By : Arzan Malik Narendra )*
In his efforts to create equal prosperity for all Indonesian people, President Prabowo Subianto initiated a downstreaming strategy as the main foundation of national economic policy.
This step is not just a technical policy, but a grand vision that aims to change the face of the Indonesian economy, utilize natural potential, and reduce dependence on raw material exports. This strategy is a foothold for creating new jobs, increasing competitiveness, and strengthening national economic resilience amidst increasingly tight global competition.
Downstreaming, in President Prabowo’s view, is a strategic step that has a broad impact, not only adding economic value, but also becoming the foundation for the economic equality that has long been desired.
By reducing exports of raw materials and starting to process them domestically, the government hopes to provide economic opportunities for regions across the archipelago. This is not just about numbers, but about ensuring that prosperity can be felt evenly, from the center to the remote areas.
President Prabowo’s concrete steps can be seen from the refinement of the downstream roadmap that has been designed for various leading Indonesian commodities, such as nickel, copper, bauxite, palm oil, and fishery and forestry products.
Not only stopping at the production aspect, this roadmap includes financial, technical, and legal aspects that are expected to facilitate the investment process, both for foreign investors and local business actors. With this initiative, President Prabowo invites all parties to collaborate and take part in creating a more inclusive and equitable economy.
One of the most striking downstream steps that has been taken is the cessation of raw nickel exports since 2020. This step is not without reason. Since the decision was implemented, the export value of nickel processed domestically has skyrocketed, from only US$3 billion to more than US$30 billion.
President Prabowo emphasized that by maintaining domestic production processes, Indonesia can optimize economic benefits while creating more jobs. Future projections show that investment potential in the nickel sector could reach US$127.90 billion by 2040, with a contribution to Gross Domestic Product (GDP) of US$43.20 billion and the creation of hundreds of thousands of new jobs.
In addition, to ensure that downstreaming is also enjoyed by regional entrepreneurs, President Prabowo issued the Minister of Investment Regulation Number 1 of 2022. This regulation requires large investors to cooperate with local business actors. The goal is clear: to provide space for regional entrepreneurs to develop and play an active role in the national economy.
Thus, Micro, Small, and Medium Enterprises (MSMEs) are expected to be able to move up a class and be involved in a larger national economic chain. The big hope is that economic distribution will be more even and local entrepreneurs can develop into major players in their own country.
On the other hand, support for this downstreaming also came from various groups, one of which was Member of the Indonesian House of Representatives Bambang Soesatyo. He considered the downstreaming initiated by President Prabowo to be in line with the needs of the times in the era of Industry 4.0 and artificial intelligence. By encouraging downstreaming, according to him, Indonesia is not only creating products with added value, but also preparing a sustainable economic legacy for future generations.
This downstreaming brings a paradigm shift in the management of natural resources; no longer merely digging and selling raw materials, but focusing on end products that are ready to compete in the global market.
However, downstreaming is not without challenges. The process requires high capital costs and still relies on imports for several important components. This is where the role of the National Research and Innovation Agency (BRIN) becomes crucial.
This research institution is expected to encourage innovation in terms of more environmentally friendly and efficient production processes. By researching and developing local production technology, Indonesia is expected to be able to reduce dependence on imports and create its own capital goods that can support downstreaming.
President Director of PT Bank Rakyat Indonesia (Persero) Tbk., Sunarso, also welcomed this downstreaming step. According to him, the downstreaming policy is one way to encourage economic growth while improving income distribution.
An example is the agricultural sector, where downstreaming of products such as palm oil can create new jobs and equalize income. BRI sees great potential in the downstream agricultural sector as a business opportunity that is not only profitable for the company, but also brings benefits to the wider community.
Downstreaming is also seen as a step to avoid the middle income trap. If Indonesia only relies on raw material exports, it is difficult for the country’s economy to experience a significant surge.
By producing value-added goods domestically, Indonesia not only increases GDP, but also spreads its benefits to all people. President Prabowo hopes that through downstreaming, every level of society, without exception, can feel the benefits of a fair and equitable economy.
President Prabowo realized that this grand vision will only be achieved if there is solid cooperation between the government, the private sector, and the community. Downstreaming is not only the government’s task, but is a shared responsibility. With a strong commitment and concrete steps, the desired economic equality through downstreaming will become a reality.
With this encouragement, we are expected to not only witness the growth of economic figures, but also feel its impact in everyday life. This is a strategic step that is expected to bring Indonesia to a brighter future.
)* The author is a contributor to the Nusa Cyber Institute