TEMPO.CO, Jakarta - President Joko 'Jokowi' Widodo urged businesses to stop exporting raw materials. The president asked them to instead focus on developing the downstream industry.
"This is what our country needs," Jokowi said at the CEO Networking 2018 event at the Ritz Carlton, Jakarta, Monday, December 3.
Jokowi said Indonesia needs to develop the downstream sector immediately, asserting that the country has abundant natural resources but unable to enjoy the wealth potential.
He pointed out bauxite, of which tons are exported every year at the price of some US$35 per ton. But at the same time, domestic aluminum plants import hundreds of thousands of tons of alumina, a bauxite derivative product.
"If we had built alumina industry in the past, we wouldn’t have needed to import," he remarked.
The same case also happened to coal. Jokowi noted that Indonesia exports approximately 480 million tons of raw coal but imports 4 million tons of LPG annually.
The impact of downstreaming, according to Jokowi, will be very useful. Especially, for the current account deficit (CAD), which has become Jokowi's special concern for the past two years. With downstreaming, imports can be reduced and thus the CAD is curbed.
Downstreaming is also able to drive Indonesia's GDP. Jokowi refers to nickel, which Indonesia exported millions of tons for US$30 per ton. With the downstreaming of nickel to ferronickel, the president said that the commodity has increased its added value by four times.