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No investor will come if we have poor infrastructure: Jokowi

Jakarta Globe - December 4, 2023

Jayanty Nada Shofa, Jakarta – Indonesia is trying to ramp up its infrastructure development to make the archipelagic country more attractive to global investors.

Indonesia over the past years has been intensifying its infrastructure works to cut logistic costs, among others, President Joko "Jokowi" Widodo said on Monday.

The National Development Planning Agency (Bappenas) reported that Indonesia's logistics costs already accounted for 14.29 percent of the country's gross domestic product (GDP) as of September. Logistic costs, however, can go as low as 8 percent in advanced economies, thus showing that Indonesia still has a lot of work to do.

"Why are we prioritizing infrastructure development? Because we want to make our logistics costs more efficient as it affects our investment competitiveness. No investor will come if we have poor infrastructure," Jokowi told infrastructure stakeholders at the State Palace in Jakarta on Monday.

"They [investors] would not be able to go to [our] islands without airports, seaports, or roads," Jokowi said.

Indonesia has set a goal to attract Rp 1,400 trillion (around $90 billion) in investment throughout this year. As of January-September 2023, Indonesia has recorded about Rp 1,053 trillion in combined domestic and foreign investment. This is equivalent to 75.2 percent of the 2023 investment target, government data shows.

According to Jokowi, Indonesia's infrastructure development is still falling behind other countries. As a case in point, the toll road length in China far exceeds that of Indonesia. The 2023 IMD World Competitiveness Ranking also puts Indonesia, which is home to 17,000 islands, in 51st place for infrastructure.

"Public Works Minister [Basuki Hadimuljono] earlier told me that we had built 2,143 kilometer-long toll roads.... So that brings [Indonesia's] toll road length to less than 3,000 kilometers, while China's toll road already spans 190,000 kilometers. We have almost 300 dams in total. But Korea has 20,000 dams. There are also 98,000 dams in China," Jokowi said.

"So we need to work even harder even though we have made progress," Jokowi said while adding that Indonesia had built 5,700 kilometers of national roads over the past 9 years.

Source: https://jakartaglobe.id/business/no-investor-will-come-if-we-have-poor-infrastructure-jokow