Jakarta, Klinik Farma – President Joko Widodo (Jokowi) has firmly stated that the Indonesian government will not abandon the continuation of the oil refining program, even though a number of countries and international organizations have united in an “attack” on Indonesian politics.
President Jokowi stressed that the government will not stop the policy of industrialization and processing of raw materials. The reason is that this policy will provide more added value for this country.
As you know, the European Union and the International Monetary Fund (IMF) have criticized and even opposed the policy of banning the export of minerals, especially nickel ore, which Indonesia has been pursuing since 2020.
“It’s clear that downstream won’t stop. Downstream after nickel, stop. Then what goes into copper, into copper. Then into bauxite and so on, because really no one, any country, any international organization, I think can’t stop our drive to industrialize, move from exporting raw materials to semi-finished products or finished products, because we want the added value to be internal,” Jokowi told reporters in Jakarta on Thursday (10/08/2023).
Jokowi emphasized that the nickel refining would eventually bring Indonesia more profit, even reaching Rs 510 trillion, compared to before the refining process began. Indonesia could only get an export value of Rs 17 trillion.
The president also said that the downstream nickel impact that Indonesia had carried out had swallowed up many times more jobs compared to selling just minerals.
He said that prior to the downstream transition, employment in the nickel sector was only 1,800. However, during the implementation of the “downstream” program, the number of employed workers reached 71.5 thousand people. This is only in Central Sulawesi, not counting other areas that are also stepping up the recycling program.
Then in North Maluku, where there used to be only 500 people, after the descent, the number of workers was fixed at 45,600 people.
As you know, in 2020, the European Union sued Indonesia at the World Trade Organization (WTO) for a ban on the export of nickel ore. Unfortunately, in October 2022, the WTO approved the EU claim and asked Indonesia to change its policy. Without remaining silent, the Indonesian government filed an appeal against this first defeat in December 2023.
Before the appeal process began, the European Union again launched a new “attack” through consultations on the Enforcement Regulation. This is done to consult with industries affected by the Indonesian government’s policies.
If it is proved that there was a loss, the EU will take revenge, one of which is the introduction of duties on the import of goods from Indonesia.
In addition to the European Union, the IMF has also criticized President Jokowi’s downstream policies. The IMF unexpectedly issued a statement that Indonesia should consider phasing out its nickel export ban policy and not extend it to other commodities.
The IMF also called for a review of the downstream program in Indonesia, especially in terms of cost-benefit analysis. The downstream policy is hurting Indonesia, according to an international lender.
“Fiscal costs in terms of forgone annual (government) revenues currently appear small and should be tracked as part of this cost-benefit assessment,” says the IMF’s Article IV Consultation report, cited on Tuesday (June 27, 2023). G.). .
Therefore, the IMF calls for regular analysis of the costs and benefits of the downstream. This review needs to be updated periodically, emphasizing downstream success and the need for downstream expansion for other types of minerals.
“Sector policies should also be designed in a way that does not hinder competition and innovation while minimizing negative cross-border spillovers,” he added.
[Gambas:Video CNBC]
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