Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia told the Indonesia-Australia Business Summit (IABS) 2024 in Melbourne on Monday, May 13, 2024, of Indonesia’s commitment to encourage downstreaming and transition to sustainable development.
Bahlil cited that diplomatic relations between Indonesia and Australia have been very good. However, in terms of investment, the potential for cooperation between the two countries has not been maximiaed. As the closest country, Australia’s investment realization in Indonesia in the last 5 years, 2019-2024, has only reached US$1.96 billion.
According to Mr Bahlil, Indonesia and Australia can collaborate in developing the electric car battery industry. Both countries have nickel commodities, while Indonesia also has cobalt and manganese, and Australia owns lithium.
“I believe the relationship between Indonesia and Australia can be strengthened. In the context of investment, we honestly say that it has not been maximized. This is our task together. If the two countries can collaborate, this will be a new force in the electric car battery industry,” he said.
Bahlil reiterated the Indonesian government’s current focus on the downstream sector. Indonesia no longer exports its raw commodities to be processed abroad, but rather in the country. This program has been carried out gradually since President Joko Widodo’s administration.
The first commodity to be banned from exports was nickel in 2020 and the results have been felt today. In 2017 the export of nickel derivative products was only at US$3.3 billion, in 2022 it increased 10 times to US$33.8 billion. Of course, this is not easy because of opposition from other countries that feel disadvantaged.
“We have started (downstreaming), like a plane we have taken off. No country can order us to retreat. We will continue as time goes by alomng with global dynamics,” Bahlil said.
In addition, Bahlil also asserted that Indonesia’s downstreaming has taken into account environmental aspects and can be an example for other countries. In fact, the Investment Minister also invited investors to come to the Weda Bay industrial area in North Maluku to see firsthand an environmentally friendly industrial area.
On the same occasion, Indonesian Ambassador to Australia and Vanuatu, Siswo Pramono, highlighted that Australian investment in Indonesia has long been dominated by mining and tourism. Recently, Australian investment has begun to expand into the energy, health, education, utilities, chemical and property sectors.
“In accordance with the topic of today’s IABS, we want to explore the golden opportunities of both countries. We are looking towards the exciting growth of the growing Indonesia-Australia economic relationship,” Ambassador Siswo said.
Bank Indonesia Deputy Governor Doni P. Joewono, President Director of PT Bank HSBC Indonesia Francois De Maricourt, and General Manager for Investment Austrade Peter Horn were also present and gave remarks at the opening of IABS 2024 which carries the theme “Green Horizons and Golden Opportunities: Forging a Sustainable Future Together”. This year is the tenth year of IABS as a leading forum that brings together Indonesian and Australian businesses.
Based on data from the Ministry of Investment/Investment Coordinating Board, in the last 5 years, namely from 2019 – 2024, the total realization of Australian investment in Indonesia reached US$1.96 billion. During the period of 2023, Australia ranked 10th as the largest source of foreign investment (FDI) for Indonesia with investment realization reaching US$500 million.
Similarly, in the first quarter of 2024, Australia still ranked 10th with investment realization of US$172.3 million. The three main sectors contributing to the largest investment realization from Australia are mining (65.4 percent), hotels and restaurants (7.6 percent) and other services (6.4 percent).
