Ahead of Indonesia presidential elections, Iskandar slams Jokowi’s nickel investment policy, calling it reckless

Muhaimin Iskandar has taken issue with Jokowi’s approach of compelling foreign companies to invest in mineral processing through export bans, criticizing it as environmentally destructive and lacking significant local benefits.

As Indonesia approaches a pivotal moment in its political landscape with the upcoming presidential election, one of the three leading candidates for the vice-presidential position, Muhaimin Iskandar, has launched a pointed critique against outgoing President Joko Widodo’s economic policy. Muhaimin Iskandar, who is the running mate of presidential candidate Anies Baswedan, has taken issue with Jokowi’s approach of compelling foreign companies to invest in mineral processing through export bans, criticizing it as environmentally destructive and lacking significant local benefits.

Muhaimin Iskandar’s critique particularly targets the government’s “downstream” policy, which aims to boost the country’s economic standing by encouraging foreign companies to invest in processing minerals within Indonesia instead of exporting raw materials. However, Muhaimin Iskandar contends that this strategy has resulted in severe environmental damage without providing substantial advantages to local communities.

Speaking at a campaign event, Iskandar emphasized the adverse impact of the downstream policy, asserting that it has failed to strike a balance between economic development and environmental preservation. He said that the measures had helped create much-needed jobs in outlying islands, especially on Sulawesi, where foreign workers have controlled the new roles.

Muhaimin Iskandar at a debate with other vice presidential candidates ahead of the election in Indonesia, said, “We saw in our mining business downstream is done recklessly.” He also said that downstream development was not significantly affecting people’s welfare. The critique from Anies Baswedan’s running mate adds a new layer to the broader debate on the direction of Indonesia’s economic policies, particularly in the context of natural resource management.

The export of raw nickel ore was banned by the outgoing head of state in the year 2020. Billions of dollars worth of investment were drawn in plants to process it into even more valuable products, led by the Chinese firms that include Tsingshan Holding Group. The move eventually escalated nickel mining and processing and upraised the global market, resulting in the price of the metal jumping and forcing miners in other countries to cut their output. Due to the explosive growth in this sector, a large scale of deforestation took place, also on the other hand, coal-fuelled smelters led to large amounts of carbon emissions. In the case of electric vehicles nickel is important for creating high-performing batteries.

According to the criticism of Iskandar, deadly accidents have also occurred at industrial facilities run by foreign firms, the most recent accident took around 21 lives. Iskandar also criticized the illegal mining of nickel which is environmentally destructive.