IO – The Indonesian Government is currently undergoing major structural transformation, to improve the nation’s competitiveness in a more uncertain and hypercompetitive world.
“The Government is intensely monitoring those major transformations,” said President Joko “Jokowi” Widodo as he virtually inaugurated the 2022 ICMI National Working Meeting from the Bogor Presidential Palace, West Java, Saturday, (1/29/2022).
The President explained that the Government currently focuses on creating jobs and improving the welfare of farmers, fishers and industrial workers. It also facilitates Micro, Small and Medium Enterprises (MSMEs) to upgrade their business with digitalization and supports the improvement of domestic products.
“Thus, we must make local and foreign investments easier – big, medium or small. That is the goal why we created Job Creation Law: to generate as many job opportunities as possible and increase added value in the country,” added Jokowi.
The Government has also been conducting downstreaming in the mining, oil and gas sector. Jokowi stated that such downstreaming is necessary to increase value, generate employment and conserve foreign exchange.
“This age is different from the Dutch East India Company (VOC) era where we always sent and exported raw materials while other countries enjoyed the income,” he continued.
Downstreaming has been proven to augment value domestically, said the President. For example, nickel downstreaming, carried out since 2015, has had significant impacts on exports and the trade balance.
“Exports of iron and steel in 2021 reached USD 20.9 billion, approximately IDR 300 trillion, a vast rise from only USD 1.1 billion in 2014. The jump from IDR 15 trillion to Rp. 300 trillion was due to the increasing value in the country,” said Jokowi.
Besides the mining sector, downstreaming must also be implemented in other sectors, such as agriculture. Indonesia has to be strong in on-farm activities and agricultural and farming innovation, so that the added value can benefit farmers.
“Farmers and breeders and the cooperatives must embark on off-farm activities – downstreaming. Again, so that farmers can benefit from the added value, because the biggest profit comes from the off-farm income. And, of course, more jobs will be created,” he explained.
The digital economy transformation is also one of the foci the Government wants to pursue. According to the President, Indonesia is estimated to have significant potential in the digital economy, at roughly USD 124 billion in 2025.
“We have had 2,229 start-ups, one decacorn and eight unicorns. There have been 8.4 million MSMEs entering the digital platforms to sell their products in the past five years. This figure will certainly grow,” said Jokowi.
Another prominent transformation the Government strives to achieve is the shift toward new and renewable energy. The President said Indonesia has 418 gigawatts of renewable energy potential in geothermal, wind, solar panels, biofuels, undersea currents and hydropower. Decarbonization in the transportation sector will begin with the development of mass urban transport. The construction of the largest Green Industrial Park in the world will also start soon in North Kalimantan.
Jokowi said the construction of a new capital city in East Kalimantan is also a vital part of the transformation. It is more than moving the administration buildings to another island, as it reflects the changing ways of working and thinking, based on a modern economy and building a social life that is more just and inclusive.
“We will make the new capital a showcase of transformation in the areas of environment, working methods, economic base, technology and others, including higher quality health and education services. It will also promote a more pluralistic and tolerant social system, one that upholds ethics and noble character,” said the President. (Eka)