By: Winna Nartya *)
In public debate, downstreaming is often reduced to a ban on raw material exports or the construction of smelters. However, the substance of this policy goes far beyond heavy industry. Sona Maesana, Special Staff to the Minister of Investment and Downstreaming, emphasized that downstreaming is about creating sustainable added value, economic independence, job creation, and determining the future direction of the nation. He observed, from his experience in the business world and now in the policy realm, that downstreaming will only survive if the investment ecosystem is healthy and supports local actors. Therefore, he believes that simply establishing factories is not enough; the key questions are who benefits from the added value and how the supply chain actively involves the nation’s youth. In his view, downstreaming must create local jobs, involve SMEs, and elevate the class of Indonesian entrepreneurs through concrete partnerships.
In the policy realm, Sona Maesana explained that the government is encouraging integration between local and foreign players, providing incentives for investors who foster local industries, and establishing transparent regulations to reduce overlapping permitting processes. He also believes that the speed and certainty of permitting are more important than the investment commitment figures on paper, because without clear execution, figures are just promises. As a bridge between the language of investors and the language of the government, he advocates a new perspective: not simply “selling projects,” but rather cultivating long-term trust. He also emphasized that downstreaming does not stop at minerals and metals; the digital, agricultural, pharmaceutical, and creative economy sectors need to enter the downstreaming orbit through connecting health startups with state-owned pharmaceutical companies, farmers with industrial buyers through local platforms, and schemes that commercialize campus innovations.
At the institutional level, the downstreaming roadmap is strengthened by collaboration between government, industry, and universities. The Industrial Estate Association (HKI) signed a memorandum of understanding with the Ministry of Investment and Downstreaming/BKPM and the Ministry of Higher Education, Science, and Technology, witnessed by President Prabowo Subianto. HKI Chairman Akhmad Ma’ruf Maulana stated that this collaboration embodies Asta Cita (Asta Cita) to promote economic independence, strengthen sustainability, and accelerate technological innovation as pillars of growth. He emphasized HKI’s role as a liaison between industry, education, and government to foster knowledge- and innovation-based competitiveness. This includes aligning the curriculum with industry needs, research collaboration to accelerate downstreaming and attract investment, and increasing competitiveness through the development of superior industrial human resources.
A concrete example of downstreaming that directly impacts the labor market is evident in Aceh. The Head of the Aceh Agriculture and Plantation Agency, Cut Huzaimah, called for a halt to raw rubber exports because the processing plant in West Aceh, PT Potensi Bumi Sakti, is ready to operate to accommodate all local production. She believes that local processing is crucial for encouraging downstreaming, creating jobs, and improving welfare. The factory, which sits on 25 hectares of land, has the capacity to process 2,500 tons of dry rubber per month, and the local government believes that investment stability and security must be maintained so that the benefits directly benefit the Acehnese people.
In the food-petrochemical cluster, downstreaming is also strengthened through strategic partnerships. Rahmad Pribadi, President Director of PT Pupuk Indonesia (Persero), explained that the company is expanding its collaboration with Petronas Chemicals Group Berhad to strengthen regional food security while simultaneously encouraging the downstreaming of fertilizers and petrochemicals in Indonesia. This collaboration includes exploring synergies in urea and ammonia supply, transferring technical and operational knowledge, and strengthening Health, Safety, and Environment (HSE) governance.
When linked, the three components above—investment policies favoring local actors, strengthening campus-industry linkages, and commodity and petrochemical processing projects—illustrate the complete logic of downstreaming. Job opportunities arise not only at the main plant but also in the multiplier effects: raw material logistics, machine maintenance services, packaging, transportation, digital supply chain services, and financial and insurance services. With a harmonized curriculum, local talent becomes not just operational personnel but also technicians, process analysts, and supply chain managers. Upstream, farmers and plantation owners are encouraged to increase productivity due to the certainty of absorption; downstream, markets are more stable because value-added products are produced domestically.
The government is currently weaving downstream processes as an effort to uphold “productive justice”: added value doesn’t stop at corporate balance sheets, but flows to the households of workers, farmers, and SMEs. The government has emphasized that the essence of downstream processes isn’t pursuing quick investments, but rather investments that grow alongside the local ecosystem, aligning with the concept of policy as the practice of discernment in selecting instruments that are not only technically effective but also socially just.
Downstreaming is a long road, but the direction is increasingly clear: added value is created domestically, knowledge is internalized, and meaningful work is expanded. When factories absorb local production, when campuses and industrial estates integrate curriculum and research, when fertilizers and petrochemicals strengthen food and energy security, when the language of investors and the language of government converge in swift and sure execution, we are shifting the economic gravity from raw commodities to innovation and value-added manufacturing. That is downstreaming that is on our side, which not only increases GDP but also elevates the dignity of its citizens’ work.
*) The author is an economic observer
