A result of decades of underinvestment, creaky infrastructure has long been the Achilles’ heel of the Indonesian economy. The archipelago has not been able to build the hard infrastructure essential for sustaining growth. The World Economic Forum’s “Global Competitiveness Report 2013-14” ranked Indonesia 61st out of 148 countries for the state of its infrastructure, and improvements have not kept pace with the robust economic expansion that the country has witnessed since recovering from…
From The Report: Indonesia 2014
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A result of decades of underinvestment, creaky infrastructure has long been the Achilles’ heel of the Indonesian economy. Around $6.8bn will be spent on power and some $29bn on water utilities and other services under the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development. The government is expected to fund 28% of the cost, with the rest coming from the private sector. The government aims to meet 2% of the country’s power demand from nuclear energy by 2017. In February 2014 it confirmed plans to build a 30-MW nuclear power plant in western Java. Although private sector involvement in water services remains limited to date, the government has envisaged that nearly 70% of water infrastructure investments between 2010 and 2014 will come through public-private partnerships, community participation and the private sector. Improving infrastructure will continue to be a priority with Indonesia’s sovereign rating upgraded to investment grade and its economy growing at a steady pace.
This chapter contains interviews with Djoko Kirmanto, Minister for Public Works; Stuart Dean, CEO, General Electric ASEAN; and Bobby Umar, Chairman, Indonesian Engineers Association.