The government has repeatedly said building infrastructure will be key to its new economic policy when President Susilo Bambang Yudhoyono begins his second five-year term in office next week. But what else is new, one might validly ask.
“The difference is that this time we will address the question of how decisions are being made,” economist Chatib Basrie told a dinner hosted by Bank Permata Monday.
“The lesson learned in the last five years is that it was not a question of having a long list of infrastructure projects we want to build. The challenge is to make sure that these projects are executed,” the University of Indonesia professor said.
MC and TV presenter Najwa Shihab introduced Chatib as a new member of the next Cabinet, picking up on strong rumors that he would be part of the new economic team, possibly as minister of national development planning.
Chatib admits that many infrastructure projects, from roads, ports and bridges had not been carried out in the last five years because of problems over land acquisition.
Previous reports have it that the government has signed new contracts with investors to develop more than 1,000 kilometers of toll roads representing investments of Rp 84.42 trillion - but at least 900 km of these projects are bogged down by land problems.
According to the latest data, Indonesia has in the past few years developed 688 km of toll roads, of which 530 km were built and are now operated by state-owned toll road operator PT Jasa Marga.
The government will soon tender another 31 projects for 1,384 kilometers of toll roads, requiring total investments of Rp 136.8 trillion.
“Now we will look into the decision making processes ... We need to do a lot of de-bottlenecking,” Chatib said.
Building infrastructure projects will be an important part of the government’s strategy to promote tighter economic integration nationally.
The cost of transporting goods within Indonesia is far higher than the average in Asia, and even double than in Europe, he pointed out.
“It’s a republic with a not-so-integrated economy,” he said, adding that many regions found it easier to trade with outsiders than with other parts of the archipelago.
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