As the value of Indonesia’s nickel exports surged tenfold in five years due to the many refineries set up in the country, the country now plans to use the same blueprint to process everything from copper to fish. Indonesia plans to double its per-capita GDP to $10,000 by 2045, and at the same time begin new centers of growth outside Java.
“We’re using nickel as the prototype,” said Investment Minister Bahlil Lahadalia. “It’s silly. We have the raw materials, but we sell it to be refined overseas then we import it back. Where did we leave our brain?”
“We used to sell the Indonesia story by the numbers: 280 million people, thousands of islands, and so on. That’s promoting history, not investment,” Lahadalia said. “Now we tell them: ‘What industry do you want? Here’s what you can make and here’s where you can do it.'"
There are signs the policy could work. The country charted its largest-ever trade surplus last year, with investments rising 44% to a record $80 bn, underpinned by nickel and copper that are mainly found on islands outside Java. In North Maluku, investments in nickel refining expanded the province’s economy by 29% last year.
Still, Indonesia’s nickel windfall was partly a result of a sudden surge in global demand from factors including the ramp-up of battery production for electric vehicles and a notorious short-squeeze on the London Metals Exchange that gave Indonesia a strong bargaining position to force miners to build smelters.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
“We’re using nickel as the prototype,” said Investment Minister Bahlil Lahadalia. “It’s silly. We have the raw materials, but we sell it to be refined overseas then we import it back. Where did we leave our brain?”
“We used to sell the Indonesia story by the numbers: 280 million people, thousands of islands, and so on. That’s promoting history, not investment,” Lahadalia said. “Now we tell them: ‘What industry do you want? Here’s what you can make and here’s where you can do it.'"
There are signs the policy could work. The country charted its largest-ever trade surplus last year, with investments rising 44% to a record $80 bn, underpinned by nickel and copper that are mainly found on islands outside Java. In North Maluku, investments in nickel refining expanded the province’s economy by 29% last year.
Still, Indonesia’s nickel windfall was partly a result of a sudden surge in global demand from factors including the ramp-up of battery production for electric vehicles and a notorious short-squeeze on the London Metals Exchange that gave Indonesia a strong bargaining position to force miners to build smelters.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
