Indonesia and Vietnam in Global Supply Chains and the Age of COVID: A Tale of Two Countries

Author Name Willem THORBECKE (Senior Fellow, RIETI) / KATO Atsuyuki (Research Associate, RIETI)
Creation Date/NO. February 2022 22-E-010
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Indonesia's economic performance since 2000 has been respectable. It has not succeeded, however, at joining global value chains (GVC). Vietnam on the other hand is a key link in GVCs for electronics, textiles, and other sectors. This paper recounts the experiences of Indonesia and Vietnam at attracting foreign direct invest, exporting, and coping with the COVID-19 pandemic. It considers why Indonesia has been less successful than Vietnam at joining GVCs. It then concludes with several recommendations for how Indonesia could attract FDI and avoid scarring from the pandemic.