Bahlil Lahadalia: Many Resent ASEAN's Growth, Mentions EU Nickel Lawsuit

TEMPO.CO, Jakarta - According to Bahlil Lahadalia, Investment Minister or Head of the Investment Coordinating Board (BKPM), there are countries that are not content with the economic growth of ASEAN countries. He mentioned this in his attendance at the 25th ASEAN Investment Council session held in Cambodia on Wednesday.

The discontent from several countries, he said, is mainly caused by the efforts of ASEAN members, including Indonesia, in carrying out economic transformation by strengthening natural resources downstream, especially minerals. 

This downstream-focused strategy makes the government no longer focus on selling raw goods, but must first be processed domestically so that there is added value.

"Indonesia is experiencing this at the moment. When we are focusing on downstream nickel to produce car batteries and some of these countries protested against us at the WTO (World Trade Organization). This is a small example, but it does not rule out the possibility for other countries, "Bahlil said, quoted from his written statement issued on Thursday, September 15.

Focusing on the downstream aspect, he added, produced positive results that are evident in Indonesia’s trade balance. In 2017, Indonesia’s trade balance deficit with China reached 18 billion US dollars but shrank to 2.5 billion US dollars in 2021. 

Even so, in the first semester of 2022, Indonesia's trade balance with China is already in a surplus of US$ 1 billion, and overall Indonesia's trade balance has also recorded a surplus of US$ 15.55 billion. According to him, this is the result of the government's efforts to sell processed natural resources abroad.

“This is a real impact of the downstream of natural resources that the current government continues to push. We have to stay on track. We will fight as much as possible," said Bahlil.

In November 2019, the European Union (EU) officially filed a lawsuit with the WTO regarding the Indonesian government's policy of limiting exports of nickel, iron ore, and chromium as raw materials for the European stainless steel industry. 

In its lawsuit, the EU considers that Indonesia has violated the commitment between WTO members to provide the widest access for international trade, including raw nickel products.

Currently, the Indonesian government is waiting for the final outcome of the trade dispute settlement process submitted by the EU in the WTO session regarding the ban on the export of nickel ore. According to him, the lawsuit is still in the preliminary dispute panel process and is still waiting for a final decision from the WTO.

On the basis of this problem, Bahlil invited ASEAN members to emphasize the importance of cohesiveness in order to create strong bargaining power at the global level. This is done by using a comparative advantage approach in each country.

"I am confident that we have the strength, but we still haven't focused on each other in providing reinforcement to fellow ASEAN countries,” he concluded.

ARRIJAL RACHMAN

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