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Indonesia builds downstream metals industry to escape middle-income trap, says Bahlil
As Indonesia continues to build downstream industries, it faces multiple challenges in becoming a developed country. Investment Minister Bahlil Lahadalia spoke to The Jakarta Post about investment prospects in 2023 and how the country has proven naysayers wrong along the way.
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Investment Minister Bahlil Lahadalia (Investment Ministry/-)
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em>As Indonesia continues to build downstream industries, it faces multiple challenges in becoming a developed country. Investment Minister Bahlil Lahadalia spoke to The Jakarta Post’s Fadhil Haidar Sulaeman, Adisti Sukma Sawitri and M. Taufiqurrahman about investment prospects in 2023 and how the country had devised its strategy.
Question: What is the current state of investment in Indonesia?
Answer: Even though the global economy is full of uncertainty, we should be grateful that there is still a glimpse of hope for Indonesia to be better. In the second quarter of this year, our economy grew by 5.44 percent, the best among Group of 20 member countries. Our inflation was below 6 percent, the second best after China.
In accordance with the direction of President Joko “Jokowi” Widodo, the main direction of economic transformation is downstreaming [commodities sectors]. When I joined in 2019, base metals and processed metals, a key downstreaming sector, only accounted for 7.6 percent of total realized investment in the year, the fourth-largest sector. It became number one in 2021, accounting for 13 percent. In 2022, it is still number one, accounting for 14.8 percent of total investment.
There is now integration between mining sites and industrial areas and clusters. We are really pushing for the creation of added value because downstreaming is Indonesia's key to get out of the middle-income trap. It is the path to becoming a developed country.
What is the investment outlook for next year, given the global recession projection?
