Jakarta – Indonesia's target to achieve economic growth of 7 percent a year within the next few years will be difficult to reach if no significant improvement is made in the country's transportation system, an economist says.

World Bank economist Sjamsu Rahardja said Tuesday that domestic connectivity remained a major challenge for investors doing business in Indonesia. "We may see a 7 percent economic growth if we can have improved connectivity within the country," he said after a seminar.

Citing a statement last year by Vice President Boediono, he said connectivity was a critical problem that should be quickly addressed. "We cannot go further without resolving connectivity problems," he said.

Apart from the country's resiliency amid the recent global financial crisis, he said Indonesia should make greater efforts to better improve its current achievements.

"Indonesia can get away unscathed from the recent crisis. Its economic growth is quite stable, which is a good point," he said, citing two other points proving Indonesia's resiliency – an improved fiscal indicator and a reduction in the poverty rate.

"The question is, what do we want to see next: Indonesia floating or rising? If we want to keep rising, then we will have to move faster to be able to enter a new prestigious category: a middle-income country," he said.

He said that Indonesia was now moving from a lower-middle income towards middle income. "In this situation, higher demand for supporting services and domestic connectivity will usually emerge. I think the government should better facilitate so service providers can easily expand their businesses and investments," he said.

Indonesian Chamber of Commerce and Industry (Kadin) vice chairman for investment and communication Chris Kanter said infrastructure should be improved due to its important role in attracting investment. Without improved infrastructure, he said, it would be difficult to increase investments.

"We know that many investors have shown interest in investing in Indonesia. But many of them are still concerned about the lack of infrastructure, which they see as one of the biggest obstacles. So they wait and see," he said, adding that improved connectivity might bring benefits such as lower and more stable prices for goods and services and wider market access leading to improve competitiveness of Indonesian products. (ebf)