Indonesia urged to deepen resource processing and rebuild industry

Bank Indonesia Governor Destry Damayanti has called for Indonesia to rebuild its industrial base and extend natural-resource processing into higher-value products, rather than export goods before further manufacturing can take place.

Speaking at the Danantara Technology Innovation Investment Forum (DTIIF) 2026, Destry said longer production chains could strengthen manufacturing competitiveness and create employment opportunities. She argued that downstream development should encompass a broader industrial ecosystem, not just processing facilities.

Destry said Indonesia's population and natural resources provided a foundation for becoming a major Asian economy. However, geopolitical shifts and advances in artificial intelligence were reshaping trade, investment and international competition, making coordinated, long-term economic planning necessary.

She said Indonesia had developed industry from the late 1980s into the early 1990s before returning to dependence on commodity exports. In her assessment, the country still exports resources too early in the processing chain to capture the greater value available from derivative products.

Destry also said Danantara could help bring strategic projects forward and give private businesses greater confidence to invest alongside it. Such investment required careful planning and coordination among stakeholders, she said.

She identified productivity, economies of scale, labour and technology use as important elements of higher-value industrial development, and called for industrialisation, resource processing and technology adoption to proceed together.