TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Jokowi reaffirms Indonesia’s 'massive downstreaming’ of natural resources

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Fri, August 14, 2020   /   01:42 pm
Jokowi reaffirms Indonesia’s 'massive downstreaming’ of natural resources President Joko "Jokowi" Widodo (center) and Vice President Ma'ruf Amin (right) leave the People's Consultative Assembly plenary hall after delivering the state of the nation address in Jakarta on Friday. (Antara/Akbar Nugroho Gumay)

President Joko “Jokowi” Widodo has reaffirmed that Indonesia’s future natural resources policy will focus on “massive downstreaming” to produce higher-value products.

The President, speaking before legislators, officials, political elites and foreign ambassadors, highlighted the country's ambitious plans to develop domestic oil refineries, metal smelters, coal-to-gas facilities and better palm-oil based biodiesel. 

Read also: 75 years later, with Indonesia’s oil industry in decay, options are wide open

“This will narrow down our current account deficit, increase our employment opportunities and start tackling fossil energy domination,” he said in his state of the nation address delivered before the People's Consultative Assembly in Jakarta on Friday.

Jokowi mentioned state-owned oil and gas giant Pertamina’s recent successful trial production of “D100” green diesel, a more engine-friendly biodiesel than the one currently available. He said the production would absorb “a million tons of farmer-produced palm” to produce 20,000 barrels of fuel each day.

Indonesia is the world's largest producer of palm oil, an industry that employs millions of citizens, mostly farmers. However, the palm oil industry is a major contributor to massive forest fires and deforestation.

Jokowi also mentioned the government’s landmark ban on the export of nickel ore, a metal mainly used to produce steel and car batteries. Its demand is expected to rise alongside the rise of electric cars. The ban shook global markets as Indonesia is the world’s largest producer of nickel.

Read also: Explainer: New rules in revised Mining Law

“This will place Indonesia in an even more strategic position in the development of lithium batteries, the world’s electric vehicles and as a future technology producer,” he said.

The President added that Indonesia would reform regulations and continue developing industrial estates, such as those in Batang, West Java, and Subang-Majalengka, West Java, to get more industries to invest in the country. 

He promised the giant estates would not undermine Indonesia’s micro, small and medium enterprises, which absorb over 90 percent of the domestic workforce.

Developing downstream industries is part of the Jokowi administration's larger ambition of transforming Indonesia from a commodity-driven economy into an industrial one, with the ultimate goal of becoming the world’s fourth-largest economy by 2045.