Indonesia's dilapidated infrastructure poses a greater threat to human life than terrorism and will hamper long-term growth unless there is urgent new investment, the World Bank says.
"In terms of the impact on human lives it's obviously dramatically worse than terrorism for Indonesia. There's no comparison," World Bank country director Andrew Steer said on the sidelines of a conference on averting an infrastructure crisis.
He told a press conference that only 1.7 percent of the people in the world's fourth most populous nation have access to network sewerage and only 16 percent have access to piped water at household level.
"As a result of this, obviously the burden of disease, especially among children, is much, much higher than it should be," he said.
Steer said Indonesia lags behind the region in almost all infrastucture sectors. "Unless some serious new investment and improved management takes place in infrastructure, Indonesia's long-term growth will be threatened," he said.
According to a recent World Bank report, Indonesia's infrastructure performance "remains highly unsastisfactory".
Many outer island regions are now suffering regular power outages and only about half the population is connected to an electricity grid, the report said. Roads in and around major cities are heavily congested throughout the day.
And while telephone connection has increased very rapidly in the last few years, it remains very low at 9.1 subscribers, including both fixed and cellular, per 100 people.
The report also said pervasive corruption, especially in the procurement area, affects infrastructure "acutely" and costs the economy extremely highly.
Estimates of the total amount of money lost through corrupt procurement practices range from 700 million dollars to 2.1 billion dollars per year. Indonesia's top economic minister Dorodjatun Kuntjoro-Jakti said the country's infrastructure development had virtually ground to a halt since the regional economic crisis struck in mid-1997 and it would take up to 15 years to catch up.
"If Indonesia is not successful in developing infrastructure I'm afraid that the coveted [economic] growth of six to seven percent is just a dream," he said.
Koetjoro-Jakti said the government was planning to establish a provident fund to enable it to build millions of low-cost houses. "It's so distressing when you see the number of houses built in the last five years in comparison to the demand," he said.
"You cannot increase the nation's productivity unless you provide good housing to the people," the minister said.
He said the private sector must be involved in building infrastructure such as seaports, airports and railways, because the state budget alone was not adequate.
The goverment still has to repay a domestic debt amounting to 650 trillion rupiah (76.5 billion dollars) and 460 trillion rupiah of bank recapitalization bonds, he said.