Indonesia needs $157 billion for infrastructure
The government has so far received pledges for just over half the funds needed to help develop the road, airport and railway projects planned in a $327 billion pipeline.
Just $15 billion has come from the state budget, with the bulk committed by private investors, including from China.
As Southeast Asia’s biggest economy continues to struggle for revenue, the Widodo government is leaning even more on the private sector.
It’s estimated the state budget will only be able to fund about $25 billion of the projects that are yet to start, while Indonesia’s legions of state-owned companies—numbering in the hundreds—will account for some $48 billion. About $83.5 billion will have to be stumped up by the private sector.
Some urgency may be required. The World Bank says Indonesia has a $1.5 trillion infrastructure gap compared to other emerging economies.
A lack of good roads and transport corridors across the archipelago—a string of more than 17,000 islands that would stretch from New York to London—are adding to logistical barriers and driving up costs for business.
Of Jokowi’s pipeline of 265 projects, 26 have been completed since the program started in 2016 at a cost of $3.4 billion, including $976 million on six projects finished last year, according to Haryanto.
There are a further 145 under construction, documents show. ■