By: Rey Saputra )*
The Indonesian government continues to optimize downstreaming policies as the main strategy in accelerating national economic growth. Amidst global economic uncertainty, downstreaming has proven to be a strategic step that is able to increase the added value of natural resources, create jobs, and strengthen the competitiveness of the national industry. This policy is part of the government’s long-term vision to build a more independent and sustainable economy.
The Coordinating Minister for Economic Affairs, Airlangga Hartarto, emphasized that downstreaming is part of the government’s grand strategy in maintaining solid economic growth. He said that although global dynamics are still full of uncertainty, the Indonesian economy remains stronger than many developed and developing countries.
Based on Purchasing Power Parity (PPP), Indonesia’s GDP value reached 4.8 trillion US dollars, making it one of the largest economic powers in the world. This success cannot be separated from the downstreaming policy which encourages increased exports of value-added products and reduced dependence on raw commodities.
In facing global challenges, the government has designed various policies that support downstreaming as a whole. One of the main steps taken is the development of Special Economic Zones (KEK) which aims to accelerate industrialization in various regions.
Gresik Special Economic Zone, for example, has become a national gold production center, supported by the launch of a bullion bank that will strengthen the mining industry and become an economic buffer against global market fluctuations. In addition to Gresik Special Economic Zone, several other Special Economic Zones such as Sei Mangkei Special Economic Zone and Palu Special Economic Zone also play an important role in the development of natural resource-based industries in their respective regions.
In addition, the government is also encouraging the acceleration of downstreaming in the mining and energy sectors. Data shows that exports of downstream nickel products have experienced a significant spike, from only 4 billion US dollars in 2017 to 33.52 billion US dollars in 2023, and are estimated to reach 40 billion US dollars in 2024. This increase reflects the success of the government’s policy in reducing dependence on raw material exports and strengthening the domestic industry. This success is also proof that the nickel ore export ban policy implemented since 2020 has been able to have a positive impact on the domestic processing industry.
The downstreaming policy is also supported by more strategic investment management efforts. MIND ID Corporate Secretary, Heri Yusuf, revealed that his party has allocated funds of IDR 20.6 trillion in 2025 for five strategic projects aimed at strengthening downstreaming and creating sustainable derivative industries. This investment not only has an impact on business growth, but also provides economic and social benefits for the wider community. The construction of smelters and other mineral processing plants also continues to be boosted to increase the added value of national mining products.
In order to ensure the sustainability of downstreaming, the government has also issued regulations related to foreign exchange from natural resource exports (DHE SDA). Through Government Regulation Number 8 of 2025, the government requires the placement of DHE SDA in the Indonesian financial system with a percentage of 100 percent for 12 months. This step is expected to increase the country’s foreign exchange reserves by up to 100 billion US dollars, while strengthening national economic stability. In addition, this policy also aims to increase transparency and supervision of the flow of funds from the mining and plantation sectors.
In the manufacturing industry sector, downstreaming continues to be expanded to various fields, including the automotive and petrochemical sectors. The government has prepared a roadmap that regulates downstreaming strategies based on product types, production locations, and their development potential in various regions. With this policy, the national industry can develop in a more focused manner, while also encouraging an increase in the contribution of the manufacturing sector to the national Gross Domestic Product (GDP).
Support for downstreaming is also strengthened through international cooperation. Minister of Foreign Affairs, Sugiono, during his visit to the Netherlands, emphasized that Indonesia hopes to strengthen partnerships with European countries in supporting downstreaming and the development of the industrial sector. He also encouraged increased cooperation in the fields of food security and energy transition, which are also part of Indonesia’s downstreaming strategy. In addition to the Netherlands, Indonesia also cooperates with China, Japan, and South Korea in developing high-tech industries.
The downstreaming efforts carried out by the government are not only oriented towards increasing state revenues, but are also directed at strengthening the competitiveness of the national economy in the long term. With this strategy, ng right, downstreaming can be the main driver of economic growth, creating jobs, and reducing dependence on imports of finished products. Downstreaming is also expected to improve the quality of the national workforce through training and certification programs in various industrial sectors.
The support of these various policies shows the government’s strong commitment to building an economy based on added value. With synergy between the government, industry, and financial sectors, downstreaming will continue to be the main pillar in realizing a more independent and competitive Indonesia on the global stage.
The sustainability of the downstreaming policy requires close coordination between the central and regional governments, as well as full support from the business world and the community. If this policy continues to be implemented consistently, Indonesia can further strengthen its position as one of the world’s major economic powers. )* Observer is a contributor to Pertiwi Institutr
