Implementation of Resource Nationalism Through Nickel Downstreaming Policy as a Form of Indonesian Economic Sovereignty

International Journal of Social Science and Human Research ISSN (print): 2644-0679, ISSN (online): 2644-0695 Volume 08 Issue 12 December 2025 DOI: 10.47191/ijsshr/v8-i12-49, Impact factor8.007 Page No: 9579-9586 IJSSHR, Volume 08 Issue 12 December 2025 www.ijsshr.in Page 9579 Implementation of Resource Nationalism Through Nickel Downstreaming Policy as a Form of Indonesian Economic Sovereignty Purwati Rahayu Edarsasi University of Indonesia ABSTRACT: This journal aims to analyze the implementation of resource nationalism through the nickel downstreaming policy, a concrete effort to strengthen Indonesia’s economic sovereignty. Resource nationalism is a view that emphasizes the importance of state-managed natural resource management for the national interest, rather than merely as a low-value raw material export commodity. The nickel downstreaming policy is seen as a strategic instrument used by the government to increase the added value of natural resources. Downstreaming is expected to provide long-term economic benefits, strengthen Indonesia’s economic sovereignty, and reduce the country’s dependence on raw material exports. This journal raises the problem of how the implementation of resource nationalism is reflected in Indonesia’s nickel downstreaming policy. To address this problem, this journal uses a qualitative approach, with a literature review as its primary method. The main theoretical framework used in this analysis is the theory of economic nationalism developed by Friedrich List and Dani Rodrik. The list emphasizes the importance of developing national productive forces through industrial protection. At the same time, Rodrik highlights the importance of policy space for the state to determine the direction of its economic development. Through this journal analysis, the author aims to provide a comprehensive overview of the role of downstream nickel in Indonesia’s economic sovereignty, while highlighting the challenges that arise in its implementation. KEYWORDS: Resource Nationalism, Nickel Downstreaming, Economic Sovereignty, Friedrich List, Dani Rodrik I. INTRODUCTION Indonesia is a country with abundant natural resources, ranging from plantations, agriculture, forestry, water, and mining. One natural resource commodity that has attracted global attention is nickel. Indonesia itself is the world’s largest nickel producer. According to data from the Ministry of Energy and Mineral Resources (ESDM), Indonesia has nickel mines covering 520,877.07 hectares spread across seven provinces, including Southeast Sulawesi, South Sulawesi, Central Sulawesi, North Maluku, Maluku, Papua, and West Papua. Furthermore, according to data from the Ministry of Energy and Mineral Resources, Indonesia’s total nickel ore reserves reached 5.32 billion tons in 2023. This figure increased by 5.90 percent compared to the previous year’s 5.03 billion tons. Meanwhile, Indonesia’s total nickel metal reserves reached 56.12 million tons in 2023. Compared to 2022’s 55.06 million tons, this figure increased by 1.91 percent (Tanisha & Sadya, 2024). Picture 1. Nickel Investment Value in Indonesia 2015-2019 (Source: Ahdiat, 2023) Implementation of Resource Nationalism Through Nickel Downstreaming Policy as a Form of Indonesian Economic Sovereignty IJSSHR, Volume 08 Issue 12 December 2025 www.ijsshr.in Page 9580 Indonesia's vast nickel reserves make it a key player in the global mineral industry. According to data from the Central Statistics Agency (BPS), nickel exports have generally increased from US$791.26 million in 2015 to US$796.25 million in 2019. This value declined in 2016 to US$587.48 million, but rebounded the following year to US$631.53 million (Ahdiat, 2023). The increase in nickel exports demonstrates that the mineral industry, particularly nickel, has become a key component of the Indonesian economy. This increase reflects Indonesia’s ability to effectively utilize its natural resources and increase the added value of mineral exports (Botutihe & Paksi, 2024). Although nickel exports increase annually, Indonesia remains dependent on raw-material exports, meaning the government has not fully maximized nickel's added value. Indonesia’s nickel availability offers significant potential for downstream processing, given that nearly 70 percent of nickel derivatives are used as raw materials for stainless steel, 11 percent for batteries, and 7 percent for various metal alloys. In contrast, the remainder is used as industrial raw materials (BRIN, 2022). In this modern era, the electric vehicle industry is growing and developing, with new and established brands launching electric vehicles. Based on data on nickel ore availability from the Ministry of Energy and Mineral Resources (ESDM), Indonesia has the potential to become a major player in the electric vehicle battery industry, which is currently undergoing massive development. However, Indonesia has not yet fully utilized its resource wealth. This is evident in the years in which Indonesia has sold nickel ore abroad (exports) without first processing it into finished goods. The sale of raw materials generates little economic value compared to the sale of finished goods. However, Indonesia possesses abundant human resource potential capable of producing finished goods, maximizing the added economic value of its natural resource wealth, particularly nickel, through industrialization. In response to this situation, Law Number 4 of 2009 initiated a downstream policy as a form of resource nationalization. Andrew Speed (2013) states that resource nationalism refers to governments’ tendency to assert control over natural resources within their territories by limiting foreign participation and increasing state ownership. This is in accordance with Article 33 of the 1945 Constitution, which states that natural resources must be controlled by the state and utilized to the maximum extent for the prosperity of the people. Thus, the constitution grants the state the authority not only to own but also to utilize and manage natural resources as instruments to benefit people’s welfare. The Ministry of Energy and Mineral Resources (ESDM) defines downstreaming as the refining and processing of mining products into domestic derivatives. Nickel is one of the commodities the government is encouraging the downstreaming of. In this regard, the Indonesian government, through Ministerial Regulation of ESDM No. Law No. 17 of 2020 has imposed a ban on the export of raw nickel ore and instructed the construction of smelters in various regions to process nickel ore into high-value products such as ferronickel, nickel matte, and even raw materials for electric vehicle batteries. This was done not only to strengthen the national industry and improve the economy, but also to support economic sovereignty, enabling Indonesia to manage and control resources independently without excessive dependence on foreigners. This policy is also expected to encourage technological progress, create new jobs, and make Indonesia a key player in the global electric vehicle supply chain. However, implementing nickel downstreaming is not without its challenges. On the one hand, Indonesia remains dependent on foreign investment and technology to build smelter plants. On the other hand, the policy of banning raw material exports has drawn criticism from several trading partners and international institutions. Furthermore, local issues have emerged, including land conflicts, environmental pollution, and economic benefits inequality between the state and investors. Therefore, the problem formulation raised in this paper is how resource nationalism is implemented in Indonesia’s nickel downstreaming policy. Based on this problem formulation, this paper will discuss how the nickel downstreaming policy can advance resource nationalism, the impact of downstreaming on Indonesia’s economic sovereignty, and the challenges Indonesia faces in implementing it. To answer these questions, the author will use Friedrich List's theory of Economic Nationalism as a conceptual framework. II. THEORETICAL FRAMEWORK The Downstreaming Policy for natural resources, especially nickel, implemented by the Indonesian government, is a concrete manifestation of economic nationalism, an approach in which the state prioritizes economic sovereignty in regulating and utilizing natural resource wealth for the benefit of national development. Where to analyze the implementation of nickel downstreaming using the theory of economic nationalism from the thoughts of Friedrich List and Dani Rodrik. List (1841) in his book entitled The National System of Political Economy, stated “The power of producing wealth is infinitely more important than wealth itself.” and Rodrik (2011) in a book entitled The Globalization Paradox stated “Markets must be deeply embedded in systems of governance, and those systems of governance must be rooted in democratic deliberation and choice.” From these two statements, it is known that List supports the state in carrying out downstreaming in order to achieve added value benefits and economic sovereignty that can be used for national development, supported by Rodrik, who emphasized the importance of state freedom in determining its economic policies without having to follow the current pressures of globalization and market liberalization. List (1841) defined economic nationalism as an economic policy approach that prioritizes national economic interests and development, not simply adhering to the principles of global free trade. List (1841) argued that free trade would only benefit economically developed, industrialized nations. Therefore, industries in developing countries require state protection and Implementation of Resource Nationalism Through Nickel Downstreaming Policy as a Form of Indonesian Economic Sovereignty IJSSHR, Volume 08 Issue 12 December 2025 www.ijsshr.in Page 9581 intervention to build their own production and industrialization capacity. In this regard, Indonesia, as a developing country, will likely struggle to compete with free trade because its economy remains unstable and its industry is still in its infancy. Therefore, the Indonesian government needs to play a role in creating protectionist policies to protect domestic industries, especially infant industries, from competition with large and global industries. In the Dictionary of Economics, protectionism is defined in two ways. First, protectionism is defined as an effort to protect domestic businesses. Second, protectionism is defined as a government policy aimed at controlling exports or imports by imposing trade barriers, such as tariffs and quotas, to protect domestic industries from foreign competition (Sumadji P. in Alya and Arie 2024). According to List (1841), a nation’s strength is not measured by its abundance of natural resources if it cannot utilize productivity, but rather by its ability to generate sustainable added value from that wealth. Material wealth without the production capacity to process it will not guarantee long-term wealth, as the nation will continue to depend on other nations that can process it. Conversely, if a nation can process or possess productive wealth, it will continue to develop and become economically strong. Nickel downstreaming is one of the government’s efforts to add value to Indonesia’s mineral resources. Meanwhile, Rodrik (2011) describes economic nationalism within the framework of the globalization trilemma, where a nation cannot simultaneously pursue democracy, national spirit, and economic globalization. In this regard, Rodrik explains that nations must prioritize democracy and national sovereignty over complying with globalization pressures, which tend to disregard the nation’s internal interests, particularly those of developing nations that are not yet economically independent. However, this does not mean Rodrik is anti-globalization; he believes that state economic policies should be tailored to national needs while taking into account political stability and domestic social structures. Furthermore, Rodrik implicitly argues in his book The Globalization Paradox (2011) that a country must have policy space to determine the direction of its economic development in the national interest. Policy space is the government’s space to implement domestic economic and social policies that align with its domestic needs. The state must do this because global policies are not always appropriate for every country, and often favor developed countries or superpowers, the leading global actors. Therefore, policy space is necessary to maintain state sovereignty and national development. The ideas of Friedrich List and Dani Rodrik are fundamentally interconnected, even though they came from different eras. Both emphasize the crucial role of the state in national economic development and criticize free markets that fail to consider a country’s domestic conditions, particularly those with immature economies. According to List, a state cannot simply be a consumer of the global free market; it must also actively increase its industrial capacity through protective state policies. This is supported by Rodrik’s view that global market pressures will hinder industrialization and weaken the country’s internal democratic legitimacy, so the state should not leave economic development to free-market mechanisms. The nickel downstreaming policy has been an interesting topic of discussion in several previous studies. Radhica and Wibisana (2023) stated that the downstreaming policy represents Indonesia’s protectionist approach, aiming to maximize the potential of nickel resources to drive national economic growth. After this policy was implemented, Indonesia’s revenue increased from US$27 billion to US$30 billion. In addition to increasing added value, downstreaming also attracted foreign investment and created significant job opportunities. However, its implementation has sparked a trade conflict with the European Union. The EU considered the nickel downstreaming policy to be disruptive to market stability and detrimental to nickel-consuming countries. This conflict prompted the EU to challenge Indonesia’s downstreaming policy at the World Trade Organization (WTO), ultimately resulting in the EU’s victory. Nevertheless, the Indonesian government continues the downstreaming program, believing it could be a stepping stone for Indonesia’s development. Sudiana, Dermawan, and Lanti (2025) state that nickel downstreaming represents a structural transformation in Indonesian trade policy. They note that the transformation of exports from raw ore has made Indonesia a major global producer of processed nickel products. This policy is considered to strengthen Indonesia’s position in global value chains as a supplier of electric vehicle batteries and stainless steel. However, Sudiana et al. (2025) also consider this transformation contradictory, given that Chinese companies dominate Indonesia’s nickel industry, accounting for up to 90 percent. This demonstrates how downstreaming remains highly dependent on external actors, potentially creating new dependencies and weakening resource nationalism. Meanwhile, research by Setiani (2024) states that downstreaming is not merely a trade policy but also part of an industrial upgrading strategy aimed at developing a national manufacturing industry. The success and sustainability of downstreaming are determined not only by policy consistency but also by the country’s ability to create a comprehensive industrial ecosystem, including infrastructure, technology, and the quality of its human resources. This aligns with research by Wau et al. (2024), which explains that nickel downstreaming, combined with technological development, can boost the economy by increasing revenue from the nonoil and gas sector and increasing companies’ contributions to state revenue. Furthermore, nickel downstreaming can maintain environmental sustainability. The development of the downstream nickel industry also drives job creation, industry growth, and domestic technology demand. Implementation of Resource Nationalism Through Nickel Downstreaming Policy as a Form of Indonesian Economic Sovereignty IJSSHR, Volume 08 Issue 12 December 2025 www.ijsshr.in Page 9582 III. METHOD This journal is written using qualitative research methods. Qualitative research methods are strategies or techniques for collecting and analyzing non-numerical data, or data based on words (Lamont, 2015). To obtain information, the author will use library research data-collection techniques or literature reviews that draw on various sources. The data used in this paper are secondary data obtained from official government documents, official government websites, scientific articles/journals, books, news, or other openly accessible sources. The author will use this data to support the analysis of Nickel Downstreaming problems in Indonesia. After the data is collected, the author will analyze it using triangulation techniques to obtain results to answer the problem formulation above. IV. MAIN DISCUSSION The discussion section will explain the implementation of resource nationalism in Indonesia’s nickel downstreaming policy as a form of economic sovereignty based on the theory of economic nationalism. This section will consist of three sub-chapters that will address the problem formulation. The first sub-chapter discusses the implementation of nickel as an economic nationalism strategy. The second sub-chapter will discuss the benefits of nickel downstreaming in the context of economic sovereignty. Finally, the third sub-chapter will explain the challenges Indonesia faces in implementing nickel downstreaming. A. Nickel Downstreaming as a Strategy for Economic Nationalism Indonesia, a country rich in natural resources, has significant mining potential, including nickel. Global demand for nickel is increasing, especially as electric vehicle technology advances. As the world’s largest nickel producer, Indonesia has an opportunity to boost its national economy by maximizing nickel production. Unfortunately, Indonesia has been able to export only raw nickel ore, without processing it into more valuable products. However, in January 2020, the Ministry of Energy and Mineral Resources imposed a ban on nickel ore exports. Downstream nickel processing offers Indonesia a golden opportunity to become a global hub for EV battery production. Nickel is the primary ingredient in lithium-ion batteries. Electric car components comprise 60 percent of the car’s components and 40 percent of the battery. Batteries have four primary raw material sources: manganese, cobalt, lithium, and nickel. Of these four, nickel accounts for a significant share of the raw material, at 80 percent (Alamsyah, 2024). Following the ban, the government began focusing on nickel downstreaming policies. Downstreaming is a strategic policy to reduce raw material exports and encourage optimal domestic utilization of natural resources by developing processing industries (Wibowo, 2014). Nickel downstreaming involves processing nickel ore into usable products such as ferronickel, stainless steel, and lithium battery precursors, which have higher value on the global market. This aligns with List’s thinking, which emphasizes the importance of building national productive capacity, where nickel is not only an economic issue but also a matter of national sovereignty in determining the direction of industrial development. At the same time, however, nickel nationalism in Indonesia appears to be embracing foreign investment and not shifting to a more radical stance. In 2021, the government issued a new regulation extending the divestment period (Barizi & Triarda, 2023). According to data from the Ministry of Investment/BKPM, since the ban on raw nickel exports was implemented, foreign direct investment in the nickel processing sector has increased sharply, particularly from China. By 2024, more than 54 nickel smelters were operational, with 120 under construction, and 16 in the planning stage. Regarding nickel mining business permits (IUPs), 70 percent of nickel mining license holders in Indonesia are local companies, while 30 percent are foreign. However, this contrasts with nickel smelter business permit holders, where 70 percent are foreign companies and only 30 percent are local. Throughout 2023, the Indonesian Ministry of Investment/Investment Coordinating Board (BKPM) recorded a significant investment realization in the downstream sector of IDR 375.4 trillion. This amount represents a significant share of the total national investment of IDR 1,418.9 trillion, with the downstream sector accounting for 26.5 percent. The primary focus of this investment is the minerals sector, with the largest allocation of funds for nickel smelter construction at IDR 136.6 trillion, followed by copper smelters at IDR 70.5 trillion, and bauxite smelters at IDR 9.7 trillion (Annur in Botutihe and Paksi, 2024). This policy direction demonstrates a priority for processing strategic mineral commodities that were previously exported only in raw form. The above explanation illustrates how nickel downstreaming is a concrete reflection of economic nationalism in Indonesia. This policy is not merely an economic strategy but also a declaration of sovereignty in the face of global inequality. By building domestic industrial capacity and maintaining control over strategic natural resources, Indonesia strives to achieve sustainable development, oriented towards added value, and in line with long-term national interests. B. The Benefits of Nickel Downstreaming in the Context of Economic Sovereignty The nickel downstreaming policy implemented by the Indonesian government is a long-term strategy aimed at strengthening national economic sovereignty by optimizing the added value of natural resources. Within the framework of economic nationalism, downstreaming is a state effort to independently control and manage natural resource wealth for the national interest, rather than simply following the logic of the global market. Rather than simply exporting raw materials with low sales value, the government Implementation of Resource Nationalism Through Nickel Downstreaming Policy as a Form of Indonesian Economic Sovereignty IJSSHR, Volume 08 Issue 12 December 2025 www.ijsshr.in Page 9583 is encouraging the development of domestic processing and refining industries to transform nickel into high-value products. This step not only increases state revenue from exports but also has the potential to create ripple effects such as job creation, increased domestic industrial growth, and various other benefits. Nickel downstreaming is not merely an economic policy but also a manifestation of Indonesia’s sovereignty and independence amid global market pressures. Nickel downstreaming in Indonesia has a significant impact on the economy because the commodities sold are products or derivatives of raw nickel. Furthermore, nickel downstreaming encourages domestic entrepreneurs to build smelters. According to data from Indonesian nickel media, Indonesia will be the world’s largest nickel producer by 2023. Indonesia’s current nickel resources reach 17.7 billion tons of ore and 177.8 million tons of metal, equivalent to 23 percent of the world’s nickel reserves (Ministry of Energy and Mineral Resources of Indonesia 2023). Furthermore, according to data from the Ministry of Investment/BKPM, the export value of processed nickel products reached US$33.8 billion in 2022, a more than fivefold increase from US$3.3 billion before the downstreaming policy was implemented in 2014. This significant increase demonstrates the effectiveness of the nickel downstreaming strategy in increasing the added value of national commodities. Processing nickel ore into finished products not only generates significant economic benefits but also stabilizes the price and value of the commodity, especially during periods of sharp increases in global raw nickel prices. This strategy increases the competitiveness of local producers while reducing dependence on volatile fluctuations in the global raw materials market. From an economic perspective, changes in sales volume, particularly exports, will enhance bargaining power with export destination countries. The European Union and the United States, as destinations for nickel ore exports, are undoubtedly impacted by Indonesia’s nickel downstreaming policy. This means that, in addition to upholding economic sovereignty, Indonesia is also building a stronger bargaining position in its diplomatic and economic relations with the European Union and the United States. Encouraging diplomatic cooperation with foreign countries helps secure the country’s foreign exchange reserves. Through bilateral and multilateral relations, Indonesia can expand export markets, attract foreign direct investment, and conclude trade agreements. This cooperation can also increase product competitiveness in the global market. Increased exports and investment capital flows can help maintain stable, sustainable foreign exchange reserves. In line with this, encouraging the construction of domestic smelters will also create new jobs for the community. Amidst Indonesia's demographic dividend, the nickel downstreaming policy will also indirectly contribute to reducing unemployment. The increasing demand for labor in the processing and refining industry, particularly for young people of productive age, can increase their opportunities to find decent and sustainable employment. C. Challenges of Nickel Downstream Implementation The implementation of nickel downstreaming in Indonesia is a strategic step to increase the added value of natural resources and stimulate national economic growth. However, this policy is not without various challenges. One major challenge is the still-limited domestic financing. This challenge is a key challenge for downstreaming and must be addressed immediately. One case that exacerbated this situation was the trade conflict between Indonesia and the European Union regarding the nickel ore export ban. The Indonesian government imposed the ban to encourage domestic processing and increase export value. However, this policy was challenged by the EU and the World Trade Organization (WTO). Indonesia lost the appeal. As a result, this has had a worrying impact on the investment climate and made access to financing for downstreaming projects more difficult. Nickel downstreaming in Indonesia remains highly dependent on high-quality foreign technology. Most of the technology used in Indonesia's downstream nickel production process still relies on imported products. Although the Indonesian government has made significant efforts to promote the downstreaming industry, limited technological mastery makes it difficult for Indonesia to innovate and develop more efficient technologies. The limited availability of qualified, adequate labor is also a challenge to promoting nickel downstreaming in Indonesia. The downstreaming process not only requires significant investment and advanced technology but also a large number of skilled workers. In addition to skilled human resources and substantial investment, this lack of skilled labor poses a barrier to Indonesia’s ability to increase the competitiveness of downstream nickel products in the global market. Without measures to improve the quality of human resources, achieving the goal of increasing the industry’s added value will be challenging. Furthermore, nickel downstreaming, which is expected to improve community welfare, actually hurts the environment. In some cases, nickel downstreaming can damage the environment and even increase poverty. According to the Halmahera Study Forum in North Maluku, the nickel downstreaming policy can lead to uncontrolled deforestation. A total of 213,960 hectares of forest in North Maluku are reportedly under nickel Mining Business Permits (IUPs) and are impacted by resulting deforestation. Nickel downstreaming also threatens the productivity of resources for surrounding communities, such as agricultural land, gardens, and fishing grounds (FOSHAL et al., 2024). In addition to deforestation, nickel extraction and downstream processing can pollute the environment through mining waste. This is due to the continued use of coal-fired power plants (PLTUs) that still generate electricity from coal. PLTUs are a major Implementation of Resource Nationalism Through Nickel Downstreaming Policy as a Form of Indonesian Economic Sovereignty IJSSHR, Volume 08 Issue 12 December 2025 www.ijsshr.in Page 9584 contributor to carbon emissions and air pollution, which directly impact the health of surrounding communities. The impacts of deforestation and the use of coal-fired power plants (PLTUs) contradict Article 33 of the 1945 Constitution, which aims to promote sustainable and environmentally conscious economic activity (Setiawan et al., 2025). Infrastructure-wise, Indonesia also faces challenges in promoting nickel downstreaming. Indonesia’s limited infrastructure, such as roads, ports, and a stable electricity network in most regions, poses a particular challenge to downstreaming. This is because all industrial activities, including downstream processing, require access to adequate infrastructure throughout the production process, from the transportation of raw materials to the distribution of finished products. Infrastructure limitations can hamper production efficiency and even reduce investor appeal. In addition to economic and environmental challenges, nickel downstreaming has also faced internal political challenges, drawing intense criticism from Indonesian economist Faisal Basri. Faisal Basri (2023) highlighted that Indonesia’s nickel downstreaming policy has not yet fully benefited the national economy. He stated that Indonesia only achieves around 10 percent of the profits, while the remaining 90 percent flows to foreign companies, particularly China, which controls the majority of domestic nickel smelters. Basri highlighted three issues: first, the tax holiday benefits granted to smelters, predominantly from China, and the exemption from paying export taxes. Second, capital borrowed by Chinese banks is repatriated through interest payments. Finally, the patent fees for technology imported from China are also relevant. Faisal Basri’s criticism highlights the inequality in the distribution of economic benefits. It emphasizes the importance of strengthening regulations, increasing investment transparency, and expanding the role of national industry players in the downstream value chain. Without comprehensive improvements, nickel downstreaming is feared to create new problems, particularly the exploitation of resources with substantial profits that the Indonesian people do not fully realize. Therefore, while nickel downstreaming has strategic potential in driving national economic transformation, its success is primarily determined by the country’s ability to address the aforementioned challenges through consistent policy synergy, national capacity building, and the active involvement of all stakeholders—central and regional governments, industry players, academics, and civil society—in the policy formulation and evaluation process. Without synergy between actors and transparent, accountable governance, downstreaming policies risk becoming merely short-term economic projects rather than transformational strategies toward national economic sovereignty. V. CONCLUSIONS The nickel downstreaming policy is a strategic step by the Indonesian government to realize economic nationalism and strengthen sovereignty over national natural resources. By reducing its dependence on raw ore exports, Indonesia seeks to increase added value through the development of domestic processing and refining industries. This aligns with the ideas of Friedrich List and Dani Rodrik. According to List, a country cannot simply be a consumer of the global free market; it must also actively increase its industrial capacity through protective state policies. This is supported by Rodrik’s argument that global market pressures will hinder industrialization and weaken the country’s internal democratic legitimacy, so the state should not leave economic development to free-market mechanisms. This strategy has had positive impacts, including increasing export value, creating jobs, and boosting the country’s foreign exchange reserves. Furthermore, downstreaming also strengthens Indonesia’s bargaining position in international diplomatic and trade relations, particularly with developed countries like the European Union and the United States. However, implementing nickel downstreaming is not without its challenges. Dependence on foreign investment and technology, particularly from China, raises concerns about external domination of the national strategic industry. On the other hand, environmental impacts such as deforestation and pollution create other serious problems, particularly concerning ecosystem sustainability. Limited infrastructure and the limited quantity and quality of human resources also pose obstacles to optimizing this policy. Therefore, strengthening national policies that are more oriented toward sustainability and equitable economic utilization, and increasing the capacity of existing industries and human resources, is needed. With a comprehensive and equitable approach, nickel downstreaming can be an instrument for realizing economic sovereignty that supports the national interests of the Indonesian people. The concept of resource nationalism is an important ideal for realizing Indonesia’s economic sovereignty. However, given the challenges faced, implementation is no easy feat. Under these conditions, Indonesia appears to be challenging the liberal global system, demanding strong domestic capacity, and requiring political courage and policy consistency. Without careful planning and good governance, resource nationalism can become merely a normative discourse without substantive impact and no longer a sustainable development strategy. Therefore, this approach demands synergy between the country’s political-economic vision and the implementation of measured, sustainable, and equitable policies. Implementation of Resource Nationalism Through Nickel Downstreaming Policy as a Form of Indonesian Economic Sovereignty IJSSHR, Volume 08 Issue 12 December 2025 www.ijsshr.in Page 9585 VI. ACKNOWLEDGMENT The author would like to express his gratitude to the entire academic community of the Master of International Relations study program, Faculty of Social and Political Sciences, University of Indonesia, especially the lecturers and fellow students in the scientific writing and fundamental theories of international political economy courses, for their knowledge, guidance, and academic discussions that greatly assisted the author in the process of compiling this research. Their suggestions and input significantly helped shape the author’s thinking, enrich the theoretical framework, and sharpen the analysis in this research. 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