Infrastructure needed for growth<\/p>\n
Rendi A. Witular, Jakarta<\/p>\n
A senior economic minister warned that the economic growth
\ntarget of 5.4 percent, as set in the draft 2005 state budget, may
\nnot be attainable unless the next government dramatically
\nimproved infrastructure in the country.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti said lack of infrastructure for the business community
\nwould prevent the government from achieving several targets in
\nnext year's draft budget.<\/p>\n
\"From my experience, achieving economic growth of almost 5
\npercent with the present condition of infrastructure will be
\nextremely difficult, especially for areas outside Java,\"
\nDorodjatun told reporters on Wednesday after a meeting with the
\nIndonesian Chamber of Commerce and Industry (Kadin).<\/p>\n
He said adequate infrastructure was essential to increase
\ninvestment and push economic growth higher.<\/p>\n
The problem of inadequate infrastructure could be resolved if
\nthe financial flow from the central to regional governments or
\nfrom major to minor cities reached at least Rp 120 trillion
\n(US$13.3 billion) over two consecutive years, he said.<\/p>\n
With the spread of funds into regions, local governments would
\nbe expected to use its autonomy to build their own
\ninfrastructure, such as roads, ports and railways, without
\ndepending on Jakarta.<\/p>\n
A region that can provide adequate infrastructure for its
\nbusiness community will have a better chance at luring investors,
\nDorodjatun said.<\/p>\n
Under the draft 2005 state budget, the Ministry of Regional
\nSettlement and Infrastructure will receive Rp 12.4 trillion, a
\n3.3 percent increase from last year. The funds will be allocated
\nmainly toward the building and maintenance of roads, bridges and
\nirrigation canals, as well as flood control and coastal security
\nprograms.<\/p>\n
The government is in the process of constructing a 1,000
\nkilometer toll road next year that will link Merak in Banten and
\nBanyuwangi in East Java, and a deep-sea port in Banten, which is
\nexpected to become a hub for cargo vessels in Southeast Asia.<\/p>\n
To realize the projects, the government has teamed up with the
\nprivate sector for funding.<\/p>\n
In an earlier report, Kadin chairman Mohamad S. Hidayat
\nlamented the small allocation for infrastructure construction
\ncompared to total state expenditures of Rp 264.9 trillion,
\nincluding Rp 64 trillion to service public debt.<\/p>\n
Hidayat said the infrastructure budget needed to be about Rp
\n50 trillion to boost the economy.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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