Minister Bahlil Asks IMF Not To Interfere With Downstream Policy

JAKARTA - Investment Minister/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia asked the International Monetary Fund (IMF) not to interfere in Indonesian government policies related to the ban on commodity exports and downstreaming.

Bahlil said the Indonesian government appreciates the IMF in providing views and recommendations regarding domestic macroeconomic growth.

However, what the IMF is doing is considered a double standard, on the one hand supporting downstreaming goals as well as opposing export ban policies.

"In my opinion, this is a double standard, in my opinion what the government is doing is on the right path and we respect them, their views but we must not be influenced by their views when they are not objective in the direction of state goals. Those who know the state's goals are our own country, the government of the Republic of Indonesia and the people, not others," Bahlil said as quoted by ANTARA, Friday, June 30.

Bahlil explained that the IMF's assessment regarding the losses that will be experienced by the Indonesian government if it implements an export ban policy is not appropriate. According to Bahlil, the downstream creation of added value is very high for Indonesia.

He gave an example, nickel exports in 2017-2018 only reached 3.3 million US dollars. However, once it stopped nickel exports and downstreamed, the value of Indonesia's exports in 2022 touched nearly 30 billion US dollars.

Downstreaming has seen Indonesia's trade balance experience a surplus for 25 consecutive months. In addition, since the implementation of downstream policy, labor growth in the downstream sector each year has reached 26.9 percent in the last four years.

"So if anyone tries to say that downstreaming is an act that is detrimental to the state, we ask what thought is behind that," said Bahlil.

Bahlil emphasized that Indonesia's downstream policy and commodity export bans are still being carried out by Indonesia. According to him, downstreaming is not only a matter of adding value, but also related to the sovereignty of the Republic of Indonesia.

"Hilirization concerns sovereignty, our country should not be regulated by other countries, nor should other institutions judge us as good and there should be no double standards in the context of a country's policies," said Bahlil.

The IMF's view regarding export ban policies is contained in a report entitled "IMF Executive Board Concludes 2023 Article IV Consultation with Indonesia" published on Monday (26/6).

The three points highlighted by the Ministry of Investment/BKPM are the IMF recognizing Indonesia's economic growth above 5 percent, admitting that FDI Indonesia will continue to increase and grow by around 19 percent and support Indonesia's downstream goal of encouraging structural transformation and creation of added value, but also against export ban policies.