By: Yusuf Rinaldi *)
Indonesia’s economic transformation is entering a new phase with the government’s accelerated cross-sector downstreaming program. Previously considered a long-term strategy, downstreaming has now become a key driver of national economic growth. Under President Prabowo Subianto, the government has not only emphasized the importance of economic independence but also demonstrated its commitment through concrete measures that have a direct impact on industry, employment, and energy security.
President Prabowo Subianto emphasized the acceleration of downstreaming programs in strategic sectors, from fisheries and agriculture to energy and mineral resources. The government is targeting the completion of 18 downstreaming projects with an investment value of nearly Rp 600 trillion, all of which are expected to begin construction in 2026.
Minister of Energy and Mineral Resources Bahlil Lahadalia emphasized that accelerating these downstream projects will boost economic growth, create jobs, and produce import-substituting products. This program is also key to strengthening national energy security.
One concrete example is the development of Dimethyl Ether (DME) as a substitute for imported LPG. Given that Indonesia’s LPG consumption is projected to increase from 1.2 million tons in 2025 to nearly 10 million tons in 2026, developing a domestic energy industry is an urgent step. The government is also targeting the development of a national oil refinery to reduce dependence on fuel imports.
Along with the acceleration of downstream processing, a new investment milestone was also recorded in Indonesia on November 6, 2025, with the inauguration of the largest naphtha cracker petrochemical industry in ASEAN, PT Lotte Chemical Indonesia, in Cilegon, Banten. With an investment value of USD 3.9 billion, or approximately IDR 62 trillion, this industry occupies 110 hectares of land and has a factory building area of 70 hectares.
This petrochemical plant uses approximately 3.2 million tons of naphtha and LPG as raw materials per year and produces 15 petrochemical products, including ethylene and propylene, most of which (70%) are used for domestic needs, while the remainder is exported.
This major investment is a concrete symbol of the downstreaming of the oil and gas industry, which produces high-value products. The end products of this petrochemical industry include vehicle components, medical equipment, pipes, plastic packaging, electrical insulation equipment, and other industrial raw materials. Thus, downstreaming is not merely a slogan, but a new mantra for economic progress and public welfare, as it can boost state revenue, create jobs, and grow the national industry.
The development of this petrochemical project was not easy. The project was stalled for a long time due to various obstacles, including land acquisition, permitting, and the impact of the Covid-19 pandemic. The successful construction of the plant, which is now commercially operational, is the result of the government’s steadfastness in overseeing the project from the outset. President Prabowo’s continued support ensured the project’s timely completion, despite changes in national leadership. This petrochemical plant now serves as a symbol of the sustainability and consistency of the downstreaming program.
In addition to the oil and gas sector, the government is targeting the acceleration of 18 downstream projects worth Rp618.13 trillion across various sectors, including minerals and coal, energy transition, energy security, agriculture, and maritime and fisheries. The National Downstream and Energy Security Acceleration Task Force submitted pre-feasibility studies for these projects to Danantara in July 2025. Each project has varying levels of complexity, ranging from refinery construction and storage to alumina and silica processing, but all are guaranteed to be completed before the end of this year so that implementation can begin in 2026.
This downstreaming program also involves intensive collaboration between the Task Force, Danantara, and the central government. The financing scheme, business model, location, and social and environmental mitigation were carefully designed to ensure the project’s smooth operation. Danantara CEO, Rosan Roeslani, added that downstreaming investment has been a major contributor to national investment realization. By the second half of 2025, Danantara had secured funding commitments totaling USD 7 billion from various international sovereign wealth funds, including Qatar, the China Investment Corporation, and the Russian Direct Investment Fund.
The impact of the downstreaming program on the national economy is predicted to be significant. The development of these 18 projects is expected to create more than 270,000 jobs with decent wages, strengthen downstream industrial capacity, and accelerate import substitution, including for LPG through DME. High-value products resulting from the downstreaming process will increase economic added value, strengthen food and energy security, and stimulate local industrial growth in various regions.
Downstreaming, therefore, can be viewed as an engine of national economic growth. Every strategic investment undertaken, such as the petrochemical industry in Cilegon, has a domino effect: creating jobs, improving human resource competency, strengthening industrial independence, and generating greater state revenue. The government, through presidential directives and cross-ministerial coordination, has demonstrated that economic development is not just about macroeconomic figures but also about tangible added value for society.
With the success of the petrochemical project and the acceleration of 18 other downstream projects, the national economic vision under President Prabowo has become increasingly clear. Downstreaming is not merely an industrialization strategy but also an instrument for achieving economic independence and strengthening Indonesia’s position on the global stage. This engine of economic growth is now moving faster, more measurably, and more sustainably, reflecting the synergy between leadership vision, policy consistency, and determined execution.
)*The author is an economic observer