'De-industrialisation' and colonial rule: The cotton textile industry in Indonesia, 1820-1941

Did colonial rule in Indonesia have a de-industrialising impact? Using the case of the cotton textile industry, this paper finds little evidence. Value added in the industry increased in Java during 1820-71, increased more than three-fold during 1874-1914 and doubled during 1934-41. Most activity involved finishing of imported cotton cloth. Spinning and weaving increased marginally, as high labour intensity of small-scale production, marginal local raw cotton production, and competitive international markets for yarn and cloth precluded domestic production. Unfavourable real exchange rates discouraged investment in modern spinning and weaving ventures. From 1934, production increased rapidly due to trade protection and technological change in small-scale weaving.