Downstreaming is an effort to develop a sustainable industry. One of the government’s serious efforts in downstreaming is to stop nickel exports in 2020. Minister of Investment/Head of the Investment Coordinating Board, Bahlil Lahadalia, said the suspension is aimed in order to add value to raw nickel by replacing exports with nickel derivative products.
“Downstreaming is not just an investment, the government has made efforts to involve local communities. It has been proven that since massive downstreaming, the added value growth also has an impact on job growth and increased state income,” Bahlil said in a scientific oration entitled “Economic Transformation through Downstreaming with Local Wisdom”, on Wednesday (5/10), at Balai Purnomo Prawiro, Depok Campus of the University of Indonesia (UI).
Bahlil added that the investment realization target in 2021 has been achieved. The government managed to realize IDR 901.0 trillion in investment throughout 2021. Currently, only 48% of the investment target for the first semester of 2022 has been achieved. Therefore, the government will strive to achieve the target of Rp1,200 trillion with balanced investment between Java and outside Java.
Dean of the Faculty of Economics and Business (FEB) UI, Teguh Dartanto, Ph.D., sees economic transformation and downstreaming with local wisdom as an important issue because Indonesia must create added value if it wants to get out of the middle income country. “Why is this issue important? Because Indonesia has a dream of becoming a developed country. One of the conditions for Indonesia to depart from the middle income country to become the developed country is do downstreaming, which is a form of economic transformation,” Teguh said.
One of the government’s economic transformation efforts is the cooperation between Indonesia and PT Freeport Indonesia (PTFI). Both agreed to achieve a triple win between the government, PTFI, and the people of Indonesia. PTFI and the government will build a single line smelter in Indonesia which is a form of downstream project.
“PTFI is ready to continue the construction of copper refining facilities to produce copper cathodes and precious metal refining facilities in Indonesia. The plan is that this facility will be built in Gresik Regency, East Java and completed in 2024,” said PTFI Chairman of The Board and Chief Executive Officer, Richard C. Adkerson.
PTFI is the operator of the world-class “Grasberg” open-pit mine. Currently, 51.2% or the majority of PTFI shares are owned by the Indonesian government. PTFI has experienced many developments throughout its journey. According to Richard, in contrast to previous years, 98% of PTFI’s current workforce comes from Indonesia. In fact, since 1996, PTFI has committed to doubling the number of Papuan employees who hold strategic management positions and actively provide social investment in various sectors.
Dean of the Faculty of Social and Political Sciences (FISIP) UI, Prof. Dr. Drs. Semiarto Aji, views economic transformation as a complex issue that must be addressed holistically and multidisciplinarily. This is because development in Indonesia is not only physical, such as infrastructure, but also non-physical, which includes the capacity of people and communities. One of the efforts to improve the quality of human resources (HR) is realized through the provision of scholarships by PTFI.
The scholarships distributed by PTFI are divided into two categories, the first category is given to 50 students through the Bakti Asa program managed by Student Executive Board UI and the second category is distributed to 10 students from Papua in the first year and second year until they graduate. It is hoped that with the provision of this scholarship, the recipient students will be more eager to study for the realization of superior Indonesian human resources who can contribute to the country.
