The massive fair was a celebration of Indonesia's recovery from the devastating 1997 Asian financial crisis, which ground exports from Southeast Asia's largest economy to a halt and left millions out of work.
Showcased were high-quality exports ranging from stylish furniture to flat-screen televisions and electric scooters. It was an impressive show, but there was an elephant in the room: China.
"We cannot compete with Chinese products on price because they're very cheap," said Fitri Irawan, the export manager of cosmetics producer Sekawan, which employs around 300 people. "We compete on quality."
The company has found a market niche for its mid-range skin-whitening soaps, shower gels and face cleansers in the Middle East and Africa but has had little success elsewhere.
Indonesian exports have indeed been booming, but growth has been concentrated in commodity exports that employ relatively few people.
High commodity prices drove up non-oil and gas exports by 19 percent to US$60 billion (HK$468) in the first eight months of this year compared to the same period last year.
But labor-intensive exports of the sort on display in Jakarta last week are lagging, said Chatib Basri, an economist and government adviser.
While average annual non-oil and gas export growth between 1996 and 2006 was 6.8 percent, growth in labor-intensive exports was only 3 percent. The pre-crisis era of 1990 to 1996 saw labor-intensive exports grow at an average of 24 percent. The collapse was one of the key reasons behind the increase in unemployment in Indonesia, Basri said.
In 1997, more than 11.2 million Indonesians - 12.9 percent of the overall labor force - were employed in manufacturing, according to government figures that include the non-labour-intensive palm oil industry.
Around 10 percent lost their jobs following the crisis.
Although overall employment has returned to pre-crisis levels, manufacturing jobs now make up just 12.16 percent of the force, despite the current boom in palm oil.
As of March, Indonesia had an unemployment rate of more than 10 percent.
Indonesia's trade minister, Mari Pangestu, conceded that labor-intensive exports have not performed well.
"I think in labor absorption it has been less than we would have liked because we haven't seen the growth in the labor-intensive industries," she said, referring to overall export growth.
Sri Adiningsih, an economist at Gadjah Mada University, said that Indonesia's manufactured goods are simply not competitive with China - nor with Vietnam, Thailand or the Philippines. And in Indonesia itself, products from China and Vietnam are flooding the markets for clothing, shoes and toys.
Basri said the lagging performance stems from investor perceptions Indonesia is a high-risk nation where production costs are relatively high because of corruption, a tangled bureaucracy, stringent labor regulations and a strengthening rupiah.
Competitor nations had elevated their standing on corruption and investment regulation and investment in infrastructure, he said, but Indonesia had not improved much.
Political sensitivity meant Indonesia was unlikely to change its labour laws, which include severance payments of two months wages for every year an employee has worked, Basri said. Attempts to change the law last year produced angry protests from workers and a backdown from legislators.
In place of laissez-faire labor reform, Basri said, Indonesia must curb inflation, rebuild infrastructure and improve its investment climate.
Pangestu said the government has already been successful in attracting investment and that this should show up in export figures within a year. And in place of comprehensive labor deregulation, she said, the government would pass legislation providing insurance for companies to cover redundancy payments.
In the meantime, companies such as Poly Jaya Abadi, a manufacturer of medical equipment, struggle to find their niche in the global market.
"I think for medical equipment, we have better quality than Chinese products," said engineer Yuliagus Zulfikar. But so far Poly Jaya's only direct buyers are in Senegal.
