Changes in the Indonesian Clothing Industry: Trade and Regulation

Abstract

Abstract Policy frameworks at national and international levels have significant influence on the growth performance and industrialisation of developing economies. This paper aims to explore the influence of such regulatory policy frameworks on the development of the Indonesian clothing industry since the mid‐1980s based on an analysis of national clothing trade statistics provided by the Indonesian Central Bureau of Statistics. Although the Indonesian policy framework had a general export‐orientation, protectionist measures for the domestic market proved to be important in facilitating the growth of the Indonesian clothing industry. This paper also shows how the existing international clothing trade regulatory framework of the Multi‐Fibre Arrangement (MFA) influenced the integration of Indonesian clothing firms into global production and trade networks. Finally, the future policy changes and potential impacts for Indonesian clothing firms are discussed.

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