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How Not to Industrialise? Indonesia's Automotive Industry

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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File URL: http://www.tandfonline.com/doi/abs/10.1080/00074910012331337843
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Article provided by Taylor & Francis Journals in its journal Bulletin of Indonesian Economic Studies.

Volume (Year): 36 (2000)
Issue (Month): 1 ()
Pages: 209-241

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Handle: RePEc:taf:bindes:v:36:y:2000:i:1:p:209-241
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  1. Haryo Aswicahyono & Hal Hill, 2014. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 50(3), pages 319-346, December.
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