According to the World Bank’s 2023 report, Indonesia has achieved a remarkable position as the leading manufacturing country in Southeast Asia and ranks 12th globally. This ranking highlights Indonesia’s substantial role in the global manufacturing sector based on the value added by manufacturing activities.
Key Insights from the World Bank Report
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Top Southeast Asian Manufacturing Country: Indonesia is recognized as the foremost manufacturing powerhouse in Southeast Asia, surpassing other regional competitors like Thailand and Vietnam.
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Global Ranking: Indonesia ranks 12th worldwide in manufacturing value added for 2023. This global position underscores the country’s significant contribution to the global manufacturing landscape.
Understanding Manufacturing Value Added
Manufacturing value added (in current US dollars) is a critical economic metric that:
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Represents Sector Contribution: It measures the total value of goods produced by the manufacturing sector after deducting the cost of intermediate goods and services. This reflects the sector’s true economic contribution.
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Assesses Economic Impact: By focusing on value added rather than gross output, it provides a clearer picture of the economic impact and productivity of the manufacturing sector.
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Evaluates Competitiveness: A higher value added indicates a more competitive and efficient manufacturing sector, capable of producing higher-value goods and services.
Key Players in Manufacturing
In addition to Indonesia, the report highlights other leading manufacturing countries:
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Thailand: Alongside Indonesia, Thailand is also recognized among the top 25 manufacturing countries globally. Thailand's manufacturing sector is significant in Southeast Asia, known for its diverse range of products and strong industrial base.
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Vietnam: Vietnam ranks among the top 25 as well, reflecting its growing manufacturing capabilities and economic development.
Implications for Southeast Asia and the Global Market
Indonesia’s achievement as a top manufacturing country has several implications:
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Regional Leadership: Indonesia’s leading position in Southeast Asia showcases its industrial strength and economic influence, setting a benchmark for other countries in the region.
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Global Influence: Securing 12th place globally highlights Indonesia’s growing importance in the global manufacturing market, attracting international attention and investment.
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Economic Development: The strong performance in manufacturing contributes significantly to Indonesia’s economic growth, creating job opportunities and boosting its industrial capabilities.
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Competitive Dynamics: The presence of Thailand and Vietnam in the top 25 underscores the region’s competitive manufacturing landscape and its growing impact on the global stage.
Conclusion
Indonesia’s top ranking in Southeast Asia and 12th place globally in manufacturing value added for 2023, as reported by the World Bank, reflects its substantial role in the global manufacturing sector. This achievement highlights Indonesia’s industrial prowess and positions it as a key player in both regional and global markets. The recognition of Thailand and Vietnam further emphasizes Southeast Asia's growing influence in the global manufacturing landscape.
