THE downstreaming agenda currently being implemented by the government is considered too exclusive and minimally involves local communities. This includes the involvement of the supply chain, both as workers and vendors. Several years on, the benefits of downstreaming tend to be more transported out.
“Local communities are actually affected by pollution which reduces their quality of life. Therefore, GRDP (Gross Regional Domestic Product) increases, but poverty and unemployment also increase,” said Paramadina University Economist Wijayanto Samirin when contacted, Thursday (25/7).
The downstreaming carried out by the government, he continued, until now has not been clear about who actually receives and feels the benefits. According to him, the government needs to provide information openly.
The magnitude of the multiplier effect of downstreaming on domestic industry and economy needs to be explained clearly. Don’t let the real benefits of downstreaming be enjoyed by other countries that are supposed to be Indonesia’s competitors.
The Ministry of Finance, for example, is being pushed to be able to reveal how much tax revenue and Non-Tax State Revenue (PNBP) from the downstream sector. According to Wijayanto, the government seems to be covering up the information.
He also assessed that the current government is too generous in giving out fiscal incentives in the refined mineral and coal sector. While at the same time, other sectors that actually provide large multiplier effects such as retail and manufacturing seem to be ignored.
Also read: Government Encouraged to Solve Downstream Anomaly
“The government also needs to be transparent regarding the foreign exchange from nickel and its derivatives, who actually owns it, where it flows to and how much. Is it true that some observers suspect that a new style of VOC practice is happening in this country? Is it true that nickel is a new style of spice?” said Wijayanto.
“Without such transparency, we may not realize that we are not actually getting any benefits from this sector, and we are only proud that Indonesia is the largest nickel producer in the world,” he added.
Therefore, Wijayanto emphasized that environmental, social, and governance (ESG) principles need to be boosted in all natural resource sectors, including downstreaming which is currently being promoted by Indonesia.
“Data transparency is needed to improve sectoral policies and ecosystems. With the right concept and policy, downstreaming will bring prosperity, and even needs to be encouraged for most of our commodity products,” he concluded. (Mir/Z-7)
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