By: Citra Kurnia Khudori)
The government continues to ensure that various measures to accelerate downstreaming are implemented effectively in order to increase the value-added of national commodities. These efforts are not only intended to strengthen the national economy, but also designed so that the benefits are felt directly at the regional level.
The government emphasizes that downstreaming opens up new investment opportunities, which in turn creates local jobs. As downstream industries expand across various regions, the local economic wheels are expected to move faster and more steadily.
The commitment to strengthening downstreaming is also linked to equitable development so that growth is not concentrated only in major cities. Through integrated policies, the government seeks to ensure that every region receives sustainable benefits from more advanced resource processing.
Since the beginning of his administration, President Prabowo has firmly stated that downstreaming—processing natural resources domestically to create added value—is part of the nation’s long-standing vision dating back to the early independence era. President Prabowo has designated downstreaming as one of the key pillars of Indonesia’s economic policy.
In his 2026 State Budget Address, President Prabowo emphasized that the government will expand downstreaming programs with a focus on added value, job creation, and ensuring that economic benefits remain in Indonesia and grow from the regions.
The downstreaming agenda has now been expanded to multiple sectors—not only mining or minerals, but also oil and gas, energy, agriculture, plantations, fisheries, and other natural resources—aiming to develop regional flagship commodities.
The impact of downstreaming is becoming increasingly visible across local economies. In several mineral-producing provinces such as Central Sulawesi and North Maluku, downstreaming has helped boost economic growth far above the national average.
The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) highlighted the positive impact of nickel downstreaming. The Director of Mineral and Coal Downstreaming at BKPM, Rizwan Aryadi Ramdhan, revealed that over the past five years, nickel downstreaming has shown significant contributions to regional economies, especially in Central Sulawesi, Southeast Sulawesi, and North Maluku.
He noted that economic growth in these areas is reflected in declining unemployment rates. Although North Maluku saw a slight increase in 2023, he stated that this was due to supply–demand adjustments in the labor market.
BKPM data shows that the open unemployment rate (TPT) in nickel-downstreaming regions is about 2–4% lower than the national rate of 5%. Economic growth in Central Sulawesi and North Maluku has also been higher than the national average during 2019–2023. In 2019, national economic growth stood at 5.02%, while North Maluku reached 6.25%. By 2023, North Maluku’s economy surged to 20.49%, while Indonesia’s growth was 5.05%. Meanwhile, Central Sulawesi recorded 8.83% growth in 2019 and increased to 11.91% in 2023.
In other downstream sectors, Cirebon and Jepara have emerged as leading examples of successful wood downstreaming in Indonesia. These two regions have become recognized models in wood processing, generating significant added value for local economies. The transformation has shifted these areas from raw-material suppliers to high-value economic hubs.
The Chairman of the Indonesian Furniture and Handicraft Industry Association (HIMKI), Abdul Sobur, emphasized that this success demonstrates the effectiveness of government policy. Through downstreaming, furniture and handicraft products from Cirebon and Jepara have penetrated global markets. According to him, thousands of workers have been absorbed, showing the sector’s substantial contribution to improving welfare. Wood processing in these regions has become a strong foundation for Indonesia’s economic independence.
In the livestock sector, West Nusa Tenggara (NTB) is now developing downstreaming for its poultry industry as a new driver of regional economic growth. Governor Lalu Muhamad Iqbal targets the creation of a province-wide integrated poultry ecosystem that can maximize the absorption of local production. Iqbal has instructed regency and municipal governments to map their potential, particularly regarding land availability for poultry housing and feed production. He stressed that accelerating downstreaming is not only about increasing output, but also ensuring efficient supply-chain and logistics systems.
Feasibility studies on distribution, Iqbal added, are crucial to ensuring that the poultry downstreaming industry remains profitable for local entrepreneurs. This way, poultry downstreaming will successfully become a regional economic driver, reduce dependence on external supply sources, and create jobs for rural communities.
Given these achievements, downstreaming has proven capable of providing strong momentum for regional economies. Targeted policies and locally rooted development strategies will further strengthen these benefits sustainably. With consistent implementation, downstreaming has the potential to become a key pillar of Indonesia’s economic transformation, reaching all corners of the country.
*) Social and Economic Affairs Observer
