World Bank Weighs Investment on Infrastructure As Low
Tuesday, 13 February, 2007 | 17:08 WIB

TEMPO Interactive, Jakarta: The World Bank has viewed that investment on public infrastructure in Indonesia is too low compared to other countries in Southeast Asia. Investment has in fact dramatically dropped after the economic crisis to about 1 percent of the GDP in 2000.

On its newest report “Study on Indonesian Public Expenditures: Maximizing New Chances” yesterday (02/12) in Jakarta, the World Bank stated that, “Indonesia was at the lowest level regarding services foe clean water, electricity and sanitation.”

According to the World Bank, total investment in these sectors, either state or private, was 3.4 percent of the GDP or around US$10.2 billion. The amount was far behind the investment level before the crisis with 5 to 6 percent of the GDP.

Up until today, according to the report, only 40 percent of Indonesian inhabitants have access to water from regional companies. In addition, one third of the inhabitants, or more than 70 million people, do not have accesses to electricity.

Country Director of the World Bank Andrew Steer said that in order to be able to handle its backlog, Indonesia must improve its investment at least 2 percent of the GDP or around US$6 billion per year. “Should it do more, the better it will be,” said Steer.

The improvement will be capable of bringing back the investment level as before the crisis, although it could not replace “the lost decade”. The development of the government and the strategy to decrease the poverty rate have made the infrastructure as the priority that must be completed soon. The World Bank has also suggested to the private sector to invest in infrastructure.

Agus Supriyanto