By: Sidni Ansori )*
The Indonesian government continues to accelerate the downstreaming agenda as a primary strategy to increase global competitiveness amidst increasingly complex global economic challenges. This step is not only aimed at increasing the economic value of domestic products, but also as a systematic effort to create sustainable national industrial resilience.
By involving various sectors, from energy, agriculture, to the manufacturing industry, the government has shown consistency in building an economic foundation that no longer relies solely on raw material exports.
In the energy and mineral resources sector, the Ministry of Energy and Mineral Resources (ESDM) emphasized the importance of green downstreaming as a main pillar of national policy. ESDM Minister Bahlil Lahadalia said that downstreaming does not only mean building mineral refining and processing facilities, but also ensuring sustainability so that Indonesian production can be accepted in the global market. The policy orientation is directed at processing strategic minerals such as nickel to support the energy transformation towards clean technology, including the production of electric vehicle batteries and energy storage systems.
The decline in global commodity prices, including nickel and coal, is indeed a challenge in itself. However, the government’s response is not limited to the short-term situation. The Ministry of Energy and Mineral Resources has formulated adjustments to production plans and tightened regulations in determining commodity prices. Through the Decree of the Minister of Energy and Mineral Resources No. 72 of 2025, the reference price mechanism is strengthened so that it continues to reflect market realities and protect business actors. This strengthening of regulations also aims to suppress exploitation practices that are detrimental to the environment and strengthen national natural resource governance.
In the plantation sector, the Ministry of Agriculture is also taking part in accelerating downstreaming. Director of Plantation Product Downstreaming, Haris Darmawan, said that the development of superior commodities such as coconut, cocoa, and palm oil is directed at creating high added value through innovation and technology. The increase in whole coconut exports in 2024 reflects the great potential of this sector if it is managed properly.
However, the government also recognizes the importance of maintaining a balance between the needs of the domestic industry and the welfare of farmers. Therefore, fair price strategies and plant rejuvenation programs are intensified to ensure the continuity of raw material supplies while increasing productivity.
Downstream processing of cocoa commodities is also being strengthened, considering that Indonesia’s competitiveness had declined to the point of having to import raw materials. The government has placed cocoa in the national priority program through synergy with state-owned enterprises and the private sector. This program not only includes plant rejuvenation, but also improving the quality of beans and developing modern processing technology. This effort will be supported by new regulations, such as the Regulation of the Minister of Agriculture regarding ISPO certification, which is expected to also be applied to other commodities in order to maintain the sustainability and welfare of farmers.
Meanwhile, the Ministry of Industry continues to encourage downstreaming in the agro sector, especially in seaweed commodities. The Director General of Agro Industry, Putu Juli Ardika, highlighted that Indonesian seaweed exports have so far been in the form of raw materials. With enormous marine potential, the government is targeting that seaweed can be processed into high-value derivative products such as carrageenan, agar-agar, and biodegradable plastic. This initiative not only contributes to exports, but also opens up great opportunities for investment in the environmentally friendly industrial sector.
Investment in the agro industry itself shows a positive trend, with total investment reaching more than IDR 200 trillion between 2022 and 2024. This achievement is an indication that the downstream policy is starting to show concrete results, while also providing confidence that Indonesia is on the right track to becoming a major player in the renewable natural resource-based industry.
Through a cross-sector approach and coordination between ministries, the government has demonstrated its seriousness in making downstreaming a long-term development strategy. Not only improving the national economic structure, but also opening up new work spaces, increasing state revenues, and creating industrial independence.
Although global challenges such as price volatility and dependence on foreign markets still loom, Indonesia’s downstream policy is built on an adaptive and responsive policy framework. The government not only sees short-term economic potential, but also places environmental sustainability, social resilience, and global competitiveness as inseparable elements of national development policy.
With a clear roadmap, Indonesia shows a strong political will to no longer be a mere exporter of raw materials. Efforts to strengthen downstreaming will continue to be synergized with the energy transition program, utilization of clean technology, and international collaboration in terms of technology transfer. This long-term vision is a signal that Indonesia is moving towards a high value-added economy, which not only answers today’s challenges but also builds a solid foundation for the future.
Through strengthening regulations, increasing industrial efficiency, and supporting sustainability, the government has laid a strategic framework to make downstreaming the main engine of national economic growth. In this context, full support for downstreaming policies is not only a necessity, but also a real step towards an economically sovereign, globally competitive, and ecologically sustainable Indonesia.
*) Macroeconomic Analyst – Nusantara Economic Center (SEN)
