President Prabowo Accelerates Downstreaming of Fisheries, Coal, and Key Commodities

Indonesia’s Downstreaming Push: A game-changer for Economic Growth and Jobs

Indonesia is taking decisive steps to strengthen its economy and create better-paying jobs by accelerating downstreaming across key industries. Under the leadership of president Prabowo Subianto,the government is prioritizing the conversion of raw materials into higher-value products in sectors such as fisheries,forestry,agriculture,oil and gas,and minerals. This aspiring initiative aims to boost the nation’s economic resilience, enhance energy security, and elevate its global market position.

Bahlil Lahadalia, Indonesia’s Minister of Energy and Mineral Resources and head of the newly established Task Force for Downstreaming and National Energy Resilience, highlighted the government’s commitment to this strategy.

“President Prabowo has emphasized the importance of downstreaming across all sectors,”

Lahadalia stated. The task force is targeting 26 to 28 commodities for downstreaming, with a focus on maximizing their economic potential.

While nickel has been the primary focus in recent years, the government is now expanding its efforts to include other critical resources.

“We are advancing copper downstreaming, followed by bauxite and tin. Additionally, we are pushing for the downstreaming of oil and gas,”

Lahadalia added. For coal, the government is exploring the production of dimethyl ether (DME) as a sustainable option to LPG, particularly in former mining regions.

A central goal of this initiative is to create high-quality employment opportunities. unlike conventional labor-intensive industries, downstreaming is expected to generate jobs with significantly higher wages.

“Downstreaming is labor-intensive, but it offers salaries well above regional minimum wages (UMR),”

Lahadalia explained. This approach not only aims to increase the value of traded commodities but also to raise the nation’s per capita income.

To ensure the success of this transformative project, President Prabowo formally established the task force through Presidential Decree Number 1 of 2025, signed on January 3, 2025. The task force, comprising various ministers and heads of institutions, is tasked with accelerating downstreaming across targeted sectors, including minerals, coal, oil and gas, agriculture, forestry, and maritime and fisheries commodities.

The overarching objective is to enhance the added value of domestically produced goods, thereby strengthening Indonesia’s position in the global market. By focusing on downstreaming, the government aims to create a ripple effect across the economy, driving growth, job creation, and energy resilience.

As Indonesia embarks on this ambitious journey,the success of downstreaming could pave the way for exponential economic growth and a more prosperous future. By leveraging its abundant natural resources, the nation is poised to build a sustainable and resilient economy.

Key Challenges in Indonesia’s Downstreaming Journey

Interview with Dr. Surya Adinata,Economist and Industry downstreaming Expert

Conducted by Archyde News

Archyde News: Thank you for joining us today,Dr. Adinata. Indonesia has been making headlines with its aggressive push for industry downstreaming. Can you explain what this means and why it’s so critical for the country’s economic future?

Dr. Surya Adinata: Downstreaming refers to the process of transforming raw materials into higher-value products. For Indonesia, this is a strategic move to reduce dependency on raw material exports and create more value within the country. It’s critical as it can drive economic growth, create better-paying jobs, and enhance our global competitiveness.

Archyde News: What are the key challenges indonesia faces in achieving its downstreaming objectives?

Dr. Surya Adinata: One of the biggest challenges is infrastructure. Downstreaming requires significant investment in processing facilities, transportation, and energy. Additionally, there’s a need for skilled labor and advanced technology.Regulatory hurdles and coordination between government agencies and private sectors also pose challenges. However, with the right policies and collaboration, these obstacles can be overcome.

archyde News: How can Indonesia ensure the success of its downstreaming initiatives?

Dr. surya Adinata: Success will depend on strong leadership, clear policies, and sustained investment. The government must create an enabling environment for private sector participation while ensuring that the benefits of downstreaming are equitably distributed.Collaboration with international partners and leveraging technology will also be crucial.

How Downstreaming is Transforming Indonesia’s Economy and Job Market

Indonesia is undergoing a significant economic transformation, driven by a strategy known as downstreaming. This approach involves adding value to raw materials by processing them into higher-value products before export. For a nation rich in natural resources like nickel, palm oil, and natural gas, downstreaming represents a pivotal shift from merely exporting raw materials to creating finished or semi-finished goods. This not only boosts global market competitiveness but also fosters job creation and technological innovation.

The Vision Behind Downstreaming

President Jokowi has championed downstreaming as a cornerstone of Indonesia’s vision 2045, an ambitious plan to elevate the country to developed nation status by 2045. According to Dr. Surya Adinata, an expert in economic development, this goal is both aspirational and attainable. “Indonesia possesses abundant natural resources, a young and growing workforce, and a strategic geographic location,” he explains. However, achieving this vision is not without its challenges.

Challenges on the Path to Downstreaming

Dr. Adinata highlights three major hurdles: infrastructure investment, regulatory reforms, and environmental sustainability. “Downstreaming requires massive investment in infrastructure, technology, and human capital,” he notes. Additionally,addressing regulatory bottlenecks and improving the ease of doing business are critical to attracting both domestic and foreign investors.Lastly, environmental concerns must be addressed to ensure that downstreaming does not exacerbate deforestation, pollution, or other ecological issues.

Job Creation: A Key Benefit of Downstreaming

One of the most significant advantages of downstreaming is its potential to create jobs across multiple sectors. Dr. Adinata elaborates, “Processing nickel into batteries for electric vehicles, as an example, requires skilled labor in engineering, manufacturing, and quality control. This not only provides high-paying jobs but also encourages skill development and innovation.”

Moreover, the growth of downstream industries stimulates ancillary sectors such as logistics, retail, and services, further boosting employment.The Indonesian government estimates that downstreaming could generate millions of jobs over the next decade, significantly reducing unemployment and underemployment.

Lessons from the Nickel Industry

indonesia’s success in the nickel industry serves as a blueprint for downstreaming in other sectors. By banning the export of raw nickel and promoting domestic processing, Indonesia has emerged as a global leader in nickel-based products, particularly for electric vehicle batteries. dr. Adinata emphasizes the key lessons from this success: “Strong government policy, strategic partnerships with global players, and investment in infrastructure like smelters and industrial parks are essential.”

These lessons can be applied to other sectors, such as palm oil, where Indonesia can transition from exporting raw materials to producing higher-value products. This shift not only enhances economic returns but also strengthens the nation’s position in the global market.

Looking Ahead: A Sustainable and Prosperous Future

As Indonesia continues to embrace downstreaming, the focus remains on balancing economic growth with environmental sustainability. By addressing challenges and leveraging its natural resources strategically, Indonesia is poised to achieve its Vision 2045 goals. The ripple effects of this transformation—ranging from job creation to technological advancement—promise to reshape the nation’s economic landscape for decades to come.

Indonesia’s downstreaming Strategy: A Pathway to Economic Transformation

Indonesia is embarking on an ambitious journey to transform its economy by shifting from raw commodity exports to producing higher-value goods. This strategy, known as downstreaming, focuses on refining resources like crude palm oil into biofuels, cosmetics, and food ingredients. by doing so, the nation aims to boost economic growth, create jobs, and enhance its global competitiveness.

The role of International Collaboration

According to Dr. Surya Adinata,a leading expert in economic development,international collaboration is essential for Indonesia’s downstreaming efforts. “Downstreaming requires advanced technology,expertise,and capital,which indonesia can’t develop overnight,” he explains.partnerships with countries like South Korea, Japan, and Germany, and also multinational corporations, are seen as key to accelerating this process.

However, Dr. Adinata emphasizes that these collaborations must be mutually beneficial. “It’s crucial that technology transfer and capacity building are integral parts of these partnerships,” he says. This ensures that Indonesia not only gains access to cutting-edge technology but also builds the skills and infrastructure needed to sustain long-term growth.

Vision 2045: A Bold Economic Goal

Indonesia’s downstreaming strategy is closely tied to its Vision 2045, a national plan to become a developed nation by the year 2045. Dr. Adinata is optimistic about this goal, stating, “I believe downstreaming will be a cornerstone of our journey toward becoming a developed nation by 2045.”

This vision is not just about economic growth; it’s about creating a more resilient and diversified economy. By moving up the value chain, Indonesia can reduce its reliance on raw commodity exports, which are frequently enough subject to volatile global prices. Rather, the country can focus on producing higher-margin products that drive sustainable development.

Challenges and Opportunities

While the potential benefits of downstreaming are immense,the path forward is not without challenges. Developing the necessary infrastructure,attracting foreign investment,and ensuring environmental sustainability are all critical factors. However, with the right policies and strategic partnerships, Indonesia is well-positioned to overcome these hurdles.

Dr. Adinata highlights the importance of aligning downstreaming efforts with Indonesia’s long-term goals.“We must ensure that these collaborations are aligned with our national interests,” he says. This includes prioritizing sectors that have the greatest potential for job creation and economic impact.

Conclusion

Indonesia’s downstreaming strategy represents a bold step toward economic transformation. By leveraging international collaboration, advanced technology, and strategic investments, the country is poised to unlock new opportunities for growth and development. As Dr. Adinata aptly puts it, “Downstreaming holds immense potential for Indonesia’s economic change.”

With Vision 2045 as its guiding star, indonesia is on track to achieve its ambitious goals and secure a brighter future for its people. The journey ahead might potentially be challenging, but the rewards—economic resilience, job creation, and global competitiveness—are well worth the effort.

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What are some examples of successful downstreaming efforts in Indonesia?

Tise, and significant investment, which can be facilitated through partnerships with global players,” he explains. By leveraging international expertise and capital, Indonesia can accelerate the progress of its downstream industries and ensure they meet global standards.

Goverment Initiatives and Policy Support

the Indonesian government has introduced several initiatives to support downstreaming, including tax incentives, streamlined regulations, and infrastructure development. President Jokowi’s management has prioritized downstreaming as a key component of the nation’s economic strategy, aiming to reduce reliance on raw material exports and increase the value-added of domestic production. Dr. Adinata emphasizes the importance of consistent policy implementation: “Stable and predictable policies are crucial to attract long-term investments and foster industry growth.”

Environmental and Social Considerations

While downstreaming offers significant economic benefits,it also raises environmental and social concerns. The expansion of processing facilities and industrial zones must be balanced with sustainable practices to minimize ecological impact. Dr. Adinata highlights the need for green technologies and responsible resource management: “Indonesia must ensure that downstreaming aligns with global sustainability goals, notably in sectors like palm oil and mining, where environmental concerns are prominent.”

Additionally, the government must address social issues, such as land rights and community displacement, to ensure that the benefits of downstreaming are equitably distributed. Engaging local communities and stakeholders in decision-making processes is critical to achieving inclusive growth.

Success Stories and Future Prospects

Indonesia’s downstreaming efforts have already yielded success in sectors like nickel and palm oil. The ban on raw nickel exports and the development of domestic smelting capacity have positioned Indonesia as a major player in the global electric vehicle battery supply chain. Similarly, the palm oil industry has seen growth in biodiesel production and value-added products like oleochemicals.

Looking ahead, Indonesia aims to replicate these successes in other sectors, such as bauxite, copper, and fisheries. Dr. Adinata is optimistic about the future: “With the right policies,investments,and partnerships,Indonesia can become a global hub for downstream industries,driving economic change and improving the livelihoods of its people.”

Conclusion

Indonesia’s downstreaming strategy represents a bold and transformative approach to economic development. By shifting from raw commodity exports to value-added production, the nation is poised to enhance its global market position, create high-quality jobs, and achieve sustainable growth.However, realizing this vision will require overcoming challenges, fostering international collaboration, and ensuring environmental and social responsibility. With strong leadership and strategic execution,downstreaming could pave the way for a prosperous and resilient Indonesian economy.