Why a commodities boom is not lifting Indonesia's economy

As investment pours into mining projects, the country's once-mighty manufacturing sector is stagnating and shedding jobs.

- A. Anantha Lakshmi and Diana Mariska

Ms Sri Lestari left her hometown as a teenager looking for work. Instead, she found a whole new life. In 2000, the then 18-year-old travelled to the quaint town of Sukoharjo in the Central Java province, and was offered a job at Sri Rejeki Isman, one of Indonesia's largest textile and garment manufacturers. Sritex, as the company was known, was thriving, supplying garments to global retailers such as Uniqlo, Walmart and foreign militaries. It offered Ms Sri more than just a job; one of her colleagues became her husband, and with their combined income they were able to build a family home among the padi fields. But by 2025, the company's fortunes had reversed. Burdened by debt, an influx of cheaper Chinese goods and stiff global competition, Sritex shut down its operations on March 1.

Both Ms Sri and her husband, who had worked at Sritex for 35 years, were laid off along with more than 10,000 others. "I was really heartbroken. I was there for 25 years. I was always loyal," she said, wiping away tears as she recalled her final days at the company. Now she runs a kiosk selling fried chicken and rice, next to the home of another recently laid-off Sritex worker who sells coffee and coconut water, and struggles to make ends meet.

Ms Sri is one of tens of thousands laid off in 2025 as a result of a manufacturing slump that is destabilising South-east Asia's largest economy and threatening to erode its appeal as one of the world's most populous consumer markets.

Although Sritex is the largest of the factory closures so far in 2025, other notable ones have been Japanese-owned Yamaha Music and Sanken, and two suppliers of footwear to US sportswear giant Nike.

Indonesia is in the throes of deindustrialisation, which economists say is having far-reaching consequences. The economy is growing more slowly and creating fewer quality jobs, both of which are eroding the purchasing power of the country's 280 million citizens.