REALIZATION OF MP3EI PROJECTS MEETS GOVERNMENT'S EXPECTATION by Fardah

  Jakarta, Nov 9, 2013 (Antara) - In May 2011, the Indonesian government launched an ambitious program, called the Master Plan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI), which was designed as part of the agenda for "development for all".

         The program is considered a strategic breakthrough in narrowing the development gap in the regions, to reduce unemployment, and to boost the nation`s economic growth through innovation.

         The MP3EI projects are geographically divided into six economic corridors, including the corridors of Sumatra, Kalimantan, Java, Sulawesi, Bali-Nusa Tenggara, and Papua-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.

         President Susilo Bambang Yudhoyono recently expressed his satisfaction that since the program was launched over two years ago, at least 259 projects have begun, with a total investment of Rp737.9 trillion (around US$66,4 billion).

         "What we had decided in 2011 at Cipanas Palace, Bogor, has yielded concrete results. Up until the groundbreaking ceremony yesterday, the investment has reached Rp737.9 trillion, and we are relieved," Yudhoyono said, when visiting Bukittinggi, West Sumatra, on October 29, 2013.

         The MP3EI project plans are real and concrete, and not just writing on paper, he stated.

         The president said the projects are becoming a reality thanks to cooperation among the central government, local administrations and business community. 
    Of these 259 projects, 104 are projects in the real sector and 22 in the economic field, with a priority on 155 infrastructure projects.

         These projects have been distributed throughout the six MP3EI economic corridors, including Rp276.8 trillion in the Java corridor, Rp112.3 trillion in the Sumatra corridor, Rp178.1 trillion in the Kalimantan corridor, Rp23.6 trillion in the Sulawesi corridor, Rp47.6 trillion in the Bali-Nusa Tenggara corridor, and Rp99.5 trillion in the Papua and Maluku Islands corridor.    
    Some 24.6 percent of the projects are being handled by state owned enterprises (BUMN), 34.5 percent by the private sector, and 11.9 percent by the government, while 29 percent are joint venture investments.

         Almost 60 percent of the projects are located outside Java Island. The 3,4,5, and 6 corridors are aimed at distributing development projects evenly and fairly throughout Indonesia.

         Coordinating Minister for Economic Affairs Hatta Rajasa said investment in MP3EI projects in Kalimantan is the nation's second largest, after investments in Java.

         "It's proof that national development does not focus only on Java," Minister Rajasa said, when accompanying President Susilo Bambang Yudhoyono during a groundbreaking ceremony of MP3EI projects worth Rp11.3 trillion in South Kalimantan recently.    
    Further, the government has been working on reducing the long and complicated bureaucratic process to assure the smooth implementation of the MP3EI projects, he said.

         One of the priorities in the MP3EI projects is the development of infrastructure, as the government wants to improve the connectivity of the archipelago nation, consisting of over 17,000 islands.    
    It is estimated that Indonesia needs Rp4,800 trillion in funds to improve the country's basic infrastructures, based upon the medium-term development plan 2015-2019.

         Also, Managing Director of the World Bank Sri Mulyani, who is a former Indonesian finance minister, said the lack of infrastructure support in Indonesia is standing in the way of economic growth, lower inflation rates, and a lower current account deficit.

         "Indonesia needs investment for infrastructure development to meet public needs," Sri Mulyani said on the sidelines of a meeting of APEC finance ministers in Bali, last September.

         Supporting Mulyani's view, current Finance Minister Chatib Basri said Indonesia, as one of the emerging economies, needs to attract long-term capital for investment in their best infrastructure projects to strengthen and maintain economic growth.

         This would not only benefit the economy of the country where the investment is being made, but also pave the way for international long-term investors finding stable and profitable investment projects, he noted.

         In fact, the government is giving priority to budget allocations for infrastructure development as the construction sector contributes 10.45 percent to the nation's gross domestic product.

         "The national construction market has continued to increase every year, along with rapid infrastructure development and robust national economic growth," said the Head of the Construction Board at the Public Works Ministry, Hediyanto W Husaini, in a press statement recently.

         The national construction market in 2013 is projected to reach Rp400 trillion, or 60 percent of the ASEAN construction market, he said while opening the "Concrete Show South East Asia 2013" in Jakarta.

         In 2012 alone, the construction sector created 6.3 million jobs, accounting for 5 percent of the country's labor force, he observed.

         To support infrastructure development in 2013, the government has set aside US$20 billion (over Rp190 trillion), President Yudhoyono noted last year.

         He said the capacity of the country`s national roads will be expanded by 4,278 kilometers, and there will be 559 kilometers of new roads and 380 kilometers of new rail tracks. Additionally, 15 new airports are planned to be built throughout the country. ***3***
(f001/INE/B003)
(EDITED BY INE)

(T.F001/A/BESSR/Bustanuddin) 09-11-2013 20:46:16