TY  - BOOK
AU  - Varela,Gonzalo
AU  - Ghosh,Swati
AU  - Rahardha,Sjamsu
AU  - Varela,Gonzalo
TI  - How the Macroeconomic Environment and Investment Climate Have Affected the Manufacturing Sector
T2  - Policy Notes
PY  - 2012///
CY  - Washington, D.C.
PB  - The World Bank
KW  - Accounting
KW  - Agriculture
KW  - Business Environment
KW  - Capital Flows
KW  - Capital Markets
KW  - Coal
KW  - Commodity Prices
KW  - Consumers
KW  - Debt
KW  - Debt Markets
KW  - Developing Countries
KW  - Dutch Disease
KW  - Economic Conditions and Volatility
KW  - Economic Recovery
KW  - Employment
KW  - Exporters
KW  - Finance and Financial Sector Development
KW  - Financial Crisis
KW  - Gdp
KW  - General Manufacturing
KW  - Global Economy
KW  - Globalization
KW  - Industrial Economics
KW  - Industry
KW  - Inflation
KW  - Innovation
KW  - Insurance
KW  - Investment Climate
KW  - Job Creation
KW  - Labor Costs
KW  - Labor Policies
KW  - Liberalization
KW  - Macroeconomic Management
KW  - Macroeconomics and Economic Growth
KW  - Private Sector Development
KW  - Social Protections and Labor
N2  - The performance of Indonesia's manufacturing sector has lagged over the past decade. This is seen in the decline in growth after the Asian financial crisis, by the sector's decline relative to other sectors within the economy, and relative to countries in the region. This note documents the effects of the challenging macro and external environment on the profits of manufacturing firms, and on the uncertainty they face, and argues that these adverse conditions partially explain the stagnation of the sector in the past decade. The changes in incentives appear to have particularly affected labor-intensive sectors, with important consequences for job creation. Policies to promote growth in the manufacturing sector should aim at alleviating pressures on manufacturing costs by: (i) reducing rigidities in the market for labor; (ii) promoting competition in the market for services; and (iii) providing incentives for productivity enhancing technology adoption, while reducing profit uncertainty by; (iv) maintaining a low and predictable rate of inflation; and (v) keeping exchange rate volatility within reasonable limits
UR  - http://elibrary.worldbank.org/doi/book/10.1596/26717
ER  -