INVESTMENT IN INFRASTRUCTURE NEEDED TO ENSURE INDONESIA'S GROWTH
Local Economic Governance survey shows entrepreneurs suffer from service interruptions
Indonesia is poised to become one of the world's top 10 economies by 2025, but poor roads, water supply, and street lighting are holding the nation back. The Foundation's pioneering Local Economic Governance surveys, which cover 90 percent of all districts, found that entrepreneurs consider infrastructure a main impediment to growth. Thirty eight percent of 12,391 private firms—mostly small and medium enterprises—surveyed in 2011 said poor infrastructure is creating tremendous costs and reducing competition. Those polled said they experienced blackouts three times a week and interruptions to water supply almost twice a week. In less developed regions, conditions are worse. Through budget advocacy, we are helping local governments focus their priorities on investments that will foster economic growth. Of course, infrastructure improvements on their own are not enough. We know unnecessary levies are still imposed on farmers to transport produce across district borders, in addition to illegal charges faced by traders and transporters along the supply chain. We therefore also promote regulatory reforms that will foster business investment and enterprise development. Our position is that national investment in the infrastructure needed for business growth, coupled with a stronger emphasis on improving economic governance, is critical if Indonesia is to continue outperforming its neighbors.
— ERMAN RAHMAN
Director, Local and Economic Governance, Jakarta