports to country j in period 2; V ij = value of Indonesia's exports of commodity i to country j in period 1; R = percentage increase in total world's fishery exports from period 1 to period 2; r i = percentage increase of the world's fishery exports of commodity i from period 1 to period 2; r ij = percentage increase of the world's fishery exports of commodity i to country j from period 1 to period 2.
The left side of the equation denotes the change in Indonesia's exports of fishery products. On the right side of the equation, the first term refers to the growth of global exports, which is considered the norm. The second term refers to the effect of commodity composition. Positive values indicate that Indonesia has a greater concentration of exports in highgrowth commodities. In contrast, negative values indicate that Indonesia has a greater concentration of exports in lowgrowth commodities. The third term expresses the effect of market distribution. Positive values indicate that Indonesia has concentrated its exports more on fast-growing markets, while negative values indicate that Indonesia has concentrated its exports on slow-growing markets. The residuals of the equation are used to calculate the competitiveness effect. The sign of differential residual components, whether positive or negative, indicates an increase or decrease in export competitiveness (Leamer & Stern, 1970;Klasra & Fidan, 2005).
Change in export value: Growth of the world exports:: Commodity composition effect: Market distribution effect: Residual or competitive effect:

Fish production in Indonesia
Indonesia's fishery production increased year after year between 1999 and 2019. While capture fisheries production tends to stagnate, aquaculture production continues to grow, reaching more than double the level of capture fisheries production in 2019. Capture fisheries dominated fish production at first. However, since 2010, aquaculture production has been the primary driver of Indonesian fishery production growth, fueled by seaweed commodities. Figure  1 shows the total production and share of Indonesian fisheries production from capture fisheries and aquaculture. Overall, Indonesian fishery production increased by 8.12 percent per year on average, while aquaculture production increased by 16.06 percent per year, while capture fisheries increased by only 2.98 percent. In 1999, Indonesian fishery production was only 4.89 million tons, but it more than doubled to 22.47 million tons in 2019. Marine aquaculture is the most significant contributor to aquaculture production, followed by brackish water and freshwater ponds.
Additionally, when compared to inland capture, marine capture continues to be the most significant contributor to capture fisheries. Indonesia's fisheries production is expected to increase in the future, in line with the target set by the Ministry of Marine Affairs and Fisheries. In 2024, fish production is expected to total 26.46 million tons, with 15.47 million tons of fish and 10.99 million tons of seaweed (MMAF, 2020).
In 2024, fish production is expected to total 26.46 million tons, with 15.47 million tons of fish and 10.99 million tons of seaweed (MMAF, 2020). Given the underutilization of fishery resources and the numerous potential barriers, the main objective is likely to be met. Numerous challenges for increasing fishery products have been incorporated into the Strategic Plan for Years 2020-2024 of the Ministry of Marine Affairs and Fisheries. These difficulties include the following: 1). The fishing fleet's productivity is not yet optimal due to its structure being dominated by small and traditional scales; 2). Aquaculture businesses are dominated by small-scale farmers, traditional technology, low productivity, decreased carrying capacity of water and the environment, climate change impacts, low added value, suboptimal land use, and high production costs. 3). Raw material availability is too volatile to support marine and fisheries industrialization. 4). Access to capital for business expansion is limited. 5). Regional infrastructure, such as fishing ports, seed centres, and salt ponds, is deficient, and 6). Ecosystem degradation, climate change, and extreme weather. Production of marine capture is concentrated in a few provinces. North Sumatra had the highest production in 2019, with 1.20 million tons, followed by Maluku, East Java, South Sulawesi, Riau Islands, North Maluku, Central Java, North Sulawesi, and Southeast Sulawesi. These provinces produce over 200.000 tons per year, accounting for 54.63% of total output. Port facilities such as the Oceanic Fishing Port, Archipelagic Fishery Port, and Coastal Fishing Port foster production from these provinces. The high proportion of fishing vessels more prominent than 100 GT also impacts. Five provinces produced more than one million tons of aquaculture in 2019. South Sulawesi, East Nusa Tenggara, and West Java are the primary producers, accounting for more than 58 percent of national production. Shrimp, milkfish, catfish, tilapia, carp, snapper, and grouper were among the fish produced. Fish consumption per capita has steadily increased nationally and globally over the last two decades as fish production has increased. The main drivers of rising consumption are population and income growth.

Indonesia's fishery export
An increase has not matched the increase in fish production over the last two decades in exports. Compared to other ASEAN countries, such as Vietnam and Thailand, whose export values have risen to become among the top ten fish exporters globally, Indonesia's exports of fishery products are more volatile. In 1999, Indonesia's fishery products were worth USD1.43 billion; by 2019, that figure had risen to USD3.07 billion. In terms of export commodity structure, shrimp (0306) remains the most significant contributor. However, its share of total exports has fallen from around 65 percent to around 44 percent. Fish fillets (0304) were the next most significant contributor, followed by molluscs (0307) and frozen fish products (0303). Table 3 shows the export value of each commodity from 1999 to 2019. Exports of fish fillets and molluscs increased significantly. Over a two-decade period, fish fillets increased from USD48.23 million to USD540.04 million, while molluscs increased from USD24.03 million to USD457.63 million.
While there has been an increase in value, Indonesia's share of the global fish trade has decreased from 4.11 percent in 1999 to only 2.75 percent (2019). Shrimp has experienced the most significant share decline, falling from 9.56 percent to 5.26 percent. Fresh fish, frozen fish, and dried fish all witnessed declines. On the other hand, the market share of molluscs increased significantly from 0.69 percent to 4.34 percent. The global fish trade has grown a lot over the last two decades. It has increased by more than 200 percent, reaching USD111.83 billion. The most traded commodities were shrimp, fish fillets, and frozen fish, valued at USD25.46 billion, USD23.87 billion, and USD22.75 billion. Over the last decade, the global export market for fishery products has shifted dramatically. Initially, the primary destinations for global fisheries exports were Japan and the United States. Nonetheless, in 2018, China surpassed Japan to become the world's second-largest importer after the United States and the world's largest exporter in terms of value. Along with these three markets, the European Union is the primary export destination for global fishery products. Figures  2 and 3 compare the countries to which Indonesian fishery products were exported between 1999 and 2019, and there are changes in export destination countries. In 1999, Japan was the most critical market for Indonesian fishery products. However, by 2019, The United States and China had surpassed Japan as Indonesia's most important trading partners for fishery products. The decline in exports to Japan was caused by the stagnation of the Japanese market and increased competition from neighbouring ASEAN countries such as Vietnam and Thailand, which were pursuing Japan as a primary destination.

Constant market share analysis
The comparison between Indonesia and world export performance during the entire period are summed in Table 4. Each sub-period of time is analyzed every two years (1999-2001,... 2017-2019). The analysis also covered the entire period . Global fishery export growth from 1999 to 2019 was 221.15%, while Indonesia's export growth was slightly less than the global average of 115.04 percent. According to sub-period data, global exports fell between The results of the CMS analysis for the entire period and the selected sub-period are summed up in Table 5. Based on the CMS analysis, world trade growth was the primary factor driving Indonesia's fishery export growth throughout  the observation period. The effect was significant, accounting for approximately 192.24 percent of the total. As previously stated, global fishery product exports have increased by more than 200 percent. The other positive contribution comes from market distribution, which is much less than the global trade effect of 20.48 percent. The commodity composition and competitiveness effects were negative and significant throughout the period, particularly the competitiveness effect, at around -85.97 percent. To demonstrate the utility of CMS analysis in analyzing export performance, Indonesia's proper competitive performance was computed and compared to the change in its aggregate market share during the period. The findings of this study confirm that world trade factors primarily determined the change in Indonesia's fishery export market and that Indonesia lacks competitiveness, as evidenced by its declining market share.
Increased world trade effects contributed positively to the growth of Indonesia's fishery exports in every subperiod except 2013-2015. During the sub-periods 1999-2001, 2001-2013, 2007-2009, and 2003  These results indicate that shrimp (0306) will continue to dominate exports of Indonesian fisheries goods. The government has sought to diversify its exports away from shrimp, as indicated by the diminishing share of shrimp exports.
In contrast, the export increase of other items was negligible, resulting in a market share fall. Besides shrimp, other highvalue fish products are fresh fish, frozen fish, and fish fillets. Compared to other commodities, the trade value of these three has increased the most rapidly. Neighbouring nations such as Vietnam and Thailand purchase raw materials from other nations, such as Indonesia, to assist their processing industries in achieving a balanced export commodity mix.
The market distribution effect is negative in the first to fourth sub-periods (1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007), in sub-period 6 (2011-2013), and sub-period 7 (2013-2015 Kong, Thailand, and Vietnam are the most dynamic markets. The pattern of specialization observed in Asian nations is strongly influenced by geographical proximity and other factors. In addition, the trade agreement between Indonesia and these nations has facilitated preferential trade relations. Enhanced global economic integration and the emergence of new economic powers in Asia, combined with sluggish or even stagnant growth in many developed nations, led to a realignment of economic activities and the rise of South-South trade (Fayaz & Ahmed, 2020). This indicates that Indonesia has focused a significant portion of its exports on the most dynamic markets.
The residual competitiveness effects are influenced by supply and demand. Consequently, these effects result from interactions between domestic forces that emerge due to increased global trade and Indonesia's trade policy. Consequently, these results may differ across sub-periods, and the sign and magnitude of competitive effects on export performance may also appear to vary in some instances.
The competitiveness effect had a positive sign in the fourth, seventh, and final subperiods but a negative in the other subperiods. The overall competitiveness effect was negative and relatively large, reflecting Indonesia's declining market share. In the most recent subperiod observation, the shift in export structure increased market share from 2.70 percent to 2.75 percent. During the subperiod 2017-2019, the competitiveness effect peaked at around 93.03 percent, contributing to the increase in market share. Compared to the performance of each government since the reform era, it is evident that the export competitiveness of Indonesia's fisheries has not changed significantly. This suggests that the various fisheries development programs implemented have not been successful. Early in the reform era, the competitiveness effect was negative, indicating a decline in market share. During the ten years of Yudhoyono's presidency, Indonesia's competitiveness was not sustained, as evidenced by the positive competitiveness effect occurring in only two subperiods: 2005-2007 and 2011-2013. As indicated by its growing market share over the most recent subperiod of observation, Indonesia was competitive at the end of the first term of Widodo's administration. This fluctuation in competitiveness suggests the government shift exports to dynamic markets, explore non-traditional markets, actively participate in bilateral, regional, and multilateral trade agreements, reduce exports of low-value products (raw materials), promote better service licenses; strengthen the fish logistics system, maximize productive capacity, and protect marine resources.

Conclusion
Indonesia's share of the global fish trade decreased from 4.11% in 1999 to 2.75% in 2019. According to the analysis, the increase in international fishery trade was the primary factor behind the growth of Indonesia's fishery exports during the observation period. The impact was significant, accounting for roughly 192.24% of the total. The commodity composition and competitiveness effects were negative and significant throughout the period, especially the competitiveness effect, approximately -85.97%. This study confirms that the rise of global trade was a significant factor in the change in Indonesia's fishery exports. For commodity composition, there is no