Trade Performance of the Indonesian Textile Industry (1980-1993)

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Muhammad Aslam Memon


The industrial sector plays an important role in the economy of country. The countries that solely relied on agriculture have remained poor and underdeveloped where as those nations which gave importance to industrial development achieved high rate of development. Textile industry in Indonesia is the most important sector of the economy. It comprises of three sub-industries: spinning / fibres, weaving/fabrics, and garments. A distinctive feature of the world trade in textile is governed by the Multi-Fibre Arrangement (MFA), which has been described as the most trade-restraining international agreement for manufactured products in existence (World Bank, 1991). Textile is among the big non-oil industries in Indonesia. Its sub-industries show different characteristics according to their capital intensity (from high in spinning/fibres to low in garments), export orientation (from low in spinning/fibres to high in garments), and ownership (from significant foreign ownership in spinning/fibres to high domestic ownership in garments) (World Bank, 1991).

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