"One way for this is by encouraging cooperation with other countries to attract investors in this value chain," Syafrian noted during a webinar on investment and trade here on Wednesday.
The Indef researcher cited the example of palm oil products, as currently, Indonesia has only processed palm oil fruits into crude palm oil.
In fact, Syafrian affirmed that palm oil has a long value chain and its derivative products have higher added value.
Hence, the country should seek investors that can process crude palm oil into other products.
"Indonesia will otherwise become stuck in the trade of low-value commodities, and we will not be able to upgrade to a developed country," he stated.
Syafrian affirmed that during the era of the global supply chain, investors in developed countries can establish headquarters and development centers in their countries of origin, but the production processes would be run in other countries.
"Hence, Apple has established its headquarter, research center, in Silicon Valley in its origin country. However, the production processes are located in China and also Vietnam," he stated.
This should be viewed as an opportunity for Indonesia to attract foreign investors to run their production processes in the country, he stated. Related news: Indonesia, New Zealand set Rp40-trillion trade target by 2024
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Translator: Sella Panduarsa G, Sri Haryati
Editor: Fardah Assegaf
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