Remarks of President of the Republic of Indonesia at the 2023 Mandiri Investment Forum (MIF), at the Fairmont Hotel’s Ballroom, DKI Jakarta Province, February 1, 2023

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 1 Februari 2023
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Assalamu’alaikum warahmatullahi wabarakatuh,
Good morning,
May peace be upon us all,
Om swastiastu,
Namo buddhaya,
Greetings of Virtue.

Distinguished Coordinating Ministers, Ministers of the Indonesia Onward Cabinet;

Your Excellencies Ambassadors of Friendly Countries;

Distinguished President Director of Bank Mandiri and all ranks;

Distinguished Guests, Ladies and Gentlemen.

We often forget to be grateful. Yes, we do. When we remember 2020, 2021, and 2022, we have to be grateful. Why? Because we can handle COVID-19 pandemic well and in December 2022, PPKM policy was revoked.

At the beginning, it was not that easy. The world never had experience in facing pandemic. We did not know from whom we had to learn. There were no measures or standards we can adopt. Everyone was panic.

Economic turbulence hit us and economic growth dropped. It is not easy to handle health and economy, the pandemic and economy. The Government never rest to work on the pandemic handling. You can ask several ministers here in attendance, Mr. Airlangga, Mr. Luhut, Mr. Erick. Fortunately, all of them did not lose weight.

We had no idea where we could find face masks. If we only need one or two face masks, it would be easy to find, but if we need hundreds of millions face masks, where can we find them? At the beginning [of the pandemic], Personal Protective Equipment [PPE] was hard to find. All hospitals were in a dire need of PPE. Fortunately, we made it. When the contagious Delta variant reached its peak, we had no idea where we could find oxygen. All countries kept them for their own need. Ventilator is a thing that become more popular. We learned about ventilator.

And the most difficult thing to get is vaccine. All countries wanted to get the priority. It would be easier if we only needed one-two millions of vaccines. However, we are a big country, a home for 280 million people spread in 17 thousand islands. Of course, it was not that easy. As of today, 450,051,000 vaccines have been jabbed. The number of coverages made us among the world’s top five countries. All of you can imagine that we had to distribute vaccines to people living on the mountain, we had to go across riversto disburse vaccines for people living in the outermost islands. Indeed, distributing 450 million vaccines is not that easy.

To that end, we have to be grateful. We can handle pandemic without a lockdown. If we carried out survey in this room, I am sure that 90 percent of you’d asked me to issue lockdown policy, especially the upper middle class people. About 80 percent of ministers had the same view. They asked me, “Sir, we have to impose lockdown.” But we also have to worry about other people. If we impose lockdown, it would create uproar in only three weeks. It is because people’s saving, food stock, and supplies would not last for more than three weeks. Even though we were nervous at that time, but I was able to stay calm to make the right decision.

On economic sector, I would like to say that we have to be optimistic. Do not be pessimistic. Once again, we have to be optimistic, not pessimistic. Since year on year (YoY) growth in 2022 is projected to reach 5.2 to 5.3 percent, and inflation rate is managed at 5.5 percent. Purchasing Managers’ Index (PMI) is at expansive figure of 50.9. It seems so wrong to be pessimistic when we notice all those figures. Nevertheless, we still have to be cautious. We still have to stay vigilant.

This morning I had a report that the global economic pressure to us has decreased.  What we had imagined, what we were afraid of, it never happened. We have to be grateful. The most important thing in banking sector in 2022 is an increase of credit by 11.3 percent. The third-party fund increased by 9 percent. NPL (Non-performing loan) gross is at 2.4. Thus, we have to be grateful.

Earlier I asked President Director of the Mandiri, how was the credit growth in 2022? 14.9 percent [of growth] and it can continue to grow. The profit is at Rp41 trillion. Sometimes I am wondering, why it can grow high? Is it because of high interest? But, we have to express our gratitude that Bank Mandiri can provide credit which grew by 14.9 percent and record profit at Rp41trillion.

Furthermore, our investment can meet the target. It exceeded the target of Rp1,200 trillion; Rp1,207 trillion. I am pleased that the [investment] growth can reach 53 percent, which was generated outside the island of Java and 47 percent in the island of Java. This indicates that we are no longer Java-centric, but Indonesia-centric. [The investment is spread] in Sulawesi, North Maluku, and Sumatra with 53 percent outside Java and 47 percent in Java. It’s very good because almost all countries are currently fighting over investment.

Why do they want to invest? There a number of things [that attracted investors]. One of them is the distribution of infrastructure carried out by the Government, both in Java and outside Java. “It includes toll road, seaport, airport, provincial road, and others. Even though (the projects) have not finished yet, everything is in the process.

In addition, social, political and security stability in Indonesia is also considered good by many countries. Our economic fundamentals are also considered good so that people are eager to invest in our country. Other factors are the G20 Presidency as well as the Chairmanship of ASEAN. The great contributions to Indonesia’s economic growth are consumption, followed by investment. Therefore, investment must be maintained, both small investments in our SMEs and large ones in corporations.

Once again, I would like to highlight that downstreaming is a key. Downstreaming serves as a key to be consistent in carrying on industrialization. Do not get satisfied only over the achievement on nickel. Indeed, it can be an example. Previously the value [of nickel ore export] was at US$1.1 billion. In 2022, according to my estimation… how much value we earned, Mr. Luhut? Thirty? It is around US$30-33 billion. Imagine, from about Rp17 trillion, the value rose to Rp450 trillion. It was a huge added value.

To that end, I told the ministers in every meetings not to hesitate, we will continue to carry out the downstreaming. We were sued in the WTO, and lost, but we will carry on, because, for our country, this will make a developing country to be a developed country. Don’t you ever think that our country will be a developed country, if we are afraid of implementing downstreaming in our country. The most difficult thing is that the integration of commodity downstreaming.

The effect of downstreaming in mineral and coal resources will increase our GDP by US$699 billion and will create 8.8 million jobs. This is a great affect, the creation of jobs. Export of nickel ore has been banned. As I said earlier on the last December, bauxite ore export will be banned on June [2023]. Then, I will immediately declare copper ore export ban. This year, it will be stopped. I have checked on the ground that the construction progress of [gold and copper miner] PT Freeport’s smelter [in East Java province] and smelter in West Nusa Tenggara has exceeded 50 percent. The development progress of PT Freeport’s smelter has reached 51 percent. To that end, we are confident to stop [the export]. All of you have to remember that Indonesia is the majority shareholder of PT Freeport. You must no longer think PT Freeport is owned by the United States. We have become the majority owner of the company.

Nickel ore [export] has been stopped. Then, bauxite ore. Why do we have to stop bauxite ore export? For the record, Indonesia exports bauxite ore. We rank top three in the world. We export the raw material. But, Indonesia’s aluminium export ranks at 33rd position in the world. The raw material ranks at the third position, how come the semi-finished/finished goods export ranks at the 33rd position?

Solar cell export ranks at the 31st position. Ironically, we have the raw material. If we can produce solar cell, the added value will increase by 194 times, while nickel export can increase by 30 times. Why did not we do it since long time ago? What was the problem? We are in the safe zone to carry out raw material export considering that the process can run fast and easily. Mine it, export it, mine it, export it. That’s all. We did the same to nickel ore. Mine, export, mine, export. We did not want to make a breakthrough. Even though it is hard, the added value can increase by 194 times.

China ranks 18th for bauxite ore export, while its solar cell export ranks at the top. From where China get the raw material? 80 percent is from our country. Please be cautious. After banning bauxite ore export, I noticed that there are still no countries that sue us.

Previously, we were afraid to be sued. When we were sued because of nickel, we’re all afraid. When we are sued, we have to prepare a good lawyer. But we lost. We lost on nickel case. What we have to do? Carry on the downstreaming. Why did we lose?  We have to request an appeal. We do not know if we will win or lose when we request an appeal. We have to carry on, even if we lost. Goods are processed. The industry is ready. If we take a step back, do not you dare to hope that our country will be a developed country.

Thirdly, it is about tin. We rank first for exporting tin ore. Our tin reserves rank the second position in the world. China ranks the first position for importing tin ore. If we can produce the PCB components, the added value can jump to 69 times. Why did not we produce it, why did we export it [the raw material] and let other countries get the added value? Please be cautious. We have to be consistent. Even though we will be sued many times, it is not a problem. Do not take a step back.

I would also like to ask you, Ladies and Gentlemen, to monitor this downstream policy. The banks monitor this policy. How? If anyone applies for credits to build a smelter, approve it. Make it simple. The profits for country, company are clear. What are we waiting for?

If we can build the big ecosystem, integrate nickel with copper, bauxite, and tin from different islands, we can produce EV battery, lithium battery. From that only, I cannot imagine how much the added value will be. If we can produce our own EV and become the biggest producer in the world, I also cannot imagine how much the added value will be. It is my estimation that in 2027/2028, if we are consistent, we can make it. Be brave, be consistent, and monitor it.

It is our hope that in 2045, Indonesia’s GDP will reach US$ 9-11 billion, while Indonesia’s per capita income will be at US$ 21,000-29,000 if we are consistent. We will be a developed country. But, if we are sued then we take a step back and decide to export more raw materials, you can forget about becoming a developed country.

That concludes my speech on this auspicious occasion.

I thank you.

Wassalamu’alaikum warahmatullahi wabarakatuh.


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