Downstream Nickel Industry Boosts Economic Growth, Reduce Poverty Rate: Minister Luhut

TEMPO.CO, Jakarta - The Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan claimed that the downstream nickel industry managed to boost economic growth and reduce the poverty rate in Indonesia. "Downstream has encouraged quality investment, especially in the east of Indonesia," said Luhut during Nickel Conference CNBC in Ballroom Kempinski, Jakarta, on Tuesday, July 25, 2023. He mentioned North Maluku and Central Sulawesi as examples of downstream industry success stories.

According to Statistics Indonesia's data as relayed by Luhut at the conference, Central Sulawesi reached an average of 11.70% of economic growth after the 2015 downstream nickel. The value of economic growth in the region increased after an average of 7.50% growth in 2001 until 2014.

Meanwhile, in North Maluku, the economic growth increased from 5.7% in 2001-2018 to 12.9% since the downstream industry of nickel in 2019. However, significant growth was only seen in 2021 with 16.79% and in 2022 with 22.94%. Previously, the economic growth in North Maluku is lower than the average pre-downstream with 6.13% in 2019 and 4.92% in 2020.

Besides economic growth, Luhut also claimed the downstream nickel industry reduce the poverty rate in both provinces. "The poor population in the downstream area keeps decreasing as well as the Gini ratio," said Luhut. According to Statistics Indonesia's data used by Luhut, the percentage of poop population in North Maluku decreased in 2022 to 6.23% of the total population compared to 6.89% in 2021. However, that was the first lower number since the downstream nickel commenced in the region. 

Since the downstream in 2019, the percentage of poverty in North Maluku increased from 6.77% in 2019 to 6.78% in 2020 and 6.89% in 2021. Despite the fact that North Maluku has consistently experienced a decrease in the poor population 7 years prior to the downstream nickel. The percentage decreased from 10% in 2011 to 6.35% in 2017 before increasing to 6.64% in 2018, a year before the downstream.

Meanwhile, Central Sulawesi consistently experienced a decrease in the poverty rate every year since the downstream in 2015. In 2016 the poverty rate reached 14.09% and kept decreasing until 2022 at 12.30%.

Luhut also used the Gini ratio to support his claim. According to Statistics Indonesia, the Gini ratio can be used to measure the gap in income. The gap in a region can be considered high when the Gini ratio moves near 1.00 and low when it moves near 0.00. The Gini ratio in North Maluku consistently moves lower since the downstream nickel. In 2019, the Gini ratio was at 0.312, it lowered to 0.308 in 2022; 0.300 in 2021; and 0.279 in 2022. 

Meanwhile, Central Sulawesi also experienced a decrease in the Gini ratio. In 2015, the Gini ratio reached 0.370 which decreased to 0.305 in 2022. The Gini ratio consistently lowered except for 2019 which moves higher to 0.330 from 0.317 in 2018.

SULTAN ABDURRAHMAN

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