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Supporting Indonesia’s SDGs
The government is really making an effort to invest in the future by closing our infrastructure and human capital gap.
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Urban poor – A resident carries out her daily activities in a slum area in Kapuk Teko, Jakarta, on Sept. 27. Poverty alleviation is one of prime issues highlighted in the Sustainable Development Goals (SDGs), a global development agenda adopted by world leaders last year. (Antara/Rivan Awal Lingga)
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nfrastructure is a crucial element of economic competitiveness and productivity. It acts as an important enabler for an economy to thrive and for a society to prosper. The government is really making an effort to invest in the future by closing our infrastructure and human capital gap. In addition to significant investments in Indonesia’s human capital — through education, health and social protection — the government has also made efforts to accelerate infrastructure investment in various parts of the country to keep our economy competitive going forward.
Infrastructure consists of many sectors all linked to people’s welfare and it has direct impacts on people’s lives and livelihoods. In transportation, for example, Indonesia has been improving connectivity among the islands to improve efficiencies, boost regional economies and lower the development disparity among the regions. People’s prosperity improves because increased connectivity brings down logistic costs and the price of basic goods on the outlying islands.
The investments made today will pay dividends in the form of economic prosperity in the future. Post-World War II, then-president Dwight D. Eisenhower in 1956 enacted the Federal Aid Highway Act that eventually expanded into the current United States interstate highway. This helped boost connectivity, drove economic activity and boosted prosperity for many decades.
Based on Indonesia’s medium-term expenditure framework, more than Rp 5 quadrillion (US$332 billion) is required for infrastructure to keep us globally competitive. In the 2018 national budget, over Rp 410 trillion is allocated to continue these infrastructure investments. Furthermore, basic infrastructure at grassroots level is also being built through the Village Fund (Dana Desa). Even with all this, public financing can only provide 30 percent of the total resources needed for infrastructure.
