From Tailor Shops to Factories: Rethinking Upgrading and Labor Role in Indonesia’s Trade with the World

Abstract

This article examines the export-oriented industrial policy, particularly in the textile and garment sector, adopted by President Joko Widodo’s administration that ended his two five-year tenures in 2024. While a number of scholars acknowledge that the sector has managed to achieve economic upgrading, primarily proven by better export performance, very few have highlighted its failure to bring about social upgrading, even by normative standards as measured by the Decent Work Agenda of the International Labor Organization (ILO). I argue Indonesia’s textile and garment industry should aim higher by attaining social upgrading, namely the fulfilment of labor rights and entitlements that will enhance the quality of their employment. But I suggest that the social upgrading is better understood from a “bottom-up” approach, in which improvement of working conditions results from the balance of power between labor and capital, institutionalized by the state, instead of a “top-down” approach as laid out by the DWA, which justifies the capital’s imperative to accumulate surplus through labor exploitation. By understanding social upgrading through a “bottom-up” approach, I argue, one can better grasp the exploitative nature in capitalist relations as well as labor resistance against capitalist exploitation, and consequently, overcome the view that workers are passive victims.