Poor infrastructure retards RI: WB<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The World Bank, one of the country's long-standing main lenders,
\nwarned on Tuesday of the need to boost spending on infrastructure
\nprojects to avoid a crisis in the largely abandoned sector and
\nimprove the country's long-term economic growth prospects.<\/p>\n
Describing infrastructure development here as \"highly
\nunsatisfactory,\" the Bank said that Indonesia was lagging behind
\nin almost all infrastructure sectors -- leaving the country with
\nsome of the poorest infrastructure in the region.<\/p>\n
\"Unless some serious new investment and improved management
\ntake place in infrastructure, Indonesia's long-term growth will
\nbe threatened,\" said World Bank country director for Indonesia
\nAndrew Steer during a seminar here held to mark the launch of the
\nbank's report on Indonesia's infrastructure.<\/p>\n
The dilapidated state of infrastructure here is seen as a
\ncontributory factor to the relatively modest economic growth of 3
\npercent to 4 percent over the past couple of years --
\ninsufficient to absorb the 2.5 million new workers entering the
\njob market each year. Analysts have said that growth must reach 6
\npercent to 7 percent per year to create more jobs.<\/p>\n
The report was titled, \"Averting an Infrastructure Crisis: A
\nFramework for Policy and Action.\"<\/p>\n
While the government has blamed the stagnant state of the
\ncountry's infrastructure on the massive economic crisis in the
\nlate 1990s, the report also pointed at other issues as being
\nequally attributable.<\/p>\n
They include a failure to optimize the use of public
\nresources, poor targeting of public subsidies, inadequate public
\nmanagement, insufficient mobilization of domestic finance, a
\nnonconducive institutional and regulatory framework for private
\nparticipation, as well as pervasive corruption.<\/p>\n
The accumulation of those factors had made the country among
\nthe poorest in terms of infrastructure networks, the report said.
\nAs a result, only 1.3 percent of the country's 215 million
\npopulation had access to network sewerage, the lowest percentage
\nin Asia.<\/p>\n
In addition, only around half the households in this country
\nhave access to electricity. In comparison, the proportion of
\nhouseholds in the Philippines, Thailand, China and Vietnam that
\nhave secured access to electricity services reaches 80 percent,
\n82 percent, 98.6 percent and 75.8 percent respectively.<\/p>\n
Indonesia has 9.1 telephone subscribers per 100 people, still
\nlow when compared with 21.9 in the Philippines, and 22.2 in
\nThailand. Roads in and around major cities are also heavily
\ncongested throughout the day.<\/p>\n
To help tackle such problems the bank urged the government to
\nformulate a clear-cut strategy to direct more investment into
\ninfrastructure, which mostly centers on two crucial points:
\nreducing endemic corruption and optimizing the role of
\ndecentralization.<\/p>\n
\"You simply aren't going to get investment in infrastructure
\nif corruption is so deep,\" Steer said. The report estimated \"the
\ntotal amount of money lost through corrupt procurement practices
\nranges from US$700 million to $2.1 billion per year.\"<\/p>\n
As for decentralization, while it presented enormous
\nopportunities for improved infrastructure provision, if not well-
\nmanaged, it would remain a liability.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti said: \"If Indonesia is not successful in developing
\ninfrastructure I'm afraid that the coveted growth of 6 percent to
\n7 percent will be just a dream,\" Dorodjatun said, adding that due
\nto constraints in the state budget, the private sector had to be
\ninvolved.<\/p>",
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"sponsor": "Okusi Associates",
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