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Late Industrialization and Structural Change: Indonesia, 1975-2000

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  • Jojo Jacob

Abstract

This paper examines economic growth and structural change in Indonesia during the period 1975-2000 using an input-output-based structural change decomposition method. The analysis focuses on the sources and pattern of growth during three phases of economic development: the inward-oriented phase from 1975 to 1985; the outward-oriented phase from 1985 to 1995; and the recent phase of crisis and recovery from 1995 to 2000. Growth during the first phase, although impressive, was moderate in comparison with the export-led manufacturing-driven growth during the second phase. During both these phases, the Indonesian economy witnessed significant structural changes, especially within manufacturing. However, the dynamics underlying growth and structural change showed important differences. Although growth under the first two policy regimes was assisted by favourable economic circumstances, selective industrial policies may also have played a significant role. The results suggest that the long neglect of the technological foundations and human capital base of the economy could be holding back recovery and sustained growth in the present phase.

Suggested Citation

  • Jojo Jacob, 2005. "Late Industrialization and Structural Change: Indonesia, 1975-2000," Oxford Development Studies, Taylor & Francis Journals, vol. 33(3-4), pages 427-451.
    • Handle: RePEc:taf:oxdevs:v:33:y:2005:i:3-4:p:427-451
    DOI: 10.1080/13600810500317820
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    References listed on IDEAS

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    1. Dijk van, M., 2003. "Industry Evolution in Developing Countries: the Indonesian Pulp and Paper Industry," Working Papers 03.02, Eindhoven Center for Innovation Studies.
    2. Okamoto, Yumiko & Sjöholm, Fredrik, 1999. "Protection and the Dynamics of Productivity Growth: The Case of Automotive Industries in Indonesia," SSE/EFI Working Paper Series in Economics and Finance 324, Stockholm School of Economics.
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    Cited by:

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    2. Ingrid Harvold Kvangraven, 2021. "Beyond the Stereotype: Restating the Relevance of the Dependency Research Programme," Development and Change, International Institute of Social Studies, vol. 52(1), pages 76-112, January.
    3. Kyunghoon Kim & Arriya Mungsunti & Andy Sumner & Arief Anshory Yusuf, 2020. "Structural transformation and inclusive growth: Kuznets' 'developer's dilemma' in Indonesia," WIDER Working Paper Series wp-2020-31, World Institute for Development Economic Research (UNU-WIDER).
    4. Wahyu Widodo & Ruhul Salim & Harry Bloch, 2015. "The effects of agglomeration economies on technical efficiency of manufacturing firms: evidence from Indonesia," Applied Economics, Taylor & Francis Journals, vol. 47(31), pages 3258-3275, July.
    5. A. Sankaran & A. Vadivel & M. Abdul Jamal, 2020. "Effects of dynamic variables on industrial output in one of the world’s fastest-growing countries: case evidence from India," Future Business Journal, Springer, vol. 6(1), pages 1-8, December.

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