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How Not to Industrialise? Indonesia's Automotive Industry

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Author Info
Haryo Aswicahyono

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Abstract

This paper examines the development of the Indonesian automotive industry since 1970. After giving an overview of trends and a comparative East Asian assessment, we investigate ownership patterns, the political economy of intervention and key structural features of the industry. Output grew rapidly in the three decades to 1997; there was a significant increase in technological capacity; and some firms in the components and commercial vehicle sectors were approaching international efficiency. However, the highly interventionist policy regime has resulted in an inefficient industry characterised by "back-to-front” industrialisation, uneconomic production runs and minuscule exports. The industry's fundamental weaknesses were exposed by the crisis of 1997--99. Looking beyond the current difficulties, the future challenge will be to develop a globally efficient and integrated industry.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Bulletin of Indonesian Economic Studies.

Volume (Year): 36 (2000)
Issue (Month): 1 (April)
Pages: 209-241
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Handle: RePEc:taf:bindes:v:36:y:2000:i:1:p:209-241

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References listed on IDEAS
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  1. Robert Rice & Hal Hill, 1977. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 13(2), pages 1-28, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mitsuhiro Hayashi, 2003. "Development of SMEs in the Indonesian Economy," Departmental Working Papers 2003-01, Australian National University, Economics RSPAS. [Downloadable!]
  2. Doner, Richard F. & Noble, Gregory W. & Ravenhill, John, 2006. "Industrial competitiveness of the auto parts industries in four large Asian countries : the role of government policy in a challenging international environment," Policy Research Working Paper Series 4106, The World Bank. [Downloadable!]
  3. Dionisius Narjoko & Hal Hill, 2006. "Winners and Losers during a Deep Economic Crisis: Firm-level Evidence from Indonesian Manufacturing," Departmental Working Papers 2006-13, Australian National University, Economics RSPAS. [Downloadable!]
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  4. Michael T. Rock, 2003. "The Politics of Development Policy and Development Policy Reform in New Order Indonesia," William Davidson Institute Working Papers Series 2003-632, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  5. Haryo Aswicahyono & Dionisius Narjoko & Hal Hill, 2008. "Industrialization after a Deep Economic Crisis: Indonesia," Departmental Working Papers 2008-18, Australian National University, Economics RSPAS. [Downloadable!]
  6. Jojo Jacob & Christoph Meister, 2005. "Productivity gains, technology spillovers and trade: Indonesian manufacturing, 1980-96," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 41(1), pages 37-56, April. [Downloadable!] (restricted)
  7. William E. James & Eric D. Ramstetter, 2005. "Trade, Foreign Firms, and Economic Policy in Indonesian and Thai Manufacturing," Economics Study Area Working Papers 78, East-West Center, Economics Study Area. [Downloadable!]
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