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An Industry without Industrialization: the Political Economy of The Failure of Indonesia's Auto Industry
[journal article]
Abstract
The development of auto industry needs a series of related policies and conditions, including market, technology, management, basic infrastructure, etc. Several Southeast Asian countries are hoping to develop their auto industries in order to lead the development of other industries in their countri... view more
The development of auto industry needs a series of related policies and conditions, including market, technology, management, basic infrastructure, etc. Several Southeast Asian countries are hoping to develop their auto industries in order to lead the development of other industries in their countries. Having the largest auto market in Southeast Asia, Indonesia is supposed to have more favorable conditions than Thailand and Malaysia on the development of auto industry. Unlike Malaysia's auto industry that has its own national brand, Indonesia does not have a national auto brand, nor like Thailand as the largest auto exporting country in Southeast Asia, a Japanese scholar even contends that Indonesia's auto industry is "technology-less industrialization". Based on the above analysis, the paper argues that the failure of Indonesia's auto industry has to do with the structural factors in Indonesia's political economy. This paper therefore will, by taking the perspective of political economy, explore the following four factors over the failure of Indonesia's auto industry: (1) inappropriate state intervention, (2) distorted government-business relations, (3) failure to join international complementarities in the auto industry, and (4) ineffective management on globalization.... view less
Keywords
foreign investment; economic cooperation; industry; industrialization; Indonesia; development; Malaysia; Thailand; Southeast Asia; industrial policy; automobile industry; developing country
Classification
National Economy
Economic Sectors
Economic Policy
Document language
English
Publication Year
2014
Page/Pages
p. 1-18
Journal
Journal of ASEAN Studies, 2 (2014) 1
ISSN
2338-1353
Status
Published Version; peer reviewed