Indonesia is an important global source for textiles and clothing.In 2004 it ranked tenth among the world's leading exporters of textiles (excluding Hong Kong,whose domestic exports are small) and ninth among clothing exporters (including Hong Kong).Within Asean (Association of Southeast Asian Nations),it is the number one exporter in both textiles and clothing.The textile and clothing industry is also important to Indonesia as it contributes significantly to the country's economy.Indeed,it is the largest provider of employment and a major source of export earnings.The official employment estimate is 1.2 mn people,spread over 4,500 factories.But some believe that an additional 3.5 mn are employed directly or indirectly in textile-related areas.Textile and clothing exports were worth US8,671 mn in 2005,representing 10.1% of the country's total exports.Furthermore,textile and clothing exports in 2005 were 13.4% higher than in 2004.The Indonesian textile and clothing industry is vertically integrated,encompassing almost every stage of production.Indonesia has the largest share of spindles and looms among Asean countries and its capacity ranks as the fourth highest in the world.The industry has a number of strengths which should enable it to retain and even expand its share of international markets.But it needs to implement an extensive modernisation programme with some urgency.After 2008,when temporary safeguard quotas against China will have come to an end,Indonesia can expect to feel the full force of unfettered Chinese competition.
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