Category: Goverment

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Changes to the Indonesia-Japan Economic Partnership Agreement, Here are the Benefits

Minister of Trade Budi Santoso revealed the trade agreement between Indonesia and Japan, the Indonesia-Japan Economic Partnership Agreement (IJEPA), since it was ratified through Presidential Regulation (Perpres) Number 36 of 2008 and has been in effect since July 1, 2008, IJEPA has provided many benefits for Indonesia.

He said the benefits obtained in the form of a trade surplus that has been maintained for more than 17 years, increased investment in the automotive sector and other industries, and increased human resource capacity in the nursing profession sector.

Even so, the Minister of Trade conveyed the urgency of change with the current conditions, including modernization by referring to the ASEAN-Japan CEPA and RCEP agreements, IJEPA needs to be updated to remain relevant.

“Apart from these benefits, there is an urgency to renew the IJEPA agreement with the aim of modernization and maintaining relevance to current challenges,” said the Minister of Trade in a working meeting with the Indonesian House of Representatives, Thursday (13/2/2025).

The Minister of Trade conveyed that the agreed IJEPA changes included adjustments to IJEPA taxes in several chapters, namely general provisions, trade in goods, movement of individuals, intellectual property, trade through electronic systems, government procurement of goods and services, and final provisions.

In addition, the Minister of Trade conveyed that Japan added a commitment of 112 tariff posts that Indonesia could utilize. Where products that received additional preference from Japan include processed tuna and other marine products, bananas and pineapples, food and beverage products, and cocoa powder.

Meanwhile, Indonesia provided an additional commitment for 25 tariff posts, including iron and steel products, rice flour, automotive products, and special rice. He also mentioned that there were 5 benefits from the IJEPA change protocol as follows:

1. Increasing Market Access for Goods and Competitiveness of Indonesian Products: Indonesian exports to Japan increased by US$ 363.4 million in the 5th year of implementation, especially the 112 new tariff posts committed by Japan, namely tuna, skipjack and processed marine products, bananas, pineapples, cocoa powder, organic chemicals, vegetable oils and other food and beverage products. Then Indonesia’s trade surplus with Japan is projected to grow 20.37% annually, with an increase in exports of more than US$ 300 million in the next 5 years.

2. Increasing Market Access: Indonesia’s e-commerce service trade exports increased to US$ 190.6 million in the 5th year of implementation and reached US$ 1.27 billion in the 10th year of implementation.

3. Absorption of Labor: The workforce absorbed includes air transportation, communications, transportation, warehousing, and supporting activities.

4. Increasing Investment: Japanese investment in Indonesia increased to US$ 10.7 billion in the 10th year of implementation. Increasing the competitiveness of domestic industry through technology transfer and capacity development programs.

5. Increasing Cooperation in the Field of Government Procurement of Goods and Services: This cooperation begins in the field of information exchange and development of market access, government procurement of goods and services.

February 13, 2025, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-7777383/ada-perubahan-perjanjian-dagang-ri-jepang-mendag-beberkan-manfaatnya)

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Indonesia-Türkiye Complete 13 MoUs

The Indonesian President Prabowo Subianto revealed the results of his meeting with Turkish President Reccep Tayyib Erdogan at the Bogor Presidential Palace, West Java, Wednesday (12/2/2025). There were several discussions ranging from economic partnerships to international relations.

“The meeting was very intensive and productive. We have the same commitment to strengthen the partnership,” said Prabowo, while giving a press statement with Erdogan.

Prabowo explained that the partnership between the two countries was carried out for the prosperity of the people in the two countries. In addition, working together for a better new world order leading to world peace and stability. Such as in the fields of economics and trade, Prabowo said the two countries are committed to increasing mutually beneficial trade. Also accelerating the finalization of the Comprehensive Economic Partnership Agreement (CEPA).

“We agreed to expand market access for products from both countries,” said Prabowo.

In addition, RI-Turkey will also strengthen cooperation in the fields of defense and security. Such as education and training for armed forces personnel, intelligence, and counterterrorism.

“We agreed to also increase joint production and cooperation in the defense industry, in the health sector we also want to increase cooperation,” said Prabowo.

Regarding international relations, Prabowo said the two heads of state agreed that a solution for peace and independence for Palestine could be achieved with a two-state solution. In addition, they also support peace in Syria and Ukraine. According to Prabowo, Indonesia already has a special spiritual and emotional relationship with Turkey. The relationship has lasted for hundreds of years since Turkey was called the Ottoman Empire. The following 13 agreements were signed:

  1. Memorandum of Understanding Between the Ministry of Religion and the Head of the Religious Affairs Division of the Republic of Turkey Regarding Cooperation in the Field of Religious Services and Religious Education.
  2. Memorandum of Cooperation Between the Ministry of Energy and Mineral Resources and the Ministry of Energy and Mineral Resources of Turkey in the field of Energy and Mineral Resources.
  3. Memorandum of Understanding on Cooperation in the Field of Higher Education Between the Ministry of Higher Education, Science, and Technology of the Republic of Indonesia and the Council of Higher Education of the Republic of Turkey.
  4. Agreement between the Government of the Republic of Indonesia and the Government of the Republic of Turkey on Cooperation in the Field of Health and Medical Sciences.
  5. Memorandum of Understanding on Strategic Cooperation in the Field of Defense Industry Between the Ministry of Defense of the Republic of Indonesia and the Secretariat of Defense Industries of the Presidency of the Republic of Turkey.
  6. Memorandum of Understanding between the Ministry of Trade of the Republic of Indonesia and the Ministry of Trade of the Republic of Turkey on Increasing Cooperation in the Field of Trade.
  7. Memorandum of Understanding between the Government of the Republic of Indonesia and the Government of the Republic of Turkey on Cooperation in the Field of Agriculture.
  8. Statement of Intent Between the Government of the Republic of Indonesia and the Government of the Republic of Turkey on Investment Promotion and Facilitation.
  9. Memorandum of Understanding Between the Ministry of Industry of the Republic of Indonesia and the Ministry of Industry and Technology of the Republic of Turkey on the Establishment of a Joint Committee for Industrial Cooperation.
  10. Joint Venture Agreement Between Republikorp and Baykar for the Manufacture of Drone Factories in Indonesia.
  11. Cooperation Protocol Between Turkish Radio Television Corporation (TRT) and Public Broadcasting Institution of Indonesian Television (LPP TVRI) in the Field of Television.
  12. Memorandum of Understanding Between Turkish Radio Television Corporation (TRT) and Public Broadcasting Institution of Indonesian Radio (LPP RRI) in the Field of Radio.
  13. Cooperation Agreement Between Anadolu Agency (AA) and Antara Indonesia News Agency.

February 12, 2025, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20250212154109-4-610108/prabowo-erdogan-saksikan-13-mou-ada-pembangunan-pabrik-drone-di-ri)

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Strengthening Cyber ​​Security, Indonesia Partners with RMIT

The Indonesian government is trying to strengthen the digital economy sector with strategic cooperation. One of them is the signing of a Memorandum of Understanding (MoU) between the Coordinating Ministry for Economic Affairs of the Republic of Indonesia and the Royal Melbourne Institute of Technology (RMIT). This memorandum of understanding aims to develop knowledge related to cybersecurity in Indonesia.

Deputy for Coordination of Economic Cooperation and Investment of the Coordinating Ministry for Economic Affairs Edi Prio Pambudi explained that this initiative can create a safe and sustainable digital economy.

“Our best priority is to create a safe and secure digital economy. This MoU is also a significant step to meet the needs of the industry in creating a competitive and quality workforce in Indonesia,” said Edi in a press conference at the Coordinating Ministry for Economic Affairs Office, Wednesday (12/2/2025).

Edi emphasized that currently the main focus is on cybersecurity, in the future this cooperation will be expanded to the development of the semiconductor sector. This is done to anticipate increasingly tight global competition in the technology sector, especially in the Asian region.

“We must prepare superior, practical human resources with capacities that can be directly applied in their fields, especially in dealing with the dynamics of cybersecurity,” he explained.

He also highlighted the many cyber attacks that occurred in Indonesia last year. Therefore, awareness of the importance of a safe digital space is also a major focus.

“We will also start building awareness about how to create a safe and accurate information-based digital economic space. Therefore, we are developing new training methods that are more practical, interactive, and adaptive, so that all participants can gain relevant knowledge,” he added.

Furthermore, he explained that the training pattern that is being designed will ensure that graduates have skills that are ready to be applied in the world of work. In this case, the teams from RMIT and Innov8 will collaborate to develop an effective curriculum and implement it immediately.

“Because this concerns the development of human resources who are ready to work, the RMIT team and Innov8 will work together to formulate an effective training pattern. We hope that this training can be implemented immediately so that it can provide real benefits for the development of digital talent in Indonesia,” he said.

February 12, 2025, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20250212150512-4-610095/perkuat-keamanan-siber-indonesia-gandeng-rmit)

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Strengthening Cyber ​​Security, Indonesia Partners with RMIT

Indonesia is currently in the process of accession to become a member of the developed country alliance, the Organisation for Economic Co-operation and Development (OECD). In the membership process, Indonesia is assisted by Japan, which is one of two Asian countries in the OECD.

The Indonesian government has set a final target to submit an initial memorandum document in Indonesia’s accession process to the OECD. The government is targeting the document to be submitted to the OCED Secretariat General in March 2025. As is known, the initial memorandum document contains a self-assessment or personal assessment of the government’s personal assessment of the alignment of Indonesian regulations, policies, and practices with relevant OECD instruments.

As is known, the government of the OECD National Team to prepare the document is in accordance with Presidential Decree Number 17 of 2024. This team is chaired directly by the Coordinating Minister for Economic Affairs Airlangga Hartarto. This team consists of 64 ministries/agencies/institutions, both government and non-government elements, the OECD National Team will partner with 26 OECD Committees with 243 OECD instruments and standards that Indonesia must follow.

Coordinating Minister Airlangga also said that the launch of the OECD Accession Portal and INA OECD was a real step to accelerate reforms in various sectors, including the economy, digitalization, and governance. At the launch of the portal, Airlangga claimed that Indonesia was the first country to use a digital system in the OECD accession process as a commitment to strengthening international cooperation and accelerating reforms in various sectors in accordance with OECD standards and recommendations.

On the other hand, the Japanese Ambassador to Indonesia, Masaki Yasushi, explained that Japan through the Japan-OECD ASEAN Partnership Program (JOAPP) allocated funds of 8 million euros over the next three years.

“This program intends to implement projects such as sending OECD experts, research and problem analysis, and training focused on areas such as private investment, connectivity, sustainability and digital,” Yasushi said at the OECD Anti-Bribery Convention technical meeting in Jakarta, Monday (10/2/2025).

Furthermore, Yasushi explained that the 8 million euro fund is the total support package for all participating ASEAN member countries.

“This is a total support package for all participating ASEAN member countries. In it there is Indonesia which is in the process and then Thailand and Vietnam in the future,” said Yasushi.

Until now, no Southeast Asian or ASEAN country has joined the OECD. As for the Asian countries that have joined so far, only 2, namely Japan and South Korea. Yasushi also explained that Japan believes that promoting OECD standards throughout Southeast Asia will attract private investment and lead to sustainable economic growth. “Not only in Indonesia, but investment throughout the region,” he said.

February 5, 2025, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20250205191548-4-608315/selangkah-lagi-masuk-oecd-ri-akan-masukan-dokumen-maret-2025)

(https://www.cnbcindonesia.com/news/20250210120035-4-609365/jepang-kucurkan-dana-8-juta-euro-bantu-negara-asean-gabung-oecd)

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Two Indonesian Airports Among 100 Best in the World

Skytrax World Airport Awards 2023-2024, released the 100 best airports in the world. The data contains two Indonesian airports that are included in the ranks of the best airports, namely Soekarno-Hatta Airport (Soetta) Jakarta and I Gusti Ngurah Rai Bali. Quoted from the official upload of the Instagram account of the Ministry of Transportation (Kemenhub) @kemenhub151 which was marked by the Ministry of  Tourism @kemenpar.ri, Soetta Airport is in the 28th best position from 2023 in 43rd place.

Meanwhile, I Gusti Ngurah Rai Bali is in 74th position in 2024 from the 80 best airports in the world in 2023. The entry of these two Indonesian airports is based on several factors given to customers.

“This warning is determined through voting by air travelers worldwide in the Skytrax World Airport Awards which assesses the passenger experience from check-in to departure,” wrote the Instagram account, @kemenpar.ri, quoted Sunday (2/2/2025).

The assessment factors include facilities, comfort, cleanliness, and customer service. In the upload, good service will invite foreign tourists to come to Indonesia.

“Good travel services will attract tourists to come and experience a safe, comfortable, and enjoyable tourist experience,” he concluded.

Meanwhile, in first place, the world’s best airport is occupied by Doha Hamad Qatar which in 2023 will be in 2nd place. While in 2nd place is Singapore Changi Airport which was previously in first place in 2023. Then in 3rd place is Seoul Incheon Airport, followed by Tokyo Haneda in 4th place, and Tokyo Narita in 5th place. This is a good development for the aviation and tourism sectors of Indonesia so that it can increase foreign tourist visits to Indonesia and increase state revenue.

February 2, 2025, detikFinance

(https://finance.detik.com/infrastruktur/d-7759242/top-dua-bandara-ri-masuk-100-terbaik-di-dunia)

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Malaysia Makes Indonesia an Investment Paradise, Capital Inflow Breaks Record

Investment from Malaysia has increased drastically in the last five years, both in terms of the number of projects. Data from the Investment Coordinating Board (BKPM) shows that the realization of Foreign Investment (PMA) in 2024 reached IDR 900.2 trillion or equivalent to 52.5% of the total investment last year (IDR 1,714.2 trillion). Of the five countries with the largest PMA realization, Malaysia stole the attention with a significant spike compared to previous years. However, which sector received the most funds?

Data from the Ministry of Investment of the Investment Coordinating Board (BKPM) shows that Singapore still leads as the largest investor with an investment value of US$ 20.1 billion, followed by Hong Kong US$ 8.2 billion, China, Malaysia, and the United States. These five countries control the majority of foreign capital flows entering Indonesia throughout the year.

Sectorally, investment from these countries mostly flows into the basic metal industry, metal goods, not machinery and equipment, followed by the paper and printing industry, mining, food industry, and other services. This trend shows that downstreaming is still a favorite for global investors, along with government policies that encourage added value domestically.

Malaysia has experienced extraordinary investment growth in the past five years. In 2020, Malaysia’s investment realization in Indonesia was still at US$ 1.045 billion, then skyrocketed to US$ 1.36 billion in 2021, then doubled to US$ 3.3 billion in 2022. This trend continued to climb in 2023 with US$ 4.1 billion and reached US$ 4.2 billion in 2024. If using the 2024 APBN exchange rate as used by BKPM (US$ 1 = IDR 15,000), Malaysia’s investment in 2024 reached IDR 63 trillion. This figure is the highest ever recorded by BKPM. When compared to 2020 or five years ago, Malaysian investment in Indonesia jumped 302%.

In terms of the number of projects, Malaysia has also experienced a significant increase. If in 2020 the number of projects worked on was only 3,283 projects, in 2024 it will reach 6,554 projects. This means that in addition to increasing investment value, project distribution is also wider and involves more sectors. Malaysia focuses on the basic metal, mining, and paper and printing industries. This is in line with the needs of the industry in Malaysia which requires a stronger supply of raw materials and production infrastructure.

Malaysia has proven its commitment as one of the largest investors in Indonesia, with consistent growth in the past five years. With an investment value of US$ 4.2 billion and more than 6,500 projects in 2024, Malaysia’s presence is increasingly felt in various industrial sectors. The challenge now lies in Indonesia’s hands: how to maximize this capital flow so that it not only benefits investors but also encourages sustainable and highly competitive economic growth.

January 31, 2025, CNBC Indonesia

(https://www.cnbcindonesia.com/research/20250131121307-128-606953/malaysia-jadikan-ri-surga-investasi-guyuran-modal-tembus-rekor)

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Prabowo Inaugurates Jawa-1 Gas Plant, Largest in ASEAN

President Prabowo Subianto inaugurated the Java-1 Steam Gas Power Plant or PLTGU which is integrated with FSRU owned by Pertamina and strategic partners along with dozens of other strategic electricity projects in West Java, Monday (20/1/2025). On that occasion, Prabowo targeted energy independence in the next five years and was optimistic that Indonesia would not only become an independent country but also become one of the main players in the global energy transformation.

Vice President of Corporate Communication Pertamina Fadjar Djoko Santoso said that the Java 1 PLTGU which is managed by PT Jawa Satu Power, a consortium company of Pertamina New & Renewable Energy (Pertamina NRE) subholding together with Marubeni and Sojitz is a manifestation of downstreaming and energy transformation according to the Asta Cita of the Government of President Prabowo Subianto in the 100-day work program and the direction of the Ministry of SOEs.

“The Java-1 PLTGU has a capacity of 1,760 MW and is the largest in Southeast Asia, equipped with sophisticated technology that has added value in operational, financial, and environmental aspects to support energy security, especially in the Java-Bali area,” said Fadjar in his statement, Tuesday (1/28/2025).

Fadjar explained that this PLTGU is equipped with LNG storage and regasification facilities located on a floating ship or also called the Floating Storage Regasification Unit (FSRU). The Java-1 PLTGU also uses single-shaft combined cycle gas turbine (CCGT) technology, the latest generation that helps it operate more efficiently and save electricity production costs.

“The technology used has a faster power increase feature, playing an important role in supporting the electricity network located in Cilamaya, Karawang as a reliable frequency stabilizer, ensuring a stable electricity supply when there are power fluctuations on the network,” he added.

According to him, this also has a direct impact on the benefits of the community, especially in reducing the potential for electricity loss on transmission lines in the process of sending electricity to industrial areas and the community. Moreover, this power plant is strategically located, namely in the center of the Java-Bali electricity load area. In addition, this power plant also has black start capability technology that allows for self-start up, so that the waiting period for the synchronization process during recovery in the event of a power outage will be faster.

In line with efforts to reduce carbon emissions from the electricity sector, the Java-1 PLTGU is projected to reduce carbon emissions by 3.3 million tons of CO2 equivalent per year. The operation of the Java-1 PLTGU is an important achievement point as well as adding to the clean energy utilization portfolio in Pertamina’s business. Natural gas plays a very strategic role in the energy transition period and supports national energy security.

The Java-1 PLTGU is also one of the important milestones created by the synergy of BUMN and international partners, who have a high commitment to jointly realize the transition to clean energy in Indonesia. Pertamina as a leading company in the energy transition sector, is committed to supporting the 2060 Net Zero Emission target by continuing to encourage programs that have a direct impact on achieving the Sustainable Development Goals (SDGs). All of these efforts are in line with the implementation of Environmental, Social & Governance (ESG) across all of Pertamina’s business lines and operations.

January 28, 2025, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20250128092415-4-606260/prabowo-resmikan-pembangkit-gas-jawa-1-terbesar-di-asean)

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Indonesia Accelerates Economic Cooperation with India

The Government of the Republic of Indonesia and the Government of the Republic of India have agreed to strengthen cooperation in various fields, from health to culture. The agreement was reached after a meeting between Indonesian President Prabowo Subianto and Indian Prime Minister Narendra Modi and was conveyed in a press statement at Hyderabad House, New Delhi, Saturday (25/1/2025). Starting the press statement, Prabowo greeted Modi with the greeting “My Good Brother”. He also thanked Modi for his extraordinary welcome to his first visit to India as President of the Republic of Indonesia.

“We discussed very intensively and very openly. We discussed many key sectors,” Prabowo said in English. Also present at the meeting were a number of ministers who are members of the cabinets of the two governments. As a follow-up to the cooperation between the two countries, Prabowo gave directions to the ranks of ministers to accelerate the process and cut regulations that could hinder.

“We must accelerate and accelerate economic cooperation with India. We will prioritize this cooperation in the context of the long-term relationship between the two countries,” said Prabowo.

On the same occasion, Prabowo admitted that he was proud to be the Chief Guest of the Republic Day Parade which will be held on Sunday (26/1/2025). Because the previous Chief Guest from Indonesia was President Sukarno at the Republic Day Parade in 1950.

“This is a source of pride for me,” said Prabowo.

Furthermore, Prabowo congratulated Modi and the Indian people on the 76th Republic Day. May prosperity and success always accompany India, a country that has long supported Indonesia.

“India is one of the biggest supporters of our independence. India provides a lot of financial assistance, health assistance, many Indian leaders support us in critical times. Indonesia will never forget this support,” said Prabowo.

Before delivering a press statement, Prabowo and Modi witnessed the exchange of memorandums of understanding (MoU) between the governments of the two countries.

“In our discussions in the fields of trade, investment, tourism, health, energy, security cooperation, AI (artificial intelligence), digital IT, energy, we agreed to strengthen this cooperation,” said Prabowo.

At that moment, there were five cooperation documents that had been agreed upon by the two countries. The cooperation that has been agreed by Indonesia and India includes: 1. MoU on Health Cooperation between the Indonesian Ministry of Health and the Ministry of Health and Family Welfare of the Republic of India; 2. MoU between the Food and Drug Administration of the Republic of Indonesia and the Pharmacopoeia Commission for Indian Medicines and Homoeopathy of the Ministry of Ayush of the Republic of India on Cooperation in the Field of Quality Assurance of Traditional Medicines; 3. MoU between the Ministry of Communication and Digital of the Republic of Indonesia and the Ministry of Electronics and Information Technology of the Republic of India on Cooperation in the field of Digital Development; 4. MoU between the Maritime Security Agency of the Republic of Indonesia and the Coast Guard on Cooperation in Maritime Safety and Security; and 5. Cultural Exchange Program between the Ministry of Culture of the Republic of Indonesia and the Ministry of Culture of the Republic of India for the Period 2025 – 2028.

January 25, 2025, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20250125155631-4-605959/prabowo-indonesia-harus-percepat-kerja-sama-ekonomi-dengan-india)

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Minister of Trade: Indonesian Furniture Exports Reach IDR 36 Trillion

Minister of Trade Budi Santoso revealed that Indonesia is the 19th largest supplier of furniture and crafts in the world. The export trend of furniture and crafts in January-November reached US$ 2.22 billion or equivalent to IDR 36 trillion. This was revealed at the launch of the International Furniture and Craft Fair Indonesia (IFFINA) 2025, at the Ministry of Trade, Thursday (1/23/2025).

“The export value of furniture and crafts in Indonesia from January to November 2024 reached US$ 2.22 billion with the main destination countries being the United States, Japan, the Netherlands, Germany, and Belgium,” said Budi.

The growth trend of Indonesian furniture and crafts in 2023 reached US$ 2.46 billion with an annual growth trend of 2.62% in the last 5 years. According to Budi, world demand for furniture and crafts is still quite promising, where the world demand trend continues to grow positively by 15.09%.

“Specifically for furniture products, the global market size reached US$ 770.42 billion in 2024 and is projected to reach US$ 925.46 billion in 2029,” he explained.

On the same occasion, the Indonesian Furniture and Craft Industry Association (ASMINDO) said that in 2024, the furniture industry again contributed positive value to the national economy, especially in the export sector, increasing by 4.7% compared to 2023.

Starting from this optimism, Asmindo will again hold an annual event for furniture and design industry players, namely IFFINA 2025. This year’s IFFINA event will be presented differently from before by raising the theme “A Showcase of Indonesia’s Finest Furniture and Homedecor”, which of course is expected to present the best products from the furniture, craft, design, and homedecor industries.

For this reason, IFFINA+ is here with the aim of meeting the needs of the domestic and international markets, supporting export growth, while opening up great opportunities for the project sector in Indonesia.

“The hope of business actors is that the government can provide incentives to attract investors to build factories that are able to produce mass products and supporting raw materials such as hinges and drawer rails in Indonesia, so that technology transfer can occur. Thus, together we can support the growth of the national furniture industry,” said Dedy.

January 23, 2025, detikFinance

(https://finance.detik.com/industri/d-7745991/mendag-ungkap-ekspor-mebel-ri-tembus-rp-36-t)

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Downstreaming Becomes Prerequisite for Industrial Sector Towards Golden Indonesia 2045

Indonesia continues to move forward in optimizing the potential of its natural resources as evidenced by the downstream mining industry program. Until 2024, this program has had a significant impact in building a national economy based on added value that focuses on copper, bauxite, and silica sand commodities. If carried out and realized in accordance with the existing investment plan, downstreaming will be a prerequisite for the processing industry sector to support the achievement of Indonesia Emas 2045. Downstreaming of the mining industry, especially copper, bauxite, and silica sand, was initially carried out through the construction of copper and bauxite smelters, as well as the development of products made from silica sand.

This statement was expressed in research by the Faculty of Economics and Business, University of Indonesia (FEB UI) entitled “Study of the Impact of Mining Industry Downstreaming on the Economy, Social, and Environment: Copper, Bauxite, and Silica Sand”.

Deputy Head of the Center for Sharia Economics and Business, Faculty of Economics and Business, University of Indonesia (PEBS FEB UI) Nur Kholis said that the requirement for the processing industry sector to be able to support the achievement of Indonesia Emas 2045 is the use of products from smelter processing. The product can be downstreamed again as input in the development of products that have higher added value domestically to the final product.

Downstreaming has enabled Indonesia to no longer just export raw materials. Value-added products such as copper cathodes, alumina, and silica sand-based products such as glass and ceramics, and in the future solar panels and semiconductors are now starting to be produced domestically. This is a strategic step to strengthen the national industrial structure and open up new economic opportunities. Indonesia cannot continue to rely on exports of raw materials and imports of intermediate goods from abroad. Downstreaming is Indonesia’s path to economic independence.

“By increasing investment in order to produce value-added products domestically, we create jobs, increase people’s income, and ensure that our natural resources truly provide maximum benefits for the nation,” said Nur Kholis in his official statement, Wednesday (15/1/2025).

In addition, Nur Kholis explained, the impact of the downstreaming of copper, bauxite, and silica sand has begun to be felt in areas such as Gresik Regency (East Java), Mempawah Regency (West Kalimantan), and Batang Regency (Central Java), where the construction of smelters has become the driving force of the local economy. In addition to increasing Gross Regional Domestic Product (GRDP) and regional income, this policy has also created thousands of jobs, both directly and indirectly.

However, downstreaming also faces challenges such as limited infrastructure and technology, limited skilled workers, fluctuating market demand, and negative impacts on the environment. According to him, the government needs to take a number of strategic steps to face these challenges. For example, human resource development, research and development of technology, application of environmentally friendly technology, product diversification, and strengthening international cooperation.

“Downstreaming of the mining industry, especially copper, bauxite, and silica sand also needs to continue to be encouraged to apply environmentally friendly technology in all mining mineral processing facilities. Effective waste management must be an integrated part of the implementation of downstreaming,” he said.

January 15, 2025, CNCB Indonesia(https://www.cnbcindonesia.com/news/20250115200002-4-603501/hilirisasi-jadi-prasyarat-sektor-industri-menuju-indonesia-emas-2045)