Through Downstreaming Industry, Kadin Optimistics Indonesia's Potential Economy Grows Extraordinary

JAKARTA - The Chamber of Commerce and Industry (Kadin) said that downstream industries could be one of the strategies to explore the potential of the Indonesian economy.

This is in line with the focus of the 2023 World Economic Annual Meeting Forum in Davos, Switzerland, which aims to strengthen collaboration between the government and the private sector.

"By carrying out downstreaming, Indonesia has the potential to provide extraordinary added value, especially because Indonesia has a large variety of minerals and potential for renewable energy," said Chairman of the Indonesian Chamber of Commerce and Industry Arsjad Rasjid in his official statement, Thursday, January 19.

Arsjad added, there are a number of challenges that have caused the downstream industry program in Indonesia to be inefficient and less competitive with foreign products, such as the lack of funding, as well as limited human resources in conducting research and use of technology.

According to Arsjad, one indicator of the success of industrial disbursement in the country is the involvement of the private sector, including global investors.

Domestic and global investment needs to move in line with the current government's priorities, namely the development of the downstream industry in Indonesia.

Arsjad added, if investment is directed in accordance with sectors that are the government's priority, added value for the national interest is expected to be even greater.

"As the largest nickel-producing country in the world, the development of the electric vehicle ecosystem is the main strategy of downstreaming in order to get maximum added value from Indonesian wealth raw minerals," he said.

To boost downstream nickel, the government has also set an ambitious target by presenting 25 percent of electric vehicles from total vehicle sales by 2030.

Meanwhile, Deputy Chairman of Kadin Azis Armand said, this momentum must of course be utilized properly, especially in supporting the achievement of the net zero emission target through an electrification strategy.

"By transitioning to electric vehicles, users of transportation modes can help reduce carbon emissions, reduce fuel dependence, and make Indonesia cleaner," he said.

In line with this, in a series of events Indonesia Pavilion in Davos, in January 2023, the Indonesian Chamber of Commerce and Industry and the World Economic Forum (WEF) has launched a policy discussion forum initiative called Moving Indonesia Network to invite governments, ministries, and business leaders to contribute objectively and transparently to support industrial downstreaming, thereby accelerating the transition using electric vehicles.