When former President Joko Widodo’s second term finally came to an end in October 2024, many commentators highlighted his commitment to making domestic processing and refining of all metal minerals a reality as being his defining legacy.
There seems to be a high degree of acceptance in Indonesia that, whatever his ethical and other failings may have been, the former President was an economic “visionary” who understood the “essential truth” that domestic processing and refining of metal minerals is the “key” to Indonesia’s future prosperity.
Indonesia’s new President, Prabowo Subianto, has made clear that his government intends to continue and, indeed, greatly expand the previous government’s policy of compulsory domestic processing and refining of metal minerals to include many other natural resources which Indonesia produces in abundance. By implication, the new President apparently accepts that his predecessor was, indeed, an economic “visionary”.
Domestic processing and refining of metal minerals, or “local value-added activity”, has now “morphed” into the more generic concept of “down-streaming” which, at least according to the government’s thinking, is applicable to any number of natural resources.
Only time will tell, of course, whether or not “down-streaming” plays the major role that is envisioned by the new President in delivering on his promise of “Golden Indonesia 2045”, with economic prosperity being assured for all Indonesians. There is, however, at least some reason to be sceptical about this and to question whether or not Indonesia is really “on the right path” in tying its economic future so firmly and unconditionally to “down-streaming” in its myriad forms
In this article, the writer will consider what “down-streaming” now means/requires in the Indonesian context and why “down-streaming” could “come up short” and otherwise fail to deliver “Golden Indonesia 2045”.