By: Maya Romansa *)
The groundbreaking of downstreaming projects marks a tangible shift in the direction of national economic development toward the regions as new centers of growth. The laying of the first stone sends a strong signal that the state is encouraging value-added industries to grow more evenly, reaching even remote areas. Downstreaming serves as a bridge connecting local resource potential with broader economic opportunities for regional communities.
The government has officially launched a new wave of industrial downstreaming through six strategic projects. Total initial investment is estimated at around Rp100 trillion to Rp101.5 trillion, reflecting the state’s seriousness in positioning the real sector as a key driver of regional economic growth.
The geographic distribution of these downstreaming projects illustrates a development approach that is no longer centralized. Bauxite and aluminum processing is directed to West Kalimantan, refinery and processing plant development targets industrial areas such as Balikpapan, while bioavtur, DME, and downstreaming in the agriculture and fisheries sectors reach production centers outside Java. This pattern opens opportunities for more equitable investment distribution while narrowing interregional disparities.
Member of Commission XII of the House of Representatives (DPR RI), Eddy Soeparno, views mineral downstreaming policy as a strategic instrument to create quality employment in the regions. The development of bauxite processing and refining projects not only increases the added value of natural resources but also expands the absorption of formal and skilled labor.
Eddy considers the integrated bauxite–alumina–aluminum ecosystem developed by the MIND ID Group as a concrete example of how downstreaming can deliver direct benefits to local communities.
Based on a pre-feasibility study prepared by BPI Danantara together with the Downstreaming Task Force, the project—with an investment value of around Rp60 trillion—is projected to absorb up to 14,700 new workers, both during the construction and operational phases.
Eddy emphasized that large-scale investment generates broad multiplier effects, as supporting industries such as logistics, services, and local MSMEs also grow alongside the core project activities. Regional economic chains become more dynamic when processing industries are established close to raw material sources.
The urgency of downstreaming becomes even clearer when linked to national aluminum demand, which still relies heavily on imports. Domestic demand reaches around 1.2 million tons per year, with more than half still supplied from abroad.
Meanwhile, Indonesia possesses approximately 7.78 billion tons of bauxite resources and reserves totaling 2.86 billion tons. Eddy sees this potential as a crucial foundation for building an independent, competitive national aluminum industry that sustainably absorbs labor in producing regions.
From the government’s perspective, Minister of State Secretary Prasetyo Hadi affirmed that the groundbreaking of the six downstreaming projects is part of efforts to mobilize the real sector and strengthen the fundamentals of the national economy.
The government is also preparing around 12 additional projects, targeting that the entire initial agenda can commence no later than March 2026. This step demonstrates the state’s consistency in maintaining investment momentum so it does not stall at the planning stage.
Previously, Cabinet Secretary Teddy Indra Wijaya stated that the groundbreaking plans were discussed directly in a meeting between President Prabowo Subianto and the Minister of Investment and Downstreaming, who is also CEO of BPI Danantara, Rosan Roeslani.
Teddy explained that the downstreaming projects will be spread across several provinces with total investment of around US$6 billion, or approximately Rp100 trillion. This agenda reflects the government’s commitment to accelerating downstreaming as a foundation for sustainable regional economic growth.
The medium-term impact of this wave of downstreaming is projected to keep national economic growth in the range of 4.9 to 5.4 percent throughout 2026. Beyond macroeconomic figures, downstreaming strengthens national industrial independence by reducing reliance on raw material exports and improving Indonesia’s position in global supply chains, particularly in green industries and future manufacturing.
Overall, the groundbreaking of downstreaming projects opens the door wider to more equitable regional economic growth. Distributed investment, the creation of local jobs, and increased value added of resources point to a new direction of development that is more inclusive and regionally balanced.
Downstreaming offers regions the opportunity to move up within the national economic structure—from exporters of raw materials to industrial hubs connected to both domestic and global supply chains.
Implementation challenges, infrastructure readiness, human resource quality, and the management of social and environmental impacts still require serious attention to ensure that development benefits are truly felt by local communities.
However, with consistent policy direction, strengthened cross-sector coordination, and disciplined execution, downstreaming has the potential to transform regions from mere raw material suppliers into resilient, competitive, and sustainable centers of national economic growth. (*)
*) The author is an economic observer.
