Indonesia exports might hit $300 billion by 2024, spurred by useful resource ‘downstreaming’ By Reuters

By Fransiska Nangoy and Gayatri Suroyo

JAKARTA (Reuters) – Indonesia’s exports might hit a report $280 billion this yr, with nickel-based metal shipments rising sharply after the nation banned nickel ore exports, whereas shipments of different commodities obtained a lift from excessive costs, a senior minister stated on Monday.

Exports might rise additional to high $300 billion by 2024 as the federal government prepares to control exports of different commodities, corresponding to , bauxite and tin, to encourage funding in native downstream industries, Coordinating Minister of Maritime and Funding Affairs, Luhut Pandjaitan, stated in an interview.

Southeast Asia’s largest financial system has been having fun with an export increase for greater than a yr as a result of rising commodity costs, which has been exacerbated by the struggle in Ukraine.

Indonesia is the world’s greatest exporter of thermal coal, palm oil, refined tin and a significant vendor of nickel-based metal, copper, rubber and different assets.

The federal government banned exports of nickel ore in 2020 in a transfer that has attracted funding in processing amenities – a method officers seek advice from as “useful resource downstreaming”.

Luhut stated the federal government was engaged on a downstreaming plan to develop an trade that might course of bauxite, copper, tin and, afterward, palm oil, into greater worth merchandise, replicating the success of the nickel export ban.

“Our exports final yr was $232 billion. This yr perhaps $280 billion. Perhaps by 2024, I believe we are able to attain $300 billion or extra,” Luhut informed Reuters.

“If this (downstreaming) works, by 2024, our financial progress will probably be exponential,” he stated, including that Indonesia’s gross home product might attain $3.5 trillion by 2030, nearly tripling from the present $1.19 trillion in 2021.

Shipments of nickel metals will rise to almost $30 billion this yr, in contrast with $21 billion in 2021 and about $1.4 billion in 2015, he stated.

His rosy outlook has taken into consideration world uncertainties, together with the potential drop in costs of some commodities subsequent yr, Luhut stated, although he added coal and palm oil costs are anticipated to carry up in 2023.

He additionally anticipated Indonesia to have the ability to produce electrical car batteries by 2024.

Nonetheless, Luhut declined to element Indonesia’s potential coverage to control different commodity shipments, saying authorities had been nonetheless contemplating whether or not to make use of an outright ban or tax devices to discourage exports.

President Joko Widodo final week stated the federal government was nonetheless making calculations a couple of attainable tin export ban and authorities had been dedicated to steering the mining trade in the direction of extra home processing.

The European Union has complained to the World Commerce Group about Indonesia’s nickel ore export ban and a dispute panel is because of announce a report this quarter. The president final month stated Indonesia would probably lose within the dispute.