President Prabowo Calls for Accelerated Downstreaming of Key Commodities to Boost National Economy
Jakarta, Indonesia – In a bold move to strengthen Indonesia’s economic resilience, President Prabowo subianto has directed the government to expedite the downstreaming of key sectors, including fisheries, forestry, agriculture, oil and gas, and coal and mineral commodities. This initiative, outlined in Presidential Decree Number 1 of 2025, aims to enhance the value of domestically produced goods while creating high-paying jobs across the nation.
The directive was issued to Bahlil Lahadalia,Minister of Energy and Mineral Resources and head of the task force for the acceleration of downstreaming and national energy resilience. “President Prabowo’s direction, in several meetings with us, encourages downstreaming of all sectors. There are 26 to 28 commodities, which will be downstreamed,” Lahadalia stated during a press briefing on friday.
A Strategic Shift Beyond Nickel
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While Indonesia has historically focused on nickel downstreaming, the government is now expanding its efforts to include other critical commodities. “Copper downstreaming is now underway. Then bauxite. Then we are encouraging (the downstreaming) of tin. We are also currently encouraging the downstreaming of oil and gas,” Lahadalia explained.
The push for coal downstreaming is particularly noteworthy. The government is exploring the production of dimethyl ether (DME) as a substitute for liquefied petroleum gas (LPG), especially in former mining areas (PKP2B). This shift not only aligns with global energy transition trends but also aims to reduce dependency on imported LPG.
Creating high-Wage Employment Opportunities
One of the primary goals of downstreaming is to generate sufficient employment opportunities with competitive wages.”If it is indeed downstreaming,let’s not talk about regional minimum wages (UMR). if UMR is labor-intensive, downstreaming is also labor-intensive but with high salary,” Lahadalia emphasized.
By increasing the value of traded commodities, downstreaming is expected to boost national per capita income. This approach aligns with President Prabowo’s vision of fostering economic growth that benefits all Indonesians.
A Comprehensive Task Force for Downstreaming
To ensure the success of this initiative, president Prabowo has established a dedicated task force comprising ministers and heads of institutions. The task force, formed under Presidential Decree Number 1 of 2025, is tasked with accelerating downstreaming efforts across multiple sectors, including minerals and coal, oil and gas, agriculture, forestry, and maritime and fisheries commodities.
The decree,signed on January 3,2025,underscores the government’s commitment to enhancing the added value of domestically produced goods. This strategic move is expected to position Indonesia as a global leader in commodity processing and export.
Key Commodities Targeted for Downstreaming
| Sector | Commodities | Downstreaming Goals |
|———————-|————————————-|—————————————————————————————–|
| Minerals and Coal | Nickel,Copper,Bauxite,Tin | Increase value-added processing; reduce raw material exports |
| Oil and Gas | Crude Oil,Natural Gas | Develop DME as an LPG alternative; enhance refining capabilities |
| Agriculture | Palm Oil,Rubber,Coffee | Boost agro-industry output; expand export markets |
| Forestry | Timber,Pulp,Paper | Promote sustainable forestry practices; increase production of finished goods |
| Maritime and Fisheries | Fish,Shrimp,seaweed | Enhance aquaculture and processing; improve export competitiveness |
A Vision for National Energy resilience
The downstreaming initiative is not just about economic growth; it also aims to strengthen Indonesia’s energy resilience. By reducing reliance on imported energy products and fostering domestic innovation,the government hopes to create a more self-sufficient and sustainable energy landscape.
As Indonesia moves forward with this ambitious plan, the collaboration between financial institutions and the private sector will be crucial. Financial institutions have already been urged to support downstreaming projects, ensuring that the necessary funding is available to drive these initiatives forward.
A Call to Action for Stakeholders
President Prabowo’s downstreaming directive presents a unique opportunity for businesses, investors, and policymakers to contribute to Indonesia’s economic conversion. By focusing on value-added processing and high-wage job creation, this initiative has the potential to reshape the nation’s economic landscape.
For more insights into Indonesia’s downstreaming efforts, explore how financial institutions are being urged to finance downstreaming projects and learn about Apple’s plans to build an AirTag factory in Indonesia.
As the government accelerates its downstreaming agenda, the nation stands poised to unlock new economic opportunities and secure a brighter future for all Indonesians.
Accelerating Downstreaming: A Path to Economic Growth and energy Resilience in Indonesia
In a bold move to strengthen IndonesiaS economic resilience, President Prabowo Subianto has directed the government to expedite the downstreaming of key sectors, including fisheries, forestry, agriculture, oil and gas, and coal and mineral commodities. This initiative, outlined in Presidential Decree Number 1 of 2025, aims to enhance the value of domestically produced goods while creating high-paying jobs across the nation. To delve deeper into this transformative policy, we sat down with Dr. Arif Rahman, an economist and expert on Indonesia’s natural resource management, to discuss the implications and opportunities of this ambitious plan.
The Strategic Shift Beyond Nickel
Senior Editor: Dr. Rahman,Indonesia has historically focused on nickel downstreaming. How significant is the government’s decision to expand downstreaming efforts to othre commodities like copper, bauxite, and oil and gas?
Dr. Arif Rahman: this is a monumental shift. While nickel downstreaming has been accomplished, diversifying into other commodities is crucial for long-term economic stability. For instance, copper downstreaming can position Indonesia as a key player in the global electronics and renewable energy sectors. Similarly, bauxite downstreaming can boost the aluminum industry, which is vital for construction and transportation. Expanding into oil and gas downstreaming, particularly with initiatives like dimethyl ether (DME) production, not only reduces our reliance on imported LPG but also aligns with global energy transition trends. This diversification ensures that Indonesia isn’t overly dependent on a single commodity, which is a smart move in today’s volatile global market.
Creating High-Wage Employment Opportunities
Senior Editor: one of the key goals of downstreaming is to create high-wage jobs. How do you see this initiative impacting Indonesia’s labor market?
Dr. Arif Rahman: Downstreaming has the potential to transform Indonesia’s labor market substantially. By moving from raw material exports to value-added processing, we can create jobs that require higher skill levels and, consequently, offer better wages. For example, processing nickel into battery components or refining crude palm oil into oleochemicals not only adds value to the commodities but also creates jobs in advanced manufacturing and research and development. This shift from labor-intensive, low-wage jobs to high-skill, high-wage employment is essential for improving living standards and reducing income inequality. It’s a win-win for both the economy and the workforce.
The role of the Downstreaming Task Force
Senior Editor: president prabowo has established a dedicated task force to oversee downstreaming efforts. How critical is this task force to the success of the initiative?
dr. Arif Rahman: The task force is absolutely critical. Downstreaming is a complex process that requires coordination across multiple sectors and stakeholders. The task force, comprising ministers and heads of institutions, ensures that there is a unified strategy and clear accountability. By having a centralized body to oversee the implementation, the government can address challenges more effectively, streamline regulatory processes, and ensure that resources are allocated efficiently. This level of coordination is essential for achieving the ambitious goals set out in the presidential decree.
Key Commodities and Their Downstreaming Goals
Senior editor: Could you elaborate on some of the key commodities targeted for downstreaming and their specific goals?
Dr. Arif Rahman: Certainly. Let’s take a closer look at a few sectors:
- Minerals and Coal: Nickel, copper, bauxite, and tin are being prioritized.The goal is to increase value-added processing and reduce raw material exports. For instance, nickel is being processed into battery components, which are in high demand globally.
- Oil and Gas: The focus is on developing DME as an option to LPG and enhancing refining capabilities. This not only reduces import dependency but also positions Indonesia as a leader in innovative energy solutions.
- Agriculture: Palm oil, rubber, and coffee are key commodities. The aim is to boost agro-industry output and expand export markets. Such as,palm oil can be processed into biodiesel,which has significant export potential.
- Forestry: Timber, pulp, and paper are being targeted to promote lasting forestry practices and increase the production of finished goods like furniture and paper products.
- Maritime and Fisheries: Fish, shrimp, and seaweed are being processed to enhance aquaculture and improve export competitiveness. This includes value-added products like canned seafood and seaweed-based cosmetics.
A Vision for National Energy Resilience
Senior Editor: How does downstreaming contribute to indonesia’s energy resilience?
Dr.Arif Rahman: Downstreaming is a cornerstone of Indonesia’s energy resilience strategy. By reducing our reliance on imported energy products and fostering domestic innovation,we can create a more self-sufficient and sustainable energy landscape. For example,the production of DME from coal not only provides an alternative to LPG but also utilizes domestic coal resources more efficiently. Similarly,refining crude oil domestically reduces our dependency on imported refined products. These initiatives not only enhance energy security but also create opportunities for technological innovation and job creation in the energy sector.
A Call to Action for Stakeholders
Senior Editor: What role do you see for businesses, investors, and policymakers in supporting downstreaming efforts?
Dr. Arif Rahman: Downstreaming presents a unique chance for all stakeholders to contribute to Indonesia’s economic conversion. Businesses and investors can play a crucial role by investing in value-added processing facilities and innovative technologies. Policymakers need to create an enabling habitat through supportive regulations, infrastructure development, and access to financing. Collaboration between the public and private sectors is essential for the success of downstreaming initiatives.Financial institutions, in particular, have a critical role to play by providing the necessary funding to drive these projects forward. It’s a collective effort that requires commitment and collaboration from all parties involved.
Senior Editor: thank you,Dr. Rahman,for your insights. It’s clear that downstreaming has the potential to reshape Indonesia’s economic landscape and create a brighter future for all Indonesians.
Dr. Arif Rahman: Thank you. I believe that with the right strategies and collaboration, downstreaming can indeed unlock new economic opportunities and strengthen Indonesia’s position on the global stage.
