Nickel Downstreaming in Indonesia: Reinventing Sustainable Industrial Policy and Developmental State in Building the EV Industry in ASEAN

Authors

  • Bahlil Lahadalia University of Indonesia
  • Chandra Wijaya University of Indonesia
  • Teguh Dartanto University of Indonesia
  • Athor Subroto University of Indonesia

DOI:

https://doi.org/10.21512/jas.v12i1.11128

Keywords:

nickel downstreaming, developmental state, industrial policy, ESG, SDGs

Abstract

The developmental state concept, which entails proactive government support for economic structural transformation, remains contentious today. Some scholars vigorously argue that government intervention in the economy was indispensable to the success of East Asian countries, whereas others are critical of the practice, arguing that it tends to neglect sustainability dimensions and contending that government intervention in the market is often unwarranted. In this study, the authors analyse how Indonesia’s nickel ‘downstreaming’ strategy represents a new developmental state model that considers the aforementioned discourse on the merit of industrial policy. The new model aligns the classical developmental state concept with the need to address pressing environmental and social concerns, which are widely recognized as being of paramount importance. Through an integrative literature review and secondary data analysis, the study reveals that Indonesia’s downstreaming strategy does exemplify a new developmental state model, as the government does not aim just to stimulate economic growth but also to contribute to the energy transition with EV battery manufacturing and to invigorate social inclusion by ameliorating inequality particularly in Eastern Indonesia. Nevertheless, the application of the new developmental state model through the downstreaming strategy uncovers some areas where improvement is necessary. The policy needs to be continuously refined so that its negative environmental and social externalities can be mitigated, and it can serve as a better example of a new developmental state model.

Dimensions

Plum Analytics

Author Biographies

Chandra Wijaya, University of Indonesia

Chandra Wijaya is a Dean of the Faculty of Administrative Sciences, University of Indonesia (FIA UI) for the period 2020 - 2024. He has several education and training certifications as follows: Certified Investment Market & Banking Analyst (CIMBA), Certified Securities Analyst (CSA), Certified Professional Human Resource (CPHR), Deputy Investment Manager (WMI) and Deputy Securities Trader (WPPE)

Teguh Dartanto, University of Indonesia

Teguh Dartanto is a Dean, Faculty of Economics and Business, Universitas Indonesia. He was formerly Vice Dean and a Head of the Department of Economics at Universitas Indonesia. He is also a Head of Cluster Research on Poverty, Social Protection and Development Economics in the same department. He is now appointed as Indonesia Representative at the Governing Board of Economic Research Institute for ASEAN and East Asia (ERIA) & Vice President of ABEST21 (Alliance of Business Education and Scholarship for Tomorrow).

Athor Subroto, University of Indonesia

Athor Subroto is a Director at School of Strategic and Global Studies, Universitas Indonesia at University of Indonesia. He is an experienced researcher in higher education, specializing in Stata, Analytical Skills, System Dynamics, Lecturing, and Econometrics. Holds a Ph.D. in Model-Based Public Planning, Policy Design, and Management from Università degli Studi di Palermo. Committed to advancing knowledge and excellence in the field.

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