Sunday March 12, 11:46 AM Indonesia's infrastructure drive hits potholes
The hazards of driving fast on Indonesian roads are escalating: if you don't hit one of the countless potholes, you may find your expressway sinking.
Now analysts warn that unless investment perks up this year, Indonesia's economy may head in the same direction.
Disappearing roads have joined regular power outages, an overburdened phone network and a groaning railway system on Indonesia's list of things-to-fix as Southeast Asia's largest economy fights off a looming infrastructure crisis.
Few roads, bridges, power plants or any other pieces of infrastructure have been built here since the Asian financial crisis struck in 1997, crippling Indonesia and unleashing political turmoil as well.
In 1996 Indonesia outranked Thailand, Taiwan, China and Sri Lanka in terms of infrastructure quality, according to figures in a government report released this month.
Now, the world's fourth largest nation ranks close to bottom in the region for most of the indicators.
It came in 11 out of 12 nations on its electrification rates, with just 53 percent of Indonesia's 220 million people connected to an electricity grid, figures in the report showed.
It crawled in at last place on fixed telephone connections -- at four percent -- and eighth on its road network, with just 1.7 kilometers (miles) of roads per 1,000 people. And about 40 percent of that road network is damaged.
Just 55 percent of people have access to sanitation, while only 14 percent have access to clean water, and national electricity supply is "at worrying levels," it said.
"Outside Java and Bali, several regions are experiencing an electricity crisis because their systems operate with extremely low reserve margins of below 15 percent in average," it added.
The government admitted last year that Indonesia needed up to 150 billion dollars over a five-year period to build infrastructure to revive the economy as it claws its way out of the 1990s crisis.
"Indonesia's crumbling infrastructure is hurting the economy. The situation is very critical because the government has no money for maintaining what it has, let alone building anew," economist Sri Adiningsih from Gadjah Mada University told AFP.
"For example, the sorry state of roads and traffic in Jakarta and its surrounding area is hampering economic activities and the movement of goods. It is very costly," she said.
Two sections of a toll road linking Jakarta to Bandung in West Java province have dramatically subsided since it was hurriedly completed in April last year to coincide with a summit of the world's non-aligned nations.
The government insists it is trying to turn the corner.
In its report, it says it wants to accelerate infrastructure development by improving investment policy, streamlining administration and improving competitiveness. But it concedes it can fund only about 20 percent of projects from its budget and must rely on investors to foot the rest of the bill.
In January 2005, it held a much-vaunted summit aimed at attracting foreign investors and announced 91 projects worth more than 22.5 billion dollars.
The outlook document said 24 projects worth six billion dollars had been secured but National Development Minister Paskah Suzetta admitted recently that only about 20 percent of the projects on offer attracted foreign investors.
"Investor interest is scant but the projects must go ahead," he said, conceding that it was difficult to attract foreign investors -- a reference to concerns about rampant corruption and legal uncertainty, among other disincentives.
A second infrastructure summit has been postponed twice -- amid claims more time was needed to fine-tune regulations for the tender and implementation of the projects -- and is expected to be held later this year. Some 25 projects worth seven billion dollars are due to be offered.
The government of President Susilo Bambang Yudhoyono, who assumed office in October 2004, is targetting economic growth of 6.6 percent this year after 5.05 percent in 2005.
"Infrastructure is getting worse and this severely affects our competitiveness," economist Faisal Basri from the University of Indonesia told AFP.
"How can the economy grow faster if roads are clogged, ports are congested and electricity is scarce?"