Capital Utilisation in Indonesian Medium and Large Scale Manufacturing∗

∗ This article is a revised version of two papers presented at a seminar on ensuring fuller utilisation of capacity in the manufacturing sector, organised by the Departemen Perindustrian, Biro Perencanaan, Jakarta, 27–28 February, 1985. The authors wish to thank an anonymous referee for helpful and stimulating comments.

Abstract

This article presents the main results of a survey of the utilisation of existing productive capacity in the Indonesian manufacturing sector. It was found that although prevailing levels of capital utilisation in Indonesian manufacturing do not appear to be out of line with levels observed in other developing countries, there is scope for improvement in some sectors. The paper suggests some policy reforms which would improve the competitive environment for Indonesian manufacturing and increase the price ratio of capital to labour, thus promoting more intensive capital utilisation in the manufacturing sector.

∗ This article is a revised version of two papers presented at a seminar on ensuring fuller utilisation of capacity in the manufacturing sector, organised by the Departemen Perindustrian, Biro Perencanaan, Jakarta, 27–28 February, 1985. The authors wish to thank an anonymous referee for helpful and stimulating comments.

Notes

∗ This article is a revised version of two papers presented at a seminar on ensuring fuller utilisation of capacity in the manufacturing sector, organised by the Departemen Perindustrian, Biro Perencanaan, Jakarta, 27–28 February, 1985. The authors wish to thank an anonymous referee for helpful and stimulating comments.