Tuesday, July 3, 2012


     Jakarta, July 3, 2012 (ANTARA) - President Susilo Bambang Yudhoyono, at a Monday evening banquet hosted by Australian Prime Minister Julia Gillard in Darwin, Australia, invited Australian businessmen to invest in infrastructure projects within the Master Plan of Acceleration and Expansion of Indonesian Economic Development (MP3EI).
      "I invite Australian businessmen to be actively involved [in the MP3EI projects], not only in Bali, West Nusa Tenggara and East Nusa Tenggara, but also in Maluku and Papua," the head of state said.
      "The development of infrastructure in the fifth and sixth economic corridors in eastern Indonesia will help improve the region`s connectivity with Australia`s Northern Territory. It will also boost the economy of the region," he added.
     The government has designated 2012 as the year of the Indonesia"s infrastructure development.
      Coordinating Minister for Economic Affairs Hatta Rajasa recently said the connectivity among regions was the key to their economic growth.
     Indonesia is particularly lagging behind in connectivity-related infrastructure development. It is a daunting task to connect the urban and rural areas of the vast archipelago, which has more than 17,000 islands.
     To boost infrastructure development, the government has developed the MP3EI program, which is aimed at accelerating economic development in Indonesia by focusing on improving connectivity between the economic regions of the country. This can be done by building the necessary infrastructure.

The MP3EI program, announced by the President in May 2011, is also aimed at making Indonesia one of the world`s top 10 economies by 2025. Under the program, Indonesia is divided into six economic corridors, each based on its respective region`s strength. The government plans to spend Rp 4,000 trillion on roads, seaports, airports, power plants and railways by 2014.

The six corridors are Sumatera, Java, Kalimantan, Sulawesi, Bali-Nusa Tenggara, and Maluku-Papua.

Hatta said the MP3EI in 2012 comprised 89 projects across the six economic corridors, which included 39 infrastructure projects worth a total of Rp195.940 trillion, and 50 projects in the real sector with a total investment of Rp294.787 trillion.

According to government data, of the 39 infrastructure projects, 12 will be in Sumatera, 17 in Java, four in Kalimantan, two in Sulawesi, three in Bali and Nusa Tenggara, and one in Papua.

And of the 50 projects in the real sector, 14 will be in Sumatera, 19 in Java, four in Kalimantan, seven in Sulawesi, three in Bali and Nusa Tenggara, and three in Papua.

The Ministry of National Development Planning/Bappenas has estimated that MP3EI projects will require 9.7 million workers.

Based on data from Bappenas, Indonesia will need Rp 1,924 trillion to finance the development of infrastructure during the 2010-14 period. However, the state revenue and expenditure budget can only provide Rp 560 trillion.

The government has encouraged state-owned and private enterprises, including foreign companies, to participate in the implementation of the MP3EI projects, by offering attractive incentives.

In his keynote speech at the Business 20 (B20) forum, a part of the G20 Summit, in Los Cabos, Mexico, on June 17, 2012, President Yudhoyono informed the leaders of G20 member countries that Indonesia was making a strong push in infrastructure development through the MP3EI program.

"In support of these efforts, I invite your active participation in investment development through public-private partnership schemes that are readily available in the Master Plan. Your investments will unleash the power of our development programs to bring about progress for our people and generate profits for investors," the President stated.

"At the G20 Summit, I will make a strong case for multilateral development banks playing a key role in supporting these efforts," he said.

"They can help by diversifying the sources of funding through greater use of credit enhancement and partial risk guarantees. Beyond mobilizing financing, they can provide recommendations to help developing countries overcome constraints, involve the private sector, and develop well-advised projects priorities," President Yudhoyono noted.

Indonesia aims to be among the top 10 largest economies in the world in the coming decades. According to the United Nations Conference on Trade and Development, Indonesia has been among the top 10 most attractive foreign direct investment destinations during the 2010-12 period.

"Due to the improvements in our FDI-related procedures, some rating agencies have raised Indonesia to investment grade. I invite you to join Indonesia as our partner in this promising journey," Yudhoyono said.

He also urged the leaders of G20 member countries to pay serious attention to the financing of infrastructure in developing economies and support global development programs in order to boost the world economy.

"The G20 members approved the proposal and decided to follow it up later," the finance ministry said in a press statement on June 22.

On August 28-30, Indonesia will organize the Indonesia International Infrastructure Conference and Exhibition 2012 (IIICE `12), which will be held along with the Asia-Pacific Ministerial Conference on Sustainable and Inclusive Infrastructure Development 2012 (APMC-SIID`12), at the Jakarta Convention Centre.

The organizing committee, PT Infrastruktur Asia, said in a statement on Monday (July 2) that the exhibition would be attended by around 1,000 people, including global business leaders, experts and senior Indonesian officials from 33 provinces. About 6,000 professionals from the public and private sectors have also been invited.

The event will be sponsored by the Indonesian Chamber of Commerce (Kadin), the National Development Planning Board (Bappenas), the Investment Coordinating Board (BKPM), the Association of Provincial Administrations (APPSI) and the Coordinating Ministry for the Economy.

Initially, the conference was planned to be held in early May, but it had to be postponed due to, among other things, major labor rallies on May Day (Labor Day) in Jakarta.

Indonesia International Infrastructure Conference and Exhibition 2012 is Asia`s leading infrastructure forum in both scope and scale.

Earlier in May, Vice President Boediono said the government had been prioritizing infrastructure development in its efforts to boost national economic growth and would offer incentives to both state-owned and private companies in order to encourage their participation in the efforts.

The government, he added, would do everything possible to reduce the hurdles to infrastructure development, with particular focus on eliminating problems hindering big projects. ***2***


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