Developing Indonesian Maritime Infrastructures through Foreign Investment.

By: Yuni Suryati

Nawacita

President Joko Widodo’s agenda known as Nawacita includes an objective to return Indonesia to its state of glory as a maritime nation. One aspect that must be noted from the Nawacita concept is the idea of developing Indonesia from the periphery. President Joko Widodo asserted that during his administration, infrastructure’s development will be focused on the regions of eastern Indonesia, because the western region, especially Java and Sumatara deemed to have been more advanced. Developing the periphery means to strengthen these areas within the framework of a unitary state.

Developing Infrastructure

As a very large developing country, Indonesia is understandably lacking in infrastructure, specifically maritime facilities such as ports that connect the islands in the archipelago.

Indonesia has 17,500 islands and 6,000 islands are inhabited. Indonesia also faces challenges with the imbalance of economic growth and the uneven distribution of population of 250 million people. Economic growth tends to be highly concentrated in Java, where almost 60 percent of the population lives. While the population in the less-developed eastern region is thinly scattered across small islands and difficult terrain, providing less political and economic incentive to develop areas. This leaves the population living in less-developed areas isolated from the nation’s progress.

Most of these communities are geographically isolated from developed economic, political and social centers, caused by inadequate roads, bridges and transportation. The challenging topography of the islands further exacerbates physical connectivity. Among diverse infrastructure, building a road network should be at the forefront of development in remote and environmentally difficult areas. Constructing road infrastructure provides communities with access to commercial finance and jobs in nearby economic centers. Linking less-developed areas to these centers will also make public service deliveries, such as health care and educational facilities, more accessible.

Unequal conditions in the field of welfare and economic growth is often a question of international society especially foreign journalists. We could said that this is the facts, and under the President Jokowi’s administration, Indonesia focus on development in the periphery region especially eastern part of Indonesia. To build infrastructure requires a very huge budget. Indonesia could not do this alone, therefore, the Indonesian government is receptive to foreign investment.

Port Development Master Plan 

The further development and improvement of the capacity of shipping and port services has been a priority of the government. With the openness of the maritime sectors to the incoming non-government investment, Indonesia’s maritime sector should be well developed in the near future. Among the priorities that have been set up, there are the construction namely developing 24 deep sea ports, improving 59 sea port and pioneering cargo ship to support the connectivity between Western part and Eastern part of Indonesia.

Government of Indonesia has launched a program called ‘Port Development Master Plan’ which is centered on the country’s six main ports: Belawan, Batam, Makassar, Sorong, Tanjung Perak, and Tanjung Priok. The plan also calls for development of a total of 24 ports within five years with multi billion-dollar funding. Other maritime infrastructure projects initiated by the government of Indonesia are developing 59 sea port and pioneering cargo ship across Indonesia. Port development in Indonesia is moving at full speed, driven by a sense of urgency as Indonesia seeks to rejuvenate its crumbling maritime infrastructure and the deep-sea.

How Indonesian Government Invites Foreign Direct Investment  

In many bilateral meetings with world leaders as well as world-class businessmen at the World Economic Forum, President Jokowi always said that Indonesia is an open economy and invited them to invest in Indonesia in the infrastructure sectors.

The investment promotion shows how serious the Indonesian government in developing Indonesia. It shows  that Indonesia will not leave the region lagging behind in development.

 Policy Options

  1. China as a trading partner has offered a major investment in building infrastructure to Indonesia. In this regard, Indonesia should also compared with other countries offer, therefore will get a more competitive investment value. For example, investment from Japan, South Korea, Netherlands, Norway etc.
  1. In addition to maritime infrastructure, Indonesia also has to build the infrastructure of other fields such as airports, roads, bridges, etc. Indonesia should determine the priorities.
  1. The infrastructure development through foreign investments should be transparent and involve local authorities and local people, so that the government will share the responsibilities.

Recomendation

Wherever Indonesian government build the infrastructure,  the local government and local communities should also be invited to participate, hence they will feel ownership and responsibility. Thus development will proceed smoothly and well.

 Jakarta, 23 September 2016

References:

http://www.eastasiaforum.org/2015/06/10/how-to-solve-indonesias-infrastructure-crisis/

http://www.thejakartapost.com/news/2016/06/10/superimposing-china-s-maritime-silk-road-indonesia.html

https://www.rsis.edu.sg/wp-content/uploads/2015/04/PR150409_Indonesias-Maritime-Doctrine.pdf

http://www.straitstimes.com/asia/se-asia/bringing-connectivity-to-indonesias-islands-the-jakarta-post

Image courtesy of  http://www.indonesiaport.co.id

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