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nalysts say that a government plan to increase its infrastructure budget to Rp 170 trillion (US$18.02 billion) in 2013 is not enough to spur economic growth.

Finance Minister Agus Martowardojo recently said that the government would increase the current Rp 160 trillion budget for infrastructure in next year’s state budget.

“I think infrastructure spending in 2013 will be no less than Rp 170 trillion,” he said.

However, Ahmad Erani Yustika, an economist from the Institute for the Development of Economics and Finance (Indef), said that Indonesia needed to allocate at least Rp 300 trillion for infrastructure given its gross domestic product (GDP) of more than US$800 billion.

Erani also said that policy makers had to address the persistent development gap between Java and Sumatra Islands and the rest of the nation, despite relatively healthy growth amid the continuing global financial crisis.

According to data from the Central Statistics Agency (BPS), Java and Sumatra remained the major drivers of economic growth in Indonesia, comprising 81.1 percent of the nation’s GDP in the second quarter of 2012.

Development of key infrastructure, such as power plants, have also been concentrated in Java.

“If the government wants to accelerate infrastructure development next year, between 70 percent and 80 percent of the allocation must be given to projects outside Sumatra and Java,” Erani said.

Deputy Finance Minister Anny Ratnawati said that the central government was aware of the development disparities between western and eastern Indonesia.

“Well-distributed development throughout the regions cannot be achieved within a short period of time. Therefore, we are still going to focus on developing connectivity and infrastructure in the east next year,” Anny said.

President Susilo Bambang Yu-dhoyono recently signed Presidential Regulation No. 71/2012, which detailed a long-awaited policy on land acquisition that has been called the key building more roads, bridges and power plants.

The regulation stipulates, among other things, that the maximum period of for resolving land acquisition problems cannot exceed 583 days, much less than the average of 720 days currently required.

Executives have welcomed the regulation, although some have said that it should have covered ongoing and stalled projects and not just new ones.

Bank Mandiri chief economist Destry Damayanti said that although the planned Rp 170 trillion was low, she expected that the government would develop projects that would provide massive multiplier effects for the economy.

“By enhancing infrastructure, we will be able to generate more investment and will be able to reduce high costs in the economy. We are expecting a trickle-down effect from the projects, which will in the end generate a higher GDP,” Destry said.

The government has targeted the economy to grow at 6.5 percent this year. The BPS recorded that the nation’s GDP grew 6.3 percent in the first half of the year.

The economy usually grows faster during the second half due to increased disbursements of government spending in the middle of the year.

The BPS data also showed the main contributors to growth in 2012 have been household domestic consumption and investment.

Analysts have said that the government had to accelerate spending, particularly on infrastructure, to ensure sustained and sustainable growth.