How Not to Industrialise? Indonesias Automative Industry

A Haryo, C Basri, Hal Hill

    Research output: Contribution to journalArticle


    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.
    Original languageEnglish
    Pages (from-to)209-241
    JournalBulletin of Indonesian Economic Studies
    Issue number1
    Publication statusPublished - 2000


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