ABSTRACT
This chapter presents Indonesia's position in global value chains (GVCs), focusing on a comparison with other Association of Southeast Asian Nations (ASEAN) countries in the electrical equipment and transport equipment sectors. It looks at the role of services in boosting export competitiveness, particularly for producers that could be part of a GVC. The chapter concludes and presents policy recommendations. The chapter discusses presents data consistent with the argument that services sector performance and especially the state of regulations governing market access. It represents a significant drag on Indonesia's manufacturing sector, and holds back its involvement in GVCs. Reforming services markets is not enough on its own to catapult Indonesia into the leading ranks of GVC performance in East and Southeast Asia. More broadly, though, there will need to be a shift in governmental and potentially also commercial thinking, away from the domestic market and towards regional and global markets.
