Quantitatively, the momentum of Indonesia’s downstream policy, particularly in the mining sector, has yielded highly significant outcomes. The ban on nickel ore exports introduced in January 2020 has served as a catalyst, multiplying the export value of its derivative products from approximately USD 1.1 billion before the policy to between USD 30-33 billion in 2022.
According to Dr. Ikaputra, Head of the Center for Transportation and Logistics Studies at Universitas Gadjah Mada (Pustral UGM), this success has directly spurred a wave of massive investment.
The Ministry of Investment and Downstream Industry/Indonesia Investment Coordinating Board recorded realized investments in the downstream sector reaching IDR 375.4 trillion throughout 2023, with the positive trend continuing into 2024, amounting to IDR 407.8 trillion.
However, behind this success lies a critical development paradox.
He noted that the surge in production volume resulting from large-scale downstreaming has not been matched by adequate supporting infrastructure, particularly in the logistics sector.
Ironically, the program’s success has become a key trigger for a connectivity crisis that threatens the competitiveness of national products.
“This logistics performance gap indicates a structural competitiveness deficit that poses a serious constraint. Infrastructure like the Trans-Sumatra Toll Road (JTTS) plays a vital role as a catalyst to address this issue,” he stated during the HK ExperTalk Webinar Series on Wednesday, Jul. 23, 2025.
Pustral UGM organized the HK ExperTalk Webinar Series in collaboration with PT Hutama Karya. The webinar was held to commemorate the 24th Anniversary of Pustral UGM, adopting the theme Infrastructure Transformation Supporting Downstreaming and Industrialization: Innovative Strategies Towards National Economic Resilience.
Several speakers participated in the event, including M. Firdausi, Deputy Assistant for Economic and Industrial Infrastructure at the Coordinating Ministry for Infrastructure and Regional Development, Dindin Solakhuddin, President Director of PT Hutama Marga Waskita, and Dr. Olly Norojono, Senior Expert at Pustral UGM.
In this webinar, Deputy Assistant Firdausi presented the subtheme “Connectivity Infrastructure Supporting Downstreaming and Industrialization in National Development,” focusing on economic growth, poverty reduction, and improving human capital quality to achieve the Golden Indonesia 2045 goal.
He highlighted that one of the priorities of Asta Cita is to advance downstream and industrialization to increase domestic value-added.
The targets include enhanced value-added, productivity, and competitiveness of the processing industry through policies that accelerate downstreaming of key natural resources and promote industrial agglomeration.
“The next target is increased integration of domestic and global economies through policies that strengthen national connectivity infrastructure, increase investment for domestic and global economic integration, and enhance domestic, interregional, and export trade,” he explained.
To support this, he emphasized the need for infrastructure to connect productive areas and prioritized downstream commodities while providing access to markets.
A well-planned, activity center–based infrastructure development is essential to ensure each investment contributes to economic growth.
“Value-added enhancement can be achieved through accelerated downstreaming of high-value commodities and industrial agglomeration in designated zones. Based on the 2025–2029 National Medium-Term Development Plan (RPJMN), eight priority commodities have been identified: copper, nickel, bauxite, tin, palm oil, coconut, seaweed, and sago. Meanwhile, industrial agglomerations are spread across 23 locations in Industrial Areas or Special Economic Zones,” he said.
Presenting the subtheme “The Role of Strategic Infrastructure of the Trans-Sumatra Toll Road (JTTS) in Downstreaming and Industrialization on Sumatra Island,” Dindin Solakhuddin explained that PT Hutama Karya was mandated to develop the JTTS to improve connectivity in Sumatra, covering 25 segments spanning 2,848 kilometers. Various data show that JTTS acts as an enabler for industrialization and downstreaming of commodities.
It serves as the backbone of connectivity across economic zones and accelerates the distribution of key commodities by linking production areas with ports and industrial/special economic zones (KI/KEK).
It reduces logistics costs for primary commodities by 15-30%.
“This infrastructure development has shortened delivery times by over 50% and boosted export volumes through strategic ports by around 30% over five years,” he stated.
President Director Solakhuddin added that JTTS not only opens up connectivity but also serves as a catalyst for new economic growth in Sumatra.
With the accelerated development of strategic industrial zones such as Kuala Tanjung, Tanjung Api-Api, Bengkalis, Tenayan, Jambi Kuningking, and Way Pisang, the resulting economic benefits far exceed the toll road’s physical investment.
JTTS has also improved tourism access to major airports, increasing tourist visits by up to 30% and adding over IDR 15 trillion annually to Sumatra’s tourism economy.
“With JTTS integrated into Kualanamu Airport, the region’s main international gateway, it has successfully stimulated foreign tourist growth in North Sumatra by more than 183% and boosted domestic visits,” he added.
The final speaker, Dr. Olly Norojono, presented a session titled Toward Efficient, Inclusive, and Sustainable Infrastructure Development.
Drawing on years of experience at the Asian Development Bank (ADB), Dr. Norojono shared a number of infrastructure project case studies, highlighting both successes and lessons learned.
These included comprehensive and integrated planning for mountain roads in Papua New Guinea (PNG), as well as examples of underperforming airport projects in Kertajati (Majalengka), Jenderal Soedirman (Purbalingga), Ngloram (Cepu, Blora), Wiriadinata (Tasikmalaya), and Trunojoyo (Sumenep).
“Other examples include inefficient and unsustainable funding in the Metropolitan Sanitation Management and Health Project in Medan and Yogyakarta, as well as environmental sustainability financing in Samoa’s Alaoa Multipurpose Dam Project and the Green Investment E-Mobility Program supported by the Green Climate Fund,” he concluded.
Author: Agung Nugroho
Post-editor: Lintang Andwyna
Photograph: Ekonomi Bisnis