Jakarta (ANTARA) - The National Development Planning Ministry (Bappenas) has made industrialization and downstreaming as central policies to increase the industry's contribution to Indonesia’s gross domestic product (GDP).

"In the economic transformation agenda, industrialization and downstreaming are central policies to reverse the contribution of the industrial sector to GDP to increase," the agency’s deputy minister, Febrian Alphyanto Ruddyard, stated here on Tuesday.

Based on Indonesia's natural resources, nickel is the commodity with the largest ore reserves in the world, with a total of 5.24 billion tons, 49.7 million tons of the world's largest Crude Palm Oil (CPO) production, 3.13 billion tons of bauxite reserves, and 9.2 million tons of the second-largest seaweed production in the world.

Downstreaming of priority commodities is considered to be the key to increasing added value with the potential for an additional GDP of USD165 billion, based on Bappenas’ data.

Industrialization will also be focused on several priority sectors, including downstream of agro, mining, and marine industries; chemical and metal industries; as well as pharmaceuticals, electronics, and transportation equipment industries.

On the other hand, Febrian affirmed that industrial development should also focus on environmental aspects to boost competitiveness.

Currently, the processing industry is the second-largest sector producing carbon dioxide emissions. Meanwhile, the demands of the eight largest nickel ore-buying countries in the world have set a net zero emission (NZE) commitment in terms of policies and regulations.

To address this problem, the strategy to encourage the development of green industry is the implementation of a circular economy estimated to increase GDP by Rp539 trillion to Rp638 trillion (USD1 = around Rp15,856) in 2030.

The second strategy is developing an Eco-Industrial Park that uses renewable energy, sustainable materials, and resources; reduces waste; encourages recycling companies and facilitates sorting; carries out business remodeling; utilizes digital technology; and conducts industrial symbiosis.

The final strategy is to develop five priority sectors of the circular economy, comprising food, textiles, construction, plastics, and electronics.

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