Editing Economy of Indonesia (section)

===Industry===
====Oil and mining{{anchor|Mining}}====
{{see also|List of countries by coal production}}
[[File:Batu Hijau mine ore trucks.jpg|thumb|right|Ore trucks in the mining area in [[West Sumbawa]], [[West Nusa Tenggara]].]]
[[File:Grasberg mine.jpg|thumb|right|The [[Grasberg mine]] has one of the largest reserves of gold and copper in the world. It is located in [[Mimika Regency]], [[Papua (province)|Papua]], Indonesia near [[Puncak Jaya]], the highest mountain in the country.]]
Indonesia was the only South East Asian member of the [[Organization of Petroleum Exporting Countries]] (OPEC) until its suspension in 2009. The country currently remains a net oil importer despite its large petroleum production industry.<ref>{{cite web |title=Member Countries |url=https://www.opec.org/opec_web/en/about_us/25.htm |website=OPEC |publisher=Organisation of Petroleum Exporting Countries}}</ref> In 1999, crude and condensate output averaged {{convert|1.5|Moilbbl|m3}} per day, and in 1998, the oil and gas sector including refining, contributed approximately 9% to GDP. As of 2005, crude oil and condensate output were {{convert|1.07|Moilbbl|m3}} per day. It indicates a substantial decline from the 1990s, due primarily to ageing oil fields and a lack of investment in oil production equipment. This decline in production has been accompanied by a substantial increase in domestic consumption, about 5.4% per year, leading to an estimated US$1.2 billion cost for importing oil in 2005. The state owns all petroleum and mineral rights. Foreign firms participate through production-sharing and work contracts. Oil and gas contractors are required to finance all exploration, production, and development costs in their contract areas and are entitled to recover operating, exploration, and development costs out of the oil and gas produced. Indonesia had previously subsidized fuel prices to keep prices low, costing US$7 billion in 2004.<ref>{{cite web|url=http://www.atimes.com/atimes/Southeast_Asia/GC10Ae04.html|archive-url=https://web.archive.org/web/20050311204959/http://www.atimes.com/atimes/Southeast_Asia/GC10Ae04.html|url-status=unfit|archive-date=11 March 2005|title=Tigers count the cost of easing fuel subsidies|work=[[Asia Times]]|date=10 March 2005|access-date=29 August 2011}}</ref> SBY has mandated a significant reduction of government subsidy of fuel prices in several stages.<ref>{{cite news|url=https://news.bbc.co.uk/2/hi/business/4200100.stm|work=[[BBC News]]|title=Indonesia plans to slash fuel aid|date=31 August 2005}}</ref> The government has stated that cuts in subsidies are aimed at reducing the budget deficit to 1% of GDP in 2005, down from around 1.6% last year. At the same time, the government has offered one-time subsidies for qualified citizens, to alleviate hardships.

Indonesia is the world's largest tin market. Although mineral production traditionally centered on bauxite, silver, and tin, it is expanding its copper, nickel, gold, and coal output for export markets. In mid-1993, the [[Ministry of Energy and Mineral Resources|Department of Mines and Energy]] reopened the coal sector to foreign investment, resulting in a joint venture between Indonesian coal producer and [[BP]] and [[Rio Tinto (corporation)|Rio Tinto]]. Total coal production reached 74 million metric tons in 1999, including exports of 55 million tons, and in 2011, production was 353 million. As of 2014, Indonesia is the third-largest producer with a total output of 458 Mt and export of 382 Mt.<ref>{{Cite web|title=Coal Mining in Indonesia - Indonesian Coal Industry {{!}} Indonesia Investments|url=https://www.indonesia-investments.com/business/commodities/coal/item236|website=indonesia-investments.com|access-date=2020-05-06}}</ref> At this rate, the reserves will be used up in 61 years until 2075.<ref>{{Cite web |url=https://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2015/bp-statistical-review-of-world-energy-2015-full-report.pdf |title=Archived copy |access-date=5 January 2016 |archive-url=https://web.archive.org/web/20171115003415/https://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2015/bp-statistical-review-of-world-energy-2015-full-report.pdf |archive-date=15 November 2017 |url-status=dead }}</ref> Not all of the productions can be exported due to Domestic Market Obligation (DMO) regulation, which should fulfill the domestic market. In 2012, the DMO was 24.72%. Starting from 2014, no low-grade coal exports are allowed, so the [[Coal upgrading technology|upgraded brown coal]] process that cranks up the calorie value of coal from 4,500 to 6,100 kcal/kg will be built in [[South Kalimantan]] and [[South Sumatra]].<ref>{{cite web|url=http://www.thejakartapost.com/news/2011/09/23/coal-production-may-reach-370-million-tons-year.html|title=Coal production may reach 370 million tons this year|date=23 September 2011}}</ref> Indonesia is also the [[Nickel mining in Indonesia|world's largest producer of nickel]],<ref>{{cite news |last1=Sanderson |first1=Henry |title=Nickel prices hit four-year high on Indonesia export ban |url=https://www.ft.com/content/1709b318-cb26-11e9-a1f4-3669401ba76f |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/1709b318-cb26-11e9-a1f4-3669401ba76f |archive-date=10 December 2022 |url-access=subscription |access-date=9 September 2019 |work=[[Financial Times]]|date=30 August 2019}}</ref> and the second-largest producer of [[cobalt]] in 2022.<ref>{{cite news |title=Indonesia emerges as world's second-largest cobalt producer |url=https://www.ft.com/content/aae97af3-02ac-4723-a6fd-dbb0e5de55ff |access-date=10 May 2023 |work=Financial Times |date=9 May 2023}}</ref>

Two US firms operate three copper/gold mines in Indonesia, with a Canadian and British firm holding significant other investments in nickel and gold, respectively. India's fortune groups like [[Vedanta Resources]] and [[Tata Group]] also have substantial mining operations in Indonesia. In 1998, the value of Indonesian gold and copper production was $1 billion and $843 million respectively. Receipts from gold, copper, and coal accounted for 84% of the $3 billion earned in 1998 by the mineral mining sector. With the addition of [[Alumina]] project that produces 5% of the world's alumina production, Indonesia would be the world's second-largest Alumina producer. The project will not make the ores to become aluminum, as there are 100 types of Alumina derivatives that can be developed further by other companies in Indonesia.<ref>{{cite web|url=http://www.antaranews.com/en/news/70198/ri-aims-to-be-second-largest-alumina-producer|title=RI aims to be second largest alumina producer|publisher=[[Antara (news agency)|Antara]]|date=12 April 2011|access-date=29 August 2011}}</ref>

[[Joko Widodo]]'s administration continued the [[resource nationalism]] policy of SBY, nationalizing some assets controlled by multinational companies such as [[Freeport McMoRan]], [[TotalEnergies]] and [[Chevron Corporation|Chevron]]. In 2018, in a move aimed to cut imports, oil companies operating in Indonesia were ordered to sell their crude oil to state-owned [[Pertamina]].<ref>{{cite news|title=Economic nationalism is back in Indonesia as election approaches|url=https://www.straitstimes.com/asia/se-asia/economic-nationalism-is-back-in-indonesia-as-election-approaches|access-date=18 September 2018|work=[[Straits Times]]|date=17 September 2018}}</ref>

====Renewable energy====
{{see also|Energy in Indonesia}}
Indonesia has significant potential for developing renewable energy, however, the country continues to rely heavily on the use of fossil fuels in domestic electricity production.<ref>Vakulchuk, R., Chan, H.Y., Kresnawan, M.R., Merdekawati, M., Overland, I., Sagbakken, H.F., Suryadi, B., Utama, N.A. and Yurnaidi, Z. 2020. Indonesia: how to boost investment in renewable energy. ASEAN Centre for Energy (ACE) Policy Brief Series, No. 6. https://www.researchgate.net/publication/341793782</ref> Continued investment in and reliance on fossil fuels, such as coal, may result in fossil fuels becoming [[stranded assets]], leading to significant investments lost that the country could have received from renewable energy investors.<ref>{{cite journal |last1=Overland |first1=Indra |last2=Sagbakken |first2=Haakon Fossum |last3=Chan |first3=Hoy-Yen |last4=Merdekawati |first4=Monika |last5=Suryadi |first5=Beni |last6=Utama |first6=Nuki Agya |last7=Vakulchuk |first7=Roman |title=The ASEAN climate and energy paradox |journal=Energy and Climate Change |date=December 2021 |volume=2 |article-number=100019 |doi=10.1016/j.egycc.2020.100019|issn=2666-2787 |hdl=11250/2734506 |hdl-access=free }}</ref> The national electricity company [[Perusahaan Listrik Negara|PLN]] is widely considered to be an obstacle to the development of renewable energy, although it is not clear whether the resistance emanates from the company itself or whether the company is rather an arena for various government bodies and other external actors who resist change.<ref>{{Cite journal |last1=Apriliyanti |first1=Indri Dwi |last2=Nugraha |first2=Diwangkara Bagus |last3=Kristiansen |first3=Stein |last4=Overland |first4=Indra |date=2024-12-01 |title=To reform or not reform? Competing energy transition perspectives on Indonesia's monopoly electricity supplier Perusahaan Listrik Negara (PLN) |journal=Energy Research & Social Science |volume=118 |article-number=103797 |doi=10.1016/j.erss.2024.103797 |issn=2214-6296|doi-access=free |bibcode=2024ERSS..11803797A }}</ref>

====Construction====
[[File:The Gatot Subroto Avenue within the Jakarta Inner Ring Road (cropped).jpg|thumb|Part of [[Jakarta Inner Ring Road]] or ''Jalan Tol Lingkar Dalam Jakarta'' in Kuningan, South Jakarta]]
For 2023, Construction sectors contribution to 9.92% of [[Indonesia]] GDP, value at Rp 2,072.4 Trillion [[Indonesian rupiah|IDR]] or $135.97 Billion [[USD]]<ref name="BPS IV-2023"/>

The expansion of the construction industry has been catalysed by major capital expenditure projects, and a key factor has been the government's Economic Programme and public-private partnership (PPP) mega-projects like [[High-speed rail in Indonesia|Jakarta-Bandung High Speed Rail]], [[Jakarta MRT]], [[Jabodebek LRT]], [[Trans-Java Toll Road]], [[Trans-Sumatra Toll Road]], [[Nusantara (city)]], and many more.

====Manufacturing====
[[File:Industry area - panoramio.jpg|thumb|right|250px|Industrial area in Batam]]
Indonesia's [[manufacturing]] sector has historically played a key role in the country's economic development and now contributes to 20 percent of GDP.
The government has ambitious plans to propel the country into the top ten biggest economies in the world by 2030, with [[manufacturing]] at the heart of this goal. The main areas of production include [[textiles]] and [[garments]], [[food]] and [[beverages]] (F&B), [[electronics]], [[automotive]], and [[chemicals]], with the majority of manufacturers in this sector consisting of micro, small, or medium-sized enterprises. The sector has posted a consistent four percent growth year-on-year since 2016 and registered 147 trillion rupiah (US$8.9 billion) in investments from January to September 2019.<ref>{{cite news|title=Indonesia's Manufacturing Sector: Practical Information for Investors|url=https://www.aseanbriefing.com/news/indonesias-manufacturing-sector-practical-information-investors/|access-date=1 July 2021|work=Asean Briefing|date=31 March 2020}}</ref>

Indonesia recently became the 10th-largest [[manufacturing]] nation in the world. Its large [[manufacturing]] sector accounts for almost a quarter of the nation's total GDP and employs over a fifth of Indonesia's working age population (around 25 million workers). Put into perspective, Indonesia's manufacturing sector is now larger than the [[manufacturing]] sectors of the [[United Kingdom]], [[Russia]] and [[Mexico]]. Industry sector (including manufacturing) which accounts for 21% of local workers (having become more prominent in recent years). Indonesia's labour pool is estimated at 120 million people, and is growing annually by approximately 2.4 million. As the economy has progressed beyond its predominantly agricultural base to a mixed composition, more workers – particularly women – are now employed in manufacturing and service-related professional industries.<ref>{{cite news|title=Manufacturing in Indonesia|url=https://asialinkbusiness.com.au/indonesia/business-practicalities-in-indonesia/manufacturing-in-indonesia?doNothing=1|access-date=1 July 2021|work=Asia Link Business|archive-date=20 April 2024|archive-url=https://web.archive.org/web/20240420035858/https://asialinkbusiness.com.au/indonesia/business-practicalities-in-indonesia/manufacturing-in-indonesia?doNothing=1|url-status=dead}}</ref>

With its rapidly growing middle class and competitive workforce, more foreign investors than ever before are taking advantage of Indonesia's strong manufacturing sector. However, the sector has significant challenges, including intense international competition, particularly from [[China]], increasing labour costs, high transportation and logistics costs, difficulties getting credit, and varying levels of transparency and clarity in regulations.

====Automotive industry====
{{Main|Automotive industry in Indonesia}}

In 2010, Indonesia sold 7.6 million [[motorcycle]]s, which were mainly produced in the country with almost 100% local components. [[Honda]] led the market with a 50.95% market share, followed by [[Yamaha Motor Company|Yamaha]] with 41.37%.<ref>{{cite web|url=http://www.thejakartapost.com/news/2011/07/01/honda-eyes-larger-share-premium-bike-market.html|title=Honda eyes larger share in premium bike market|work=The Jakarta Post|access-date=29 August 2011}}</ref> In 2011, the retail car sales total was 888,335 units, a 19.26% increase from last year. [[Toyota]] dominated the domestic car market (35.34%), followed by [[Daihatsu]] and [[Mitsubishi Motors]] with 15.44% and 14.56%, respectively.<ref>{{cite web|url=http://www.thejakartapost.com/news/2012/01/05/local-automobile-sales-hit-all-time-high0.html|title=Local automobile sales hit all-time high|date=5 January 2012}}</ref> Since 2011, some local carmakers have introduced some [[Indonesian car|Indonesian national car]]s which can be categorized as Low-Cost Green Car (LCGC). In 2012, sales increased significantly by 24%, making it the first time that there were more than one million units in automobile sales.<ref>{{cite web|url=http://industri.kontan.co.id/news/mobil-laku-11-juta-unit-di-2012|title=Penjualan mobil capai 1,1 juta unit di 2012|date=8 January 2013}}</ref>

[[File:2006Indonesian exports.PNG|thumb|upright=2.00|Indonesian export destinations, 2006.]]
In August 2014, Indonesia exported 126,935 Completely Build Up (CBU) vehicle units and 71,000 Completely Knock Down (CKD) vehicle units, while total production reached 878,000 vehicle units, constituting 22.5% of total output. Automotive export is more than double of its import. By 2020, it is predicted that the automotive exports will be the third after [[Cooking oil#Extraction|CPO]] and shoe export.<ref>{{cite web |url=http://www.kemenperin.go.id/artikel/10087/Optimisme-Ekspor-Mobil-Terus-Menanjak|title=Optimisme Ekspor Mobil Terus Menanjak|access-date=22 September 2014|archive-url=https://web.archive.org/web/20150923193034/http://www.kemenperin.go.id/artikel/10087/Optimisme-Ekspor-Mobil-Terus-Menanjak|archive-date=23 September 2015|url-status=dead}}</ref> In August 2015, Indonesia exported 123,790 motorcycles. In the same year, Yamaha Motor Company, which exported 82,641, announced to make Indonesia as a base of exporting of its products.<ref>{{cite web |url=http://industri.kontan.co.id/news/roda-dua-makin-ngacir-ke-luar-negeri|title=Roda dua makin ngacir ke luar negeri|date=14 September 2015}}</ref>

In 2017, the country produced almost 1.2 million motor vehicles, ranking it as the [[List of countries by motor vehicle production|18th largest producer in the world]].<ref>{{cite web|url=http://www.oica.net/category/production-statistics/2017-statistics/|title=2017 Production Statistics|publisher=Organisation Internationale des Constructeurs d'Automobiles|access-date=8 May 2018}}</ref> Nowadays, Indonesian automotive companies can produce cars with a high ratio of local content (80%–90%).<ref>{{cite web |url=http://www.toyotaindonesiamanufacturing.co.id/industrial/localization |title=Localization|publisher=PT. Toyota Motor Manufacturing Indonesia |access-date=29 June 2016|url-status=dead|archive-url=https://web.archive.org/web/20160629201829/http://www.toyotaindonesiamanufacturing.co.id/industrial/localization|archive-date=29 June 2016}}</ref>

In 2018, the country produced 1.34 million cars and exported 346,000 cars, mainly to the Philippines and Vietnam.<ref>{{cite web |url=https://setkab.go.id/en/car-exports-expected-to-increase-15-6-this-year/ |archive-url=https://web.archive.org/web/20200730225901/https://setkab.go.id/en/car-exports-expected-to-increase-15-6-this-year/ |url-status=dead |archive-date=30 July 2020 |title=Car Exports Expected to Increase 15.6% This Year |author=Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation |date=25 April 2019 }}</ref>

====Defense====
[[File:BRP Tarlac homebound.jpg|thumb|[[Tarlac-class landing platform dock|''Tarlac''-class landing platform dock]]|188x188px]]
[[File:RMAF Airtech CN-235 MPA Persuader AX-2334 Pichugin.jpg|thumb|Indonesian Air Force Airtech CN-235 MPA, July 2005]]
[[Indonesia|Indonesia's]] defense industry has been shaped by the need for

* Strategic self-reliance due to arms embargoes in the past (e.g. U.S. embargo in the late 1990s).
* Economic value creation via job creation, technology transfer, and industrial capability.
* Support for Minimum Essential Force (MEF) modernization targets set by the Ministry of Defense.

[[Indonesia]] has various companies, with their respective focus area on [[Arms industry|defence]], such as [[Pindad|PT Pindad]], [[PAL Indonesia|PT PAL]], [[Indonesian Aerospace|PT DI]], [[:id:Dahana|PT Dahana]], [[:id:Len Industri|PT LEN]].

{| class="wikitable"
! Company
! Focus area
! Products
! Export market
|-
| [[Pindad|PT Pindad]]
| Weapons & land systems
| SS2 rifle, Anoa APC, medium tank
| [[Brunei]], [[Laos]], and various [[List of sovereign states and dependent territories in Africa|African countries]]
|-
| [[PAL Indonesia|PT PAL]]
| Naval shipbuilding
| LPD, submarines
| [[Philippines]], [[UAE]]
|-
| [[Indonesian Aerospace|PT DI]]
| Aerospace
| CN-235, N-219
| [[Pakistan]], [[Senegal]]
|-
| [[:id:Dahana|PT Dahana]]
| Explosives & propellants
| Bombs, rockets
| [[Iran]]
|-
| [[:id:Len Industri|PT LEN]]
| Electronics & radars
| Surveillance, C4ISR systems
| Domestic uses
|-
|}

As of MEF 2025, Indonesia plans to produce $1 billion worth of [[Baykar Bayraktar TB3]] and [[Baykar Bayraktar Akıncı]] domestically.<ref>{{cite web |title=Indonesia Buys 60 Turkish-Made Bayraktar TB3 Drones |url=https://thedefensepost.com/2025/02/17/indonesia-buys-bayraktar-drones/ |website=thedefensepost.com |date=17 February 2025 |access-date=14 June 2025}}
</ref> A contract to acquire 60 TB3s was signed.<ref>{{Cite news |last=Avcioglu |first=Mucahithan |date=12 February 2025 |title=Türkiye's Bayraktar drones set to be exported to Indonesia|url= https://www.aa.com.tr/en/asia-pacific/turkiyes-bayraktar-drones-set-to-be-exported-to-indonesia/3480051 |access-date=2025-02-12|website= Anadolu Haber Ajansi|language=English}}</ref> [[Ministry of Defense (Indonesia)|Minister of Defense of the Republic of Indonesia]] and the [[Defence Industry Agency|Turkish Defence Industry Agency]] signed a Memorandum of Understanding (MoU) for 48 [[TAI TF Kaan|KAANs]] at the [[Indo Defence Expo & Forum|Indo Defence Expo & Forum 2024]], [[Jakarta]], on 11 June 2025. The total order is planned to be delivered with domestically produced engines in approximately 10 years after the effective signatures are obtained.<ref>{{cite web |author1=Genta Tenri M |author2=Resinta Sulistiyandari |editor=Primayanti |url=https://en.antaranews.com/news/358837/prabowo-witnesses-signing-of-27-mous-at-indo-defence-expo |title=Prabowo witnesses signing of 27 MoUs at Indo Defence Expo |website=[[Antara (news agency)|Antara News English]] |date=11 June 2025 |access-date=11 June 2025 }}</ref><ref>{{cite web |title=TÜRKİYE İLE ENDONEZYA ARASINDA ATILAN İMZALARLA TÜRKİYE TARİHİNİN REKOR İHRACAT SÖZLEŞMESİ GERÇEKLEŞTİRİLDİ. ANLAŞMA TUSAŞ TARAFINDAN MİLLÎ İMKANLARLA ÜRETİLEN 48 ADET MİLLÎ MUHARİP UÇAK KAAN'IN SATIŞINI KAPSIYOR. - TUSAS |url=https://www.tusas.com/medya-merkezi/haberler/turkiye-ile-endonezya-arasinda-atilan-imzalarla-turkiye-tarihinin-rekor-ihracat-sozlesmesi-gerceklestirildi-anlasma-tusas-tarafindan-milli-imkanlarla-uretilen-48-adet-milli-muharip-ucak-kaan-in-satisini-kapsiyor |website=www.tusas.com |publisher=Turkish Aerospace Industries (TAI) |access-date=11 June 2025 |language=tr}}</ref>