BI Governor Calls for Deeper Downstream Processing and Reindustrialisation
Bank Indonesia (BI) Governor Destry Damayanti says Indonesia needs to strengthen industrialisation and deepen downstream processing so it can generate greater added value from its natural resources.
Indonesia should not simply process raw materials to a certain stage before exporting them, Destry said. Developing longer supply chains and more extensive processing is necessary to build a competitive manufacturing base and support sustainable economic growth.
She made the remarks in a presentation entitled “The Emerging Giant: Indonesia’s Next Decade in Asia’s Growth Story” at the 2026 Danantara Technology Innovation Investment Forum (DTIIF).
Destry said Indonesia had substantial advantages that could help it become one of Asia’s major economic powers, including its population and natural resource wealth. However, geopolitical shifts and advances in artificial intelligence (AI) are also reshaping trade, investment and competition between countries.
Indonesia therefore needs to strengthen its economic foundations and pursue clear long-term planning, she said. Development policies should not operate in isolation, but should support common objectives.
One of Indonesia’s main challenges is to revive industrialisation. Destry noted that the country began building its industrial sector in the late 1980s and early 1990s, but later became dependent again on commodity exports.
“Back to basics,” Destry said, emphasising the need to reinforce industry and deepen downstream processing.
She said Indonesia’s natural-resource processing chains were not yet long enough. In her presentation, Destry described how the country still exports products after only some processing, before more value can be created by developing derivative products.
“Our economic complexity index is very low. We only get halfway through the process, then export it,” she said.
Natural-resource processing should not stop at a single stage, Destry said. Indonesia needs to develop downstream industries to produce higher-value goods, boost manufacturing competitiveness and create job opportunities.
She also stressed the importance of productivity, economies of scale, the workforce and the use of technology in developing high-value industries.
As a result, the downstream-processing agenda should not focus solely on building processing facilities, but should also foster a more complete and competitive industrial ecosystem.
Danantara urged to become a growth engine
Destry also highlighted Danantara’s role in promoting productive investment. She said it could become a growth engine by paving the way for strategic projects and boosting private-sector confidence to invest.
“I hope Danantara can become a locomotive for future growth. Danantara will play a very important role in unlocking projects, and then giving the private sector the opportunity and confidence to invest alongside it,” she said.
Productive investment is one of the keys to strengthening national economic capacity. Project development must therefore be supported by careful planning and coordination among stakeholders.
Destry said industrial development requires joint efforts and medium- to long-term planning. Industrialisation, downstream processing and technology adoption must advance in tandem if Indonesia is to raise productivity and competitiveness amid changes in the global economy.
BI, meanwhile, is mandated to maintain rupiah stability, the payment system and financial-system stability in support of sustainable economic growth. Destry said strong economic foundations were essential for Indonesia to seize opportunities arising from global changes and play a greater role in Asia’s growth.