Chalongphob Sussangkarn: This paper's main focus is on the development of the intermediate goods industries in Indonesia as part of a strategy to increase the domestic value-added of its industries and substitute for imports, and the costs and benefits of such a strategy. The paper starts with a brief conceptual background on the import substitution strategy (ISS). There is a useful review of the evolution of Indonesia's industrial policy from the 1970s to the present and plans to 2035. The paper executes descriptive analyses of intermediate industries’ key performances (real value-added, employment, labor productivity, exports and imports) by aggregated sectors between 1990 and 2013 and some international comparisons. Econometric estimates of the impacts of tariff and non-tariff measures on the performance of intermediate industries were carried out using various indicators of performance: output, employment, labor productivity, product quality, and trade variables.
Although the paper provides interesting data and analyses related...