Indonesian government to prioritize downstreaming of 21 commodities, including bauxite

On Monday, February 6, Bahlil Lahadalia, Indonesia's investment minister, stated that the Indonesian government would continue to prioritise downstreaming the sectors of 21 commodities to draw a total investment of US$545.3 billion by 2040. Bauxite, coal, nickel, tin, copper, steel, gold, silver, asphalt, oil, natural gas, coconut, rubber, biofuel, logs, pine resin, shrimp, fish, crab, seaweed, and salt are among the 21 commodities covered by the eight sectors. The eight key sectors are forestry, plantations, marine, fisheries, and the mining, coal, oil, and natural gas industries.

"If we can do it (downstreaming) well and we focus on it, it may become one of Indonesia's strategies to transform from a developing into a developed country as well as increase our per capita income from US$4.5 thousand to US$9–10 thousand," said Bahlil Lahadalia.

During a working meeting with Commission VI of the Indonesian House of Representatives (DPR RI), the minister made the announcement. By the prioritised downstreaming rules, Indonesia will prohibit bauxite export in 2023, and prohibitions on copper and tin will follow. Lahadalia claims that from 2019 to 2022, there was an increase in the trend of investment realisation, with even more investors opting to invest in the downstreaming industry instead of the labour-intensive sector.

The number of investments realised in 2022 was Rp1,207 trillion, exceeding the government's objective of Rp1,200 trillion and increasing 34 per cent yearly. The amount was at least 54.2 per cent foreign investment (PMA), with the remaining percentage coming from local investment (PMDN).

The minister said that in 2022, investment led to the creation of 1,305,001 new employments, exceeding the government's goal of 1.3 million new jobs. Singapore, China, and Hong Kong were Indonesia's top three foreign investors in 2022, each contributing US$13,281 million, US$8,226 million, and US$5,514 million, respectively.