Economist: Expanding Transport Integration Must Boost Regional Connectivity
Jakarta (ANTARA) - The Executive Director of the Institute for Development of Economics and Finance (Indef), Esther Sri Astuti, believes that the expansion of public transport integration must be directed towards strengthening inter-regional connectivity, particularly in remote areas, to serve as a driver for new economic growth.
“Especially in remote areas, because building connectivity between regions is necessary to encourage regional economies to develop further,” Esther said when contacted in Jakarta on Monday.
According to her, strengthening connectivity in these regions is not only related to the provision of public transport but also to the development of basic infrastructure that supports community mobility and the distribution of goods.
She noted that roads in several regions remain inadequate, posing challenges to mobility. Therefore, improving connectivity in these areas is considered a crucial part of efforts to expand economic growth centres.
Regarding financing, Esther mentioned several alternative schemes that local governments could utilise to support the development of transport infrastructure and connectivity.
One such method is through Public-Private Partnerships (PPP), which involves collaboration in providing public services between local governments and the private sector.
Under this scheme, local governments do not need to outlay capital at the initial stage, as construction can be funded by the private sector, with payments made through an availability payment scheme.
In addition to PPPs, local governments can utilise regional bonds and regional sukuk (Islamic bonds) as funding instruments. These instruments allow local governments to issue debt securities purchased by the public or investors in the capital market to finance projects that provide added value or generate regional revenue.
Regional loans can also serve as an alternative, Esther said, with funding sources including the central government, other local governments, or the banking sector.
These loans can be directed towards financing regional programmes and activities that fall within development priorities.
Previously, President Prabowo Subianto stated that Danantara Indonesia is obliged to assist the Provincial Government of DKI Jakarta in continuing the development of the Integrated Mass Rapid Transit (LRT).
During the inauguration of the Jakarta LRT Kelapa Gading-Manggarai line at Manggarai Station on Wednesday (16/9), the President also expressed his appreciation to all parties involved in the construction and inauguration of the new LRT Jakarta route.
“I believe Danantara is obliged to help. Because DKI does not belong only to those living in DKI; DKI belongs to the entire nation,” said President Prabowo, as monitored online via the Presidential Secretariat’s YouTube channel.