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COMMAND ECONOMY IN ACTION: Indonesia’s Import Paradox and the Erosion of Industrial Credibility

Rabu, 25 Februari 2026 | Rabu, Februari 25, 2026 WIB | 0 Views Last Updated 2026-02-24T17:50:37Z

                  By Laksamana Sukardi


CNEWS, Jakarta, 22 February 2026

“Speak first before the mirror—so you understand the meaning of your words—before expecting others to understand them.”

This old maxim becomes painfully relevant when public policy drifts away from the rhetoric used to justify it.


Indonesia’s decision to import 105,000 pickup trucks from India for the operational use of the Merah Putih Village Cooperatives presents a striking development paradox. At a time when the President publicly champions domestically produced vehicles—most notably the Maung—as symbols of national resilience and industrial sovereignty, the state has chosen large-scale imports for a product well within domestic manufacturing capability.


This is not a matter of technological constraint. Pickup trucks are not strategic high-tech goods such as aerospace systems or semiconductors. The technology is mature, widely mastered, and already embedded in Indonesia’s industrial ecosystem.


Indonesia is not short of automotive capacity. Its manufacturing base, supplier networks, and engineering competencies have been built over decades, making the automotive sector one of the country’s clearest industrial success stories. Development economics literature consistently emphasizes that industrial deepening and domestic capability upgrading are prerequisites for long-term productivity growth (Amsden, 2001; Rodrik, 2004).


Thus, the central issue is not procurement mechanics—but policy rationality.

The Development Contradiction

The pickup truck import decision creates a direct policy inconsistency:

The government promotes “Proudly Made in Indonesia.”

It elevates domestic vehicles as emblems of industrial sovereignty.

It speaks of supply-chain resilience and import substitution.

Yet for a product already producible at home, it opts for mass importation

.

From a political economy perspective, this pattern closely resembles institutional incentive distortion and soft budget constraints (Kornai, 1986). When economic decisions are driven primarily by administrative directives rather than coordinated market signals and industrial policy logic, inefficiencies multiply—and institutional discipline weakens

.

Import Mentality and Instant Gratification


Trusting domestic industry requires coordination, financing mechanisms, inter-ministerial discipline, and accountability. Imports, by contrast, offer speed and administrative convenience.


However, industrial policy theory is unequivocal: short-term efficiency gains that bypass domestic learning-by-doing undermine long-term productive capacity accumulation (Chang, 2002).


The argument of operational efficiency for cooperatives deserves consideration. Yet when many of these cooperatives are not fully operational, national-scale procurement risks preceding—rather than responding to—actual demand. This reverses the logic of sound public investment.


Policy ignorance—failure to grasp long-term structural consequences—is often more destructive than moral hazard. Corruption drains fiscal resources; misguided policy erodes developmental direction.


Command Economy Reflexes


At approximately Rp24.66 trillion, the pickup truck import value is modest relative to Indonesia’s total trade volume. The concern lies not in the number, but in the decision-making pattern.


Centralized procurement without demand differentiation and without leveraging domestic capacity mirrors characteristics of command-style resource allocation—where administrative instruction overrides industrial coordination and market feedback (Kornai, 1992).


Historical experience across developing economies shows that successful industrialization depends not merely on state intervention, but on policy coherence, fiscal discipline, and alignment between nationalist rhetoric and technocratic implementation (Amsden, 2001; Rodrik, 2004).


Final Reflection


Development is not merely about GDP figures or trade balances. It is fundamentally about institutional reflexes and the quality of judgment.


When a country capable of producing its own vehicles chooses mass imports while simultaneously proclaiming industrial sovereignty, the question is no longer about intent—but about policy coherence.


Is Indonesia’s industrial policy a long-term, disciplined commitment—or merely rhetoric that ends at the podium?


When words and decisions diverge, what is at risk is not a single procurement project, but the credibility of the national development strategy itself.


Even if the nominal value of imported pickup trucks appears insignificant within Indonesia’s overall import structure, the implications are profound. It reflects a command-economy decision-making reflex—one that, if repeated, carries destructive potential for long-term economic stability and industrial resilience.

( Red) 

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