Downstream Processing Becomes Key Requirement as Prabowo Firmly Regulates Foreign Investment
President Prabowo Subianto has emphasised Indonesia’s increasingly firm investment policy direction, requiring all foreign investors to follow the industrial downstream processing programme. This stance emerges amid discussions on economic cooperation with the United States, which has drawn global attention.
The government assures that the door to investment remains open, but with the primary condition of a commitment to developing domestic processing industries. Thus, this strategy is aimed at increasing the added value of national natural resources.
In his statement via the Indonesian Government’s Communication Agency, the President emphasised that the practice of exporting raw materials without processing can no longer be accepted. This policy forms part of the economic transformation to reduce dependence on raw commodity exports.
“Raw materials, we ask to be processed. If they want to mine and process here, of course,” the President said. Prabowo stressed that investments must bring direct benefits to the domestic industry.
Furthermore, the President explained that every investor entering the natural resources sector is obliged to build processing facilities in Indonesia. This step is deemed crucial for sustainably strengthening the national industrial structure.
The government also emphasised that openness to foreign capital remains within the bounds of national interests. All investment activities must comply with applicable domestic natural resource management regulations.
In managing critical minerals, the government prioritises the principle of transparency through the application of international market prices. This aims to ensure Indonesia obtains fair economic value from strategic commodities.
“Regarding critical minerals, I have said, we are open. But everything at market price. At economic price,” the President stated. According to the former Kopassus Deputy Commander, cooperation still refers to global market mechanisms.
The President also reminded that foreign involvement in the mining sector is not new to Indonesia. For a long time, such cooperation has been running while still adhering to national rules.
As an illustration, the President mentioned the operations of Freeport Indonesia, which have been ongoing for decades. The company now contributes significantly to state revenue.
“So if they want to follow (the rules), we allow them to mine at Freeport. It has been decades. Freeport now generates one of our largest revenues. We allow it,” he continued.
Nevertheless, the government remains consistent in prohibiting the export of raw materials without downstream processing. This policy is believed to drive increased added value and strengthen national industrial competitiveness.
He also emphasised that the government will provide broad access to investors who comply with the rules and follow international market prices. This approach is expected to attract quality investments while accelerating domestic industrialisation.