China’s Wen Visit May Prove Boon for Indonesia Infrastructure

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By Yoga Rusmana

April 14 (Bloomberg) -- A visit by Chinese Premier Wen Jiabao to Indonesia later this month may lead to increased investment in the infrastructure Southeast Asia’s biggest economy needs to sustain growth.

Wen and Indonesia’s President Susilo Bambang Yudhoyono will sign a bilateral infrastructure agreement that will be a framework for Chinese investment, Indonesia’s Trade Minister Mari Pangestu said.

“On infrastructure, apart from what’s already there in terms of soft-loans-funded infrastructure projects, we would like to see much more public-private partnership-types of infrastructure investment” from China, Pangestu told a lunch meeting with foreign journalist in Jakarta today.

Indonesia, which overtook Vietnam to as the region’s fastest growing economy after China and India in December, plans to double spending on roads, seaports and airports to $140 billion over the next five years to help boost annual growth to an average 6.6 percent.

Indonesia’s GDP grew 5.4 percent in the three months to Dec. 31, compared with 10.7 percent for China and India’s 6 percent. Vietnam, who economy expanded 4.5 percent in that period, posted a 5.8 percent gain in the first quarter.

BLOOMBERG/China’s Wen Visit May Prove Boon for Indonesia Infrastructure