KPBI says downstreaming policy is a key step in national economic development

Jakarta (ANTARA) - Chairman of the Indonesian Confederation of Trade Unions (KPBI) Ilhamsyah stated that the government’s downstreaming policy, which has begun to be implemented, is an important step to correct the direction of national economic development, and that policy needs to be expanded. “Downstreaming is important to increase the added value of natural resources, reduce dependence on raw material exports, and promote national industrialisation,” said Ilhamsyah in his statement in Jakarta on Friday. He assessed that Indonesia’s national development still faces fundamental problems because it has not fully relied on the objective potential possessed by the nation itself. According to him, the direction of national industrialisation has so far been heavily influenced by external interests, both through foreign investment, control of technology, and global market orientation. Ilhamsyah said that such dependence not only impacts the economic aspect but also touches on issues of national sovereignty. “Indonesia has abundant natural resources, a strategic geographical position, and a large workforce. However, when that potential is not made the main basis of development, Indonesia only becomes part of the global production chain, not the controller within it,” he said. Therefore, Ilhamsyah assessed that the downstreaming policy that the government has begun to implement in recent years is an important step to correct the direction of national economic development. However, according to him, that policy needs to be expanded and deepened so that it does not only stop at the mining sector alone. KPBI encourages downstreaming to be placed within a broader national industrial strategy framework by positioning state-owned enterprises (SOEs) as the main actors. According to Ilhamsyah, cooperation with foreign parties is still possible, but majority control and operational control must remain in Indonesian hands. In addition to the natural resource-based industrial sector, Ilhamsyah also highlighted Indonesia’s great potential in the maritime sector, particularly Indonesia’s strategic position in the Malacca Strait area, which is one of the busiest trade routes in the world. He explained that every year tens to hundreds of thousands of ships pass through that area, from oil tankers, logistics ships, cargo ships, to cruise ships. According to him, the Malacca Strait can be likened to a “global toll road” that requires various supporting services such as bunkering, logistics, crew changes, to port services. However, Ilhamsyah assessed that various high-value economic activities have so far mostly taken place outside Indonesian territory. Activities such as oil transshipment through ship-to-ship transfer mechanisms or the development of international logistics centres are considered not yet optimally utilised by Indonesia. “The coastal areas from Aceh to Riau are actually very strategic to be developed as bunkering centres, international logistics hubs, to global energy trading centres,” he said. KPBI encourages the government to build an integrated national strategy to change Indonesia’s position from merely a transit route to a maritime economic control centre. That strategy, according to Ilhamsyah, includes the construction of deep-sea ports, fuel and LNG bunkering facilities, the development of integrated maritime industrial zones, to strengthening transshipment functions in Indonesian territory. “SOEs must be the main driving force. Foreign cooperation may be carried out, but national interests must remain the top priority,” said Ilhamsyah.