Paper short abstract:

I would present how political-economic factors shape resource-rich countries' economic development in the age of GVCs and the clean energy transition

Paper long abstract:

Over the last ten years, there has been an increase in the demand for critical minerals driven by the clean-energy transition agenda. Increased demand for critical minerals presents new opportunities for resource-rich developing countries. At the same time, global value chains (GVCs) have changed how goods are produced, including renewable energy products. This opens opportunities for resource-rich developing countries to participate in global trade and benefit from the increased demand for critical minerals. However, as a number of GVC literature has shown, the such benefit would not rise automatically. Hence, the question is, what factors enable these countries to benefit from the increased demand for critical minerals? This paper tries to answer this question by using the case of nickel in Indonesia. Indonesia has used nickel to attract investment and boost trade in more sophisticated products, which fosters upgrading in the nickel value chain. The paper unpacks factors contributing to this upgrading. It highlights that linking up with lead firms is crucial for upgrading efforts, as they positively impact the accumulation of production abilities. However, such linkages will not arise automatically without the government's active involvement. The paper also examines how the domestic political and economic environment allows the state to implement policies that foster relationships between domestic economies and leading firms.