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Government Aims High with Economic Development Plan
Indonesia expects to become the world’s 12th-largest economy by 2025 through stimulating domestic growth with its planned economic corridor scheme and programs to improve regional connectivity.
A document from the Coordinating Ministry for the Economy obtained by the Berita Satu Media Group on Monday showed that the government has targeted boosting gross domestic product to between $3.8 trillion and $4.5 trillion in 2025 from $700 billion in 2010, when the country was the 17th-largest economy.
Per capita income will also be raised to between $13,000 and 16,100 in 2025 from last year’s $3,005, the document said.
The “Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development [MP3EI] through 2025” designates six regions as main economic corridors. Total investment of Rp 3,348 trillion is needed for infrastructure development as well as economic activities, it says.
The government expects state-owned enterprises to pour money in the promoted regions, but it also called on the private sector to participate.
Vice President Boediono told reporters on the sidelines of a two-day meeting of government and business representatives at the Bogor State Palace that the government would offer incentives for mining as well as manufacturing activities in the six priority regions.
“We will ease requirements for the flow of goods so we can link domestic economic activity to global trade” he said.
Sumatra will be developed as an agricultural and energy center, while Kalimantan will see a focus on mining and energy and Sulawesi and North Maluku on agriculture and fisheries. Bali and East and West Nusa Tenggara will focus on tourism and supporting national food self-sufficiency, Papua and Maluku will focus on natural and human resources and Java on industry and services.
Java island will get the bulk of investment at Rp 1,079 trillion, followed by Kalimantan with Rp 703.9 trillion, Papua-Maluku with Rp 602.2 trillion and Sumatra with Rp 545.7 trillion.
The government vowed to tackle the infrastructure bottlenecks that hamper economic growth, including by speeding up the revision of building-related laws and curbing conflicting regulations at the central and regional levels. It said it would also provide more fiscal incentives and ease business licensing.
The document says the government expects to “connect remote areas with better infrastructure in order to share the benefits of development with more people.”
Regarding infrastructural constraints, the document said none of the 25 key seaports across the nation could serve as a global hub while the main international airport, Soekarno-Hatta in Cengkareng, Tangerang, was already overcrowded.
The government plans at least two global marine hubs and two air hubs to provide better gateways to the eastern and western parts of Indonesia.
taken from The Jakarta Globe