By: Aristika Utami )*
Downstreaming and investment are two important elements that have a strategic role in Indonesia’s economic development. Amidst global challenges, Indonesia needs to ensure that its abundant natural resources can be utilized optimally. One relevant concept to achieve this goal is Asta Cita, which means a vision or noble ideal that must be realized for the common good.
Investment is the main key in the downstreaming process. Without sufficient capital, the processing and development of the downstream industry will not run optimally. Therefore, Indonesia needs to attract investment, both from within the country and abroad, to develop industrial sectors that have great potential.
Supportive policies, ease of doing business, and tax incentives for investors who invest in downstream sectors are very important to create a conducive investment climate. Investment can also encourage the development of infrastructure needed to support the downstreaming process, such as the development of technology, energy, and transportation.
Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia said that the government has agreed to 21 downstream projects for the first phase with an investment value of USD 40 billion. The types of projects cover various strategic sectors, including oil and gas, mining, agriculture, and maritime.
Through downstreaming and investment, Indonesia can increase the added value of products produced from natural resources, and not just export raw materials. This is very important to reduce dependence on raw material exports which are often vulnerable to global price fluctuations. Thus, these two aspects have a very large role in driving economic growth, creating jobs, and encouraging equitable development throughout Indonesia.
As part of the government’s efforts to optimize the potential of natural resources, the BUMN Holding of the Indonesian Mining Industry, MIND ID, strengthens its position as the main pillar of national downstreaming by consistently implementing investments to accelerate industrialization in the mineral and coal sectors. The downstreaming projects carried out by MIND ID are expected to be a model for other companies in developing industrial sectors with higher added value.
MIND ID Corporate Secretary, Heri Yusuf said that the MIND ID Group has prepared an investment allocation of IDR 20.6 trillion for five strategic projects, the investment allocated by the MIND ID Group is directed to strengthen downstreaming, create sustainable derivative industries, and support national economic growth targets.
In 2025, MIND ID is working on a number of strategic projects, such as the Smelter Grade Alumina Refinery (SGAR) in West Kalimantan to reduce dependence on alumina imports, a new aluminum smelter by INALUM with a capacity of 600 thousand tons per year, and a nickel smelter and HPAL facility in East Halmahera to support the electric vehicle industry. In addition, the copper smelter and Precious Metal Refinery (PMR) in Gresik will start operating in the third quarter of 2025, and the development of coal infrastructure in Tanjung Enim, South Sumatra, for efficient coal transportation.
Downstreaming and investment play a very important role in building Indonesia’s future. As a country with abundant natural resources, Indonesia has great potential to grow into one of the world’s major economic powers. However, to realize this potential, Indonesia needs to utilize both of these things effectively.
In line with that, the Ministry of Investment and Downstream/Investment Coordinating Board (BKPM) is working with the Ministry of Manpower (Kemnaker) to prepare skilled and certified workers. This initiative aims to support investment growth and accelerate the development of the downstream industry in Indonesia. The availability of skilled workers is very important to ensure that the downstream sector can develop well and produce high-quality products.
The Minister of Investment and Downstream/Head of BKPM, Rosan Perkasa Roeslani said that his party is working with the Ministry of Manpower to prepare workers to attract investment. This can increase labor productivity, encourage more inclusive investment, and ensure the sustainability of national economic growth through synergy between labor and industrial downstreaming. The main focus of this collaboration is to create jobs that are not only numerous, but also of high quality and sustainable.
This effort also focuses on ensuring that the Indonesian workforce is ready to meet the demands of modern industry, while increasing national competitiveness in attracting investment, especially in the sectordownstreaming is a priority of the Government. By optimally utilizing natural resources, Indonesia can strengthen the industrial sector, create jobs, and increase state revenues.
Downstreaming and investment are interconnected and mutually supportive. Investment entering Indonesia can accelerate the development of the downstream sector, while successful downstreaming can increase Indonesia’s attractiveness as an investment destination. With downstreaming, Indonesia does not only rely on exports of raw materials, but can also produce products with higher added value, which will increase state revenues and create a more diverse industrial ecosystem. This is in line with efforts to make Indonesia an independent, competitive country with a strong position in the world.
)* The author is an observer of economic issues
