$200 billion needed for infrastructure: Soeharto<\/p>\n
JAKARTA (JP): Indonesia needs more private investment,
\nincluding foreign investment, to finance the development of its
\ninfrastructure which will cost about US$200 billion over the next
\n10 years, President Soeharto said last night.<\/p>\n
Indonesia requires huge investment in basic infrastructure to
\nsustain its high economic growth with a more equitable
\ndistribution of wealth, Soeharto said while opening an
\ninternational conference on infrastructure at the State Palace.<\/p>\n
"For this reason, the provision of basic infrastructure by the
\nprivate sector is extremely important," he said.<\/p>\n
"As a general illustration, the infrastructure development
\nrequired in Indonesia over the next 10 years is estimated to cost
\naround $200 billion, most of which is expected to come from
\nprivate investment," he said.<\/p>\n
Because of the vast finance required, Soeharto continued,
\nIndonesia is seeking various private finance options, including
\nthose from international financial markets.<\/p>\n
He said that to attract more foreign investment for
\ninfrastructure, Indonesia would continue to open its doors widely
\nto foreign investment and maintain its free-foreign exchange
\nregime.<\/p>\n
"This is the reason why we shall continue to encourage the
\ncreation of a more open economic system through deregulation and
\nreduced bureaucracy," the President said.<\/p>\n
He said the private sector had been increasingly involved in
\nfinancing the country's infrastructure over the last 10 years,
\nespecially toll roads, power generation and telecommunications.<\/p>\n
In addition, Soeharto said, the government is offering water
\nprojects to private investors, including clean water projects for
\nhouseholds and industry.<\/p>\n
By giving the private sector a bigger role in infrastructure
\ndevelopment, Soeharto said, the government could focus more on
\nthe development of society, a more equitable distribution of
\nwealth and alleviation of poverty.<\/p>\n
He said that during the current Five-Year Development Plan,
\nwhich will end in March 1999, the private sector is expected to
\ncontribute 77 percent of the investment in infrastructure
\ndevelopment.<\/p>\n
The government last year upwardly revised its target for
\ninvestment in the current five year development plan to Rp 815
\ntrillion ($345.3 billion) from its previous target of Rp 660
\ntrillion to attain a targeted growth rate of 7.1 percent a year.<\/p>\n
He called for improved bilateral, regional and multilateral
\ncooperation so that the use and allocation of resources and
\ntechnology could be maximized.<\/p>\n
Also important is the role of multilateral financial
\ninstitutions which, according to Soeharto, have allocated more
\nthan 60 percent of their loans toward infrastructure development.<\/p>\n
The three-day, ministerial-level international conference on
\ninfrastructure, sponsored by the World Bank, features a number of
\nforeign dignitaries, including Malaysia's Deputy Prime Minister
\nand Minister of Finance Anwar Ibrahim.<\/p>\n
The conference is being attended by 30 ministers, 36 senior
\ngovernment officials, 26 bankers and 68 senior executives of
\nmultinational companies from 18 countries.<\/p>\n
The meeting will discuss topics on regulatory and other
\npolicies to optimize investment in infrastructure, financing
\nalternatives, contracting mechanisms for private investors and
\nsectoral strategies to balance public and private interests. (rid)<\/p>\n
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