President Joko Widodo keeps planning to invest in and construct more infrastructure for Indonesia. With this in mind, the construction does not seem to show any reduction in the near future.
Indonesia’s Coordinating Minister for Economic Affairs Darmin Nasution said that the country requires a huge investment in this. Accordingly, this is to support government’s infrastructure project.
Following his argument, only less than 50% of overall infrastructure projects is done out of 223. Additionally, the reasons are pertaining to financial and administrative issues.
“Out of them (223 projects), we haven’t reached 40%. Others are under construction and the other perhaps is dealing with administration. This is why we need huge amount of investment to gain 1% growth,” he said.
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Darmin argues that Indonesia’s Incremental Capital to Output Ratio (ICOR) is too high, which is above 6%. Correspondingly, this causes low investment rates.
In the recent years, Indonesia has erected numerous infrastructure projects. They include highway, public transportation, airports, building projects, and so forth.
Lately, the government also informed that they have begun preparation to move its capital. This is to support equality in each region’s development. In short, they are planning to rebuild Indonesia.
Indonesia and Infrastructure
Since Former President Soeharto’s New Order regime, Indonesia had slow development in infrastructure projects. The country had imbalance between infrastructure development and economic growth following the recovery from 1997 Asian financial crisis.
To point out the difference, the “radical” movement in infrastructure development had just started in President Joko Widodo’s era. Since his era began in 2014, Indonesia has been rebuilding the country.
To date, Indonesia has numerous on-going infrastructure projects. The projects, however, do not only include Indonesians. Instead, the country has been actively dealing infrastructure joint with foreign countries.
For instance, the nearest, upcoming summit to discuss the issue is 2019 Indonesia-Africa Infrastructure Dialog. The summit will be held in Nusa Dua, Bali, on August 20-21.
The event, furthermore, will discuss myriad sectors, including infrastructure development and trades. With that being said, this is just one of the examples of the joints. There are more upcoming joints as the country keeps focusing on infrastructure.
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