Public lecture convened by LPEM Universitas Indonesia, FEB Universitas Gadjah Mada and ANU Indonesia Project in honour of Professor Mohammad Sadli and Professor Mubyarto

Industrial policies to escape the middle-income trap: a new structural economics approach for Indonesia

by Professor Justin Yifu Lin (Peking University)

Indonesia has been trapped in the middle-income status since the 1960s. The middle-income trap is a result of a middle-income country’s failure to have a faster labour productivity growth through technological innovation and industrial upgrading than high-income countries. Industrial policy is essential for the government of a middle-income country to prioritise the use of its limited resources to facilitate technological innovation and industrial upgrading by overcoming inherent externality and coordination issues in structural transformation. The industries in a middle-income country may be classified into five different types, depending on their distance to the global technology frontier: catching-up industries, leading-edge industries, comparative advantage-losing industries, short innovation cycle industries, comparative-advantage-defying strategic industries. Industrial policy should be designed accordingly.

DISCUSSANTS

Dr Muhammad Edhie Purnawan (Universitas Gadjah Mada)

Dr Kiki Verico (Universitas Indonesia)

Participate via Zoom (registration required) http://bit.ly/lecture13november

Participate via YouTube http://bit.ly/fkp-live

ABOUT THE LECTURE

The ANU Indonesia Project and the Institute of Economic and Social Research at Universitas Indonesia (LPEM FEB UI) have conducted the Sadli Lecture since 2007 in honour of the late Professor Mohammad Sadli of Universitas Indonesia. Since 2017, in honour of Professor Mubyarto, the ANU Indonesia Project and the Faculty of Economics and Business of Universitas Gadjah Mada (FEB UGM) convened the annual Mubyarto Public Policy Forum. Both Professors Sadli and Mubyarto were influential economists who during their lifetime contributed greatly to the intellectual debate on the development policies of Indonesia. This public lecture is convened in collaboration with LPEM FEB UI and FEB UGM to commemorate their lives and contributions, and to continue the tradition of having open and public debates about Indonesia’s development path.

ABOUT THE SPEAKERS

Justin Yifu Lin is Dean of Institute of New Structural Economics, Dean of Institute of South-South Cooperation and Development and Professor and Honorary Dean of National School of Development at Peking University. He was the Senior Vice President and Chief Economist of the World Bank, 2008-2012. Prior to this, Professor Lin served for 15 years as Founding Director and Professor of the China Centre for Economic Research (CCER) at Peking University.

Muhammad Edhie Purnawan is a lecturer at Universitas Gadjah Mada and former Vice Dean of its Faculty of Economics and Business. He was recently appointed as Chairman of the Board of Supervisors of the Indonesian central bank (Badan Supervisi Bank Indonesia/BSBI)

Kiki Verico is lecturer at Universitas Indonesia and Deputy Director of Research at LPEM FEB UI. He also currently serves as expert advisor in industrial and trade policy to the Indonesian Minister of Finance.

Thumbnail photo by Rio Lecatompessy on Unsplash