Boosting Indonesia's Economy through Downstream Development: A Strategic Vision of President Prabowo Subianto

Jakarta, INTI - Downstream development, or "hilirisasi," has become one of the primary focuses of economic advancement in Indonesia, especially in the mining sector. This aligns with President Prabowo Subianto's "Asta Cita" vision, which emphasizes the significance of downstream development and industrialization to enhance the value of Indonesia's natural resources. By processing raw materials domestically, Indonesia aims to reduce its dependency on raw exports, transforming these materials into higher-value products that contribute directly to the national economy.

In the context of mining, downstream processing means more than simply exporting minerals in their raw form. It involves converting them into finished products with added value, such as refined metals and processed minerals, that command a higher price on global markets. This approach not only generates greater revenue but also strengthens Indonesia's position in the global supply chain.

Maluku Utara: A Model of Success in Downstream Processing

The Vice Minister of Energy and Mineral Resources (ESDM), Yuliot, stated that President Prabowo has instructed the Merah Putih Cabinet to prioritize downstream development programs across all ministries. Yuliot made this announcement during the inauguration of the One-Price Fuel (BBM Satu Harga) Program in Ternate, North Maluku, on Thursday, October 30.

"North Maluku is a shining example of successful downstream development," Yuliot said. "Where previously the region exported raw nickel ore, downstream processing has enabled us to produce both nickel and cobalt, creating new avenues for economic growth and local industry."

Due to the implementation of downstream policies, North Maluku’s economic growth reached an impressive 20.49% in 2023, making it the fastest-growing economy globally. In 2022, the region achieved an even higher growth rate, exceeding 22%.

Investment and Future Plans for Downstream Development

Between January and September 2024, North Maluku attracted approximately IDR 55 trillion in investments tied to downstream development, mainly due to the demand for nickel and cobalt in the electric vehicle ecosystem.

Vice Minister Yuliot emphasized that the government’s downstream plans extend beyond the initial stage, with further phases aimed at maximizing added value. "The Ministry of Energy and Mineral Resources (ESDM) has mapped out industrial pathways to advance downstream processing up to the fourth stage, significantly enhancing the value generated from these resources," he added.

Statistical Data on Economic Growth and Sector Contributions

According to the Central Statistics Agency's (BPS) 2023 data, downstream development has had a transformative impact on North Maluku’s economy. The province's industrial processing sector achieved a growth rate of 10.60%, followed by the mining sector at 7.97%. Other contributing sectors include trade at 0.72%, agriculture at 0.62%, and other industries at 0.57%.