Indonesia has the potential to become a major manufacturing hub for electric vehicles (EV) in Southeast Asia (ASEAN) if the right structural transformation is executed. This viewpoint was expressed by Senior Economist at UOB, Enrico Tanuwidjaja, during the UOB Gateway to ASEAN Conference 2023 in Jakarta. He emphasized that if Indonesia undertakes structural transformation correctly, it could become a primary manufacturing center in the ASEAN region.
In addition to the potential in the EV sector, Indonesia is also intensifying the downstream processing of mining commodities such as nickel, bauxite, copper, and more. This strategy has already added significant value to the country's economy. The economist highlighted the notable contribution of smelters and downstream processing of base metals to Indonesia's manufacturing sector, which has steadily increased since 2010, accelerated in 2018, and remained robust even during the COVID-19 pandemic. Enrico Tanuwidjaja pointed out that Indonesia's nickel exports, for instance, surged from around USD 2 billion to USD 30 billion after the implementation of policies like the nickel ore export ban and intensified downstream processing.
This economic shift represents a significant turning point and is considered a substantial opportunity, particularly in the context of a broader ecosystem focused on cleaner transportation. Indonesia's commitment to both EV manufacturing and the downstream processing of mining commodities has the potential to bring substantial economic benefits and reinforce its position in the regional market.
