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Industrial development


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Industrial development

  1. 1. Vania Lundina
  2. 2. <ul><li>Manufacturing industry has played an important role in the industrial and economic development of Indonesia. This sector has also become the most influential factor to the economic and industrial growth among other sectors. The following presentation will discuss the developments and effect of the manufacturing industry in Indonesia. </li></ul>
  3. 3. Indonesia’s Manufacturing Products <ul><li>Products: </li></ul><ul><ul><li>Textiles </li></ul></ul><ul><ul><li>Clothing </li></ul></ul><ul><ul><li>Footwear </li></ul></ul><ul><ul><li>Cement </li></ul></ul><ul><ul><li>Chemical fertilizers </li></ul></ul>The largest exports, as well as garments, furniture and shoes
  4. 4. The Manufacture Growth Indonesia experienced a rapid industrialization since 1975. Manufacturing’s contribution to the economy increased from 10% to 25% during this period.
  5. 5. <ul><li>Significant developments in 1969-1996; </li></ul><ul><ul><li>From the mid 1960s to early 1980s, the GDP grew by 7.5% every year </li></ul></ul><ul><ul><li>Due to the collapse of the price of oil in 1980-1985, the GDP decreased into 6.7% p.a. from the mid 1980s to 1996 </li></ul></ul><ul><ul><li>In 1970, 45% of GDP is obtained from agriculture sector, while 12% of it came from manufacturing industry. </li></ul></ul>
  6. 6. <ul><ul><li>The manufacturing sector began to slow down to 7% p.a. after 1993. Factors affecting the slow down were: the long-standing weaknesses and others due to the emerging constraints to sustained industrial growth. </li></ul></ul>
  7. 7. <ul><ul><li>By 1996, the GDP from manufacture rose again to 27% </li></ul></ul><ul><ul><li>In 1998-1999, the balance trade between manufacturers has shown some advantages through manufactured exports </li></ul></ul><ul><ul><li>Manufacturing exports increased from less than 15% to 60% by 1999. </li></ul></ul>
  8. 9. <ul><ul><li>Entering 2000, the industrial manufacture began to be stable </li></ul></ul><ul><ul><li>During the Financial Crisis in 2008-2009, the manufacture industries grew by 4.2% with the greatest growth in paper and printing, cement and food and beverage production. </li></ul></ul><ul><ul><li>This is supported by foreign investment </li></ul></ul><ul><ul><ul><li>In 2009, Panasonic company plan to locate one of its companies in Indonesia due to the promising manufacture condition. </li></ul></ul></ul>
  9. 10. Problems <ul><li>The problems of Indonesian Manufacturing Sector can be grouped under two categories: Structural Weaknesses and Organizational Weaknesses. </li></ul>
  10. 11. Specific Problems <ul><ul><li>In 1980s, Indonesia faced a series of economic problems; the rose of oil prices </li></ul></ul><ul><li>In 1997, there was another serious economic problem. The manufacturing sector experienced a negative growth of -11.4% </li></ul><ul><ul><li>of Indonesia’s manufacturing sector </li></ul></ul>
  11. 12. Strategies and Policies <ul><li>Between 1970-1980s the government launched an economic liberalization programs to improve the economic condition </li></ul><ul><li>Made oil and gas exports a top priority </li></ul><ul><li>In 2010, the government is going to do a manufacturing industry revitalization, especially to sugar, cement and fertilizers industries. </li></ul>
  12. 13. Growth and Structural Change <ul><li>Indonesia’s manufacturing sector stands out in comparison with other countries </li></ul><ul><li>Expanded 11% per annum (second after China) </li></ul><ul><li>Average increases in labor productivity compared to other sectors </li></ul><ul><li>Technologies: </li></ul><ul><ul><li>Low = 47% production </li></ul></ul><ul><ul><li>Medium = 36% </li></ul></ul><ul><ul><li>High = 17% </li></ul></ul>
  13. 14. Impacts and Opportunities <ul><li>Manufacture employment </li></ul><ul><li>Manufacture exports </li></ul><ul><li>Manufacturing production </li></ul>
  14. 15. <ul><li>According to Loretta Wan, the Regional Director of South East Asia & India from Hong Kong Trade Development Council Delegation, Indonesia will experience another significant development of manufacturing industry up to 2015. Indonesia is a favorite destination of investment from many investors around the world, especially Asian countries. </li></ul>
  15. 16. Bibliography <ul><li>Sumantri, Jajang. 2009. Indonesia Punya Potensi Jadi Pusat Manufaktur Dunia . July. 27. 2010. </li></ul><ul><li>Manufacturing Industry-Indonesia. July. 29. 2010. </li></ul><ul><li>Daniel, Wahyu. 2009. Industri Manufaktur Indonesia Masih Seksi. July. 31. 2010. </li></ul><ul><li>Yandri, Erkata. 2009. Transfer Teknologi Pada Industri Manufaktur Indonesia: Menelaah 50 Tahun Hubungan Persahabatan Jepang-Indonesia. July. 29. 2010. </li></ul>