Indonesia Accelerates Downstream Processing, Rejects Role as Mere Raw Commodity Supplier

The Indonesian government is aggressively pushing for the strengthening of downstream processing and industrialisation to enhance the nation’s bargaining power in global trade. According to Edi Prio Pambudi, Deputy for Economic and Investment Cooperation at the Coordinating Ministry for Economic Affairs, Indonesia is no longer content with merely being a supplier of raw commodities. The country must evolve into a supplier of high-value finished products.

This strengthening of Indonesia’s position in the global supply chain is being pursued through several strategies. These include reinforcing the downstream processing of 28 key commodities and building industrial ecosystems to boost efficiency and attract investment. The government is also aiming to integrate the country into high-tech supply chains, such as the semiconductor industry.

One of the primary commodities targeted for downstream development is rare earth minerals, which are currently a highly contested resource globally. The government also faces challenges related to regulatory ease and energy supply security, which are essential for streamlining production processes and enhancing the competitiveness of national products, including those from the small and medium enterprise (UMKM) sector.