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Indonesia: Regional Industrial Development
Country Study > Chapter 3 > The Economy > Industry > Regional Industrial Development


The pattern of regional development in Indonesia mirrored the diversity of natural resources among the Outer Islands and the historical dominance of Java as the densely populated agrarian center. Java remained the economic center of the nation, producing about 50 percent of total GDP in the 1980s. Sumatra, the heart of the nation's oil and rubber production, ranked second with 32 percent of GDP. Half of total foreign investment, excluding the oil sector, from 1967 to 1985 was in Java, with the remainder dispersed widely throughout the nation.

In spite of this regional imbalance, there were important and more-or-less uniform features of economic development. By 1983 agricultural production, including nonfood crops such as rubber and forestry and fishing, had declined to less than half of total production in almost all twenty-seven provincial-level administrative units. The majority of the labor force still found employment in these activities, however. Almost all provinces shared in the rapid growth rates of the 1970s, and most attained annual growth rates between 4 and 8 percent per year. Specific industries usually reflected local resource endowments; for example, sawmills and plywood factories dominated manufacturing in Kalimantan, whereas Sumatran manufacturing was more diverse, including rubber processing, cement, and plywood. Major industries on Java included motor vehicle assembly in Jakarta, weaving in Jawa Barat Province and Yogyakarta, kretek cigarette production in Jawa Timur Province, and sugar refining in Jawa Tengah Province.

Data as of November 1992

Last Updated: November 1992

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Indonesia was first published in 1993. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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Section 110 of 210


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