Indonesia's Downstreaming Policy: A Model for Asian and African Nations, Says Binus Research
**Indonesia’s Downstreaming Policy Inspires Asian, African Countries: Binus Research** *Source: [The Jakarta Post](https://www.thejakartapost.com/adv/2024/12/30/indonesias-downstreaming-policy-inspires-asian-african-countries-binus-research.html)*
Overview of Indonesia’s Downstreaming Policy
Economic Impact
- Indonesia's mineral downstreaming policy has successfully increased the added value of natural resources, serving as a model for developing countries in Asia and Africa. - Current policies allow for the processing of resources like nickel, copper, and cobalt into high-value products, enhancing their competitiveness in the international market.
Inspiration for Other Nations
- Countries such as the Philippines, a major nickel supplier, are adopting similar downstreaming strategies inspired by Indonesia’s success. - The Binus University study underscores the potential of this policy framework to maximize resource utilization in various contexts.
Key Benefits of the Downstreaming Strategy
Investment Attraction
- The domestic downstreaming sector has drawn significant foreign investment, fortifying Indonesia’s position in the global supply chain. - Higher export values of processed products compared to raw materials are notable, particularly for materials used in lithium batteries.
Economic Diversification and Job Creation
- The policy promotes economic diversification, bolsters the manufacturing sector, and generates employment, especially in resource-rich regions like Sulawesi and Maluku.
Challenges and Considerations
International Trade Disputes
- The study highlights challenges, including disputes like the EU's lawsuit regarding Indonesia's unprocessed nickel export ban. - Effective economic diplomacy is crucial to manage these disputes to avoid potential negative impacts on international trade relations.
Environmental Concerns
- There are risks associated with processing heavy metals, which can generate hazardous waste without proper management. - Increased mining may lead to deforestation and environmental degradation, stressing the need for stringent regulations and sustainable practices.
Future Directions and Recommendations
Emphasis on Sustainable Practices
- The Binus study advocates for continuous evaluation of downstreaming policies to ensure economic sustainability, environmental protection, and equitable community benefits. - Long-term success will depend on inclusive regulations and responsible resource management, reaffirming Indonesia’s potential to transition from a raw material exporter to a global manufacturing hub.
