The Purpose of Interregional Trade—Some of us may still be confused about the purpose of interregional trade, but do you know why interregional trade exists? The answer is simple: every region in Indonesia depends on other regions.
For example, in Jepara, leather crafts are shipped to various regions, or in Bantul, there is limestone that is shipped to regions that need it—that’s the general idea. Regions cannot meet their own needs on their own.
In this context, inter-regional trade serves specific purposes. What are they? Check out the explanation below:
Purposes of Interregional Trade
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Making a Profit
Whenever a sale and purchase transaction takes place, there is inevitably a profit involved. This profit is derived from the difference between the purchase price and the selling price. If the goods are produced locally, the profit comes from the difference between the selling price and the production cost.
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Expanding Market Reach
Market reach is not limited to the region itself but can extend to many other regions due to the process of shipping.
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Creating Jobs
With the expansion of trade reach and the potential for increased demand, a production facility will inevitably need to increase its workforce to meet all these needs. The hope is that productivity levels will be supported by adequate human resources so that the goods produced can better satisfy customer needs.
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Serving as a Means of Consumer Satisfaction
Fulfilled needs bring satisfaction and peace of mind to consumers. Therefore, trade can serve as a means of satisfying consumers by allowing them to access resources not from their own region but from other regions.
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Fostering Interregional Cooperation
The broader the scope of interregional trade in products, the stronger the relationships built between communities on one island and another. Beyond economic benefits, interregional trade can also have positive social impacts—even more so when compared to the benefits of international trade. It fosters interaction among people from different cultural backgrounds and promotes mutual respect.
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Improving Community Prosperity
As people’s needs are met through inter-regional trade, the people become prosperous. This is essential given the vast size of Indonesia, and the equitable distribution of resources must align with the principles of Pancasila.