Indonesia steps up industrialisation drive, eyes EV ecosystem

2026-03-20 - 10:41

Prabowo Subianto also reiterated plans to develop a domestic automotive industry centred on an electric vehicle (EV) ecosystem. JAKARTA: Indonesia is accelerating its downstream industrialisation drive to maximise the value of its natural resources, bolster domestic manufacturing and create high-quality jobs, said President Prabowo Subianto. He said Indonesia must move away from exporting raw materials and instead process them into higher-value industrial products to ensure greater economic benefits remain within the country. Indonesia is rich in minerals such as bauxite and tin which are crucial to support manufacturing, but has yet to fully capitalise on them compared with countries such as South Korea and Japan. “What we are witnessing is deindustrialisation, with Indonesia’s wealth not staying within the country. I want to see results – this is the only way. We must stop merely exporting raw materials.” “We must process them into high-value industrial products,” he said during a roundtable discussion with senior journalists from major Indonesian media organisations at his residence in Hambalang, West Java, recently. The President also reiterated plans to develop a domestic automotive industry centred on an electric vehicle (EV) ecosystem. “I will open a car factory. Why should we be a market for other people’s cars? Why?” he asked. He said the initiative would go beyond conventional manufacturing, with a focus on building a fully electric transport system powered by renewable energy. The President said Indonesia must pursue reforms across multiple sectors simultaneously to revive industrialisation and ensure inclusive economic growth. The government has mapped out an “industrial tree” strategy involving the development of downstream industries across key commodities to build complete domestic value chains. The push for industrialisation comes amid concerns over structural imbalances in the economy, including a shrinking middle class and the prevalence of low-paying informal jobs despite steady economic growth. Prabowo acknowledged the issue, saying economic expansion has not translated into broad-based prosperity and stressed the need to create not only employment, but quality jobs for for the people. The president also underscored the importance of deregulation in improving competitiveness and curbing leakages. Citing deregulation in fertiliser distribution as one his administration’s efforts to enhance efficiency, he said the government had eliminated 145 regulations, allowing farmers to purchase directly from factories. “We removed 145 regulations. From the factory, farmers can now buy directly. So deregulation is very important,” he said, adding that unnecessary red tapes is an obstacle to competitiveness.