Indonesia's nickel boom has barely helped wages

For Indonesia, sluggish income growth has been a persistent issue. It's not just the case for graduates in Jakarta: granular datasets show that workers in Central Sulawesi are seeing limited benefits from the province's nickel boom.

Central Sulawesi has seen a rapid expansion in nickel processing and associated downstream manufacturing, making it one of the nation's fastest-growing provinces and a hotspot for foreign investment.

We've visualized how Central Sulawesi compares to other provinces' per-capita GDP and incomes, dividing a scatterplot into quadrants. As might be expected, the capital city of Jakarta has the strongest economy and highest wages. In the opposite quadrant, a large cluster of provinces have weaker economies and incomes than Central Sulawesi.

However, at least eight provinces record higher net wage levels than Central Sulawesi despite having lower GDP per capita. This group (in the pink, upper left quadrant) is led by fast-growing Banten, which is seeing rapid urbanization spilling over from neighboring Jakarta.

This phenomenon underscores an important structural feature of the Sulawesi growth model: the predominance of capital‑intensive investments relative to labor‑absorptive equivalents. Nickel processing generates substantial value added, but with limited pass-through to household incomes or broad welfare improvements.

Our subsequent charts compare the Jakarta and Central Sulawesi head to head, and visualize longer-term wage growth for all of Indonesia's provinces in bar-chart and map formats. 

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