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Infrastructure key to boosting W. Java growth

Policymakers believe that accelerating infrastructure development is a key factor in improving the economy of West Java and creating more sustainable growth in the province

Prima Wirayani (The Jakarta Post)
Bandung
Thu, September 28, 2017

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Infrastructure key to boosting W. Java growth

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olicymakers believe that accelerating infrastructure development is a key factor in improving the economy of West Java and creating more sustainable growth in the province.

The West Java economy expanded by 5.28 percent in the first half of this year, higher than the 5.01 percent growth in the national gross domestic product (GDP) during the same period.

Despite contributing about 13.5 percent to Indonesia’s economy, ranking third after Jakarta and East Java, the province continues to struggle with a number of issues stifling growth, mainly inequality of wealth between the northern and southern parts of the province caused by a lack of adequate infrastructure.

Economic activities in the northern part of West Java are dominated by manufacturing industry as well as transportation and warehousing, the combined contribution of which amounts to 48 percent of the province’s economy.

Meanwhile, the southern part relies on agriculture, fisheries and animal husbandry, which accounts for around 9 percent of West Java’s economy.

High-level officials of central and regional governments as well as Bank Indonesia (BI) felt the need to address those issues as they gathered in a coordination meeting in Bandung, the provincial capital on Wednesday.

Aside from BI Governor Agus Martowardojo, prominent figures sharing their thoughts in the meeting were Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan, Industry Minister Airlangga Hartarto and West Java Governor Ahmad Heryawan, among others.

The meeting agreed on several points that needed to be realized into consistent and comprehensive policies to accelerate the infrastructure development required to support potential economic sectors, Agus said.

Agus said West Java’s local administrations should play active roles and ensure that the spatial planning of the projects was in harmony with each other.

The programs should increase the quantity and quality of regency or city roads, optimally utilizing village funds and improving other key infrastructure facilities managed by local administrations, he said.

Priority infrastructure projects in West Java include the construction of several toll roads, double-track railroads plying between Bogor and Sukabumi, Kertajati International Airport, Patimban Port, several dams, clean-water facilities as well as the Lontar and Suralaya power plants.

BI’s assessment showed the development of Kertajati airport and Patimban seaport would contribute around 0.02 percent and 0.03 percent of additional growth to the country’s GDP, said BI executive director for monetary and economic policy Dody Budi Waluyo.

Beyond infrastructure, the meeting agreed on pushing local economic potential as new sources of growth by taking into account local content and characteristics.

The meeting urged West Java officials to improve human resources through vocational education and upgrading small and medium businesses through technology and e-commerce.

In agriculture, West Java officials should set programs focusing on added-value products and agribusiness, managing the food trading system as well as helping farmers to access micro-loans and land registration.

The final point was to improve tourism as the fastest way to trigger growth by developing thematic tourist attractions, such as maritime, historical, religious and cultural destinations.

Accelerated construction of the Ciawi-Sukabumi toll road should also complement the development of tourist destinations in the southern parts of West Java and Banten.

Governor Ahmad said the meeting helped connect central and regional governments to quickly remove obstacles hampering infrastructure development.

“[Our priorities] will be infrastructure [development], such as airports, toll roads, seaports, [and] the development of industry and tourism in the south,” he said.

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