President Joko Widodo Advocates for Resource Utilization and Downstreaming in Indonesia

Tin Production

President Joko Widodo, in his address during the Commemoration Ceremony of Pancasila Birth Anniversary on Thursday (May 1, 2023), emphasized the importance of utilizing natural resources to their maximum potential for the welfare of the people. He also touched upon the issue of downstreaming Indonesia’s abundant natural resources.

In his speech, President Jokowi stated, “We aim to ensure that the natural wealth of our nation benefits the people to the fullest extent. We want all citizens, including those living outside of Java, to experience significant benefits from the ongoing development initiatives.”

Furthermore, President Jokowi expressed his hope that his successors as leaders of Indonesia would continue the efforts towards downstreaming natural resources. He emphasized the need for continuity and sustainability in achieving a just and equitable development trajectory.

While acknowledging that government officials may change over time, President Jokowi stressed that the pursuit of justice, equality, and prosperity must remain constant. He outlined the importance of implementing structural reforms, enhancing the quality of human resources, promoting industrial downstreaming, and advancing the development of the National Capital as key elements of the government’s vision.

Turning to the specific case of nickel downstreaming, it is worth noting that Indonesia initiated this policy in 2020. The government claims that this strategy has resulted in significant added value, with the downstreaming of nickel contributing approximately US$33 billion or Rp514.3 trillion in 2022.

However, concerns have been raised regarding the equitable distribution of these added benefits among the population. Senior Economist at INDEF, Faisal Basri, highlighted that smaller-scale communities have not fully reaped the rewards of this policy, as it primarily benefits large-scale businesses. Additionally, a portion of the proceeds from nickel exports is retained overseas, with China, as a major recipient of Indonesian nickel, reaping substantial gains.

Despite these criticisms, the downstreaming policy has also been recognized for its success in stimulating economic growth in Eastern Indonesia. Deputy for Economic Affairs at the Ministry of National Development Planning/ Bappenas, Amalia Adininggar Widyasanti, emphasized the positive outcomes of the program, particularly the consistent double-digit economic growth observed in regions such as Central Sulawesi and North Maluku.

In conclusion, President Jokowi’s address underscored the imperative of harnessing natural resources for the well-being of the people and emphasized the importance of continued efforts in downstreaming Indonesia’s vast resources.

While acknowledging the challenges and criticisms, the government aims to pursue a just and equitable development trajectory through structural reforms, human resource development, industrial downstreaming, and the advancement of the National Capital project.