The role of industrialization in Indonesia's economic development : the case of the plywood industry

Abstract

This thesis analyzes the role of the plywood industry in the industrial sector and its contribution to the development of the Indonesian economy. In analyzing this industry, the study is mostly based on a historical presentation. The Indonesian government has consisted of two regimes, the "Old Order" and the "New Order" period. Prior to 1965, Indonesia initially implemented the first stage of Import Substitution Industrialization (ISI) policies. Entering the new order period in 1967, the industrialization policy changed gradually to Export Oriented Industrialization (EOI) without ignoring the existing ISI. The discussion on the role of manufacturing sector includes the trade orientation with an R index, which refers to the comparative advantage of the product. Based on the R index, plywood has an R which is positive and greater than 0.01. It indicates that plywood has a substantial comparative advantage. The thesis concludes that the plywood industry in Indonesia developed when the government applied ISI by protecting domestic industries. (Abstract shortened by UMI.)