Indonesia has unveiled plans for more than US$400 billion in building projects, from constructing 25 airports to developing power stations in an attempt to boost growth.
The proposals were for 6 trillion rupiah (US$415 billion) in investments from 2020 to 2024, said Indonesia’s planning minister, Bambang Brodjonegoro.
Around 40 per cent of the total would come from the Jakarta government with 25 per cent through state-owned enterprises and the rest from the private sector, he said.
Transport-related infrastructure would take up around 60 per cent of the fund, the ministry said, as Indonesia looks to stimulate the economy after a month of poor trade figures.
President Joko Widodo’s recent re-election campaign centred around using infrastructural spending as a means to boost economic growth and spread wealth beyond Java.
Java, the island on which Jakarta is located, has about 60 per cent of Indonesia’s population of roughly 250 million, while making up just 7 per cent of its territory.
Building ports is particularly complicated and costly across Indonesia’s 17,000 islands.
Improved infrastructure could also complement efforts to attract more tourists to help narrow the current-account deficit, which widened to a four-year high in 2018.
“The only way for Indonesia to have higher economic growth is connectivity,” Brodjonegoro told Bloomberg. “We are planning to establish the equivalent of a highway for the skies by building airstrips or smaller airports for connectivity.”
He said the spending would stretch to Papua, which has some of Asean’s most valuable natural resources but contains the country’s poorest regions.
Papua Province hosts one of the world’s largest gold and copper mines, run by US giant Freeport-McMoRan and BP has a large natural gas plant in West Papua.
Most Papuans are rural, with poverty rates that are the highest in Indonesia, at around 41 per cent, compared with only 5 per cent in urban areas. Papuans have the highest rates of illiteracy in Indonesia, with around 25 per cent of children not in school, and the two provinces have the highest infant, child and maternal mortality rates in the archipelago while having the lowest basic child vaccination rates.
Several recent infrastructure projects have been shelved or delayed although the World Bank and other international bodies have warned that an infrastructure gap is limiting economic growth.
The Indonesian economy has been expanding at about 5 per cent a year, short of the 7 per cent “Jokowi” promised before taking office in 2014.
Jakarta is choked with litter, sinking and clogged with traffic. Picture credit: Wikimedia