Is Indonesia Undergoing A Process Of De-Industrialization?

The debate of whether Indonesia has been experiencing deindustrialization after being severely hit by the economic crisis in 1997 is the most talked about, since manufacturing industry has been the foundation of the national economy for long time after the revenue gained from the oil sale has been depleted, generating a lot of employment, raising people living standard and as vital engine of economic growth and development. However, poor performance, growth deceleration and the contraction of the manufacturing industry for the period of ten years after the crisis has left the question of what is the factor that has contributed to that, since Indonesia has been forced to pursue the policy of liberalization, whereas the prolonged contraction could lead to deindustrialization. The measure of deindustrialization being used in this paper is a declining share of manufacturing industry to GDP. The paper also discusses the reason of deindustrialization and growth consequences of deindustrialization.