Abstract
The paper examines the structure of Indonesia's manufacturing sector, using data from the 1980 input-output tables., and supporting data from various industrial surveys and national accounts. An input-output analysis of sectoral linkages and factor demand (labour, proxies for skill and capital, imports) is used to derive implications for growth and employment of two contrasting industrial development strategies — a labour-intensive strategy and a more capital-intensive strategy fostering basic industries. It is argued that a labour-intensive, resource-based, and export-oriented strategy combined with selective import substitution is most likely to achieve the stated development goals of the Indonesian government. ∗ Part of the work on this study was financed under the Netherlands technical assistance programme and by the Bureau Data and Analysis (BDA) of the Ministry of Industry of Indonesia The authors gratefully acknowledge the permission of BDA and BPS to use provincial 1980 input-output data. Special ...
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