Riani Sanusi Putri, Jakarta – Senior Economist from the University of Indonesia Faisal Basri again criticized President Joko Widodo or Jokowi's downstream mining policy, especially nickel. He said most of the benefits from the policy were going to China.

Indonesia, he claimed, gets less than 10 percent of the profits. "90 percent [of the profits] flow to China," Faisal said at a seminar held by the Institute for Development of Economics and Finance (Indef) in Central Jakarta, on Tuesday, August 8, 2023.

If the downstream of nickel ore into nickel pig iron (NPI) or ferronickel, Faisal said, most of the profits would still channel to China. On this basis, he believes that the country's downstream nickel policy only supports China's industrialization.

Faisal explained that 95 percent of the nickel ore in Indonesia is used by Chinese companies. Initially, the Indonesian government set the price of nickel ore at US$34, while in Shanghai, nickel ore is sold at US$80.

The senior economist also slammed Jokowi and the cabinet ministers for always talking about the success of nickel downstream. Faisal said most of the exported products are not in processed form or downstream goods.

Unfortunately, Indonesia only enforces a downstream policy and lacks an industrialization strategy, while it could boost value-added and strengthen industrial and economic structures.

On the same occasion, Mochamad Firman, Acting Deputy for Economic Affairs at the Coordinating Ministry for Maritime Affairs and Investment, confirmed that only 10 percent of the benefits from the downstream policy would flow to Indonesia. However, he emphasized that before the downstream policy, Indonesia used to earn zero percent of the value or value edit.

With the downstream policy, the value skyrocketed. Before, the export value of six million tons of nickel ore was only US$1.7 billion, and then after the downstream policy was implemented, the figure reached US$35.6 billion, or about 6 times.

"It is also true that we still focus on iron and steel, but our iron and steel exports rank 5th in the world," Firman stressed.

Source: https://en.tempo.co/read/1757491/economist-says-90-of-downstream-nickel-profits-flow-to-chin