SAIMA SHAFI 13131(2010-2012)

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 elected parliament and president. The nation's capital city is Jakarta

 was

established to coordinate the acceleration of infrastructure provision with the objective of national economic recovery. was established with the Presidential Decree Number 81 Year 2001 the Asian financial crisis, the Indonesian national budget plunged and the percentage of spending on infrastructure significantly decreased. Policy for the Acceleration of Infrastructure Development

 Government

of Indonesia has long recognized the vital role of basic infrastructure in enabling and supporting sustained and rapid economic development, and in improving public welfare and opportunities for the poor The Governments determination to accelerate infrastructure development is one of the steps taken to realize the expected economic growth

 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 basic infrastructure desperately needed by poor people.

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 and private cooperation feasible infrastructure will be developed through public-private partnership (PPP) regulation.

 Infrastructure

development needs to have pattern and direction that are able to provide maximum benefit. Hence, from this point, the role of infrastructure development policies becomes the direction guideline to perform infrastructure provision activities in efficient, direct and responsive to change, global and regional, fashions.

 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.

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 for Economic Affairs Secretary II: Deputy Minister for Infrastructure, Bappenas

 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

 Formulate

the coordination strategies to accelerate infrastructure provision Coordinate the integration of planning and programs and monitor the implementation of policies Formulate the implementation of public service obligation (PSO) in the acceleration of infrastructure provision Determine efforts required to solve various issues relating to infrastructure provision.

 Transportation

infrastructure Road infrastructure Water infrastructure Water supply and sanitation infrastructure Telematics infrastructure Electricity infrastructure Oil and gas distribution infrastructure

Following the worldwide trend of private participation in infrastructure and increased infrastructure investment, the Indonesian government 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 the evolution of the PPP policy. Initially, the policy in the 1980s still lacked a sound framework. To address this issue, a new policy with a more comprehensive framework that encouraged competition was adopted in the late 1990s.

 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.

structural reform of public enterprise, including the 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 regional governments and agencies, a nd prevent local government from imposing unnecessary regulations or inappropriate taxes and levies. the government wanted to complete the process of re-defining the role of the government for many sectors. This process has been initiated but much work remains to be done.

The policies and efforts described have been made by the government to tackle the problems in infrastructure development. Despite some achievements, there are a few lacunae. First, even though the need of building more infrastructures has been realized, the decision and finally construction of infrastructure is not easy. Even though institutional coordination among government agencies has been arranged and regulatory reform launched, speeding up infrastructure decision has not automatically resulted. In this respect the researcher argues that the decision-making process with regards to infrastructure is getting more complex in the new environment with multi-actor involvement and balanced power.

 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.