The grand proposal calls for a record $412 billion in investments between 2020 and 2024, Minister Bambang Brodjegoro said in an interview this week.
He added that as much as 40% of the quantity will probably be financed directly by the federal government, 25% by state-owned enterprises and the remaining by the private sector. According to the draft plan seen by Bloomberg and verified by the ministry, about 60% of spending will probably be allocated to transport-related infrastructure.
“The only way for Indonesia to achieve higher economic growth is through connectivity,” Brodjnegoro said in Jakarta.
“We plan to create the equivalent of an air highway by building runways or smaller airports to provide connectivity” in distant areas resembling the Papua region, he said.
The latest spending plan corresponds to roughly 5.7% of gross domestic product for 2020–2024, during which the federal government assumes economic growth of 5.4–6%, based on the draft proposal. Brodjnegoro said the federal government is open to the opportunity of financing some projects with debt.
According to the draft plan, about 17% of the infrastructure expenditure will probably be spent on energy, followed by 10% on irrigation.
The proposal also calls for the modernization of as many as 165 existing airports and the event of water infrastructure to permit seaplanes to access distant islands on this planet’s largest archipelago, Brodjonychro said.
Better infrastructure would also complement government efforts to draw more tourists to assist reduce the present account deficit, which rose to a four-year high in 2018 and put pressure on domestic currency, bond and stock markets.
Source: The Straits Times | Daily Express
