The future of Indonesia’s green industrial policy
Indonesia’s green industrial policy—centered on domestic processing of critical minerals and development of an electric vehicle (EV) industry—has positioned the country as a global leader in nickel production and a key player in EV supply chains.
However, this progress has brought limited local economic benefits and has been accompanied by environmental harm, labor issues, and weak governance. Reliance on China for investment and technology has also emerged as a strategic vulnerability amid slowing Chinese growth and rising global competition.
To ensure sustainable growth, the report recommends securing current gains in the nickel and EV sectors, addressing ESG concerns, diversifying trade and investment partnerships, and realigning industrial policy to enhance long-term manufacturing competitiveness.