Industrial Growth

Indonesia has seen a steady increase in its industrial production over the years, particularly the
mining, automobiles and electronics industries which have seen growth in production and
exports. The agricultural sector is performing fairly, with the primary objective being self-
sufficiency and less dependency on imports.

Mining Industry

Looking into the previous years Indonesia’s growth in the mining sector has been steady. The
mining activities in Indonesia are primarily coal but at a smaller scale oil and gold mining is also
carried out. The Mining Industry of Indonesia saw good growth in the late 2000’s as the prices of
commodities started to rise and by 2013 Indonesia was the largest coal exporter in the world and
had major share in producing copper and gold. (Industrial Sector of Indonesia) As harmful
environmental effects of mining were brought to light in the world investments in the mining
sector became bleak and little room for progress, however, after the governments efforts to
promote environmentally friendly practices had brought back investments, (Industrial Sector of
Indonesia) by 2018 Indonesia had doubled its coal production compared to 2008 and 19% of the
produced coal was used domestically and exported the rest. In 2019 Indonesia was the worlds 2nd
largest exporter of coal behind Australia, but steadily increasing its production. (Ranking the top
five coal exporting countries globally)

The mining industry took a big hit as the COVID-19 pandemic struck, one of the first measures
taken was to minimize world trade in efforts to curb the spread of the virus which meant a halt to
exports, although Indonesia does not heavily depend on its exports the mining sector does and
took a big hit when commodity prices fell and exports halted. Such circumstances could not have
been foreseen by anyone and leaving no time to implement counter measure to cut costs due to
long lead times.

As the world battles the virus with more and more activities resuming, economies are bouncing
back and future recovery of the mining sector may see growth as the market price for coal is
rising.
Automotive Industry

Indonesia is the second largest automobile producer in the southeast Asia trailing Thailand. In
recent years Indonesia has had a steady production of cars in of ~1.2 million and Thailand far
ahead at ~1.9 million units per year. The automotive industry benefits from Indonesia being the
biggest car market of southeast Asia, with Indonesia’s large population and growing middle class
contributing to large sales numbers. (Automotive Manufacturing Industry Indonesia)

As the COVID-19 battle began the many measures were taken to combat the virus and though
they have been beneficial the economic impact is great and recovery is yet to be seen. Car sale
saw a drastic decline after the business restrictions and lockdowns were put in place. The figure
for sales decreased by 96% from previous year being the worst figures of car sales ever recorded.
(Overview of the Automotive Industry of Indonesia) Although activities are resuming the recovery for
Automobiles has been slow due financial constraint faced by people during this pandemic.

Agricultural sector

Indonesia has a fair agricultural sector which fails to fulfill local demand. Rice being the staple
food of the country is the most consumed food, Indonesians consume 129Kg of rice per capita
which is the highest in the world and this demand is not fulfilled by the local production and
therefore rice is imported to fulfill demand even though Indonesia is the largest producer of rice
in the world. (Agricultural Sector of Indonesia)

During the pandemic the role of farmers was crucial as imports were suspended the local the
population had to rely on local production to fulfill the need.