Resource Nationalism and Local Economic Justice: Assessing the Distributional Effects of Nickel Downstreaming in Morowali, Indonesia

Abstract

Resource nationalism has increasingly shaped Indonesia’s mineral policy, particularly through restrictions on raw mineral exports and the promotion of domestic downstream processing. While these policies aim to capture greater economic value domestically, questions remain regarding how the resulting benefits and costs are distributed at the local level. This study examines the relationship between resource nationalism and local economic justice through the case of nickel downstreaming in Morowali, Indonesia. The study employs a qualitative case-study methodology combining legal and policy analysis with secondary socioeconomic evidence on investment, employment, local business participation, and regional development. A distributional justice framework is used to evaluate the allocation of economic benefits among the state, corporations, workers, and local communities. The analysis also considers whether increased domestic value capture translates into meaningful improvements in local economic inclusion. The study argues that resource nationalism should be assessed not only according to national ownership, fiscal gains, or industrial upgrading, but also according to the extent to which local populations participate in and benefit from resource-based development. The research contributes to debates on resource governance by connecting resource nationalism with subnational economic justice. It further highlights the importance of local procurement, skills development, employment access, and institutional accountability in translating mineral policy into broadly shared economic benefits.