Jakarta, Nov 4 (Antara) - The World Bank (WB) has agreed to provide Indonesia with a loan to develop its tourism infrastructure and logistics reform programs respectively worth US$200 million and US$400 million.
The assistance is expected to advance Indonesia's tourist destination development and improve its logistics and connectivity systems.
Considering that tourism is one of the significant contributors to the nation's foreign exchange earnings, the government is focusing on the development of ten priority tourist destinations.
By developing these destinations, the government hopes that the number of foreign tourist arrivals would reach 20 million in 2019. Last year, a total of 10.4 million foreign tourists visited Indonesia.
In order to carry out tourism infrastructure development, particularly the ten main tourist destinations, the government involved the World Bank (WB). This is because Indonesia needs a huge fund to develop the ten priority tourist destinations.
However, the funds obtained from the WB is not adequate to develop the 10 tourist destinations. The WB agreed to provide only US$200 million for the development of three of the ten tourism destinations.
The agreement on the WB assistance will be signed in June 2017 and will be effective from July 2017, according to Tourism Minister Arief Yahya.
The three destinations to receive the WB assistance by the central government are Lake Toba of North Sumatra, the Borobudur Buddhist Temple in Magelang of Central Java and the Mandalika tourist resort of West Nusa Tenggara (NTB). Labuan Bajo, which also needs infrastructure development, should wait the next assistance.
The ten destinations are Lake Toba in North Sumatra, the Mandalika in West Nusa Tenggara (NTB), the Morotai in North Maluku, and the Tanjung Lesung in Banten, in addition to the Labuan Bajo in NTB, the Seribu Islands in Jakarta, and the Bromo Tengger Semeru in East Java. Also on the list are the Wakatobi in Southeast Sulawesi, the Balitung Island, and the Borobudur Buddhist Temple in Magelang, Central Java.
The Ministry of Public Works and Public Housing (PUPR) is responsible for infrastructure development and is therefore involved with the WB in the development of the three tourist destinations.
"The Secretary General of the PUPR ministry has sent a letter to the National Development Planning (PPN) minister/head of the National Development Planning Agency (Bappenas) regarding the integrated master plan of the three tourism destinations and its inclusion in the foreign loan plan," Regional Infrastructure Development Head of PUPR, Rido Matari Ichwan said.
The PUPR ministry is also in the process of setting up an auction team for finalizing the term of reference (TOR) for the drawing of the integrated master plan.
The PUPR will fully support the infrastructure development of prime tourist destinations, particularly housing and water supply resources.
"To support the development of Lake Toba, the government is now constructing the Medan - Kualanamu - Tebing Tinggi toll road sections which are expected to be completed by 2018. The Tebing Tinggi - Siantar - Prapat toll road sections are also under construction and are expected to be completed by 2019," said Rido.
In the meantime, the World Bank has also approved a US$400 million development policy loan for Indonesia's logistics reform, which will be used to improve the country's logistics system and connectivity.
"These reforms will help Indonesia in achieving higher inclusive growth," World Bank's Country Director in Indonesia Rodrigo Chaves said in a statement received by Antara in Jakarta Thursday (November 3).
Chaves explained the US$400 million loan will support Indonesia to overcome obstacles in the supply chain, such as dwelling time and trading permits.
The inefficient dwelling time has resulted in Indonesia's logistics costs accounting for 25 percent of the total costs, while Thailand is only 15 percent and Malaysia is 13 percent.
Currently, the cost of container shipping of oranges from Shanghai, China to Jakarta is cheaper than the cost of similar items shipping from Jakarta to Padang, West Sumatra.
Though, the distance between the two cities in Indonesia is only a sixth of the distance between Jakarta and Shanghai.
Logistics efficiency will improve connectivity and provide a significant impact on the competitiveness of the country. Improved logistics can reduce the cost of goods and services flows, especially in remote and underdeveloped regions in Indonesia.
The Development Policy Loan will support Indonesia over a transition period from the commodity-dependent economy to manufacturing-based economy with high competitiveness.
World Bank's Senior Economist Massimiliano Cali added that the high cost and unreliable logistics are obstacles in improving national competitiveness.
Managing these problems will increase production and export, thus lifting economic growth.
The three main objectives of this funding is increasing the performance of the ports, improving the competitiveness of logistics services and strengthening trade facilitation.
World Bank's support for the logistics reform is an important part of the Partnership Framework of World Bank Group States, which is centered on the government's priority to bring significant changes.**3***(A014/INE)
EDITED BY INE(T.A014/A/BESSR/A. Abdussalam) 04-11-2016 21:03 |
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