Abstract

This study examines the importance of the health sector in Indonesia's economy and the Indonesian government's role in the country's economic development. This paper investigates the political economy of Indonesia's industrial strategy, which was particularly marked by a movement from sector-based to market-based industrial policy as the world system evolved. This study also concludes that industrial policy is a major issue that cannot be divorced from the present evolution of the global system. Our study aligns with the strategies adopted to address health sector development in the country, most notably when the government introduced a new national health system in 2014, which aims to increase health access from limited to guaranteed, according to the State convention. The analysis is extended to 2008 and can be interpolated to 1945, following the country's proclamation, to characterize the industrial policies. The empirical evidence demonstrates that Indonesia saw a considerable import increase from 2008 to 2019, although the value created has dropped, as demonstrated by a decline in capital productivity.