Java furniture makers: Globalisation winners or losers?

Abstract

This article is concerned with the question of whether participation in the global economy leads to sustainable income growth. It examines the furniture industry of Central Java, which has grown rapidly since the financial crisis in 1997. The article shows that the exporting small and medium-sized enterprises generated substantial employment and income growth. However, this growth is not sustainable because the viability of exports has become dependent on wood which is logged illegally and risks depletion. Government and donor projects aimed at small enterprises risk driving these enterprises deeper into the race to the bottom. The article then discusses ways to avoid this, stressing the need for a coalition of public and private actors along the local–global axis.

Additional information

Notes on contributors

Lienda Loebis

Lienda Loebis is a government official in the Department for Small and Medium Enterprises of the Ministry of Industry and Trade of the Republic of Indonesia. For many years she was in charge of her Department's international cooperation and is now Deputy Director for Marketing and Promotion.

Hubert Schmitz

Hubert Schmitz is a Professorial Fellow at IDS at the University of Sussex. He has led the Institute's work on the collective efficiency of small firms and on local upgrading in global chains. He is currently developing value-chain analysis for policy makers.