President Jokowi: Our Way Out of Current Account Deficit is Downstreaming

MINISTRY OF ENERGY AND MINERAL RESOURCES REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 669.Pers/04/SJI/2019

Date: 21 November 2019

President Jokowi: Our Way Out of Current Account Deficit is Downstreaming

Indonesia's current account deficit and trade balance deficit can be solved through increased downstreaming of mining activities. President Joko "Jokowi" Widodo reiterates this in his speech at the Indonesia Mining Award 2019 at Ritz Charlton Hotel Jakarta, Wednesday (20/11).

President Jokowi is even convinced the problem will be solved in three years with the optimum execution of downstreaming policy. "I've done a calculation, if everything is made towards downstreaming and industrialization, made into finished and semi-finished goods, I'm sure in less than three years, all problem (issue) of deficit can be solved in only three years," said Jokowi who was escorted by Minister of EMR Arifin Tasrif.

One of the mining commodities in the spotlight is nickel. According to Jokowi, nickel can be turned into a component of lithium battery to be used in the battery of electric vehicles. This is in line with the government policy to develop electric cars.

"So what's the point of importing LPG, importing huge volume of petrochemical, while we can actually develop nickel; current account deficit will be made up. I guarantee (deficit) will be made up in less than three years if we add one commodity, turn some attention to it, we'll be done with," said Jokowi.

Previously, Ministry of EMR through Regulation of Minister of EMR Number 11 of 2019 bans the export of nickel ore effective 1 January 2020. This decision was based on consideration for increased added value of the commodity.

Another commodity that can be maximized from downstreaming is coal, which can be converted into Dimethyl Ether (DME) to replace Liquefied Petroleum Gas (LPG). Next, LPG can be turned into petrochemical, methanol, etc.

Towards Environmentally Friendly

Although efforts are made to optimize the added value of the mining sector, President Jokowi reminds miners that the world is moving towards environmentally friendly energy slowly replacing the current use of fossil energy. Therefore, development of New, Renewable Energy (NRE) is inevitable to meet the demand of the tomorrow.

"One thing that we need to underline is that the world is moving towards environmentally friendly energy," Jokowi reiterates.

The President realizes the importance of environmentally friendly energy when he met with several world leaders such as IMF Managing Director Kristalina Georgieva and UN Secretary General Antonio Guterres. Both leaders reminded the President to minimize the construction of coal-based power plants.

"Be mindful of the use of coal, I notice a number of environmental damage is due to the rapid use of natural resources. I ask you to limit the environmental damage resulting from exploration that takes place in many areas in our country," requested Jokowi to the mining entrepreneurs.

Jokowi also reveals the substantial potential of NRE in Indonesia. "I'm fully aware of the potential, we'll prioritize the use of NRE, whether hydropower, wind power, solar cell, or geothermal power," explained Jokowi.

According to Ministry of EMR's record, NRE potential is made up of geothermal (11 GW), wind (60.6 GW), bioenergy (32.6 GW), water and micro-hydro (94.3 GW), solar energy (207.8 GWp), and ocean wave (17.9 GW). In total, Indonesia has an NRE potential of 442 GW, with only 2.1% or 9 GW has been utilized. (IY)

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