Monitoring the Socioeconomic Impact of the 2008/2009 Global Financial Crisis in Indonesia - Impact on the Indonesian Manufacturing Industry, Up to August 2009

Robert Justin Sodo
Report SMERU Research Institute • November 2010 Indonesia

Abstract

The findings of news monitoring in a number of mass media up to the beginning of August 2009 reveal that the 2008/09 global financial crisis (GFC) has had an impact on manufacturing in Indonesia, particularly on those manufacturing industries that are export-oriented and use imported raw materials. The signs are evident in, among other things, a rise in production costs, a drop in orders, and an accumulation of stock in a number of businesses. The industries most frequently reported as having been affected by the 2008/09 GFC are the TTP group (textiles and textile products, including garments), handicrafts, wood and wooden products (including furniture and rattan), paper, and electronics. News about the effect on the food and beverage industry and the fishing industry is more limited. The measures adopted by the various industries in attempting to overcome the downturn include the dismissal of contract, daily, and even permanent workers. Various news items have reported that the central government and regional governments have prepared and are preparing certain measures to reduce the impact of the crisis. These include assistance in finding alternative markets both abroad and at home, a reduction in the Bank of Indonesia's interest rate, and a tightening up of the import of finished goods. Nevertheless, there is still concern about the sustainability of industries that have been affected.

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SMERU Research Institute

Since its establishment in 2001, SMERU has been a leader in poverty and inequality research in In... see more

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DFAT | AusAID