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Jakarta Post

The problem with ISI policies in Indonesia

  • Suraj Shah


Jakarta   /   Thu, June 21, 2018   /  09:43 am
The problem with ISI policies in Indonesia Downtown cityscape of Seoul, South Korea on a smoggy day. (Shutterstock/File)

With technological progress driving vast economic and societal change the government is planning for the future with its industrial strategy Making Indonesia 4.0, yet, import substitution industrialization (ISI) has raised its ugly head yet again. In the age of Brexit, with the United Kingdom demanding reduced competition in the labor market, and United States President Donald Trump’s America First policy that aims at bringing sunset industries back onshore, a vocal group is calling for protection of Indonesian industry to make it more competitive. Far too often, the proponents of ISI time and again refer to the developmental states of South Korea, Japan, Taiwan and Singapore to back up claims that industry in Indonesia is uncompetitive, and thus needs protection and incentives to allow it to grow, with the delusional belief that once these industries become internationally c...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.