Todotua Reveals Indonesia's Major Challenge: Supply Chain Cost Structure

Deputy Minister of Investment and Downstreaming, who is also Deputy Head of BKPM, Todotua Pasaribu, has revealed that the government is pushing downstreaming as a major agenda to create added value for the nation’s natural resource wealth. This is because Indonesia still faces significant challenges related to a high supply chain cost structure, large consumption, and high imports.

“Our cost structure is still high, so this is a problem. Our major challenge is how we can process the supply chain, which is also part of consumption, ourselves given our large population,” Todotua said at the Mindialogue 2026: Minerals for Indonesia’s Economic Stability event on Wednesday (12/8/2026).

Downstreaming is being promoted primarily to reduce costs from consumption demand, as cost control depends on the producing country. This makes Indonesia, with its large population, vulnerable to high consumption costs.

“If the consumption cost is large, then we must also look at its value. So we see the challenge lies in these realisation figures. We may have achieved this investment target, but if the cost structure is high, theoretically the figure will not be fully realised,” he explained.

He also asserted that Indonesia’s strength is not only seen in its natural resource wealth, but also in how it can create added value from that wealth. “If we cannot create value for our natural resource products, then there will be no impact,” Todotua said.

He also emphasised that the government continues to carry out bureaucratic reform, particularly regarding licensing. Initially, Todotua stated that Indonesia has an economic growth target of 8%. One factor that can support this is the realisation of incoming investment targets. As is known, investment realisation in 2025 reached Rp 1,950 trillion, or 3% higher than the target. “So we see that the movement of investment realisation is quite good. We still have a level of confidence in that, but we understand that several aspects of investment realisation need improvement,” Todotua explained.