Jokowi’s Metals Downstreaming Push Leads to Record FDI Surge

Foreign-direct investments into Indonesia surged by the most on record, driven by the metals industry as President Joko Widodo pushes ahead with his commodities downstream policy.

FDI grew 63.6% in the third quarter from a year ago as investors buy machinery and build plants in the country, said Investment Minister Bahlil Lahadalia in a press briefing in Jakarta on Monday. Metals manufacturing accounted for the largest share of FDI at nearly a quarter of the total.

“Foreign investors are in love with Indonesia,” he said. “Natural resource downstream continues on a massive scale. This is in line with government policies, and even if we are brought to the WTO, we will not be shaken.”

The investment surge lends credence to Jokowi’s promise that pushing companies to refine commodities onshore would multiply Indonesia’s exports value, create jobs, and help the country take on a bigger role in global supply chains. The world’s top nickel producer enforced a market-shaking ban on nickel ore shipments in 2020, prompting the European Union to seek a review by the World Trade Organization. Next, the country will push for bauxite, copper, and tin downstream.

Nickel miner Vale SA, as well as gold and copper miner Freeport-McMoRan Inc, are among the companies building smelters in the country to keep pace with the government’s plan to only allow exports of processed commodities eventually.

The government expects its FDI to keep growing in the fourth quarter by at least 50% as many projects remain in the pipeline, Lahadalia said.