The Road to the SDGs

PURPOSE X IsDB has conducted preliminary GVC analysis of Indonesia’s major industries, taking into account issues that could help the country to compete more effectively in global value chains. X Analysis based on IsDB’s GVC selection methodology initially identified five key industries for Indonesia: – Agri-food – Textiles and clothing – Food – Mining – Automotive. X Of these, the GVC analysis narrowed the list down to agri-food, mining and automotive as the most important champion industries for the country going forward. These are also industries that the Government of Indonesia is actively promoting and supporting with major industrial policies. METHOD X IsDB's GVC analysis methodology (see page 170) was used to identify the key action points for Indonesia. X The GVC analysis of Indonesia’s key industries has highlighted many opportunities for economic growth: – The agri-food industry is indispensable for Indonesia’s economy, contributing nearly 13% of GDP and employing 30% of the workforce. Over the years, with its vast arable and fertile land, Indonesia has built a comparative advantage in a variety of crops such as palm oil, rubber, coffee, tea, cassava, spices, coconut and fisheries – Currently, Indonesia is the world’s first producer of durian and fourth producer of avocado, with untapped exports in these products – Due to the growing international demand for fresh fruits and vegetables, connecting smallholder farmers to the international market can offer excellent opportunities for poverty reduction as it increases the income of farmers and generates employment. In addition, farmers should be helped to meet the growing international demand for fresh fruits – There is significant growth potential for one of the country’s main mining products, nickel, which is a key input for products in the automotive industry. Indonesia — A post-COVID-19 restart strategy A nalysis based on IsDB’s GVC selection methodology has identified the agri-food, mining and automotive sectors as champion industries for Indonesia, with potential to improve the country’s competitiveness Indonesia has significant potential to expand into EV battery production, thanks to its critical raw material deposits [ 248 ] SDGs