Today, 17 October 2026, marks the 75th birthday of the President of\nthe Republic of Indonesia, coinciding with the second anniversary of his\nadministration. One way to mark President Prabowo Subianto\u2019s birthday is\nto highlight the significant achievements of a national strategic\nprogramme\u2014in this case, downstream processing and its two subsequent\npriorities: energy self-sufficiency and industrialisation.<\/p>\n
President Prabowo has championed downstream processing and energy\nself-sufficiency since the beginning of his administration. As his\ngovernment enters its third year, the programme has made significant\nprogress and is contributing an increasingly large share of national\ninvestment.<\/p>\n
Indonesia\u2019s investment realisation in the first half of 2026 reached\nRp 1,010.6 trillion, up 7.2 per cent on the same period a year earlier.\nIt also generated more than 1.4 million jobs.<\/p>\n
As Investment and Downstreaming Minister and Danantara chief\nexecutive Rosan Perkasa Roeslani said earlier this month at the\ngroundbreaking and commercialisation of 11 nickel-processing ecosystems,\nand the first export of electric-vehicle batteries from the Weda Bay\nIndustrial Park (IWIP) in Central Halmahera, North Maluku, the effects\nof downstream processing can be seen directly in the province.<\/p>\n
An area once known primarily for mining is now developing into one of\nthe country\u2019s processing-industry centres. North Maluku\u2019s downstream\nproducts have also become more diverse. Exports no longer rely on raw\nmineral ore, but increasingly include processed products such as\nferronickel, nickel matte, mixed hydroxide precipitate (MHP), nickel\nsulphate and cobalt.<\/p>\n
North Maluku is following the earlier success of Morowali in Central\nSulawesi, illustrating how mineral downstreaming is directly linked to\nindustry. At the same time, mineral processing requires large quantities\nof energy and a highly reliable supply.<\/p>\n
When he launched the mandatory 50 per cent biodiesel blend (B50) in\nmid-July, President Prabowo said the programme was not merely a\ntechnological achievement, but tangible proof of national sovereignty in\nthe energy sector. He added that B50 demonstrated Indonesia\u2019s ability to\nuse its natural wealth for the benefit of its people.<\/p>\n
Downstream processing is a constitutional mandate. Article 33,\nparagraph 3, of the 1945 Constitution stipulates that the state controls\nthe natural resources contained within the country and that they must be\nused to the greatest possible extent for the people\u2019s prosperity. Those\nresources are then processed through downstreaming programmes.<\/p>\n
The Constitution clearly establishes the state\u2019s full sovereignty to\nregulate and use mineral resources without intervention by other\ncountries or international organisations. This is also reflected in\nUnited Nations Resolution 1803 (XVII), which affirms the principle of\npermanent sovereignty over natural resources (PSNR).<\/p>\n
Inspired by Mr Cum and Mr Margono<\/strong><\/p>\n As the old saying goes, the fruit does not fall far from the tree.\nThis is perhaps true of President Prabowo: the roots of his major\nprogrammes on mineral downstreaming, industry and investment can be\ntraced to ideas put forward by his father, Sumitro Djojohadikusumo, and\ngrandfather, Margono Djojohadikusumo.<\/p>\n Sumitro Djojohadikusumo, known as Pak Cum, was a key figure in the\ncountry\u2019s economic planning during the early years of the republic. An\nintellectual proponent of Keynesian development economics, Sumitro was\nalso influenced by his father, RM Margono Djojohadikusumo, who was known\nas a pioneer of the co-operative movement.<\/p>\n When he served in the Cabinet as Finance Minister and Trade Minister\nin the early 1950s, Pak Cum was strongly influenced by the development\nand modernisation theories of William Arthur Lewis and W. W. Rostow,\nwhich supported industrialisation as a stimulus for social\ntransformation.<\/p>\n As a minister, Pak Cum launched the Economic Urgency Plan (the\nSumitro Plan) and the Benteng Programme in April 1951. They focused on\nindustry as a foundation for strengthening indigenous entrepreneurship\nand encouraging the growth of domestic capital.<\/p>\n An industrialisation committee was also established, setting three\nmain goals for industrial development: a balanced economic structure,\nthe absorption of a growing population into productive sectors, and an\nincrease in national income. Another source of inspiration was Margono\nDjojohadikusumo, who founded Bank Negara Indonesia (BNI) in 1946.<\/p>\n That is why BNI was once known as BNI 46. Margono founded the bank as\na way to contribute to the economic development of Indonesia, a country\nnewly emerged from colonial rule. He believed that this development\nrequired infrastructure, including a national banking institution that\ncould support domestic interests.<\/p>\n The legacy of Pak Cum\u2019s ideas on industrialisation and Pak Margono\u2019s\nideas on investment can still be seen in the economic development\npolicies of the Prabowo administration. Ultimately, these policies aim\nto improve people\u2019s welfare, as Pak Cum had hoped, and their effects can\nbe seen on the ground.<\/p>\n The economic restructuring envisioned by Pak Cum is evident in\nMorowali, Central Sulawesi, and Central Halmahera, North Maluku, both\nmentioned earlier. These areas could serve as models for other regions\npreparing to develop industries based on downstream processing.<\/p>\n This structural change shows how processing industries can broaden\neconomic activity in areas that previously depended more heavily on\nprimary sectors such as agriculture. The benefits of downstreaming\ndepend not only on increased production capacity, but also on its links\nwith local economies, workforce development and sustainable industrial\ngovernance.<\/p>\n For mineral-producing regions, the next challenge is to ensure that\nindustrial expansion generates broader economic benefits. Increased\nvalue should go hand in hand with the development of local workers\u2019\nskills, participation by regional businesses, environmental impact\nmanagement and the creation of economic activity that can endure over\nthe long term.<\/p>\n The sustainability of this transformation will depend not only on the\nscale of investment and production, but also on the extent to which\nindustrialisation generates added value connected to regional economic\ndevelopment and community welfare.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/downstream-processing-as-a-catalyst-for-peoples-welfare-and-prosperity-1792227035",
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"sponsor": "Okusi Associates",
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