Jokowi’s Infrastructure Focus: Is it Indonesia’s New Growth Strategy?

Abstract

Indonesia's parliament has approved a revised 2015 state budget with a significant shift in the spending allocation for infrastructure and subsidies.1 In doubling the capital expenditure, the revised budget clearly reflects the commitment of the new government to fix the economy’s underlying infrastructure problems. Overall, the revised budget looks better targeted thanks to the elimination of the premium fuel subsidy and the significant increase in infrastructure spending. Getting the money is only the first step. The upcoming infrastructure projects are expected to pose serious challenges to the government. Within the next few months, the government has to design and execute a well-targeted investment priority, expedite the state budget realization for priority infrastructure projects, and attract private investors. Arguably the most challenging task of all is to supervise project implementation to minimise corruption and ensure the expected results.