National Development Planning, Industrial Policy, and Sustainable Growth Challenges in Indonesia and Malaysia: A Comparative Historical Analysis

Abstract

Indonesia and Malaysia are two developing nations that are deemed successful in avoiding the ``resource curse'' by achieving strong growth trajectory in the past three decades. However, they are now faced with the challenge of overcoming ``middle-income trap.'' Although sharing many similar features, the two countries differ in the adoption of industrial policies and national development strategies. By historically comparing national development planning and industrial policies, this research aims to illustrate how Indonesia and Malaysia circumvented the resource curse. This study also explains how contemporary challenges shape national development planning in Indonesia and Malaysia to achieve greener growth. This paper argues that effectiveness of government policies in attaining sustainable growth and maximizing the utilization of natural resources depend not only on development planning but also on policy consistency, coherence, coordination, and implementation.