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Jakarta Post

Recognizing the benefit of asset recycling

  • Adelia Pratiwi
    Adelia Pratiwi

    Works for the Center of Macroeconomic Policy at the Finance Ministry’s Fiscal Policy Agency

Jakarta   /   Mon, February 6, 2017   /  02:05 pm
Recognizing the benefit of asset recycling Workers are involved in the construction of peer at the multipurpose terminal of the Kuala Tanjung seaport project in Batubara regency, North Sumatra on March 14, 2016. (Tribun Medan/Riski Cahyadi)

Realizing the state budget’s capacity is still limited due to a high deficit ceiling, the private sector and state-owned enterprises (SOEs) should play a greater role in the development of the country’s infrastructure projects. Based on data from the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP), of the total Rp 3 quadrillion (US$224.4 billion) in investments needed for the development of infrastructure projects in the medium term, the government and SOEs can only provide about 40 percent. Thus there is still a gap that needs to be financed externally, either indirectly through banks or the capital market, or directly by private infrastructure companies. An innovative scheme such as recycling assets by state-owned enterprises (SOEs) should therefore be promoted as an alternative to finance such infrastructure projects. It is inarguable that S...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.