Indonesian Industrial Development and its Impact on the Economy
ASEDP
No.12
Edited by Suryo Sediono, Kunio Igusa
Published in 1991
CONTENTS
Introduction / Kunio Igusa
Chapter I.
The Indonesian Economy in the Pacific and the Role of Private Enterprise / Mohammad Sadli
1. Political and Ideological Background
2. The Importance of the Pacific Region
3. Development of the Private Sector in Indonesia
3-1. Foreign Investment as Initial pacemaker
3-2. Effects of Economic Development and Structural Change
3-3. influence of Deregulation
3-4. Financing of the Private Sector
3-5. Problems of Privatization
3-6. Institutional Aspects: the Chamber of Commerce and Industry
3-7. Equity and Distributional Problems
4. Summary and Conclusions
2. The Importance of the Pacific Region
3. Development of the Private Sector in Indonesia
3-1. Foreign Investment as Initial pacemaker
3-2. Effects of Economic Development and Structural Change
3-3. influence of Deregulation
3-4. Financing of the Private Sector
3-5. Problems of Privatization
3-6. Institutional Aspects: the Chamber of Commerce and Industry
3-7. Equity and Distributional Problems
4. Summary and Conclusions
Chapter II.
Foreign Investment and its Impacts upon Industrial Development / Suryo sediono
1. Introduction
2. Export led Growth Strategy and Investment
2-1. Impact of the de-regulation measures on trade investment & financial sector since 1983
2-2. Industrial Policy: Turning-point from Import-substitution to Export-industries
2-3. Exports of manufactured goods
2-4. The need for industrial expansion, diversification
2-5. Export-led Growth Strategies
3. The Role of Investment in Industrial Development
3-1. Total Investment and PMDN
3-2. Foreign Investment: PMA
3-3. Location of Industry
3-4. The Impact of Foreign Investment
4. Relocation of Industries and Influx of Foreign capital to Indonesia
4-1. global tendency of relocation of industries
4-2. The Indonesia Case
4-3. competing Forces
4-4. Expectation and Performances
4-5. Japan: The Leading Goose
4-6. Korea: The High Archiever
4-7. Taiwan: Competing with PRC
4-8. Hongkong: Capital Flight Facing Hongkong 1997
4-9. Singapore: The Late-Comer
4-10. Concluding Remarks on Relocation
5. Review of Theories on International Trade and Political Jargons
5-1. Comparative Advantage
5-2. Competitive Advantage
5-3. Value-added
5-4. "Brood Spectrum" vs Specialization
5-5. Policies of Structural Adjustment: "Broad-base"
5-6. Theories on International Trade
6. Foreign Capital Flow and Foreign Investment
6-1. Waves of Capital Flow
6-2. Complementary Activities
6-3. Annual Flow of Capital: 1990
6-4. investment Climate
7. Concluding Remarks
Appendix 1
Appendix 2
Appendix 3
2. Export led Growth Strategy and Investment
2-1. Impact of the de-regulation measures on trade investment & financial sector since 1983
2-2. Industrial Policy: Turning-point from Import-substitution to Export-industries
2-3. Exports of manufactured goods
2-4. The need for industrial expansion, diversification
2-5. Export-led Growth Strategies
3. The Role of Investment in Industrial Development
3-1. Total Investment and PMDN
3-2. Foreign Investment: PMA
3-3. Location of Industry
3-4. The Impact of Foreign Investment
4. Relocation of Industries and Influx of Foreign capital to Indonesia
4-1. global tendency of relocation of industries
4-2. The Indonesia Case
4-3. competing Forces
4-4. Expectation and Performances
4-5. Japan: The Leading Goose
4-6. Korea: The High Archiever
4-7. Taiwan: Competing with PRC
4-8. Hongkong: Capital Flight Facing Hongkong 1997
4-9. Singapore: The Late-Comer
4-10. Concluding Remarks on Relocation
5. Review of Theories on International Trade and Political Jargons
5-1. Comparative Advantage
5-2. Competitive Advantage
5-3. Value-added
5-4. "Brood Spectrum" vs Specialization
5-5. Policies of Structural Adjustment: "Broad-base"
5-6. Theories on International Trade
6. Foreign Capital Flow and Foreign Investment
6-1. Waves of Capital Flow
6-2. Complementary Activities
6-3. Annual Flow of Capital: 1990
6-4. investment Climate
7. Concluding Remarks
Appendix 1
Appendix 2
Appendix 3
Chapter III.
Domestic Investment and Growing Business Circle in Indonesia / Asril Noer
1. Introduction
2. Inward Looking Policies
3. The Era of Deregulation
4. Investment Growth in Post Deregulation
4-1. Approval During 1980-1990
4-2. Cumulative approval by Sector 1968-1990
4-3. Domestic Investment Sectoral Growth in Post Deregulation
4-4. The Trend of Domestic Investment Location
4-5. The Rise of Export Oriented Investment
5. Conclusion
2. Inward Looking Policies
3. The Era of Deregulation
4. Investment Growth in Post Deregulation
4-1. Approval During 1980-1990
4-2. Cumulative approval by Sector 1968-1990
4-3. Domestic Investment Sectoral Growth in Post Deregulation
4-4. The Trend of Domestic Investment Location
4-5. The Rise of Export Oriented Investment
5. Conclusion
Chapter IV.
Deregulation Policies and Changing Environment of Investment in Indonesia,1982-1991 / Dorodjatun Kuntjoro-Jakti
1. Introduction
2. Background of Economic Reform in the Period of 1982-1991
2-1. The Reopening of the Economy, 1966-1969
2-2. "Comparative Advantage" Based Growth, 1969-1974
2-3. Oil Boom 1, 1973-1978
2-4. Oil Boom 2, 1979-1981
2-5. Oil Price Crash, 1982-1988
2-6. BOP Crisis of 1983 and 1986
2-7. Effects of the External Shocks
2-8. Pressures on the Economy for Reform
3. Development of Deregulation Policy Packages
3-1. The Two Stages of Deregulations
3-2. Bank and Financial Deregulations
3-3. Tax Reform
3-4. Business and Investment Reform
3-5. Trade Reform
3-6. Transportation Reform
3-7. Differences in the Timing of the Reforms
3-8. Extra-Ordinary Measures of 1985-1991
4. Impact of Deregulation on the Environment of Investment
4-1. Response of the Private Sector
4-2. The Sudden Jumps in PM and PMDN
4-3. Structural Change of the Economy
4-4. "Sumarlin Shock 2" 1991
4-5. Difficulties in the Real Sectors
5. Conclusion
2. Background of Economic Reform in the Period of 1982-1991
2-1. The Reopening of the Economy, 1966-1969
2-2. "Comparative Advantage" Based Growth, 1969-1974
2-3. Oil Boom 1, 1973-1978
2-4. Oil Boom 2, 1979-1981
2-5. Oil Price Crash, 1982-1988
2-6. BOP Crisis of 1983 and 1986
2-7. Effects of the External Shocks
2-8. Pressures on the Economy for Reform
3. Development of Deregulation Policy Packages
3-1. The Two Stages of Deregulations
3-2. Bank and Financial Deregulations
3-3. Tax Reform
3-4. Business and Investment Reform
3-5. Trade Reform
3-6. Transportation Reform
3-7. Differences in the Timing of the Reforms
3-8. Extra-Ordinary Measures of 1985-1991
4. Impact of Deregulation on the Environment of Investment
4-1. Response of the Private Sector
4-2. The Sudden Jumps in PM and PMDN
4-3. Structural Change of the Economy
4-4. "Sumarlin Shock 2" 1991
4-5. Difficulties in the Real Sectors
5. Conclusion
Chapter V.
Reform of the Banking Sector in Indonesia,1983-91 / Anwar Nasution
1. Introduction
2. Characteristic of the Banking Industry and Monetary Policy prior to the October 1988 Deregulation
2-1. The Structure of Commercial Banks
2-2. Branching and Geographic Dispersion
2-3. Special Preference to State Banks
3. Deregulation Measures in the Banking Industry
3-1. Relaxation of Credit Policy
3-1-1. Credit Programmes
3-1-2. new Selective Credit Policy
3-2. Access to Public Sector Deposits and Foreign Exposures
3-3. Rediscount Windows
3-4. Relaxation of Entry Barriers
3-5. Measures to Strengthen the Capital Base of the Banks
3-6. Other Measure to Improve Competition
4. The Impact of Deregulation
4-1. Micro Effects
4-2. Monetary Policy
4-2-1. The Money Supply Determination
4-2-2. Intervention in Foreign Exchange Market and Instrument for Open Market Operations
4-2-3. Interest Rates
4-2-4. Inflation
5. Conclusion
2. Characteristic of the Banking Industry and Monetary Policy prior to the October 1988 Deregulation
2-1. The Structure of Commercial Banks
2-2. Branching and Geographic Dispersion
2-3. Special Preference to State Banks
3. Deregulation Measures in the Banking Industry
3-1. Relaxation of Credit Policy
3-1-1. Credit Programmes
3-1-2. new Selective Credit Policy
3-2. Access to Public Sector Deposits and Foreign Exposures
3-3. Rediscount Windows
3-4. Relaxation of Entry Barriers
3-5. Measures to Strengthen the Capital Base of the Banks
3-6. Other Measure to Improve Competition
4. The Impact of Deregulation
4-1. Micro Effects
4-2. Monetary Policy
4-2-1. The Money Supply Determination
4-2-2. Intervention in Foreign Exchange Market and Instrument for Open Market Operations
4-2-3. Interest Rates
4-2-4. Inflation
5. Conclusion
Chapter VI.
The Role of Small Industries in Economic Development / Ahmad Hamid
1. Introduction
2. Some Criteria of the Small Scale Industries
3. The Role of Small Scale Industries in Creating employment and their Characteristics
3-1. The Development of the Number of Establishment Employment
3-2. The development of Value Added per Worker in MLI, SI and HCI and its Characteristics
4. Assigned Mission of Small Scale Industries
4-1. Mission of Small Scale Industries
4-2. Additional Employed Workers Will be Absorbed within Five Year in Small Scale Industries
5. Government Policy in Promoting Small Industries
5-1. business Interrelated between Classification of Firms
5-2. The Development of Subcontracting System in Japan
5-3. Hierarchical Subcontractors Feature The Japanese Subcontracting System
5-4. The Position of Subcontractors in its Relation with Parent Company
5-5. Benefit of Subcontracting System
5-6. Subcontracting in Indonesia
5-7. Component Reject Ratio
5-8. Subcontractors Background
6. Foster Father Program
6-1. Projection of the Number of Foster Father
6-2. Foster Father Performance
6-3. State Owned Enterprises Foster Father
7. Concluding Remarks
2. Some Criteria of the Small Scale Industries
3. The Role of Small Scale Industries in Creating employment and their Characteristics
3-1. The Development of the Number of Establishment Employment
3-2. The development of Value Added per Worker in MLI, SI and HCI and its Characteristics
4. Assigned Mission of Small Scale Industries
4-1. Mission of Small Scale Industries
4-2. Additional Employed Workers Will be Absorbed within Five Year in Small Scale Industries
5. Government Policy in Promoting Small Industries
5-1. business Interrelated between Classification of Firms
5-2. The Development of Subcontracting System in Japan
5-3. Hierarchical Subcontractors Feature The Japanese Subcontracting System
5-4. The Position of Subcontractors in its Relation with Parent Company
5-5. Benefit of Subcontracting System
5-6. Subcontracting in Indonesia
5-7. Component Reject Ratio
5-8. Subcontractors Background
6. Foster Father Program
6-1. Projection of the Number of Foster Father
6-2. Foster Father Performance
6-3. State Owned Enterprises Foster Father
7. Concluding Remarks