JAKARTA - The Jakarta Post highlighted the awareness of Indonesia President Susilo Bambang Yudhoyono of the importance of infrastructure development during a speech he delivered at the 2012 Indonesian International Infrastructure Conference and Exhibition in Jakarta on Tuesday.
The newspaper reported that if the President’s willingness to act looks sincere, however the country’s leader did not provide a clear solution to the protracted problems that have often hindered the country’s major infrastructure projects.
“Infrastructure, other than being a pillar of the economy and being a crucial component of sustainable growth, is also an important factor to establishing solid domestic connectivity,” Yudhoyono said.
He said that the government had done its best to implement the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI).
“Under this master plan, as many as 135 infrastructure development and real sector projects have been launched with a total investment worth more than Rp 490 trillion [US$51.45 billion].”
To reaffirm the government’s commitment to the master plan, Yudhoyono said that his administration planned to allocate around $20 billion for infrastructure spending next year. “We want to expand our 4,278-kilometer national road capacity. We also plan to build new roads, stretching 559 kilometers in total, 380 kilometers of new railways and 15 new airports,” Yudhoyono said.
The Jakarta Post explained that although Yudhoyono depicted ambitious and courageous governance, most of the projects are either old or guilty of missing their target completion dates when observed from a historical perspective. As an example, the development of the 2,500-kilometer Trans-Sumatra Highway project has not been initiated, let alone completed, despite the fact that this project was initially set to begin in 2005. The Trans-Sumatra Highway is intended to connect Lampung in South Sumatra and Aceh, which is located in the northern part of the island.
Industry Minister MS Hidayat said that the issues hindering infrastructure development had always been the same. “I have now participated in three infrastructure summits and the problem in our infrastructure development has always been about regulatory issues. I do not know whether the regulatory issues that were brought into our attention in the previous two summits have been properly resolved or not,” Hidayat explained.
Coordinating Economic Minister Hatta Rajasa also could not provide a concrete strategy over ways the government should use to immediately resolve problems plaguing the infrastructure construction. “We’ll continue improving bureaucracy and resolves all problems that have created bottleneck in the infrastructure development,” he said.
The country’s budget allocation for infrastructure development has been criticized by economists and industrial players. The government might plan to increase infrastructure spending by 7%to Rp 180 trillion next year (US$ 2 billion) but the increase is still far lower than increases in energy subsidy spending for example. Deputy Finance Minister Mahendra Siregar said that the country would never be able to fulfill its infrastructure development funding with the current budget allocation.
Critics believe that massive subsidy spending shows the government’s tendency to put political popularity ahead of sustainable economic development due to the fact that the country will have general elections in 2014.