DOWNSTREAMING, INDUSTRIALIZATION, AND ENERGY RESILIENCE IN RESPONDING TO ECONOMIC FRAGMENTATION AND CONTEMPORARY GEOPOLITICAL CHANGES

Abstract

Indonesia’s energy security impacted by geoeconomic fragmentation and contemporary global geopolitical changes. To achieve energy transition target, Indonesia has a strategy to optimize vast mineral resource potential, particularly nickel, through downstream processing. However, the downstream processing policy is not yet fully equitable and sustainable, and therefore cannot be effectively implemented to strengthen national energy sovereignty, increase economic added value, and maintain environmental sustainability. This study uses a qualitative descriptive method combined with strategic policy analysis, utilizing primary data in the form of transcripts of keynote speeches at the 2025 JGF and interviews with economic and downstream processing experts, representatives of the central government, regional governments, and business actors. Primary data were collected by focusing on industrial areas in Morowali and Central Halmahera, which are among the major downstream processing areas in Indonesia. Secondary data used in the study include laws and regulations, official reports from relevant ministries and institutions, and academic publications. The Astagatra and SWOT analyses show that Indonesia still has weaknesses that reflect the resource curse. Therefore, by referring to the developmental state model, governance theory, sustainable development theory and cases in previous research, the TOWS analysis produces 10 fair and sustainable downstreaming policy strategies.