Indonesia Industry Sectors

March 15, 2010Indonesiaby EconomyWatch Content


The biggest economy of South East Asia, Indonesia smoothly escaped the brunt of the 2008 global recession. Its diverse industrial portfolio contributes the major share of the country’s gross domestic product, at 47.1%. Indonesia’s industry sectors provide employment to 18.6% of the total workforce of the country. Some of the major industries of Indonesia include petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber, food and tourism. However, the lack of development in the health industry and in transportation, along with corruption, is the biggest obstacle to the country’s economic growth.

Indonesia Industry Sectors: Major Sectors

The major industry sectors in Indonesia are as follows:


Agriculture: With 42.1% of the total labor force engaged in agriculture, Indonesia can be rightly considered an agrarian economy. The sector contributed 14.4% to the country’s GDP in 2009. Indonesia’s agricultural sector can be categorized into food crops, non-food crops, horticulture, animal products, fish products and forest products. In 2006, the country yielded food crops worth 213,529,700 million rupiahs, which was 35% more than the 2003 level. Rice and coffee remain the major produce of the country, making it the world’s fourth biggest producer of these products.


Mining: According to the statistics provided by the energy and mines ministry, investment in the country’s mining sector increased from US$1.2 billion in 2007 to US$1.6 billion in 2008. The fall in commodity prices in 2009, due to the global economic downturn, resulted in several major mining companies putting their investment plans on hold. However, the mining industry is expected to reach US$123 billion by 2014, with yearly growth of 10%-11% from 2010 onwards. Increase in international interest can be seen in the Indonesian coal sector, after the significant number of deals that took place in the last quarter of 2009.


Textile and Apparel: The textile and apparel manufacturing industry of Indonesia ranks 14th in the world. In 2008, the value added by textiles and clothing manufacturing dropped to 1.2%. Industry was hard hit by the global recession of the late 2000s. Around 155 textile production companies went bankrupt in 2009 due to an increase in the cost of production and enormous inflow of cheap stuff from China.


Tourism: Tourism is among the biggest economy boosters in Indonesia. This is apparent in the fact that 6.45 million visitors came to the country in 2009, despite of hotel bombings in Jakarta. Tourism contributes 3% to the GDP of the country. The tourism growth plan for 2010 aims at 7 million foreign tourists. However, this is much lower than that of its tiny neighbor Singapore, which was visited by 9.5 million people in 2009.


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