Indonesia reforms slightly boost infrastructure plan

Subject

Indonesia's infrastructure plans.

Significance

Indonesia will need over 416 billion dollars for infrastructure development between 2015 and 2019, according to the National Development Board's mid-term development plan published late last year. To that end, President Joko 'Jokowi' Widodo's government is planning to treble public infrastructure spending to 26 billion dollars in 2016, from about 9 billion dollars in 2015. For 2016, the government has pledged to streamline further the planning and funding systems of infrastructure projects, offering increasingly better regulatory and financial terms to private investors.

Impacts

• Cancellation of the Bandung-Jakarta rail project has hit Chinese-Indonesian infrastructure cooperation, but only temporarily.
• A repeat of such a political debacle, however, could have a more lasting impact on Chinese and Japanese investors' appetite.
• To make 'new friends' in South-east Asia, Russia will probably invest in Indonesian infrastructure, especially in the energy sector.