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Indonesia is drafting ambitious plans for more than $400 billion in building projects, from constructing 25 airports to new power plants, as the government seeks to stoke growth in Southeast Asia’s largest economy, according to the country’s planning minister.
The grand proposal calls for a record $412 billion in investments from 2020 to 2024, Minister Bambang Brodjonegoro said in an interview this week.
As much as 40% of the total will be funded directly by the government, 25% through state-owned enterprises and the rest through the private sector, he said. About 60% of the spending will go toward transportation-related infrastructure, according to a draft of the plan seen by Bloomberg and verified by the ministry.Such spending would build on President Joko Widodo’s strategy of using infrastructure as a key plank to boost economic growth and spread wealth beyond the main island-powerhouse of Java, where the capital is located. Building critical ports and facilities are particularly complicated and costly in Indonesia because the country is dispersed across 17,000 islands through an area spanning the distance between New York and London.
“The only way for Indonesia to have higher economic growth is connectivity,” Brodjonegoro said in Jakarta.
“The only way for Indonesia to have higher economic growth is connectivity,” Brodjonegoro said in Jakarta.
“We are planning to establish the equivalent of a highway for the skies by building airstrips or smaller airports for connectivity” in remote areas such as the Papua region,” he said.
The new spending plan is equivalent to about 5.7% of gross domestic product from 2020 to 2024, during which the government has targeted economic growth of 5.4% to 6%, according to the draft of the proposal. The government is open to the possibility of financing some projects through debt, Brodjonegoro said.
According to the draft plan, about 17% of the infrastructure spending will go toward energy, followed by 10pc for irrigation.
The proposal also calls for the upgrade of as many as 165 existing airports and the development of water-based facilities for seaplanes to access remote islands in the world’s largest archipelago, Brodjonegoro said.
Better infrastructure would also complement the government’s efforts to attract more tourists to help narrow the current-account deficit, which widened to a four-year high in 2018 and pressured the nation’s currency, bond and stock markets.
Separately, the minister said the government will push for certification of the domestically developed N219 propeller plane to support the expanding air-travel and tourism industries in the nation of more than 260 million people.
Source : The Straits Times | The Daily Express
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