This article is concerned with the question of whether participation in the global economy leads to sustainable income growth. It examines the furniture industry of Central Java, which has grown rapidly since the financial crisis in 1997.
The article shows that the exporting small and medium-sized enterprises generated substantial employment and income growth. However, this growth is not sustainable because the viability of exports has become dependent on wood which is logged illegally and risks depletion. Government and donor projects aimed at small enterprises risk driving these enterprises deeper into the race to the bottom. The article then discusses ways to avoid this, stressing the need for a coalition of public and private actors along the local–global axis.