JAKARTA - When the Susilo Bambang Yudhoyono government pushed through Indonesia’s 2009 Mining Law, industry skeptics warned that provisions in the legislation ending the export of raw minerals and ushering in a new era of value-added manufacturing would cost the country dearly.
Now those same critics are having to eat their words. Led by the booming nickel industry, iron and steel exports this year are expected to top US$20.5 billion, double that of 2020 and one reason why the economy has stayed afloat through the Covid-19 pandemic.
That will make the category Indonesia’s biggest foreign exchange earner, ahead of palm oil, oil and gas and electrical equipment, with the country relying on exports to take the place of still-sluggish domestic consumption as the main economic driver.
The World Bank estimates the economy expanded by 3.7% this year and forecasts it will accelerate to 5.2% next year, the highest growth rate since 2013, provided Indonesia avoids the danger of a new Covid-19 spike and the government maintains its record of sound monetary and fiscal policies.