Nickel Shows Indonesia How to Escape the Middle Income Trap
The success of its strategy to boost investment in smelting has encouraged the government to expand the idea to other industries
A nickel processing complex operated by PT Vale Indonesia on Sulawesi Island.
Photographer: Dimas Ardian/BloombergThe value of Indonesia’s nickel exports surged tenfold in five years after it forced buyers to set up refineries in the country. Now Southeast Asia’s biggest economy plans to use that blueprint to catapult the nation into the ranks of higher-income economies by processing everything from copper to fish.
The goal is to double per-capita GDP to $10,000 by 2045, which would bring Indonesia close to the World Bank’s high-income threshold. At the same time, the shift would create new centers of growth outside Java, its richest and most populated island.