Indonesia Designs Three Scenarios for Infrastructure Funding in the RPJMN
The government of Indonesia - through its Ministry of National Development Planning (known as Bappenas) - designed three funding scenarios for Indonesia's infrastructure development in the National Medium-Term Development Plan (RPJMN 2015-2019). The lack of appropriate infrastructure is one of the bottlenecks to Indonesia's development. The scenarios involve the amount of funds and other requirements for infrastructure investment. The three scenarios are divided into a 'full scenario', a 'partial scenario' and a 'baseline scenario'.
The full scenario is the most optimistic scenario in which Indonesia manages to reach international standards of infrastructure development investments. The international standard involves infrastructure development equivalent to 5 percent of a country's gross domestic product (GDP). Currently, Indonesia can only provide 2 percent of GDP. Based on this full scenario, Indonesia needs at least IDR 6,541 trillion (USD $536.1 billion) worth of infrastructure investments. These funds are expected to originate from the State Budget (APBN), Regional Budgets (APBD), state-owned companies, private sector, and public-private partnerships (PPPs). The other requirements for successful infrastructure investments in the full scenario are an extra commitment of all stakeholders, strong (political) leadership and bureaucratic reform.
The partial scenario implies infrastructure investments worth of IDR 4,781 trillion (USD $391.9 billion), which constitutes 75 percent of the international standard. Lastly, the baseline scenario involves investments worth of IDR 3,561 trillion (USD $291.9 billion), or 50 percent of the international standard.
According to data from Bappenas, infrastructure development in the RPJMN 2015-2019 is still focused on land transport infrastructure, in particular roads. Either in a full or partial scenario, the largest infrastructure investments are aimed at roads development or repairment. However, in the baseline scenario, most of infrastructure investment will be directed at the electricity sector.
Looking at the infrastructure funding scenarios, it seems that Indonesia has not given great attention to the maritime sector. In fact, being an archipelagic country, Indonesia should give a larger portion of investments to the maritime sector for the building of maritime transport. In the full scenario, sea transportation investments are targeted at IDR 563 trillion (USD $46.1 billion), or 8.6 percent of the total investment.
Required Infrastructure Investments in RPJMN 2015-2019 (in IDR trillion):
||Partial Scenario||Baseline Scenario|
|Energy & Gas||535||420||268|
|Water & Sewage||666||450||330|
|Information and communication
Source: Ministry of National Development Planning (Bappenas)
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