DOWNSTREAMING TOWARDS INDONESIA EMAS

Abstract

Indonesia is aspiring to be high income by 2045, which required to escape the middle-income trap, which involves strategic transformation of economy. This paper examines the core driving forces behind the transformation, focusing on productivity improvement, diversifying capital formation, and downstream industrialization. Through the method of qualitative content analysis, the paper learns from best practices and successful transitions in countries, for example China and Malaysia. This paper emphasized priority to pursue enterprise productivity, strong and strategic sectoral development, and institutional coherence. The paper conclude that a robust base for economic growth in the longer term is sustainable downstreaming, export competitive, human capital development and policy consistency. The study articulates a “Make in Indonesia” strategy to drive industrialization that will enable Indonesia to shift towards advanced manufacturing and transform into a cost-effective manufacturing base so that the country does not become mired in a middle-income trap.