BUSINESSES WANT BETTER INFRASTRUCTURAL FACILITIES

By Andi Abdussalam

Jakarta, Sept. 28 (ANTARA) - Businesses urge the government to focus on the development of infrastructure such as roads, seaports, airports, electricity and other facilities that support the activities of domestic industries so that they would improve the competitive edge of the country's products and boost economic growth.          "Last year we were the biggest low calorie coal exporter, had the largest agricultural land and highest volume of crude palm oil (CPO) production. These are assets for us to build sustainable economic growth. However,  this all would have weak contribution to the economic growth if they were not supported by enough infrastructural facilities such as roads,  electricity, seaports and airports," Vice President of PT Indika Energy Wishnu Wardana said here on Tuesday.          So far, businesses considered that the development of infrastructure in the country has not yet been done maximally. Thus, the competitive edge of the country's products could not yet be improved.          "There is no significant improvement in industrial competitiveness because the government fails to focus on infrastructure. The government can only meet 30 percent of the economic budget and the rest is for the business sector, but it should be supported by infrastructure and the budget should be focused on infrastructure," Andi Putra of the Indonesian Chamber of Commerce and Industry (Kadin) said  recently.          According to Andi, the government should start to focus 2011 budget on infrastructure development in agriculture sector in an effort to step up domestic industrial competitiveness.      "It is for agriculture infrastructure in wider sense. If the infrastructure for production and industrial products derivation in this sector is good, we will certainly be more competitive," he said.          Meanwhile Kadin deputy chairman for  fiscal policy and monetary Haryadi Sukamdani said that in making the policy the government should also consider the capability in business and industrial sector to maintain competitive power.          "Do not make a policy which systematically weaken the competitive power by raising basic electricity rate tariff and plans to raise it again next year," Haryadi said.  He said it's better for the government to improve energy policy so that industrial and business players were not burdened by high energy cost.         Indonesian Young Businessmen Association (Hipmi) chairman Erwin Aksa said meawhile that domestic business players so far were less competitive with overseas producers because infrastructure had yet to be well developed and the government policy did not support business and industrial activity.          "Industrial development is also slow and only grows by four to five percent per year while in reality it could reach 11 percent in 1998," he said.          President Susilo Bambang Yudhoyono said last month that the government would focus on the development of infrastructure in 2011. "We are going to focus the budget on the development of good quality infrastructure facilities in our effort to improve the pace of economic development," President Susilo Bambang Yudhoyono said in his statement on 2011 draft State Budget (APBN) last month.          The president said the funds would be used among other for construction of 4,551-meter flyovers and underpasses, and  bridges of a total length of 2,119 meters.          "We will also use the funds to preserve 355,961 kilometers of roads, 212 roads, and 212.36 kilometers of bridges in addition to stepping up the capacity of 2,613 kilometers of roads," the president said.          For infrastructure development next year, the government will increase its budget from Rp108 trillion to RP126 trillion.          According to Vice Minister for Financial Affairs Anny Ratnawati the budget for infrastructure in 2011 would increase Rp18 trillion to Rp126 trillion from Rp108 trillion in 2010.          "Investment in the infrastructural sector would be carried out through a government-private sector partnership program. In 2010, the budget for it is set at Rp108 trillion, and it will increase to Rp126 trillion in 2011," the vice minister said on Tuesday.          She said that the budget in the infrastructural sector should be managed as well as possible so that Indonesia's competitiveness could be increased. The increase in the infrastructure funds was expected to boost economic growth because the country's competitive edge would also be raised.          Businesses hailed the increase in the infrastructure budget, as what was said by Vice President of PT Indika Energy, Wishnu Wardana.          "The government cannot do it alone. It needs the private sector's role. But we need legal certainties which at present are being questioned by many quarters," he said.          After all, the government is only able to finance about 30 percent of the needed infrastructure development which reach about Rp280 trillion per year.  According to Finance Minister Agus Martowardojo, investment in the infrastructural sector in the 2010- 2014 period is estimated at Rp1,400 trillion, of which the government is only able to finance 30 percent.          In order to accelerate the development of infrastructure in the country,  the government will begin auctioning the 2011 infrastructure projects next November so that the disbursement of the budget could be realized earlier.          "Our target is that the auction  for infrastructure projects in 2011 would have begun in November this year and contracts would have been concluded in January 2011," director general for road construction of the Public Works Ministry, Djoko Murjanto said.           He said that accelerating the auction of the 2011 infrastructure projects and the finalization of the work contracts was to speed up the project realization and budget absorption so that it would not accumulate at year end.***2*** (T.A014/A/HAJM/22:34/H-YH) 28-09-2010 22:38:3