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espite significant increases in the state budget (APBN) in recent years, the government did not do enough to improve infrastructure throughout the country, a prominent businessman says.

Indonesian Employers Association (Apindo) chairman Sofjan Wanandi said Monday that although the government tripled its annual budget to Rp 1,200 trillion (US$132 billion) from Rp 400 trillion five years ago, the impact on infrastructure improvement was not significant.

“Our state budgets are so big, but why can’t we build more infrastructure? Perhaps there’s something wrong in the budget use,” Wanandi said during a ceremony in Jakarta to commemorate Apindo’s 59th anniversary. The event was also attended by Vice President Boediono, Trade Minister Mari Elka Pangestu and former vice president Jusuf Kalla.

Sofjan said infrastructure problems were one of the main reasons why Southeast Asia’s largest economy had lower growth than other fast-growing countries such as China. China’s economy grew by 10.3 percent last year, while Indonesia’s only grew by about 6 percent.

The problem, he said, also hampered the expansion of the formal sector, which currently contributed only 30 percent to the economy, leaving the greatest role to be played by the informal sector.

Infrastructure development was the key to enhance manufacturing industries, which currently were less developed than natural resource-based and service industries, Sofjan added.

Due to the urgent need for further infrastructure development, Sofjan expected the government to encourage the House of Representatives to speed up deliberation of the Land Acquisition Bill and pass it into law soon.

Kalla shared a similar view, saying infrastructure was a major problem, along with the provision of energy, such as electricity and gas, to develop domestic manufacturing industries.

“Poor infrastructure makes logistics expensive,” he said, adding that Indonesia also faced energy problems because exports of natural resources, such as coal and gas, led to high electricity rates.

In addition to enhancing infrastructure, Sofjan said the government had to overcome other problems, including issues of law enforcement, labor and bureaucracy, in order to create better conditions for businesses.

“After the reform in 1998, and especially over the last five years, businessmen were the backbone of economic development and we must continue this,” he said. “Therefore, the government should build a better partnership with businessmen.”

Vice President Boediono also emphasized the need to build an “effective partnership” between the government and businesses. He said both parties should know their roles and comply with the regulations.

“The government has the mandate from its people to rule. It should obey laws and create good governance,” he said.

Boediono cited the case involving former low-level tax officer Gayus H. Tambunan, who was sentenced to seven years in prison by the South Jakarta District Court for corruption, and businessmen who the former helped avoid paying taxes.

“Both the government and businesses should obey the law. Please, don’t make compromises,” he said while asking businessmen not to offer bribes because the government was trying to clean its institutions from corruption. (lnd)