Jokowi Calls the Next President Must Continue Downstreaming and Stop Exporting Raw Materials

President Joko Widodo gave a speech at the opening of the workshop and the National Coordination Meeting for the Winning of the National Mandate Party Election in Semarang, Central Java, Sunday (26/2/2023). (ANTARA)

JAKARTA - President Joko Widodo (Jokowi) said that the next Indonesian president, who will replace himself through the 2024 presidential elections, must have the courage to continue downstreaming in all fields for the sake of Indonesia's progress.

"Whatever the risks, the next Indonesian leader must be courageous and continue downstreaming this, because it creates 10.5 million jobs," Jokowi said at the opening of the workshop and the National Coordination Meeting for the Winning of the National Mandate Party (PAN) Election quoted by ANTARA, Sunday, February 26.

He said that Indonesia should not turn its back on downstream decisions which have the consequence of stopping the export of raw materials in all fields, even though the risk is that Indonesia may become hostile to other countries.

"Don't make another turn, we will shift the export of raw materials to exports of semi-finished goods or finished goods. Even though we run the risk of being despised by other countries. Because of the factories there (other countries), the industry there has stopped because of raw materials. We don't export the raw material. That's called downstream," he explained.

He reviewed that Indonesia had stopped exporting nickel raw materials in 2020, which drew a lawsuit from European Union countries at the World Trade Organization (WTO). Despite losing the lawsuit, President Jokowi emphasized that Indonesia must not back down.

Therefore, he said, Indonesia submitted an appeal.

"If we lose, then we are hesitant to turn back on exports of raw materials, until whenever this country will not become a developed country. I always repeat this to the minister. Yes, we lose, but keep moving forward. What business? Yes, appeal. I don't know later. if the appeal again loses, is there another appeal, given the opportunity to appeal again," he said.

He said the most important thing during the appeal process was that Indonesia continued to prepare the downstream industry. So whatever the outcome of the appeal, the national industry is ready.

"We are ready for nickel now. We will stop bauxite again in June (2023). Stop it. In fact, be careful, 90 percent of our exports of raw bauxite materials go to China. I don't know if he will sue us or not. If he is sued, that means EU is suing nickel, China is suing bauxite, because 90 percent of our raw material exports go there," Jokowi said.

Even so, Jokowi stressed that Indonesia would continue to make efforts to gradually stop exports of raw materials. After nickel, then bauxite, Indonesia will also stop exporting raw materials from tin, copper to gold.

The President on different occasions has also mentioned that downstreaming is not only in the mining sector, but must also be carried out in the agricultural, plantation and fisheries sectors.

"What will we get (by downstreaming)? Many have asked me, Sir, this will stop, the big companies will get? Don't be mistaken," said Jokowi.

He explained, before downstreaming was carried out, nickel exports were only at IDR 17 trillion. Now, after downstreaming nickel into finished goods and semi-finished goods, nickel-related exports are already at IDR 450 trillion.

"From there the state gets what is called income tax, VAT tax, employee tax, non-tax state revenue, export duties. If we join the company earlier, like at Freeport, we get dividends, get royalties, from there it comes in as state revenue," he explained.

"From that state revenue we can finance development in the village. We can budget for social assistance. So the flow is like that. The impact of downstreaming is enormous if we can downstream all of these raw materials. GDP can jump to IDR 11. 000 trillion. The jobs that will be created can be 10.5 million," he added.

He reminded Indonesia not to continue exporting raw materials and creating job opportunities only in neighboring countries.

"Are we going to continue this (export of raw materials)? I think the answer is no," he explained.