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Labour-Intensive Industrialisation in Indonesia, 1930-1975: Output Trends and Government Policies

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  • Pierre van der Eng

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Abstract

Growth of industrial output for domestic consumption during 1930-75 was significant, but not continuous; growth (1932-41) was followed by decline (1942-46), recovery (1947-57), stagnation (1958-65) and acceleration (1966-75). Protective trade policies triggered growth in the 1930s, when industry policy favoured a balanced development of capital-intensive large and medium-sized ventures and labour-intensive small firms and firms in light industries. The gist of this policy continued during the late-1940s and 1950s, but industry policies increasingly favoured large, capital-intensive stateowned enterprises. By 1960, policies no longer targeted small ventures and labour-intensive industrialisation. After 1966, economic stabilisation and deregulation rekindled the momentum of industrialisation. Although policy interest in the development of small industrial ventures revived in 1975, large-scale labour-intensive industrialisation did start until the mid-1980s.

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Bibliographic Info

Paper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2008-20.

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Length: 46 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:pas:papers:2008-20

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Keywords: Manufacturing industry; Indonesia; industry policy; technological change;

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Cited by:
  1. Pierre van der Eng, 2008. "The sources of long-term economic growth in Indonesia, 1880-2007," ANU Working Papers in Economics and Econometrics 2008-499, Australian National University, College of Business and Economics, School of Economics.

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