Essay On Industrialization Of Indonesia

1165 Words 5 Pages
In 1960, the term of Newly Industrializing Economies (NIEs) has been introduced world widely due to the massive growth of industrialization in Asia. Indonesia, whose economic growth were about 6 percent a year, joined to the NIEs together with Malaysia and Thailand. One specific characteristic of these countries was an huge improvement of the export of a manufacturing sector as the industrialization has integrated to the international trade (Trade and Development Report, 1996). The manufacturing sector plays an important role for the economic growth. Therefore, this literature review will discusses further about the manufactures and its export determinants particularly in case of Indonesia.
Firstly, according to the Trade and Development Report (1996) published by United Nations Conference on Trade and Development (UNCTAD), the manufacturing sector is categorized into five categories based on the labour skill, technologies, and capital required in the industries. It is started with primary commodities consisting of raw materials which are extracted or harvested and require minimal processing such as processed food. The second category is ‘labour-intensive and resource-based industries’. This category is
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Generally, trade policies are categorized into two which are tariff and non-tariff measures. Tariff is the most popular policies used to restrict trade. However, the world wide admission of trade liberalization causes countries reduce the use of tariff instruments. Therefore, another way to restrict trade is non-tariff measures (NTMs) instruments, consequently the number of countries applying NTMs increase and its coverage of products becomes wider (World Bank and IMF, 2008). Hoekman and Nicita (2011) verify that the use of NTMs instruments represents the development of a country. A more develop country will apply more NTMs. It is proved by the high number of developed countries exploit

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