Small Budget Impairs Infrastructure Projects

TEMPO.CO, Jakarta - Infrastructure development is threatened with delays because the government has no sufficient funds to finance the sector throughout 2015-2019. Dedy S. Priatna, deputy for infrastructure at the National Development Planning Ministry, said that infrastructure development in the period is expected to cost Rp5,452 trillion. However, the government can only provide 22 percent of the required investment, or around Rp1,170 to Rp1,200 trillion.

"Over the next five years, the new president will be facing severe challenges," Dedy said yesterday.

On Monday, the World Bank reminded Indonesia to boost its economic growth to above nine percent. World Bank Country Director for Indonesia Rodrigo Chaves said to spur the economic growth Indonesia must raise its competitiveness by improving infrastructure and labor skills in order to increase productivity and revenue.

The World Bank noted Indonesia spends very little for the infrastructure sector. Ndiame Diop, World Bank senior economist for Indonesia said, in the last decade, the government, SOEs and private companies have spent less than four percent of the GDP for infrastructure. Due to this low investment, the country's economic growth had declined by one percent in the last decade.

Despite many obstacles, Gadjah Mada University economist Sri Adiningsih said the government should prioritize infrastructure budget. If the government does has no sufficient funds, the private sector should be more involved. "Efforts should be made to intensify budget use and increase revenues," Sri said.

BERNADETTE CHRISTINA | ANANDA PUTRI | AYU PRIMA SANDI