By: Ferri Alfian)*
The government’s ongoing downstreaming project is now entering a more concrete phase with the opening of various processing centers in various regions. This step is not only aimed at increasing the added value of domestic products but also serves as a strategy to create massive new jobs. Downstreaming in strategic sectors such as nickel, bauxite, palm oil, and coal is believed to be able to absorb a large number of local workers while promoting economic equality across regions. The government emphasizes that every downstreaming project must consider social aspects, including creating opportunities for local communities to actively participate as part of the production chain.
The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, stated that the planned development of 18 downstream projects will create significant employment opportunities. Bahlil stated that the 18 downstream projects are estimated to require an investment of US$38.63 billion, equivalent to Rp618.13 trillion. Of the 18 projects, with the potential to employ 276,636 people, the majority will be employed in oil refineries (44,000 people) and in downstream coal processing into dimethyl ether (DME) (34,800 people).
The 18 downstream and national energy security projects consist of eight downstream projects in the mineral and coal sector, two projects on energy transition, two energy security projects, three downstream agricultural projects, and three downstream marine and fisheries projects.
The government is also encouraging the involvement of state-owned enterprises (SOEs) and the private sector to accelerate the development of processing and refining facilities (smelters), which form the backbone of the downstream sector. In this process, training the local workforce is a key agenda to ensure human resource readiness to meet industry needs. The Ministry of Manpower has launched various competency-based training programs aligned with the needs of the downstream industry. These include training in welding, heavy equipment operation, and other technical skills. The hope is that the local workforce will not only be manual laborers but also be able to fill strategic and technical positions.
Meanwhile, Danantara CEO Rosan Roeslani stated that investment in the downstream sector has increased significantly. Approximately 30 percent of the investment in the second batch of over Rp 950 trillion, based on downstream investment, was contributed.
This figure demonstrates that the government’s policy direction of promoting natural resource-based industrialization has received a positive response from investors, both domestic and international. This substantial funding injection not only demonstrates optimism about Indonesia’s economic potential but also opens up significant opportunities for job creation across various sectors, from upstream to downstream. This emphasizes that downstreaming is not merely a development slogan, but rather a concrete strategy capable of driving the national economy and improving the welfare of the wider community.
In addition to creating jobs, downstream processing also has a multiplier effect on the local economy. The presence of the processing industry has spurred the growth of other supporting sectors such as housing, food stalls, local transportation, and even banking and microfinance services. In some regions, economic activity has seen a surge in demand, driven by increased purchasing power. Many young people who previously migrated to cities are now returning to their hometowns as job opportunities are opening up. This equitable distribution is part of the current government’s Indonesia-centric development strategy.
However, the success of the downstreaming project is not without challenges. INDEF’s Director of International Collaboration, Imaduddin Abdullah, explained that the availability of basic infrastructure such as electricity, clean water, roads, and ports remains a challenge in several regions. The government needs to accelerate the development of supporting infrastructure through Public-Private Partnership (PPP) schemes to ensure efficient and highly competitive processing industry activities. Without adequate infrastructure, opportunities for job creation and economic equality through downstreaming are feared to be suboptimal.
The government also ensures the involvement of local communities not only as workers but also as stakeholders. Socialization, public dialogue, and corporate social responsibility (CSR) programs are mandatory as part of the industrial development process. In some projects, communities are involved from the planning stage, so they feel part of the transformation process. This can help reduce social resistance and increase public trust in development. This model is expected to set a new standard for area-based development approaches.
Through this downstreaming project, Indonesia affirms its vision to no longer be a raw material exporter but a key player in the global value chain. By maximizing resources and strengthening local human resource capacity, downstreaming is a path to more inclusive and equitable economic growth. If implemented consistently and measurably, this project will not only create significant job opportunities but also transform national development from a centralized to a more equitable one, with a tangible impact on the wider community.
)* The author is a contributor to the Lingkar Khatulistiwa Institute
