Indonesia’s rapidly growing population together with robust economic growth and underinvestment in infrastructure development has resulted in the country’s current lack of quality and quantity of infrastructure.
This situation has caused a marked increase in logistics costs and blocked efforts to develop and realise national and regional economic potentials. However, government spending on infrastructure development is set to start soon.
During his presidential campaign last year, Joko Widodo repeatedly highlighted the importance of public and private investment in the country’s ailing infrastructure. The country is in need of hard infrastructure and soft infrastructure (such as healthcare). Widodo kept his promise by scrapping the country’s fuel subsidies in January 2015. This was a relatively easy move at the start of the year due to low global petroleum prices. Since January, however, global petroleum prices have recovered and now cause additional inflationary pressure in Southeast Asia’s largest economy.
Adapted from press release by Joseph Green
Read the article online at: https://www.worldcement.com/asia-pacific-rim/06072015/accelerating-infrastructure-development-indonesia-103/