On Monday, 9 July 2018, CSIS Indonesia and ANU Indonesia Project hosted one of the main events of Forum Kajian Pembangunan, The Hadi Soesastro Policy Forum (HSPF) 2018. The HSPF is an annual event in honor of Hadi Soesastro, one of the founders of CSIS Indonesia and a prominent Indonesian economist. This year’s HSPF lecture is entitled Joining Global Production Networks: has Indonesia Missed the Boat? by Professor Prema-chandra Athukorala (ANU). Following the lecture, launch of the 2018 Indonesia Update book followed. More than 185 people attended the event, mostly from academe but also from the international diplomatic corps, donor agencies. NGOs and the private sector.

Professor Athukorala opened his lecture by emphasizing the need for Indonesia to  engage in global production networks (GPNs). A successful integration of a manufacturing sectors into production networks has played a major role in improving welfare, at least in high-performing East Asian countries. Indonesia, however, has lagged behind other East Asian countries in reaping gains from global production sharing. In terms of GPN in electronics and electrical goods, for example, Indonesia still failed in fitting in. However, in the automobile sector Indonesia shows its participation has grown rapidly in recent years, despite having only a third of export size compared to Thailand. One reason that might explain this was the natural tendency for automobile assemblers and component producers to co-locate in countries with large domestic markets.

In order to accelerate Indonesia’s performance to fit into GPN, it is important to combine further reforms that will reduce service link costs, along with investment campaigns that will attract multinational enterprises to engage Indonesia in GPN. He closed his presentation by concluding that the role of 4^th Industrial Revolution is vastly exaggerated in terms of economic globalization.

Comparison of export performance in selected East Asian countries

The event continued with Haryo Aswicahyono (CSIS) as discussant. He briefly added some insights about the issue by stating that Indonesia will have an easier way to start industrialization with respect to relative cost advantage. He also suggested that using domestic and foreign value-added content of export data is preferable compared to the currently-used export value since the latter was usually overstated. He concluded by commenting that instead of missing the ‘boat’, Indonesia may just have missed the momentum.

Aswicahyono argued that value content of exports data is more accurate than exports value data

The last session of the HSPF 2018 was the launch of Indonesia in the New World: Globalization, Nationalism & Sovereignty edited by Arianto Patunru (ANU Indonesia Project), Professor Mari Pangestu (Universitas Indonesia and CSIS) and M. Chatib Basri (Universitas Indonesia and CReco). The book discusses recent emergence of nationalism in Indonesia amidst international dynamics. The book was launched by Vice Minister of Finance, Dr Mardiasmo, and Professor Mari Pangestu provided a brief overview of its content. A panel  of authors then gave brief presentations of their chapters, chaired by Arianto Patunru. The authors were Professor Arief Anshory Yusuf (Universitas Padjadjaran), Anis Hidayah (MigrantCARE), Yose Rizal Damuri (CSIS) and Shafiah Muhibat (CSIS). Ninuk Mardiana Pambudy (Kompas) was a discussant during the launch.

Media coverage of the event

Kompas 10 July 2018: “Indonesia jangan kehilangan momentum”

Kompas 10 July 2018: “Pemerintah bahas strategi hadapi ketidakpastian”

ABC News 16 Juli 2018: “Indonesia masih tertinggal dalam jaring produksi global”

Ministry of Finance 10 July 2018: “Globalisasi, antara ancaman dan kesempatan”

For the complete presentation and Q&A session, please refer to the videos and materials provided.