General (Ret.) Prof Dr AM Hendropriyono,
Secretary for Development Operations Control of the Republic of Indonesia (1996 - 1998)
Amidst the current global geopolitical turmoil, the Middle East has once again become a region that determines global economic stability. Recurring conflicts, tensions over energy routes, and shifting strategies of Gulf states create uncertainty that impacts energy markets and international trade. For many industrialized nations, this region represents a source of risk. However, for Indonesia, the region can also be seen as a source of strategic opportunity, when understood through the framework of development economics formulated by Soemitro Djojohadikusumo. Soemitro's economic thinking is fundamentally based on one central idea: the state must lead the structural transformation of the economy from dependence on commodities to sovereign national industrialization. In the geopolitical context of the Middle East, this approach is highly relevant because the region holds three crucial factors for Indonesia's development: energy, capital, and markets.
Energy as the Foundation of Industrialization
There can be no industrialization without stable and affordable energy. The Middle East remains a major hub for global oil and gas supplies. Within the framework of Soemitronomics, Indonesia's relationship with the region should not be viewed solely as an energy trade relationship, but as a national industrial security strategy.
Indonesia needs to establish long-term energy contracts, strengthen strategic energy reserves, and develop petrochemical and refinery cooperation with Gulf countries. In this way, energy will not simply be an imported commodity, but rather a strategic input for national industrialization.
Petrodollars as an Engine of Industrial Transformation
Gulf countries currently manage a significant capital surplus through sovereign wealth funds. In Soemitro's logic, foreign capital can be a tool for national development if directed selectively. Investment from the region should be directed toward sectors that strengthen Indonesia's economic structure, such as:
the petrochemical industry, oil and gas refineries, fertilizer and metal industries, export industrial estates, port logistics, and energy.
With this approach, capital from the Middle East will not only enter as portfolio investment or consumer property, but will also become an engine for building national industrial capacity.
