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Economy, Manufacturing

aerospace products, veneers, traditional crafts, electrical appliances, GDP

In the 1960s Indonesia manufactured little more than handicrafts and a few textiles, but by the mid-1990s Indonesia was producing manufactures that ranged from traditional crafts to aerospace products. Manufacturing in 2000 accounted for 26 percent of the GDP, up from 13 percent in 1980. Labor-intensive consumer exports, such as footwear and glassware, in particular have grown quickly.

Indonesia’s main manufactures include food and beverages, tobacco products, textiles and garments, motor vehicle parts, and electrical appliances. Most of these manufactures are produced by joint-venture companies backed by foreign and local investors. The main manufactured exports include wood products (veneers, plywood, and furniture), textiles, clothing, and footwear. In 1999 manufactured exports accounted for 54 percent of Indonesia’s total exports, up from just 2 percent of total exports in 1980.

Much of the new manufacturing is located on Java, especially in Jakarta and the surrounding parts of West Java province. Despite Jakarta’s congestion and other problems caused by rapid growth, it remains a very attractive location for manufacturers. The city and surrounding villages provide a large supply of labor, and the city’s roads, airport, and port are the best in the country. During the 1980s the government attempted to direct foreign investment away from Jakarta and Java, but the policy was mostly unsuccessful and has since been relaxed.

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aerospace products, veneers, traditional crafts, electrical appliances, GDP, handicrafts, plywood, surrounding villages, wood products, tobacco products, glassware, new manufacturing, footwear, foreign investment, garments, airport, furniture, textiles, clothing, percent, rapid growth, beverages, government, food, problems, country, Manufacturing, manufacturers, best, manufactures, policy


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