Wednesday, October 17, 2012


       "Since it was launched on May 27, 2011, up until July 2012, the MP3EI programme has made a lot of progress. The groundbreakings of 135 projects, with a total investment of more than Rp490 trillion in infrastructure development and real sector, have already been done," President Susilo Bambang Yudhoyono said in his state of the nation address before the Parliament, on August 16, 2012, a day before the 67th anniversary of Indonesian independence.
       Being designed as part of the agenda of "development for all" and considered as a strategic breakthrough, the MP3EI is expected to help address the development disparity that for a long time has become a trap hindering the realization of equitable distribution of development throughout the country.
       Under the Master Plan, the government is accelerating and expanding development in six economic corridors in the country to stimulate the emergence of economic centers in each corridor and promote regional connectivity in this nation consisting of 17,508 islands.

The MP3EI`s six economic corridors are the Corridor of Sumatra, Kalimantan, Java, Sulawesi, Bali and Nusa Tenggara, and the Corridor of Papula-Maluku.

Sumatra is being designated as a center for agriculture and energy; Java for industries and services; Kalimantan for mining and energy; Sulawesi and North Maluku for agriculture and fisheries; Bali and East and West Nusa Tenggara for tourism and supporting national food self-sufficiency; and Papua and Maluku for natural and human resources.

"The MP3EI programme is necessary to narrow the existing development gap in regions, to reduce the unemployment rate, and to boost the nation`s economic growth through innovation," Yudhoyono said last year.

During the first half of 2012 alone, the implementation of MP3EI projects that included real sector and infrastructure sector, reached an investment of Rp140 trillion, or 65 percent of the target for the whole year, according to Luky Eko Wuryanto, a senior official at the office of the chief economic minister, last August.

The investment was used in 36 projects including nine projects

from the real sector with a total investment of Rp89 trillion and 27

infrastructure projects with a total investment of Rp51 trillion. The projects are part of 59 projects worth Rp370 trillion to be

implemented this year, he said.

Last year, the projects that had been implemented, reached only 87

percent of the target of 144 projects with a total investment of Rp420


The project realization in 2011 included 99 projects worth Rp356 trillion including 49 projects from the real sector with investment of Rp194 trillion and 50 infrastructure projects worth Rp162 trillion.

Some problems hampering the project implementation concerned among other things licensing bureaucracy, overlapping and conflicting regulations, and land acquisition for public infrastructure projects.

To support the infrastructure development in 2013, the government has set aside US$20 billion (over Rp190 trillion), President Yudhoyono revealed when opening Indonesia International Infrastructure Conference and Exhibition 2012 as well as the Asia Pacific Ministers and Regional Governor Conference (APMRGC) on sustainable infrastructure development, in Jakarta on August 28, 2012.

The capacity of the country`s national road will be expanded by 4,278 kilometers, and there will be 559 kilometers of new roads , and 380 kilometers of new rail tracks. Besides, 15 new airports are planned to be built all over the country until 2013, he said.

Altogether, construction of infrastructure in the country will need a total investment of no less than US$250 billion over the next five years, the president stated.

The fund would be needed for electricity, energy, road, railways, airport and seaport infrastructure and information and communication technology systems, he said.

The government has encouraged participation of state companies and the private sector in the implementation of MP3EI projects, which is expected to help transform Indonesia into a big economy.

"You can see how the government is set to make MP3EI as a reference to place Indonesia in the ranks of 10 largest economies in the world in 2025 with a per capita gross domestic product of US$15,000," Coordinating Minister for Economic Affairs Hatta Rajasa said in his closing remarks at the Indonesia International Infrastructure Conference and Exhibition 2012, on August 30, 2012.

He said success in the implementation of MP3EI will depend on the

implementation of three pillars - development of economy in six corridors, strengthening of national and international connectivity and improvement of the quality of human resources and sciences and technology.

"In order to achieve the growth target set in the MP3EI, the country has to maintain a real economic growth rate of 6 to 7 percent a year," he said.

He said the country`s economy is forecast to grow 6.8 percent next year, therefore, investment would be needed in the infrastructure and manufacturing sector to achieve the target.

In addition, mobility and connectivity need to be increased and improved and new jobs need to be created and the small and medium enterprises to be strengthened, he said.

The implementation of MP3EI would strengthen the connectivity and the country`s economic fundamentals, he added.

"It is impossible for the government to meet all the requirements. We hope the mechanism of PPP (government-private sector partnership) could bridge the gap in financing," he said. ***2***


(T.F001/A/F001/S012) 17-10-2012 21:54:06

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