Industrial Policy in Indonesia: A Global Value Chain Perspective

Julia Tijaja () and Mohammad Faisal ()
Additional contact information
Julia Tijaja: ASEAN Secretariat
Mohammad Faisal: Center of Reform on Economics Indonesia

No 411, ADB Economics Working Paper Series from Asian Development Bank

Abstract: The gains of a country from participating in global value chains (GVCs) will depend on the productive activities taking place in its jurisdiction and their linkages to the domestic economy. Lead firms’ decision on where to locate and how to coordinate production activities is influenced, among others, by industrial policies. On the one side, policy space provides governments with some leverage in guiding economic activities and influencing development outcomes. On the other hand, policy risks have the potential to adversely affect the outcomes. This study focuses on industrial policies in Indonesia, using the mineral sector as a mini case study. The case study assesses the Indonesian Government’s recent effort to boost domestic value addition in the sector. This paper argues that the effectiveness of government policies in maximizing the gains from GVC participation depends not only on policy design, but also on policy consistency and coherence, effective implementation, and coordination.

Keywords: industrial policy; Indonesia; global value chain; upgrading (search for similar items in EconPapers)
JEL-codes: F63 F68 L52 L70 O25 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2014-10-01
New Economics Papers: this item is included in nep-int and nep-sea
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Citations: View citations in EconPapers (6)

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