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Impossible is Possible: Industrialization in Indonesia 1983-1993

This study explores the industrial progress in Indonesia between 1983 and 1993, showcasing the transformation from a struggling economy to a prominent member of the global economic community. Through the lens of R. Hartarto Sastrosoenarto's leadership, the analysis delves into the strategies, achievements, and lasting impact of Indonesia's industrial development during this period. By highlighting the contributions of key figures and examining the shift in economic sectors, the research provides insights into the legacy of Indonesia’s New Order regime and the role of government in fostering industrial growth. The study emphasizes the importance of teamwork, visionary leadership, and strategic policies in achieving industrial success, illustrating how the once perceived impossible became a reality in Indonesia.

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Impossible is Possible: Industrialization in Indonesia 1983-1993

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  1. IMPOSSIBLE IS POSSIBLE:R. HARTARTO SASTROSOENARTO AND INDUSTRIALIZATION IN INDONESIA *) Dr. Yuda B. Tangkilisan Faculty of Humanities University of Indonesia -------------------------------------- *) Delivered at The International Graduate Student Conference on Indonesia (IGSC), Yogyakarta December 2009

  2. BACKGROUNDS • Prior to 1970, Indonesia was characterized as a “chronic economic dropout” and as a one of the poorest countries in the world (Higgins 1968: 678) • No one would believe that Indonesia would be grouped as a member of the most exclusive club of “East Asian Miracle Economies” and with the highest economic group in the world in just 20 years (Wulan Sari 2004: 3) • Few chances for Indonesia to have a rapid economic growth (Myrdal 1969)

  3. BACKGROUNDS (2) • Industrialization and economic growth • New Industrial Country (NIC) in the 1980s as Asia’s ‘dragon’ economies • Industrial sectors (non migas) contribution to GDP (Gross Domestic Products) outnumbered Agricultural sectors • Sectors 1983 1993 • -------------------------------------------------- • Agriculture 24.3 % 11.4 % • Industry 17.8 % 22.3 %

  4. IMPOSSIBLEIS POSSIBLE • A BELIEF OF R. HARTARTO SASTROSOENARTO • THOUGHTS • STRATEGY • SELF ESTEEMED • OPTIMISM • TEAM WORK

  5. PURPOSES • To show industrial progress during 1983—1993 • Sumitro Djojohadikusumo (1991) was impressed by the progress • Anne Booth (2001) has similar impressions • To explain how the progress was achieved • To explore the good side (legacy) of New Order from economic development angle as lessons for today • Cultivating the role and contribution of R. Hartarto Sastrosoenarto in indonesian industrial development

  6. METHODOLOGY • Gathering data • Documentary & Literature Study • Oral history (Interview) • Key persons • Other informants • Structurism/ Structuration (Lloyd/ Giddens) • Structure and Changes • Agency • Reproduction (Failed) • Transformation (When Succeeded)

  7. Biographical Backgrounds • 1983 to 1993 was the terms of Hartarto Sastrosunarto as Minister of Industry • Chemical engineers graduated from Australia • Began his career from the bottom at Department of Industry • Visions for Indonesia in the future as a world player • Still concerns with industrialization of Indonesia

  8. Thoughts and Performance • Industrialization needs a legal ground • Acts of Industry no. 5, 1984 • Priority of Industries (middle technology) • A links to agrarian sectors (fertilizers) • Constructions (cements) • Social needs (pulps) • Production (machines) • 6 Main Policies • 4 Supporting policies

  9. 6 Main Policies: • 1) Developing industrial structure, • 2) Developing machinery and electronics industries, • 3) Developing small industries, • 4) To export industrial wares, • 5) Developing research and technology, • 6) To develop entrepreneurship and professionalism.

  10. 4 Supporting Policies • 1) legal basics, • 2) clustering national industries, • 3) inter-linkage programs and • 4) widening domestic and international markets

  11. Ability & Leadership • Expert in matters by training and experiences • Firm personality—not hesitate to take a decision • To organize the department • Making a new branches • Merit system (right men in the right place) • Corporate Culture

  12. RESULTS • Hartarto played an important role in industrialization during the New Order • Industrialization endured along the law and policies • Industrial sectors (manufacturing) grew outnumbering agrarian sectors to GDP • From the UNIDO (United Nation Industrial Development Organization) criteria, Indonesia has entered a phase of New Industrial Countries (NIC)

  13. CONCLUDARY REMARKS • Industrialization is not only building factories but also more important industrial society • Industrialization implied a team work, not one man show • Government has important roles in industrialization as a regulator and prime mover but not as a main player • Impossible is Possible

  14. THANK YOU

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