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Nickel smelters spew emissions on Jan. 26, 2024, into the skies above Indonesia Morowali Industrial Park and a nearby residential area in Bahodopi district, Morowali regency, Central Sulawesi. (Antara/Dhemas Reviyanto)
T
he Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi has become a cornerstone of the nation’s mineral downstreaming agenda since its establishment in 2015 under former president Joko “Jokowi” Widodo’s administration. Sitting atop some of the country’s richest nickel reserves, the complex now hosts more than 50 companies involved in value-added processing, from stainless steel manufacturing to electric-vehicle (EV) battery production.
It is for this reason that Defense Minister Sjafrie Sjamsoeddin’s recent remarks questioning the alleged operation of international flights at the special-purpose airport within the IMIP compound sent ripples through industry circles.
A retired Army general, Sjafrie is a long-time confidant of President Prabowo Subianto. So when he warned that the IMIP airport might be operating without adequate oversight from state institutions, potentially creating a “state within a state”, his words carried weight far beyond a routine bureaucratic complaint.
His comments reignited concerns about how Indonesia intends to uphold its economic policy, particularly in relation to Chinese companies that heavily populate the area.
The timing could not be worse.
Indonesia urgently needs a major economic boost if it hopes to meet Prabowo’s ambitious target of 8 percent growth by 2029. While strong domestic consumption has long provided a steady backbone, it will not be enough on its own. To reach that target, the country must draw in far greater foreign direct investment, the kind that creates jobs, strengthens supply chains and, in turn, fuels even stronger household spending.
But the numbers tell a worrying story. Foreign direct investment, which for years made up roughly half or slightly more of total investment, is now on a clear downward trend.
