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SAIMA SHAFI

13131(2010-2012)

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Indonesia, officially the Republic of Indonesia

(Indonesian: Republik Indonesia), is a nation

in Southeast Asia. Comprising 17,500 islands,

it is the world's largest archipelagic state.With a population of over 200 million, it is

the world's fourth most populous country and

the most populous Muslim-majority nation.

Indonesia is a republic, with an electedparliament and president. The nation's

capital city is Jakarta

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was established to coordinate the

acceleration of infrastructure provision with

the objective of national economic recovery.

was established with the Presidential DecreeNumber 81 Year 2001

the Asian financial crisis, the Indonesian

national budget plunged and the percentage of

spending on infrastructure significantlydecreased.

Policy for the Acceleration of Infrastructure

Development

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Government of Indonesia has long recognized

the vital role of basic infrastructure in

enabling and supporting sustained and rapideconomic development, and in improving

public welfare and opportunities for the poor

The Governments determination to

accelerate infrastructure development is oneof the steps taken to realize the expected

economic growth

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Multiplier effects of infrastructure development

are expected to touch every element social,

culture, politic, and even defense-security of a

nation Through infrastructure development, the

Government is optimistic to be able to open

millions of new employment as well as

eradicate poverty by providing access to basicinfrastructure desperately needed by poor

people.

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To realize the desired infrastructure

development, the Government launched a policy

package that consists of more than 150 action

plans to develop various types of infrastructure.

The Governments limited fund will be

concentrated in developing the basic needs such

as rural infrastructure through public service

obligation.

On the other hand, commercially viable andprivate cooperation feasible infrastructure will

be developed through public-private partnership

(PPP) regulation.

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Infrastructure development needs to have

pattern and direction that are able to

provide maximum benefit.

Hence, from this point, the role ofinfrastructure development policies becomes

the direction guideline to perform

infrastructure provision activities in

efficient, direct and responsive to change,global and regional, fashions.

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Infrastructure development policies, thus,

have to be formed in light of the creation of

a balance among various interests, including

that of the public, users and operator.

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Chairperson:

State Coordinating Minister for Economic Affairs

Executive Chairperson:

State Minister for National Development

Planning/Head of National Development Planning

Board (BAPPPENAS)

Secretary I:

Deputy Minister for Infrastructure and Regional

Development, Coordinating Ministry forEconomic Affairs

Secretary II:

Deputy Minister for Infrastructure, Bappenas

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Members:

Minister of Home Affairs

Minister of Finance

Minister of Energy and Natural Resources

Minister of Public Works

Minister of Transportation

Minister of Information and Communication State Minister of State-Owned Enterprise

Secretary of the Cabinet

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Formulate the coordination strategies to

accelerate infrastructure provision

Coordinate the integration of planning and

programs and monitor the implementation ofpolicies

Formulate the implementation of public

service obligation (PSO) in the acceleration

of infrastructure provisionDetermine efforts required to solve various

issues relating to infrastructure provision.

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Transportation infrastructure

Road infrastructure

Water infrastructureWater supply and sanitation infrastructure

Telematics infrastructure

Electricity infrastructure

Oil and gas distribution infrastructure

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Following the worldwide trend of privateparticipation in infrastructure and increasedinfrastructure investment, the Indonesiangovernment initiated the PPP policy in the

1980s. The policy has been remarkably important to

enhance infrastructure provision in the economy.Table 8 provides a short description of theevolution of the PPP policy. Initially, the policy

in the 1980s still lacked a sound framework. Toaddress this issue, a new policy with a morecomprehensive framework that encouragedcompetition was adopted in the late 1990s.

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The impact of the policy related to PPPthe

result of private investment in

infrastructurecan be seen in Figure 24.

Private investment was increasing in the

1990s just before the economic crisis in late

1997 and 1998. During the economic crisis,

private investment went down dramatically.

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http://trialweb.bappenas.go.id/blog/wp-content/uploads/2010/12/duaempat.png

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structural reform of public enterprise, includingthe SOEs and Regional-Owned Enterprises (ROEs)

tackle the large-scale decentralization process.To improve the process of fiscal transfers from

the center, promote inter-regional cooperation,improve the institutional capacity of the regionalgovernments and agencies, a nd prevent localgovernment from imposing unnecessaryregulations or inappropriate taxes and levies.

the government wanted to complete the processof re-defining the role of the government formany sectors. This process has been initiated butmuch work remains to be done.

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The policies and efforts described have beenmade by the government to tackle the problemsin infrastructure development. Despite someachievements, there are a few lacunae. First,even though the need of building more

infrastructures has been realized, the decisionand finally construction of infrastructure is noteasy. Even though institutional coordinationamong government agencies has been arrangedand regulatory reform launched, speeding up

infrastructure decision has not automaticallyresulted. In this respect the researcher arguesthat the decision-making process with regards toinfrastructure is getting more complex in thenew environment with multi-actor involvementand balanced power.

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Second, there is an imbalance in

infrastructure growth among the provinces.

To this extent, the government has to pay

more attention to developing infrastructure

from the view of regional basis. Further,

there is an important issue in relation to

regional development policy and

infrastructure policy. Special attention

should be directed towards an interplay of

spatial and infrastructure development

policy.

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